Signs for cash-advance companies, pawn shops and other businesses line… (Stephen Morton / Associated…)
Individually, the poor are not all that tempting to thieves. Mug a banker and you might score a wallet containing a month's rent. Mug a janitor and you'll be lucky to get bus fare to flee the crime scene. But the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them.
The trick, however, is to rob them in ways that are systematic, impersonal and almost impossible to trace to individual perpetrators.
Lenders, including major credit companies as well as payday lenders, understand this. They have taken over the traditional role of the street corner loan shark, charging the poor insanely high rates of interest. When supplemented with late fees (themselves subject to interest), the resulting effective interest rate can be as high as 600% a year, which is perfectly legal in many states. Gary Rivlin, who wrote "Broke USA," calculated that the poor pay an effective surcharge of about $30 billion a year for the financial and banking services they use.
Employers too have found ways to enrich themselves off the poor: by taking money from their employees. Kim Bobo documents in her book "Wage Theft in America" how U.S. employers pocket at least $100 billion a year through such things as requiring employees to work hours for which they're not paid, failing to pay minimum wage and refusing to honor overtime pay differentials.
And it's not just the private sector that's preying on the poor. Local governments are discovering that they can partially make up for declining tax revenues through fines, fees and other costs imposed on indigent defendants, often for crimes no more dastardly than driving with a suspended license. And if that seems like an inefficient way to make money, given the high cost of locking people up, a growing number of jurisdictions have taken to charging defendants for their court costs and even the price of occupying a jail cell.
The poster case for government persecution of the down and out would have to be Edwina Nowlin, a homeless Michigan woman who was jailed in 2009 for failing to pay $104 a month to cover the room and board charges for her 16-year-old son's incarceration. When she received a back paycheck, she thought it would allow her to pay for her son's jail stay. Instead, it was confiscated and applied to the cost of her ongoing incarceration.
In 2009, a year into the Great Recession, I started hearing complaints from community organizers about ever more aggressive levels of law enforcement in low-income areas. Flick a cigarette butt and get arrested for littering; empty your pockets for an officer conducting a stop and frisk operation and get cuffed for a few flakes of marijuana. Each of these offenses can result, at a minimum, in a three-figure fine.
And the number of possible criminal offenses leading to jail and/or fines has been multiplying. In New York City, it's now a crime to put your feet up on a subway seat, even if the rest of the car is empty. And a South Carolina woman spent six days in jail when she was unable to pay a $480 fine for the crime of having a "messy yard." Some cities — most recently, Houston and Philadelphia — have made it a crime to share food with indigent people in public places.
Being poor itself is not yet a crime, but in at least a third of the states, being in debt can now land you in jail. If a creditor like a landlord or credit card company has a court summons issued for you and you fail to show up on your appointed court date, a warrant will be issued for your arrest. And it is easy enough to miss a court summons, which may have been delivered to the wrong address or, in the case of some bottom-feeding bill collectors, simply tossed in the garbage — a practice so common that the industry even has a term for it: "sewer service."
Attempts to collect from the already poor are often not just punitive but self-defeating. Most states confiscate the drivers' licenses of people owing child support, virtually guaranteeing that they will not be able to work. Michigan has started suspending the drivers' licenses of people who owe money for parking tickets. Las Cruces, N.M., just passed a law that punishes people who owe overdue traffic fines by cutting off their water, gas and sewer.
The predatory activities of local governments give new meaning to that tired phrase "the cycle of poverty." Poor people are more likely than the affluent to get into trouble with the law, either by failing to pay parking fines or by incurring the wrath of a private sector creditor like a landlord or a hospital.