The thread over in General Questions regarding the use of hard checks got me thinking about something that is odd and pretty consistent where I work.
Our office has about 20 or so employees. We have many different races, colors and creeds represented in our small number. Our company offers direct deposit and currently everyone takes them up on that but the five African Americans that work here. When a new employee starts, they are offered the election of having direct deposit. It seems that all new employees take them up on it but the African American new hires. These folks aren’t friends or connected in anyway that I know of except by skin color. I have been here for many years, have seen people come and go and this doesn’t seem like a fluke. Is it a cultural thing that I am unaware of or this huge coincidence that keeps happening? I will offer that we all work in some capacity of health care if that helps in anyway.
You haven’t said what industry or field your office represents or where these Blacks fall in terms of job category, hierarchy or education, so I’ll take a WAG.
I’m sure part of it starts with a basic working class misunderstanding of the mechanics of direct deposit, plus a fear that something will go wrong and they can’t get access to the proceeds of that next paycheck many desperately look forward to each period period. It also can go all the way to a historical mistrust by Blacks of institutions and beauracracies having that kind of control over their money and finances, given shit that’s happened in the past.
I don’t think it is necessarily race related. At lower ends of the economic spectrum, avoiding wage/bank account garnishments can be a concern. A direct deposit to a bank account is relatively easy for a creditor to garnish. A hard check can be taken elsewhere for cashing–albeit usually for high fees. Even if your coworkers are not in economic distress, they may know someone who is or has been, and that experience may lead to their reluctance…
I think this combined with a distrust of banking institutions by people in certain economic circumstances, rather than race, is true.
I also think of the times I’ve been at a Vegas casino on Fridays. A lot of the “local” casinos offer people a chance at a particular jackpot if they cash their paycheck at the cashier’s window. People may just want some flexibility with their paychecks.
I remember hearing that a lot of poor people only deal in cash. They go around to various locations and pay their power bill, phone bill etc, all in cash. That seems to be a lot more effort to pay a bill but they do it anyway. Around here Hispanics are targeted for home robberies because they are known to keep a lot of cash at home.
I can see what’s going on here, but its kind of hard to put into words. I’ve seen this mostly with folks who are a little financially naive, have been burned a bit by banks, or are young. When I was in grad school, those of us who were coming back into academe after a while in the private sector were glad to have direct deposit. The younger folk who had always been in college were incredulous at this; I remember a chorus of them exclaiming “I want a CHECK” in unison. Conversely, my dad, who’s never used an ATM, is a little peeved that he never sees his paycheck–direct deposit is mandated where he works.
I don’t thing garnishing per se is the issue; folks who don’t have a lot of trust in financial institutions–or e-commerce–tend to be very leery of a concept as abstract as direct deposit.
Why even offer the option of a hard check vs direct deposit? The places I have worked don’t. The place my wife works doesn’t.
We gave new hires the instructions, which was to set up a bank account and provide the routing number or just provide a voided check for a current account. They could get paid via hard check for 2 pay periods if needed. It could go into a savings account if you had lousy credit and couldn’t get a checking account.
Third payday rolls around and no check?! We told you, now get it done and you will get paid. Or don’t you want to work here?
Maintaining 2 sets of payroll and printiing checks was not something we were going to do. We just phoned the hours in to ADP.
Some people prefer to have cash in hand, especially if they or another family member or friend have been screwed by direct deposit in the past. If you’ve never read the book The Broke Diaries by Angela Nissell I highly recommend it. In addition to just being broke she dealt with a lot of financial crap that most of us have never experienced. At one point she used her debit card to try and make some phone calls to a friend who was late picking her up and didn’t realize that there was a huge charge to do so and was charged $300 in bounced check fees. The bank took their fees out of her student loan check before she had a chance to discuss the situation with them and she wasn’t able to pay her rent. She came up with a pretty ingenious way to get around only having a partial rent payment for that month, but you only need to have something like that happen to you once to forever have a distrust of banks.
I just wanted to mention that I was not implying that there was something specific to Blacks when it came to being leery of DD but, in responding to his specific question, was trying to describe some things that might be specific to their experiences but not exclusively or racially driven.
