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   From: o@o.org   
      
   The High Cost of Being Poor   
      
   By Barbara Ehrenreich, AlterNet. Posted July 21, 2006.   
      
   From food prices to auto insurance, when did poverty get so expensive?   
      
   There are people, concentrated in the Hamptons and Beverly Hills, who still   
   confuse poverty with the simple life. No cable TV, no altercations with the   
   maid, no summer home maintenance issues -- just the basics like family,   
   sunsets and walks in the park. What they don't know is that it's expensive   
   to be poor.   
      
   In fact, you, the reader of middling income, could probably not afford it. A   
   new study from the Brookings Institute documents the "ghetto tax," or higher   
   cost of living in low-income urban neighborhoods. It comes at you from every   
   direction, from food prices to auto insurance. A few examples from this   
   study, by Matt Fellowes, that covered 12 American cities:   
      
      
     a.. Poor people are less likely to have bank accounts, which can be   
   expensive for those with low balances, and so they tend to cash their pay   
   checks at check-cashing businesses, which in the cities surveyed, charged $5   
   to $50 for a $500 check.   
      
      
     b.. Nationwide, low-income car buyers, defined as people earning less than   
   $30,000 a year, pay two percentage points more for a car loan than more   
   affluent buyers.   
      
      
     c.. Low-income drivers pay more for car insurance. In New York, Baltimore   
   and Hartford, they pay an average $400 more a year to insure the exact same   
   car and driver risk than wealthier drivers.   
      
      
     d.. Poorer people pay an average of one percentage point more in mortgage   
   interest.   
      
      
     e.. They are more likely to buy their furniture and appliances through   
   pricey rent-to-own businesses. In Wisconsin, the study reports, a $200   
   rent-to-own TV set can cost $700 with the interest included.   
      
      
     f.. They are less likely to have access to large supermarkets and hence to   
   rely on the far more expensive, and lower quality offerings, of small   
   grocery and convenience stores.   
      
   I didn't live in any ghettoes when I worked on Nickle and Dimed --a trailer   
   park, yes, but no ghetto -- and on my average wage of $7 an hour, or about   
   $14,400 a year, I wasn't in the market for furniture, a house or a car. But   
   the high cost of poverty was brought home to me within a few days of my   
   entry into the low-wage life, when, slipping into social-worker mode, I   
   chastised a co-worker for living in a motel room when it would be so much   
   cheaper to rent an apartment. Her response: Where would she get the first   
   month's rent and security deposit it takes to pin down an apartment? The   
   lack of that amount of capital -- probably well over $1,000 -- condemned her   
   to paying $40 a night at the Day's Inn.   
      
   Then there was the problem of sustenance. I had gone into the project   
   imagining myself preparing vast quantities of cheap, nutritious soups and   
   stews, which I would freeze and heat for dinner each day. But surprise: I   
   didn't have the proverbial pot to pee in, not to mention spices or   
   Tupperware. A scouting trip to K-Mart established that it would take about a   
   $40 capital investment to get my kitchenette up to speed for the low-wage   
   way of life.   
      
   The food situation got only more challenging when I, too, found myself   
   living in a motel. Lacking a fridge and microwave, all my food had to come   
   from the nearest convenience store (hardboiled eggs and banana for   
   breakfast) or, for the big meal of the day, Wendy's or KFC. I have no   
   nutritional complaints; after all, there is a veggie, or flecks of one, in   
   Wendy's broccoli and cheese baked potato. The problem was financial. A   
   double cheeseburger and fries is lot more expensive than that hypothetical   
   homemade lentil stew.   
      
   There are other tolls along the road well-traveled by the working poor. If   
   your credit is lousy, which it is likely to be, you'll pay a higher deposit   
   for a phone. If you don't have health insurance, you may end taking that   
   feverish child to an emergency room, and please don't think of ER's as   
   socialized medicine for the poor. The average cost of a visit is over   
   $1,000, which is over ten times more than what a clinic pediatrician would   
   charge. Or you neglect that hypertension, diabetes or mystery lump until you   
   end up with a $100,000 problem on your hands.   
      
   So let's have a little less talk about how the poor should learn to manage   
   their money, and a little more attention to all the ways that money is being   
   systematically siphoned off. Yes, certain kinds of advice would be helpful:   
   skip the pay-day loans and rent-to-pay furniture, for example. But we need   
   laws in more states to stop predatory practices like $50 charges for check   
   cashing. Also, think what some microcredit could do to move families from   
   motels and shelters to apartments. And did I mention a living wage?   
      
   If you're rich, you might want to stay that way. It's a whole lot cheaper   
   than being poor.   
      
   Barbara Ehrenreich is the author of 13 books, most recently "Bait and   
   Switch: The (Futile) Pursuit of the American Dream." This piece first   
   appeared on her blog.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)