There are some significant barriers that people living in poverty face when it comes to managing their finances. However, these may not always be obvious, so let’s talk about them.
Let’s consider what it might look like to be living in poverty here in British Columbia, Canada, where I live. Provincial income assistance payments, including basic welfare and disability benefits, can be direct-deposited into a bank account, or they can be issued by cheque. Easy peasy, right? Not necessarily.
Direct deposit may seem like an obvious choice, but only if you have a bank account. Banking can be expensive, and that adds up pretty quickly if you’ve got barely enough to live on. And you probably use up your cheque before month-end, so you’re running a zero account balance at least part of the time.
No ID without ID
Another potentially significant issue is a lack of identification, and you can’t open a bank account without ID. If you’re sleeping outside and haven’t showered for a while, security might not even let you in the door, ID or no ID, but that’s a whole other problem.
It’s remarkably difficult to get ID without ID (which is part of the problem with voter ID laws). Let’s say everything you had was stolen. The first step usually needs to be getting a birth certificate. Okay, but let’s say your mother is dead and your father is in prison for molesting you. The only extended family you have is on your dad’s side, but they won’t speak to you because they blame you for getting him locked up. You know both parents’ date of birth, but not where they were born. Now you’ve got yourself a big problem, because you probably can’t get a birth certificate without that information.
Or, let’s say you do have the information to replace your ID. But do you have the money to spare to pay for that replacement ID?
Show me the money
Alternatively, you could take your cheque to a payday loan/cheque-cashing service. They’ll take a substantial cut of your cheque, but, unlike most banks, they won’t put a hold on it and you can get your money right away. They also won’t demand ID. Their fees seriously suck, but there isn’t much of an alternative.
If you’re lucky (or not, depending on how you look at it), your government benefits may qualify you for payday loans. The maximum annual percentage rate interest allowed in BC is 391%. But there’s no way an actual bank is going to give you a loan, so what can you do?
If you’re caught in the spiral of addiction, you’d better hope that you don’t owe people other than your payday loaner, like your dealer or your pimp. When everybody on assistance gets paid on the same day, everyone’s cashing their cheques at the same time and in the same few places. Cash in people’s pockets makes for easy targets.
A social justice alternative
Here in Vancouver, there’s a partnership between a local credit union and a social service non-profit organization to operate Pigeon Park Savings. It’s right in the heart of the city’s skid row area. They have a low monthly flat fee account package that includes unlimited withdrawals, as well as low-fee government cheque cashing for non-members. They also provide assistance with getting ID. Basically, they treat poor people like human beings.
Money can’t buy happiness, but lack of money for basic necessities can buy misery. Poverty is hard, but it doesn’t have to be this hard. Universal basic income could be a far more civilized solution.
It’s easy to write off people living in poverty, but maybe if we stop throwing so many barriers in their way, more people might be able to rise out of poverty.
The Social Justice & Equality page has info and resources on a wide variety of social issues.
Well said! A lot of banks where I live charge “fall below” fees so you get punished for being unable to maintain the minimum balance.
Yeah, here too.
I liked it
Nothing is so easy, even poverty
Great post. In the US, about 10% of residents lack bank accounts, and government assistance programs use debit cards to get money to residents. Banks (notably Bank of America) charge fees of up to 5% for accessing those funds, either through a teller or at an ATM. So the paltry amount that the needy get is reduced.
It’s such a slap in the face to people in need.
Wow. Thanks for highlighting these issues and barriers. Pigeon Park sounds like a vital service. Working there maybe could feel like making a difference in people’s lives.
For sure.
