Yup, I think the author of nickel and dimed talked about this.
On a per night basis, a nightly rental is more expensive than a weekly rental. A weekly rental costs more than a monthly rental. A monthly rental costs more than a year long lease, a year long lease costs more than a 15-30 year mortgage.
Long long ago, a friend offered the trivial example of a can opener. An affluent person buys a quality opener that will last for years. A poor person is stuck buying the cheapest flimsiest one available, knowing it will soon be discarded.
I recall a joke. Man lectures a homeless man who’s just bought a can of beer: “It’s cheaper by the six-pack.” The man points out that he lacks a frig and anyway would have to split the six-pack with all his homeless buddies.
Or you could have a medical emergency, that even with insurance has deductibles/co-pays that are more than your income. Even if it’s not the medical bills directly, it could be something like you let a credit card default so you could pay your medical bills or you maxed out buying groceries, etc. happened to me about 7 years ago. Didn’t want to file BK; maybe I should have in retrospect but it all “worked out” I guess.
If they lack access to a regular bank, they probably have to use a check cashing company. These are businesses that cash paychecks but require a fee. So poor people end up having to pay to get their own money.
And if they’re paying bills, they have to use money orders, which cost a fee, instead of paying with checks or making online payments.
One thing my employer does (realizing that many employees are low-income, especially when they start) is give them a bank account, with a debit card AND access to checks, along with their first paycheck that doesn’t charge fees for low balance accounts. I’m not going to oversell it - there are a few drawbacks - but the point is that it allows the employees to access their money at no charge and pay bills without money order fees. This is given to all employees, including part-timers.
Some folks are so unfamiliar with this sort of money management they need coaching. They’ve never had a bank account and in at least instance I know of no one in their family had ever had a bank account. It was very much a new thing for them. Sort of flabbergasted me, but then, I’m from a white, middle-class background and I’ve always had a savings and/or checking account from around age 8 (that was savings - I didn’t get checking until I was 18).
Deferred maintenance (house, car, body) can turn into expensive emergencies.
I would expand this in that what credit you can get often has a much higher interest rate (and/or fees) than what is available to others. I paid a lot of money for money once when I had a cash flow misalignment.
I thought of another one prompted by a different post. If someone is arrested for a bondable crime and they have to resources to post bond they get their bond refunded if they are found not guilty. If they lack the resources they either stay in jail or go to a bondsman and usually pay 10% of the bond to have the bondsman put up the bond. That 10% is not refunded, the bondsman keeps that as a fee for his services.
So if the bail is say, $25,000 and you’ve got it, it’s olly olly oxen free, if you don’t have it; you’re out $2,500.
I live in an apartment complex with washers and dryers in a laundry room, paid for by a prepaid chip card. At $1.50 a load, it’s not a hardship for me, but I could see how it could be, especially for families with young, messy children. There used to be someone in my building who would hang their laundry to dry off the balcony, and another neighbor reported them because we really weren’t supposed to be doing that. I sure didn’t say anything, because this might well have been a family who said, “Do we eat, or do we machine-dry our clothes?” (and probably washed them in the bathtub). Tell you what, if I were faced with a choice like that, I’m gonna eat.
They probably wouldn’t have been “poor” if they brought their paychecks home, which like you said is another problem. That armored car company knew they had a good thing going.
“The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”
-Anatole France
I did all those when poor but not since. And I found that surprisingly few weeks’ patronage of laundromats will pay for a used washer and dryer, if there’s space for them.
I worked casual labor long ago via a daily-work agency in Manhattan. The owner wrote checks every day to all who earned them. Many casual laborers lacked ID or even citizenship. Luckily, the owner’s brother ran the bar next door and would cash checks if beer was bought. That’s keeping it in the family, right?
When you’re poor, everything is overpriced because you can’t afford economies of scale or access. Cheap, shoddy stuff wears out fast. Cheap, shoddy foods don’t nourish. Preventative care is beyond reach. Rents and fares rise. And of course you feel little self-esteem. You wouldn’t be poor if you were a worthwhile person, sez society. To be poor is to be shit.
Overdosing is the easy way out.
When you can’t afford bank fees to cash checks, that pay check is nothing more than a piece of paper. Your first sentence is callous and untrue. They can bring all their paychecks home and stick them on the wall - doesn’t make them any less poor.
