How Government and Corporations Use the Poor as Piggy Banks
Cross-posted with TomDispatch.com.
Individually the poor are not too tempting to thieves, for obvious reasons. Mug a banker and you might score a wallet containing a month’s rent. Mug a janitor and you will be lucky to get away with bus fare to flee the crime scene. But as Business Week helpfully pointed out in 2007, the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them.
The trick is to rob them in ways that are systematic, impersonal, and almost impossible to trace to individual perpetrators. Employers, for example, can simply program their computers to shave a few dollars off each paycheck, or they can require workers to show up 30 minutes or more before the time clock starts ticking.
Lenders, including major credit companies as well as payday lenders, have taken over the traditional role of the street-corner loan shark, charging the poor insanely high rates of interest. When supplemented with late fees (themselves subject to interest), the resulting effective interest rate can be as high as 600% a year, which is perfectly legal in many states.
It’s not just the private sector that’s preying on the poor. Local governments are discovering that they can partially make up for declining tax revenues through fines, fees, and other costs imposed on indigent defendants, often for crimes no more dastardly than driving with a suspended license. And if that seems like an inefficient way to make money, given the high cost of locking people up, a growing number of jurisdictions have taken to charging defendants for their court costs and even the price of occupying a jail cell.
The poster case for government persecution of the down-and-out would have to be Edwina Nowlin, a homeless Michigan woman who was jailed in 2009 for failing to pay $104 a month to cover the room-and-board charges for her 16-year-old son’s incarceration. When she received a back paycheck, she thought it would allow her to pay for her son’s jail stay. Instead, it was confiscated and applied to the cost of her own incarceration.
Government Joins the Looters of the Poor
You might think that policymakers would take a keen interest in the amounts that are stolen, coerced, or extorted from the poor, but there are no official efforts to track such figures. Instead, we have to turn to independent investigators, like Kim Bobo, author of Wage Theft in America, who estimates that wage theft nets employers at least $100 billion a year and possibly twice that. As for the profits extracted by the lending industry, Gary Rivlin, who wrote Broke USA: From Pawnshops to Poverty, Inc. -- How the Working Poor Became Big Business, says the poor pay an effective surcharge of about $30 billion a year for the financial products they consume and more than twice that if you include subprime credit cards, subprime auto loans, and subprime mortgages.
These are not, of course, trivial amounts. They are on the same order of magnitude as major public programs for the poor. The government distributes about $55 billion a year, for example, through the largest single cash-transfer program for the poor, the Earned Income Tax Credit; at the same time, employers are siphoning off twice that amount, if not more, through wage theft.
And while government generally turns a blind eye to the tens of billions of dollars in exorbitant interest that businesses charge the poor, it is notably chary with public benefits for the poor. Temporary Assistance to Needy Families, for example, our sole remaining nationwide welfare program, gets only $26 billion a year in state and federal funds. The impression is left of a public sector that’s gone totally schizoid: on the one hand, offering safety-net programs for the poor; on the other, enabling large-scale private sector theft from the very people it is supposedly trying to help.
At the local level though, government is increasingly opting to join in the looting. In 2009, a year into the Great Recession, I first started hearing complaints from community organizers about ever more aggressive levels of law enforcement in low-income areas. Flick a cigarette butt and get arrested for littering; empty your pockets for an officer conducting a stop-and-frisk operation and get cuffed for a few flakes of marijuana. Each of these offenses can result, at a minimum, in a three-figure fine.
And the number of possible criminal offenses leading to jail and/or fines has been multiplying recklessly. All across the country -- from California and Texas to Pennsylvania -- counties and municipalities have been toughening laws against truancy and ratcheting up enforcement, sometimes going so far as to handcuff children found on the streets during school hours. In New York City, it’s now a crime to put your feet up on a subway seat, even if the rest of the car is empty, and a South Carolina woman spent six days in jail when she was unable to pay a $480 fine for the crime of having a “messy yard.” Some cities -- most recently, Houston and Philadelphia -- have made it a crime to share food with indigent people in public places.
