“Anyone who has struggled with poverty knows how extremely expensive it is to be poor.” – James Baldwin
How expensive could it be to be poor in 21st century America? Isn’t poverty the ultimate cost saver? Actually, it’s not – far from it.
A few years ago my wife and I decided to move from a middle-class suburb of Boston to a poorer, post-industrial satellite town. Our new apartment was comfortable and modern, we liked our neighbors and nothing I observed made me think the neighborhood was unsafe.
So it was a shock to learn during the change of address process that our annual auto insurance premium had increased by a thousand dollars. Our agent told me the reason was our new address. The rate of car thefts and accidents involving uninsured drivers was higher than in our former city. A thousand dollars for a zip code!
I believed auto insurance was a statewide risk pool, like it was when Massachusetts originally became the first state to have mandatory auto insurance. But the Commonwealth is now one of many states that allow insurers to discriminate geographically.
Drivers who live in higher crime – ie poorer – zip codes or have low credit scores (also a sign of poverty) are considered to be at higher risk. So insurers are increasing their premiums and cutting their coverage. People who live there, who may never be the victim or cause of an insurance claim, need to factor those extra thousands into their annual expenses. For many of my neighbors, this corresponds to a 13th month’s rent. In poor cities, annual premiums are quoted up to 500 percent higher than in rich ones.
Since that disturbing discovery about higher car insurance premiums, I’ve often noticed another heavy cost being imposed on the poor – the poverty taxes, as I see them. Examples include food prices in small urban grocery stores with no supermarkets nearby; rental housing or housing facilities; higher apartment rents per square foot; and higher flood insurance rates in less affluent coastal Massachusetts cities.
Those denied car ownership have to pay for taxis to get to the grocery store, doctor’s visits and even job interviews. (Cabs, which can be a small luxury or a corporate tax deduction in Manhattan or Boston, are the mode of transportation of poor people in low-income neighborhoods.) Pedestrian street conversions for urban renewal often result in injuries and subpoenas. Employment opportunities are limited because getting to work is so much harder.
For those with low-paying jobs, there are severely cut family and sick leave benefits. Part-time or contract jobs often bring no benefits at all. Working poor with children pay as much for childcare as middle-class parents, which can account for a much larger percentage of their income.
Even government support comes with higher costs for the poor: stricter drug reporting requirements and bans on Medicaid prescriptions in areas with high drug-related crime rates; housing subsidies that actually increase the basic rent; Income limits that penalize employment.
Mere access to the banking and credit system is often a barrier for poor people, as there are few bank branches in their neighborhood and overdraft fees take a disproportionate percentage of a small balance. For those without access to a bank account, the alternatives are notoriously rampant payday loans and check cashing fees.
Then there are the punitive costs of the legal system in which a greater proportion of the poor are trapped: cash bails, increased fines for late payment of court fees, the scandalous profiteering of phone calls to and from jails and jails.
All of these costs and many more are not just inconveniences or inconveniences brought on by poverty in America; it is a direct monetary cost out of pocket. When viewed as a percentage of income spent on basic needs, they can be enormous. (Those thousand dollars of increased auto insurance account for 3.3 percent of a $30,000 income, but only 0.7 percent of a $130,000 income.) In addition to the increasing difficulty of moving from the lower class to the middle class, together they represent a huge obstacle to the pursuit of happiness for millions of poor Americans.
The theme that the rich earn more than the poor runs through American history. But this is more than a political issue; it’s a moral one. America subsidizes the wealthy and their neighborhoods in many ways: better public schools, superior infrastructure, lower interest rates, tax deductions for business pleasures, to name a few.
When did we give up fairness? Why have we added the burden of a higher cost of living to the many disadvantages of poverty? What exactly is the moral code that directs us to punish the poor for their poverty and penalize the less fortunate for the inadvertent crime of having the wrong zip code?
Jonathon Nix is a multimedia freelancer based in Becket and Lawrence. He would like to thank FranAllen Acosta, co-founder of the non-profit Mi Casita, which operates Lawrence Housing, for her help and support.