Per the textbook, p. 113 states “in the fringe economy, economic distress and low credit scores translate into high cost that are justified by the supposedly higher risk of serving poor or credit challenged population.” Moreover, on p. 118 “the poor pay more than the middle class for financial services…and the costs are aggravated by a dual financial system, one for the poor and one for middle and upper classes.” Where does this assumption, that someone who is poor is a higher risk, come from and how is the risk determined? Are there any policies in place to protect the poor from the fringe economy tactics?
Federman, M. et al. What Does it Mean to be Poor in America? 1996 (2009). Pp. 296-310
reality of not being able to make ends meet. (p. 262) The very real problem that Mr. Collinge and
On the other hand, if you are surrounded by an environment which revolves around drugs and bad influences, you have a bigger chance of falling into those same paths. I wasn’t poor but I wasn’t rich either, I was surrounded by an environment in which many people were in need of shelter and food because their families could not afford both. Just like poverty played a major role in my life, so did an ambitious and hardworking environment. Because those people I would see every day on the streets without food or a home, were the ones that had a bigger passion than anyone else, to one day be able to have a stable job and home for their family.
One of the most prominent concerns of Evicted is the issue of inescapable financial instability as it relates to eviction. In the very first few pages of the book, Desmond reveals that the majority of poor renting families in America spend over 50% of their income on housing, with an even more astonishing one in four spending over 70% of their income on it (4). When families are spending the majority of their already meager income on housing alone, it is no surprise that they have little money left for savings or self-betterment programs such as a college education. Compounded with this is the fact that some welfare systems are constructed in a way that discourages long-term financial responsibility. For example, Supplemental Security Income, a program that provides monthly stipends for low-income elderly or disabled individuals, is revoked if individuals have too much money in their bank account (217). For
In the Working Poor, David Shipler shows the different levels of poverty in the United States. Although many people work every day they still do not have enough money to live their lives comfortably or contently. In chapter 1, Money and Its Opposite, discuss the different people that worked hard their entire lives only to remain in or below the poverty line. For instance, in the book Shipler speaks of the disadvantages that the working poor are susceptible to. Often being taken advantage of from employers that do not give accesses that they are entitled to, the working poor are more likely to be audit than the wealthy, and become victims of cons that point toward money for a small payment, first. The many that live in poverty often overspend.
Shipler explains the effects of tax payments and refunds, the abuse of the poor by private and public institutions, the spending habits of the working poor, the culture of the U.S., and the presence of money as a factor in the lives of the working poor. In dealing with government bureaucracy or private business, the working poor are vulnerable to the abuse of con-artists, employers, financial service providers, and public service providers. Financial service providers can misguide or misinform their clients about their services or rights. For example,
Marshall (2005) identifies that “financial inequality” is not the solitary cause of “social inequality”, but it is often related. She suggests education plays a significant role in ‘class stratification’. Marshall (2005: p1), Part 2:
With each class comes a certain level in financial standing, the lower class having the lowest income and the upper class having the highest income. According to Mantsios’ “Class in America” the wealthiest one percent of the American population hold thirty-four percent of the total national wealth and while this is going on nearly thirty-seven million Americans across the nation live in unrelenting poverty (Mantsios 284-6). There is a clear difference in the way that these two groups of people live, one is extreme poverty and the other extremely
Poverty is more functional to the affluent members of society because they are the ones who benefit greatly from others living in poverty. In my opinion, there are a great number of people who are a part of the affluent society that lack compassion for others. This in turn results in them having more financial gains and people on the other end of the spectrum falling deeper and deeper below the poverty line. Members of the affluent society has also been known to utilize the impoverished to do the “dirty work,” which are strenuous low paying jobs that sometimes require an excessive amount of hours. Working these types of jobs, are not very beneficial to those living in poverty because of the downfalls they may cause on their households. Due to the amounts of hours that may be required, the impoverished often faces risks of losing their subsidies.
Even though people are created equally, there is a very difficult to change the class you were born into. Not only because of a lack of easy upward mobility, but also because people can become content almost anywhere. If someone is born into poverty there is very little likelihood of them wanting to leave their safety-net, or even seeing an opportunity for a way out of their impoverished life. Complacency and a lack of motivation are things that are more prominent in recent generations, and so these issues also affect the poor. Although many in poverty are hard working people, they can barely get by because of the lack of good full-time work. People have to work two to three jobs just to make enough to live on. The fact of the matter is that whose who need to work can find a job, but will it be a job that can sustain them? In all likelihood, no. Businesses cannot afford to pay their employees enough to live
...ear price and communication. If the financial services firms focus on providing special services to the mass affluent including bundles, the mass affluent will begin to take part in financial services at an even higher rate than the affluent. Banks must offer proper services and advisory services for which the segment is willing to pay for without feeling ripped off. Holding the 43 percent of the world’s wealth the mass affluent are underserved and deserve their time to have the same services offered in the banking industry as the mass affluent. If the banking industry provides outstanding services to the affluent, the American social system should not hinder the mass affluent segment from obtaining financial advice. It is time for a change in the American banking industry and the mass affluent are the future of the movement for an affordable lifestyle for everyone.
...f poor and the real barriers to their access to adequate services must be fully understood in order to resolve this problem. The subsidization for women's shelters and child care services are important to relive some of their financial burdens. Koppelman and Goodhart also suggested providing tax relief for the lower income families (2007).
When income inequality is prevalent in a society, financial intermediaries target high income earners. This helps them save money in terms of administrative and marketing costs. They only have to market their services to a smaller group of people. As stated in the article, high income earners have a low Marginal Propensity to Consume (MPC) so they save and invest more than low income earners. These savings and investments are the sources of funds for financial intermediaries. This is why financial intermediaries focus more on high income earners.
While demagogic statements like these have high emotive worth, they reflect resolute, near incurable stupidity about the sources of income. Listening to some of the talk about income differences, one would think that out there somewhere is a pile of money. People who are wealthy just happened to get there first and greedily took an unfair share. Justice requires that they "give back." Or, there's talk about income distribution. The way some people talk, unequal distribution of income means that there is a dealer of dollars who shells out $1,000 to one person, $100,000 to another and a million dollars to yet another. Thus, the reason why some people are wealthy while others are not wealthy is that the dollar dealer is a racist, sexist, a multi-nationalist, or just plain mean. Economic justice requires a re-dealing of the dollars, income redistribution, where the ill-gotten gains of the few are returned to their rightful owners.
The first and arguably most common effect of poverty on society is its financial impact (Veritta, 2008). In many of the societies that experienced significantly high levels of poverty, debt was increasingly common, and especially debt accrued from moneylenders (Hatcher, 2016). For many individuals living in poverty, access to financial services such as banking is often stifled and rudimentary, making it difficult for such individuals to access self-improvement loans at standard and fair rates (Yoshikawa, Aber, & Beardslee, 2012). For these individuals, moneylenders are the best option available, which results in them paying exorbitant interest rates. The interconnection between poverty and finance, however, is cyclic in nature. The lack of finances or access to financial services causes poverty, which in turn causes an isolation of individuals from finances and financial services (Hickey & du Toit, 2013). This makes poverty a fairly complex problem to