Being poor itself is not yet a crime, but in at least a third of the states, being in debt can now land you in jail. If a creditor like a landlord or credit card company has a court summons issued for you and you fail to show up on your appointed court date, a warrant will be issued for your arrest. And it is easy enough to miss a court summons, which may have been delivered to the wrong address or, in the case of some bottom-feeding bill collectors, simply tossed in the garbage -- a practice so common that the industry even has a term for it: “sewer service.” In a sequence that National Public Radio reports is “increasingly common,” a person is stopped for some minor traffic offense -- having a noisy muffler, say, or broken brake light -- at which point the officer discovers the warrant and the unwitting offender is whisked off to jail.
Local Governments as Predators
Each of these crimes, neo-crimes, and pseudo-crimes carries financial penalties as well as the threat of jail time, but the amount of money thus extracted from the poor is fiendishly hard to pin down. No central agency tracks law enforcement at the local level, and local records can be almost willfully sketchy.
According to one of the few recent nationwide estimates, from the National Association of Criminal Defense Lawyers, 10.5 million misdemeanors were committed in 2006. No one would risk estimating the average financial penalty for a misdemeanor, although the experts I interviewed all affirmed that the amount is typically in the “hundreds of dollars.” If we take an extremely lowball $200 per misdemeanor, and bear in mind that 80%-90% of criminal offenses are committed by people who are officially indigent, then local governments are using law enforcement to extract, or attempt to extract, at least $2 billion a year from the poor.
And that is only a small fraction of what governments would like to collect from the poor. Katherine Beckett, a sociologist at the University of Washington, estimates that “deadbeat dads” (and moms) owe $105 billion in back child-support payments, about half of which is owed to state governments as reimbursement for prior welfare payments made to the children. Yes, parents have a moral obligation to their children, but the great majority of child-support debtors are indigent.
Attempts to collect from the already-poor can be vicious and often, one would think, self-defeating. Most states confiscate the drivers’ licenses of people owing child support, virtually guaranteeing that they will not be able to work. Michigan just started suspending the drivers’ licenses of people who owe money for parking tickets. Las Cruces, New Mexico, just passed a law that punishes people who owe overdue traffic fines by cutting off their water, gas, and sewage.
Once a person falls into the clutches of the criminal justice system, we encounter the kind of slapstick sadism familiar to viewers of Wipeout. Many courts impose fees without any determination of whether the offender is able to pay, and the privilege of having a payment plan will itself cost money.
In a study of 15 states, the Brennan Center for Justice at New York University found 14 of them contained jurisdictions that charge a lump-sum “poverty penalty” of up to $300 for those who cannot pay their fees and fines, plus late fees and “collection fees” for those who need to pay over time. If any jail time is imposed, that too may cost money, as the hapless Edwina Nowlin discovered, and the costs of parole and probation are increasingly being passed along to the offender.
The predatory activities of local governments give new meaning to that tired phrase “the cycle of poverty.” Poor people are more far more likely than the affluent to get into trouble with the law, either by failing to pay parking fines or by incurring the wrath of a private-sector creditor like a landlord or a hospital.
Once you have been deemed a criminal, you can pretty much kiss your remaining assets goodbye. Not only will you face the aforementioned court costs, but you’ll have a hard time ever finding a job again once you’ve acquired a criminal record. And then of course, the poorer you become, the more likely you are to get in fresh trouble with the law, making this less like a “cycle” and more like the waterslide to hell. The further you descend, the faster you fall -- until you eventually end up on the streets and get busted for an offense like urinating in public or sleeping on a sidewalk.
I could propose all kinds of policies to curb the ongoing predation on the poor. Limits on usury should be reinstated. Theft should be taken seriously even when it’s committed by millionaire employers. No one should be incarcerated for debt or squeezed for money they have no chance of getting their hands on. These are no-brainers, and should take precedence over any long term talk about generating jobs or strengthening the safety net. Before we can “do something” for the poor, there are some things we need to stop doing to them.
