The dual economy didn’t happen overnight, says Temin. The story started just a couple of years after the ’67 Summer of Love. Around 1970, the productivity of workers began to get divided from their wages. Corporate attorney and later Supreme Court Justice Lewis Powell galvanized the business community to lobby vigorously for its interests. Johnson’s War on Poverty was replaced by Nixon’s War on Drugs, which sectioned off many members of the low-wage sector, disproportionately black, into prisons. Politicians increasingly influenced by the FTE sector turned from public-spirited universalism to free-market individualism. As money-driven politics accelerated (a phenomenon explained by the Investment Theory of Politics, as Temin explains), leaders of the FTE sector became increasingly emboldened to ignore the needs of members of the low-wage sector, or even to actively work against them.
America’s underlying racism has a continuing distorting impact. A majority of the low-wage sector is white, with blacks and Latinos making up the other part, but politicians learned to talk as if the low-wage sector is mostly black because it allowed them to appeal to racial prejudice, which is useful in maintaining support for the structure of the dual economy — and hurting everyone in the low-wage sector. Temin notes that “the desire to preserve the inferior status of blacks has motivated policies against all members of the low-wage sector.”
America is Regressing into a Developing Nation for Most People
https://www.ineteconomics.org/perspectives/blog/america-is-r...
I'm not sure I understand what you're saying here. I work for a salary and am most assuredly not in poverty. Could you expand a bit on what you meant by that?
So your belief is, the dominant economic-political movement in America regards "preserving the inferior status of blacks" as an end goal in and of itself? Or is this an instrumental goal that somehow serves some other purpose?
At best, you want their sales and votes -- but even that, not if they vote for their interests and/or more progressively.
Besides the blacks, if not predominantly now, for a lot of time, were also among the poor and working class, which is an even bigger enemy if you want to keep your privileges.
If your current paycheck doesn’t take you far enough to solve the problem, you have to pay for substandard stop-gap solutions in between. This serves to prolong the time it takes to accumulate the capital needed for a permanent solution.
Another element, I suspect, is that washing dishes takes precious time and energy, that an impoverished person probably doesn't have. It's easier to just throw away the dish. I'm not judging. If I stood on my feet for 6-8 hours doing grueling menial labor, I'd be exhausted, too.
I think us here on HN can have a tremendous impact on different levels of poverty if we listen to the struggles of impoverished people, and then use our well-fed, psychologically-safe minds to help brainstorm higher-level solutions.
I think this might be an industry that could help mitigate some social ills, not just prolong or exacerbate them.
Are there any good gaps in my view that I'm not seeing?
How much of these costs are appropriate economics (e.g. due to defaulting, management costs, etc) vs abuse of the relatively powerless.
While unlikely to be profitable. I'm sure you could get some donations to offer better financial services to the bottom percentages.
Overall, it is difficult to be even stay in business let alone profitable due to structure of how interests work at that income level due to most not paying back on their loans.
Edit: Before such ersatz-bank-account services proliferated, I believe it was common for poor people to cash their paychecks at a check cashing place (which costs time and money).
The worst was the electric bill. I've been in the exact situation described in the article, past due by under $100 and service remotely cut off. TXU Energy wanted a grand total of $793 to restart service, including the past due balance, a reconnection fee, and a deposit (plus a fee for taking such a large deposit). Fortunately, at least at the time, Texas' deregulated energy market rules didn't prohibit a subscriber from switching companies even when owing a balance to a previous one, so I was able to get my mother to co-sign on my having service with Texas-New Mexico Power.
These days, two jobs and many salary rises later? My water/sewer/garbage bill is direct debited from my checking account, same for the gas bill. Seattle City Light, CenturyLink, T-Mobile, and every other bill? Automatically charged to one of a handful of credit cards I have with >$20,000 limits. The house where I live ran into a medium-sized electrical problem that cost about $5,300 to fix. Instead of panicking, I charged the bill to a credit card and then used a 0% balance transfer on another one to make it be an interest free loan for 18 months.
I spent more in one year on overdraft fees ($1,550) back in the early 2000s than I spend on mobile phone service ($1,200) this year, to say nothing of all of the costs for payday loans and late fees and all of that. Being poor in America absolutely sucks ass and, the worst part is, I'm pretty sure virtually every one of our societal and financial systems is engineered to enforce that feeling of helplessness, not to make it better.