Walmart will cash checks. I checked - $4 for checks up to $1000. Over $1000, it’s $8. So hardly 15%
StG
If you are arrested for a crime you didn’t commit and can’t post bond/bail you stay in jail. That could get you fired from your barely scraping by job.
If a prospective landlord runs a credit check and your credit is bad, they can demand a higher security deposit.
Exactly. Minimum wage is still $7.25 an hour, and lots of places still pay it. That’s, what $14,500 a year? After taxes you have sweet fuck-all.
And as far as buying, dude, I make $15.41 an hour. Any house I could afford in Tucson is in an area I will not live.
I agree that’s one aspect of possible confusion about such an argument, ‘renters subsidize owners’. It’s true that most rental properties are owned by people doing it at a significant to large scale. But even besides that, no renter under a normal cash rent lease subsidizes the owner of the property they rent via owner imputed rent on that property. Because the owner by definition is collecting cash (taxable) rent, not implicit (non-taxable) owned imputed rent.
The idea is that renters in general are subsidizing owners in general. However I think this argument like many similar leaves out a key aspect which seriously undermines it. It assumes there’s no impact on the ratio of prices to rents from tax benefits to one or the other. Lets say next year an enlightened Congress implemented a tax on owner imputed rent as ordinary income (for the sake of argument, ignore fo the moment likely overwhelming political opposition as well as serious practical issues in implementing and enforcing such a provision). That would, obviously, lower the price of homes, which would now be much more expensive to carry. And Hari Seldon left out in the original argument the fact that owned houses also have to be paid for in after tax dollars. So buying wouldn’t necessarily be less attractive than now if there as a tax on owner imputed rent: it would take fewer after tax dollars to buy the home at the new lower market equilibrium price for homes, although more future taxes would be due on the owner imputed rent. In a reasonably efficient market you might expect those effects to largely wash out over all people needing a place to live, although it would be a big wealth transfer away from people who own homes (which they live in) now (and therefore it wouldn’t happen politically).
Also back on practicality, an owner imputed rent tax would have to give an allowance for depreciation or else no longer allow a depreciation allowance for renting for profit, so big communities of owners, owner occupied or rent for profit, against one or the other of those options. In high value markets (that internet discussions disproportionately focus on) the depreciation allowance makes the tax on net income quite low for those renting for profit. In NY Rent Stabilized market for example (over 1mil units) rent minus cash expenses minus depreciation is close to zero. The owners are making current cashflow, rent minus cash expenses, and hoping to profit from market price appreciation.
If you only work 40 hours a week on average, which I’ve certainly never done.
Although many jobs end up locking up so much time due to just-in-time scheduling that it’s impossible to work a second job.
I’m not buying it. My family has a history of driving cars into the ground, and we were never really in fear of our annual safety inspections. My current car is 15 years old, and hasn’t failed an inspection yet.
Of course, if you can’t afford to maintain your cars to the minimum safe standard mandated by the state, then yeah, they’re going to find stuff that needs fixing. Which is a GOOD thing, not a bad one. These things are safety issues for everyone else, not only the driver.
Look at it this way- yeah, the inspection may find that your tires are bald and require you replace them. Which may suck for you if you can’t afford it, but that’s YOUR problem. If you drive on them anyway, or you don’t inspect for that sort of thing, you are putting others at risk. Same with wiper blades, brakes, lights, etc… they’re as much about other drivers as about yourself.
If you can’t afford to keep your beater in safe shape, then take the bus.
Likewise if you can’t afford license and insurance.
Did you read any of the rest of my post that you quoted from? It’s literally explained there.
The subsidy is through the tax code. Those who rent end up paying more of their taxable income over the long term for the service, and they are taxed more on it. Those who own aren’t because the service their owned thing provides isn’t taxable income.
Some states include both emissions and safety tests as part of the inspection. I agree that a safety inspection is important for the reasons you mention. But the emissions test can often flag things that aren’t really that important. In my state, the test fails if the check engine light is on. But the light can be on for any number of issues, and not all will affect things like safety or emissions. Some error conditions may be related to performance sensors or things that the driver doesn’t care about getting fixed. Many of those things cost hundreds of dollars to fix.
As a fellow driver of old cars (~20 years old), I’m always worried about having that check engine light pop on just before the inspection expires. I’m fortunate enough to be able to get anything fixed, but I don’t want to spend hundreds of dollars to fix something that won’t really make any significant difference to the car. This would be a much more serious concern if I didn’t have the money to get the car fixed.