Barbara Ehrenreich, a TomDispatch regular, is the author of Nickel and Dimed: On (Not) Getting By in America (now in a 10th anniversary edition with a new afterword). She is most recently the founder of the just-launched Economic Hardship Reporting Project, which supports innovative journalism on poverty and economic hardship. To listen to Timothy MacBain's latest Tomcast audio interview in which Ehrenreich discusses how the poor get soaked and her latest project to fund investigative journalism on poverty, click here or download it to your iPod here.
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Tamar Abrams: D.C.'s Homeless People Peddling So Much More than Newspapers
Bernard Starr: If Only it Were 99 Percent -- or Even 80 Percent -- Versus the Rich
-- Isaiah 10:1-3
Matthew 13:12
12 Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.”
imoftenrighttoo (2:08 PM on 05/21/2012) wrote, “...You asked, “Have you ever been in trouble?” Of course, I have....I’ve been so poor that...I didn’t like it, so I did something about it.”
If you know (A) THAT you could do something about it, and (B) WHAT you could do about it, then you have never been “poor.”
You’ve been “broke.” I have, too. But I’ve always known that I had the resources and the wherewithal to make my way out.
____________________
Through American history, the condition of poverty has meant that (A) you don’t know you can fix it.
In our recent economy, with a shrinking of middle-income opportunities—poverty or no—(B) you may not know anything that still will work.
More and more hard-working Americans are slipping in poverty. Meanwhile, many other Americans are comfortably convinced that it’s these new-poor’s fault.
____________________
What’s frustrating about cavalier, Conservative attitudes toward the plight of others, is the shallow-minded thinking which says, “It hasn’t happened to me yet, so something must be wrong with those it happens to.”
A Conservative believes, “It can’t happen here.” A Liberal believes, “It hasn’t happened to you yet.”
A Pragmatic says, “Let’s fix it so that it doesn’t have to happen again.”
Regards,
(($; -)}
Gozo!
Another example: Gingrich said we should train "poor" kids early in grade-school how to work hard by giving them the adult's janitor's jobs ......how soul-less can they be....they show us every time they speak.
It is the official bank of the US military and has branches by or on
many bases, which provides the firm with another locus of extortion.
BofA can entice military personnel to take out loans at usurious
rates. Personal loans made to soldiers for a few thousand dollars can
actually keep them indebted for the rest of their lives.
Last May, Bank of America paid $22 million to settle charges of improperly foreclosing on active-duty troops.
http://www.nationofchange.org/10-reasons-hate-bank-america-1320153713
http://pinterest.com/pin/282952789058491871/
He is your friend, your partner, your defender, your dog.
You are his life, his love, his leader.
He will be yours, faithful and true, to the last beat of his heart.
You owe it to him to be worthy of such devotion.
(This lady is very worthy of their devotion. Much more worthy than the monetarily wealthy Romney who treated Seamus so shabbily.)
Ah, usury. Harkens back to a time when a certain prophet drove Usurers out of a Temple. Not that your modern right wing christianist would object, as times have surely changed..
For Gawd’s sake man, you are talking about a few minutes a day. Why should that matter? Let the company take a few minutes of your time. Perhaps your career would have a prayer if you weren't worried about donating a few minutes of your precious time to promote your career.
I have news: they do not pay a working class man enough to support ONE famly, much less two -- so when you say a man should pay child support, you are saying his new wife should as well (it is a TWO wage earner economy). Everything is so WHACK its unbelievable.
I also have news: the rich get ALL their money frrom labor, by preying on labor; in one sense, I do not mind as they are just organizers, but they think they are a lot more, and that is when we get into trouble.
As Abraham Lincoln said: "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."
Read more at http://www.brainyquote.com/quotes/quotes/a/abrahamlin395631.html#GcjTJe5PpVoMZerF.99
Listen: there is no hope. Decency is dead. And the poor are the scapegoats.
Usury is now the norm. Business no longer accepts its own operating risk. Government isn't government anymore--it's a pre-Wall Street training ground and a post-Wall Street proving ground.