That is definitely the behavior of people that come from a poor upbringing who live hand to mouth. The idea that any kind of glitch could prevent them from accessing their money is a real fear when you barely make enough to survive. Anyone who lives like that has heard horror stories of someone (whether they are true is a different issue) suggesting that a glitch caused their life to be destroyed rather than anything that person did.
Here in San Diego, some of the Asian families also hoard money instead of using banks, leading to them being targeted by Filipino and Vietnamese gang members in home invasions, though I haven’t heard about one of those happening in quite a while. Then again, these same people have a terrible fear of law enforcement, so they may also go unreported.
I don’t think it’s a color issue, but rather a money issue. With cash, you have what you have, and when it’s gone, it’s gone. With a bank account and it’s fees, you may never be quite 100% certain how much money is in there. You are also NOT seeing and experiencing the cash flow, so it’s easy to think “here’s my card” without first thinking of what you have to pay for out of that account. Thus, if you mis-spend at the wrong time, as with the person above, you can be seriously fucked over by bank charges. A hundred or two in fees when you don’t have the money and are living paycheck to paycheck can have a ripple effect that impacts more than one area of your life and seriously inconveniences you. After that, it’s easy to go back to “I have this cash in my hands” while at the same time remembering how much the banks raped you because you messed up by a couple of bucks.
Right now, I’m in a Cash and Money Orders mode because I completed bankruptcy a couple of months ago and have no bank accounts. Nor can I get one, because I owed on two different bank accounts that got charged off. I’m being told that I won’t be able to get another bank account for at least a year after my discharge. While I’d like to get back to dealing with checks and direct deposit, I can kinda see where just dealing with cash could be mentally easier.
When I started my job at a local pharmacy chain, I asked about Direct Deposit. I was told by the owner that he didn’t offer it because a lot of our employees didn’t even have checking accounts. Sounds crazy to me.
If you’re not good with money, banks can be a real pain. A few overdraft or declined fees because you didnt track your bills, and cash can pretty quickly seem like the way to go.
There are certain African American communities that are very distrustful of banks. If you grow up in a poor community in which nobody puts their money in a bank, you are less likely to think of banking as a normal part of life. From a 2007 Washington Postarticle:
I did volunteer work with an African American woman who was extremely mistrustful of banks. She did have some savings in a bank, but carried most of her money in rolls hidden on her person – in her socks, pinned to her bra, etc.
From what I saw when the company I worked for years and years ago went to direct deposit, some people didn’t trust it(the envelope thing[li]), some people couldn’t get a bank account since they owed other banks, some didn’t have bank accounts since they didn’t want to show up on the radar as having money due to back child support. [/li]
The week of 9/11/2001 was a fun(ny). That was a Tuesday, IIRC, checks where flown in on Fed Ex from across the country on Wednesday night. My money was in my account Thursday morning at 12:01 AM. The ones that didn’t have direct deposit due to whatever didn’t get their checks until the following Tuesday or Wednesday.
I don’t think this one is a racial deal. I hate and distrust banks more than anybody in the world, but if my deposit goes missing I would rather it be my employer saying that “you took the money out of my account” vs my word against a bank teller.
the envelope thing… My grandmother does this. X dollars goes in whatever envelope to pay for whatever. Every week, $13 in the cable envelope. $12 in the property tax envelope. $32 in the heating envelope. $10 in the vacation envelope. $8 in the vet bill envelope. Works great until somebody (my grandfather) steals it all.
A lot of black people and their extended families struggled up from the underclass, even if they have professional jobs now. In those circumstances they would probably experience the scenario of a lot of their family and peers being chased for debts. In that context they would understand the vulnerability of money in accounts and not in your hand, to bill collectors and similar entities.
Even if they have money now, having that money in hand is more reassuring than having it transmitted there.
Yep, but more common than you’d think. There’s a whole stratum of people out there who can’t qualify for a bank account due to bad credit or (nod to AZ) immigrant status.
When I started on my current job (the second time around), I was in an orientation with a group largely hired for Spanish-language customer service. When the HR person passed out the direct deposit forms and informed the group that direct deposit was manditory, I saw more than one face exhibit that familiar “whatamIgonnado” panic.