In the States, there’s an alternative to the ‘bank’. It’s called a ‘credit union’. Now I’m not a financial wizard by any means, and I don’t really clearly understand the differences. All I know is that I won’t bank with a ‘bank’ (fees and more fees and some more fees, and a buncha rules that nobody understands) but have banked with one or another credit union all of my adult life. No fees usually, or a very affordable one (like $5 for checking or something). No minimum balance usually (although the one I’m with now has a $50 minimum balance). The ID ‘dance’ is the same though, and I have a relative who for various reasons didn’t have ANY ID (she was a free spirit type who flew under the radar for years and years). When she became obligated to get some ID (because these days one can’t fly under the radar unless one is independently wealthy), she got lots of attitude from the government workers about her lack of ID. Her mother (a narcissist) had denied her children any access to their birth certificates and I was glad to be able to help my relative by informing her of the Vital Statistics Office and where she could get a copy without her mother’s consent. She jumped the hoops and now has ID. It scares me a little to realize how much hold the government keeps on people by dint of requiring that damned little card – driver’s license or ID whichever it is. A person truly has no face without one.
That’s good that she was able to get it. It’s a tough balance, because if it was too easy to get ID, identity theft would jump.
Thank you, Melanie! I have always encouraged Credit Union usage over large banks, though, to my surprise, here in San Diego, nearly all of the credit unions do credit checks before letting one open an account. I did manage to find a small credit union that did not do a hard pull, but it took me some digging. This credit union also supports local small businesses in ways that larger banks here do not.
You ain’t joking! That’s why when people blame the recent coup attempt on people who are facing economic hardship, I almost want to laugh. If you are really impoverished, you don’t have the money or ability to just jet off to DC to stage a protest and try to storm the Capitol! The people who can afford to do that are already rather privileged.
And they can afford to have their guns, too…
Exactly.
Wow, I never realised it was so difficult. It’s so easy to look at someone unfortunate and think one action will save them from their situation 🙁
For sure.
Amen x1000! Society spits on these people who have umpteen barriers to getting anything many of us take for granted. Universal income is a good choice!
Yeah, people get all self-righteous without remembering there but for the grace of God go I (one of those things I think applies just as well secularly as religiously)
Yeah. It’s pretty shallow, and, as you said, self righteous to behave like that. We’d all be much better off with a slice of humble pie!
True!
Great post! Definitely time to stop throwing road blocks in the way of people who are already having a rough time.
Absolutely.
Thank you for this article, and for expanding on my post, Ashley. You hit some excellent points that I left out, and I really appreciate it.
-Shira
And thank you for giving me the idea!
My deepest pleasure and respects for the idea, and especially for your fantastic articles, with all the images, and everything! 🙂
You are the coolest, Ashley!
-Shira
Thanks! And you’re awfully cool yourself!
🙂 Thank you for your very kind words. 🙂
I love this quote that “The opposite of poverty is justice.”
Exactly.
Yes, it’s so perfect.
Yes, it is perfect: sharing this post!
I am happy you were able to find some solace.
A 2007 study (“The Science of Early Childhood Development”) found and reported that,
“The future of any society depends on its ability to foster the health and well-being of the next generation. Stated simply, today’s children will become tomorrow’s citizens, workers, and parents. When we invest wisely in children and families, the next generation will pay that back through a lifetime of productivity and responsible citizenship. When we fail to provide children with what they need to build a strong foundation for healthy and productive lives, we put our future prosperity and security at risk …
“All aspects of adult human capital, from work force skills to cooperative and lawful behavior, build on capacities that are developed during childhood, beginning at birth … The basic principles of neuroscience and the process of human skill formation indicate that early intervention for the most vulnerable children will generate the greatest payback.”
While I appreciated the study’s initiative, it’s still for me a disappointing revelation as to our collective humanity when the report’s author feels compelled to repeatedly refer to living, breathing and often enough suffering human beings as a well-returning ‘investment’ and ‘human capital’ in an attempt to convince money-minded society that it’s in our own best fiscal interest to fund early-life programs that result in lowered incidence of unhealthy, dysfunctional child development.
Yes!!! Universal basic income. And yes, I will pay more taxes.
It could make such a huge difference.