This is a guest post by Will Sanford. Will is a Housing Research & Policy Analyst at Housing Opportunities Made Equal in Richmond VA. He is currently a PhD candidate in the Wilder School of Government & Public Affairs at Virginia Commonwealth University. This post was originally published on the blog “Take Me Home Virginia“.
In America, we have a unique perspective of the poor. We often tend to blame the person for being in that situation while looking past the systems that perpetuate poverty. Poverty is a dynamic issue and to understand it is not so simple. Not because it’s complex (though it is), but because we use ignorance and blame to avoid addressing it.
According to one survey:
“while 60% of European citizens subscribe to the view that the poor are trapped in poverty, only 29% of Americans share this view. Conversely, 60% of Americans believe the poor are lazy, as compared to 26% of European citizens.”
Never mind a discussion about why so many Americans think that poverty is a personal choice. That discussion could last years and ultimately get us nowhere. Instead, it is easier to discuss poverty in terms of who has access to the types of things that most of us take for granted; things like electronics, furniture and access to credit.
In America, and yes, even in our own community, low to moderate income folks are being charged a premium for everyday goods – just because they are poor. Certainly, we are quick to point out that those who use services that a middle class person would not even dream of (like paying $2000 for a $1000 loan or $2500 for a $600 tv), do so because they have bad credit. Bad credit must be 100% the fault of the person, right? There couldn’t possibly be any retail establishments or financial institutions that trap people in a cycle of poverty, could there? It is illegal to exploit the poor, isn’t it? The differences in access to these things vary dramatically by neighborhood and many of us never quite understand exactly what a poor person faces when they seek to make a seemingly simple purchase of, let’s say, a television.
Recently, a coworker and I made a trip to Southside Plaza in Richmond (which is at the intersection of Broad Rock and Hull Streets) to get a better understanding of exactly how poor people get charged a premium for being in poverty. This shopping center is located at the confluence of two major thoroughfares that connect some of the poorest areas of the city. Of 44 shopping establishments, there is only one major bank (a Wachovia), but three payday lenders, one check cashing place, five fast food restaurants, a plasma bank, a liquor store, a tax service (who, by their own admission do a majority of their business with refund anticipation loans that charge up to 125% interest) and four rent-to-own establishments.
My coworker and I decided to see how much a household’s income had to be in order to rent a nice television. While she posed as a someone who had recently been fired from her job and I posed as a disabled veteran who had just returned from my second tour in Iraq, I indicated to a rent-to-own employee that I receive only $500 per month (PER MONTH!) in disability pay. I discussed that I had severe mental trauma from my time in the Middle East and that I didn’t know how long my disability would last, but I just wanted to get a television for our new one room apartment. Here is how the conversation went:
Me: So, I just make about $500 a month in military disability – what can I qualify to rent from you all? That’s a nice tv there, how much?
Employee: $39.99 per week… do you have a stand to put it on?
Me: Nope, not stand. How much per month?
Employee: Well, let me check on what kind of a deal I can get for you. How much do you want to spend at a maximum?
Me: Around $150 – again, you don’t have a max amount you’ll rent to me since my income is so low?
Employee: Nope, as long as you are comfortable, that’s all.
Me: Oh, and my credit is wrecked, is that cool?
Employee: Yep, no credit check allowed, just need a proof of your residence and disability verification. People on disability rent from us all the time so it’s no problem.
Me: Well that makes me feel better that you rent to people on disability. Thanks… Let me know what kind of deal you can get me – again, just want to spend around $150.
[wait about 3 minutes]
Employee: Well, I can get you that 52” tv with a stand for $179 per month…. How about that?
Me: Let me think about it.
Employee: Well, let me get you an application..
Me: Thanks – I’ll be in touch.
If we charge people so much for something as simple as a tv, what kind of access do they have to things like housing or even healthcare?
While it might be easy to think that this is an isolated incident, we went to four different rent-to-own places that day and every single one gave us the same story – no credit, low-income, no problem. We also went into a car title loan place where I was quoted an annual interest rate of 120% or more. At a tax service place, I was quoted an interest rate of 125% if I wanted to get my tax refund TODAY. When asked what percentage of customers get the ultra-high-interest refund anticipation loans, the employee said ‘the majority of all of our customers’. To every place we went that day, we got the same feeling; we were being charged more because we were poor. Even when reporting that I was a disabled veteran that served two tours in Iraq with a measly $500 per month in income, I was told the same thing: ‘you’re approved…. But it’ll cost a bit more than everyone else.’
It’s easy to disregard these examples and think that someone can easily work their way out of poverty and that opportunity abounds for all. However, when we place such a premium on those who are poor (paying $179 per month for a tv when I’m making $500 in disability income, or paying 125% for a small loan to make ends meet), the prospect of success and moving upward through society becomes bleak. Instead, people become trapped in poverty while an entire segment of our economy prospers at the expense of those who “made the personal choice to be poor”. Heck, 60% of Americans can’t be wrong. Can they?