Preying on the Poor
May 17th, 2012
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Individually the poor are not too tempting to thieves, for obvious reasons. Mug a banker and you might score a wallet containing a monthâs rent. Mug a janitor and you will be lucky to get away with bus fare to flee the crime scene. But asÂ Business WeekÂ helpfully pointed outÂ in 2007, the poorÂ in aggregateÂ 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.
Itâs not just the private sector thatâs 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 toÂ charging defendantsÂ 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 wasÂ jailed in 2009Â for failing to pay $104 a month to cover the room-and-board charges for her 16-year-old sonâs incarceration. When she received a back paycheck, she thought it would allow her to pay for her sonâs 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 ofÂ Wage Theft in America,Â 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 wroteÂ 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 distributesÂ about $55 billion a year, for example, through the largest single cash-transfer program for the poor, theÂ 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,Â gets onlyÂ $26 billion a year in state and federal funds. The impression is left of a public sector thatâs 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 andÂ get arrestedÂ 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, itâs 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 theÂ crimeÂ of having a âmessy yard.â Some cities — most recently, Houston and Philadelphia — have made it a crime toÂ share foodÂ 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 youÂ 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: âsewer service.â In a sequence that National Public RadioÂ reportsÂ is âincreasingly common,â 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.
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Contributed by Barbara Ehrenreich of TomDispatch.com.
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