Systemic Poverty

Poverty is a weird issue for me. I see so many facets to the problem. On one hand, I have the tax clients who ask every year, "what's the most money I can make and still get the earned income credit?" The people who proudly proclaim all the ways as to how they are able to cheat the government and everyone else. And then there's those who work so hard, trying to get ahead, trying to better their situation. Or maybe they don't know what they need to do. But they hate where they're at.

The problem is that society is structured in such a way that the poor are kept poor. For example, the enterprising person who decides they're going to open a savings account. These days, more and more banks are requiring a minimum balance without fees-usually around $300. Sounds great, right? But see, most poor people can't afford that. For them, to even be able to save $25 or $50 is a lot of money. Most banks won't let them do that.

Last year, I opened a savings account. I was pretty excited that I was able to set aside some money for a rainy day. Unfortunately, as happens in his industry, my husband was laid off, and we needed to use some of the money. What the bank didn't tell me was that if I didn't have a certain balance, I'd be charged fees on the account. A few months later, I get my statement, and the money I'd worked hard to save was gone. I closed the account today, and of course, they charged me another fee. Two hundred dollars whittled down to $75 in six months-all because of the fees I was charged.

Some of the training I had to go through at work looked at the cost of being unbanked. The average person who does not have a bank account spends roughly $1200 in check cashing and money order fees each year.

When you're living paycheck to paycheck, neither option is really good-you can't afford the minimum balances or bank fees, and yet it costs money to get to (and spend) the money they've earned. What could these people do with the money that they're wasting on all the expenses associated with being too poor to use their own money?

And then there's this letter we got from the insurance company. Our policy was reviewed, and... based on our credit report, we didn't get their best rates. Which, I don't understand, but apparently that's the shift the insurance industry is making. The insurability of a person is dependent on their credit report. My husband and I, who have a pretty good credit score, don't get the best rates. So we asked why. One of the major issues is lack of credit history.

Let's break down this lack of credit history-ours is based on the fact that we have an account that's less than five years old. Of course a lot of poor people don't have credit. I talk to these people who proudly say that they don't have credit cards or car payments or debt. Guess what? That's a black mark on their credit history. For every little thing that's seemingly wrong on your credit report, that's a ding.

So now, we have people who are trying to improve their situations, but the system is structured in such a way that they are kept poor. They pay higher fees for banking, can't get a decent credit score, pay higher insurance rates, and when they do get credit, say to buy a house or a car, or even a credit card of their own, they're going to pay higher interest rates. Less money they have to spend on basic living, not to mention on improving their situation.

What frustrates me the most is that as much as I want to help people get out of a bad situation, the system is structured in such a way that they can't. Not without a lot of time, and a lot of work. As much as I lament our financial situation, the truth is, we're better off in a lot of ways than a lot of people. And I wonder-just how can I really help, when throwing dollars at the problem isn't enough? How do you fix a system that is structured to keep people poor?

I don't have any answers, just needed to vent. I'm so angry because yes, I work hard for what we have, and it stinks that as hard as we work, we can't get ahead. But you know what? We're fine. I can't imagine, though, what it's like for people who aren't as well off. My heart hurts for those who aren't as fortunate as we. And I don't know what to do about it.