The High Cost of Poverty: Why the Poor Pay More

[Lunican]

The High Cost of Poverty: Why the Poor Pay More

Having Little Money Often Means No Car, No Washing Machine, No Checking Account And No Break From Fees and High Prices

You have to be rich to be poor.

That's what some people who have never lived below the poverty line don't understand.

Put it another way: The poorer you are, the more things cost. More in money, time, hassle, exhaustion, menace. This is a fact of life that reality television and magazines don't often explain.

So we'll explain it here. Consider this a primer on the economics of poverty.

"The poor pay more for a gallon of milk; they pay more on a capital basis for inferior housing," says Rep. Earl Blumenauer (D-Ore.). "The poor and 100 million who are struggling for the middle class actually end up paying more for transportation, for housing, for health care, for mortgages. They get steered to subprime lending. . . . The poor pay more for things middle-class America takes for granted."

Poverty 101: We'll start with the basics.

Like food: You don't have a car to get to a supermarket, much less to Costco or Trader Joe's, where the middle class goes to save money. You don't have three hours to take the bus. So you buy groceries at the corner store, where a gallon of milk costs an extra dollar.

A loaf of bread there costs you $2.99 for white. For wheat, it's $3.79. The clerk behind the counter tells you the gallon of leaking milk in the bottom of the back cooler is $4.99. She holds up four fingers to clarify. The milk is beneath the shelf that holds beef bologna for $3.79. A pound of butter sells for $4.49. In the back of the store are fruits and vegetables. The green peppers are shriveled, the bananas are more brown than yellow, the oranges are picked over.

(At a Safeway on Bradley Boulevard in Bethesda, the wheat bread costs $1.19, and white bread is on sale for $1. A gallon of milk costs $3.49 -- $2.99 if you buy two gallons. A pound of butter is $2.49. Beef bologna is on sale, two packages for $5.)

Prices in urban corner stores are almost always higher, economists say. And sometimes, prices in supermarkets in poorer neighborhoods are higher. Many of these stores charge more because the cost of doing business in some neighborhoods is higher. "First, they are probably paying more on goods because they don't get the low wholesale price that bigger stores get," says Bradley R. Schiller, a professor emeritus at American University and the author of "The Economics of Poverty and Discrimination."

"The real estate is higher. The fact that volume is low means fewer sales per worker. They make fewer dollars of revenue per square foot of space. They don't end up making more money. Every corner grocery store wishes they had profits their customers think they have."

According to the Census Bureau, more than 37 million people in the country live below the poverty line. The poor know these facts of life. These facts become their lives.

Continue:
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/17/AR2009051702053_2.html

[CrysG]

Lunican,

Great story. It will be interesting to see some of the replies.

[Sigma]

PLP, Lunican, PLP. 

It's a way for the poor to pay "their fair share" since they don't pay taxes.  Maybe the stores can charge more for malt liquor?  Or stop selling scratch-off tickets (which is just a waste of money) so they can have a few more dollars in their pocket.

Maybe we should tax the corner store more for making "wind-fall profits" off the "little guy".

I know CrysG - I'm un-caring, maybe even evil.

[Shwaz]

None of the poor have car's   

It's a 3 hour bus ride to less expensive grocery stores 

Only the poor got bamboozled by sub-prime mortgages 

"Corner store" is another name for "convenience store" - and they charge more than grocery stores in all neighborhood's not just the ghetto.

[CrysG]

It's a way for the poor to pay "their fair share" since they don't pay taxes.  Maybe the stores can charge more for malt liquor?  Or stop selling scratch-off tickets (which is just a waste of money) so they can have a few more dollars in their pocket.


Poor people don't pay taxes. This is news. I know a lot of "poor people" that might like to know that. What you really mean with your comment is that people who don't make as much money as you pay less taxes than you.

And last time I checked they sell malt liqueur and scratch off in Ponte Vedra too.

[CrysG]

None of the poor have car's   Roll Eyes

It's a 3 hour bus ride to less expensive grocery stores  Huh

Only the poor got bamboozled by sub-prime mortgages  Cheesy

"Corner store" is another name for "convenience store" - and they charge more than grocery stores in all neighborhood's not just the ghetto.


You might want to tell that to Sigma, he thinks all poor people do it sit around, drinking a 40 and scratching off lotto tickets with there government check.

[mtraininjax]

Sigma - You are not evil, you are just a capitalist and not a socialist, like the President.

We all pay takes, sales tax. No matter what you buy, except food is a little squirrly. What pushes my button are all the zealots who claim we need Gambling Addiction hotlines for the idiots who buy the scratch-off tickets. Promote the tickets, ala the State of Florida, only to open up gambling addiction hotlines. Its a big giant waste.

[Lunican]

This article was not about taxes, but thanks for sharing.

[JMac]

What is it about?  It costs more to shop at a corner store than at Sam's Club?  Very enlightening.

[Lunican]

I suppose it was written to give some insight into what its like to live in poverty in the United States.

It really wasn't a commentary on taxes or tax policy, or to focus hatred toward the poor.

[BridgeTroll]

Poverty exists across the globe and the costs of it are the same in every country.   I think President Johnson declared war on poverty.  Our definition is...

http://www.census.gov/hhes/www/poverty/povdef.html

http://en.wikipedia.org/wiki/Poverty_in_the_United_States

[BridgeTroll]

An Escape from Poverty... 7.5 minutes...

http://video.ted.com/assets/player/swf/EmbedPlayer.swf?vu=http://video.ted.com/talks/embed/JacquelineNovogratz_2009U-embed_high.flv&su=http://images.ted.com/images/ted/tedindex/embed-posters/JacquelineNovogratz-2009U.embed_thumbnail.jpg&vw=432&vh=240&ap=0&ti=494

[Doctor_K]

I think President Johnson declared war on poverty.

And we all see how well *that's* turned out, don't we?  Forty-plus years of pretty much negative progress, to the point of the fact that we still have stories like this making headlines. 

[vicupstate]

I think President Johnson declared war on poverty.

And we all see how well *that's* turned out, don't we?  Forty-plus years of pretty much negative progress, to the point of the fact that we still have stories like this making headlines. 

Poverty will never be completely eliminated but US  Poverty was cut in half by the War on Poverty, that link shows that.  So, actually, it turned out pretty successful in that regard.  Unfortunately, it also led to many bad unintended circumstances (absent fathers, dependency, etc.) which the reforms of the '90s helped to correct.

The vast majority of the population is only a couple of missed paychecks away from serious financial distress.     

Sigma, you are not evil, just uninformed, if you think the poor don't pay taxes.  They pay sales taxes, payroll taxes on every dollar they earn, gas tax, property tax (either directly or indirectly through higher rent), and just about every other tax that is levied except income tax.  When all taxes are taken into account, the poor pay a much larger share of their income in taxes, than the wealthy. I would suggest less time listening to Rush and Sean.  Maybe then you won't get such a warped view of reality. 

Lottery tickets, alcohol, cigarettes and sub-prime loans are much more heavily marketed to the poor, which is one reason they spend more money on them.  Another reason is the escape or dream of a better life (lotto) that they offer.  An appeal that they are more receptive to because of their condition.     

[BridgeTroll]

I would venture to guess that most poverty in the U.S. is self induced.  Failure to take advantage of educational opportunities... early involvement in crime, early drug and alcohol abuse.  ANY person born into poverty in this country can rise out of it.  It is done every day and by people of all colors and ethnicity.  This is where America differs from other countries...