We've crossed a population threshold. The last forty years of every rising costs have escalated numbers into the mind boggling billions and trillions. That insanity which sets-in via the inability to comprehend ridiculous high numbers and their penchant for multiplication is a mental illness which manifests itself as viewing people, not as human beings, but as consumers, demographics, units.
If the white collar world woke-up tomorrow and discovered that all of the rest of us had simply croaked over night? There'd be a week long celebration. At the end of this, a series of demotions would come down from the top and who ever doesn't hold a position in a profit center would be handed a blue shirt and told to clean-up that mess.
This is the real goal.
Frankly, if the new government would just get into the business of handing-out arsenic pill, I'd be quite happy to swallow one. At least I'd be engaged in a system that's more honest. And, really, I've been missing George Carlin anyway.
Any job that can be performed at a desk or a computer can be performed overseas for much less; e.g.:
o computer programmer
http://www.liveleak.com/view?i=4ea_1195705444
LiveLeak.com - "30 Days: Outsourcing" (2006) (Part 1/2)
The "star" is Chris Jobin, a programmer whose job was outsourced to India. He traveled to India and stayed for 30 days as an employee of a call center.
o accountant
o architect
o engineer
o radiologist
o car designer
o legal services:
http://www.manufacturingnews.com/news/10/0126/outsourcing.html
Outsourcing Firms And Foreign Countries Target More American Service Industries, Especially U.S. Law FirmsAny job that can be performed at a desk or a computer can be performed overseas for much less; e.g.:
o computer programmer
http://www.liveleak.com/view?i=4ea_1195705444
LiveLeak.com - "30 Days: Outsourcing" (2006) (Part 1/2)
The "star" is Chris Jobin, a programmer whose job was outsourced to India. He traveled to India and stayed for 30 days as an employee of a call center.
o accountant
o architect
o engineer
o radiologist
o car designer
o legal services:
http://www.manufacturingnews.com/news/10/0126/outsourcing.html
Outsourcing Firms And Foreign Countries Target More American Service Industries, Especially U.S. Law Firms
Gee, come to think about it, that income gap has become so enormous that, what I really meant, I guess, is the 1%.
Thanks for the links.
http://libcom.org/library/us-thibodaux-massacre-1887
US: The Thibodaux Massacre of 1887 | libcom.org
"One of the most interesting, and probably least known events in Louisiana history is the Thibodaux Massacre of 1887, the second most bloody labor dispute in U.S. history.
Although most of the blood letting occurred in the environs of Thibodaux, the strike encompassed a larger area. The strike affected sugar plantations in St. Mary, Terrebonne ,and Lafourche parishes. These parishes make up an area known as the "sugar bowl." Thibodaux is the parish seat of Lafourche.
The plight of the sugar cane worker in 1887 was one of back-breaking labor and meager pay. Most field hands were paid approximately 13 dollars a month. They were also paid in script. Script was basically a coupon redeemable only at the company store owned by the planter. The store´s prices were normally marked up 100%. You can see that the worker usually wound up being indebted to the planter. Louisiana law stated that if a worker owed money to a planter he could not move off the planters land until the debt was paid. This law essentially reduced the plantation laborer to the status of serf..."
http://www.businessweek.com/the_thread/economicsunbound/archives/2009/06/a_lost_decade_f.html
We've been subsidizing businesses as they ship jobs overseas. This article suggests that there should be more oversight especially for companies that try to engage in illegal wage practices. I myself had been a victim of this several times. One job hadn't paid me in five weeks and then the 6th week, I was given a $30 check. In essence I had been paid a penny for each hour I worked. Needless to say, I started writing letters to the CEO until it was rectified (even so they still shortchanged me $60). Another job would tell me the "check was in the mail". A month later I finally receive payment and this continued up until I threatened to leave (I left anyway shortly thereafter. My patience had been used up.) Some "job creators" are unscrupulous and there should be a checks and balances system in place.
Frank and Dodd may have started out to " help the poor" but it takes more than good intentions to do good, and what they accomplished was to assist in defrauding the world.