Saturday, April 9, 2016
Expensive to be poor
Bernie Sanders has been repeatedly quoted as saying it is "expensive to be poor". This article by the Wasahington Post goes into a study which shows how Bernie may be right. By studying toilet paper, and how the savings strategies employed by the wealthy are impossible for the poor, a researcher at the University of Michigan shows how very poor people will end up paying more for basic necessities. Their inability to stock up and take advantage of sales causes them to pay 5.9 percent more for toilet paper (although because they are more likely to buy cheaper brands and single-ply toilet paper they still on net pay slightly less, but for much worse products). What do you think? Do you think this can be applied to many more goods? Enough to really add up to it being much more expensive to be poor? Or do the specifics of toilet paper make this a more isolated incident?
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As someone who lives in the Detroit area with friends who live in lower income parts of town, I have witnessed the phenomenon of "expensive to be poor". A key term that I'll use to demonstrate how this is true is known as a "Food Desert". Basically, in many parts of Detroit, local economies have collapsed from poverty and businesses have closed in these areas most notably, food markets. Businesses see these areas as little potential for profit as well as dangerous to operate something as large as a supermarket. As a result, people in these areas have to drive (if they even own a car) miles to reach what many of us consider a staple of our communities.
ReplyDeleteThe few businesses that do remain are liquor stores and gas stations, which are smaller, lower maintenance, easier to secure and low risk. Would you want to do your grocery shopping at a liquor store where you can find all the healthy, nutritious, essential, high quality items that are required to live a stable life? On google maps, search "detroit supermarket" and you'll see a handful of stores meant for over 700,000 PEOPLE, most of which are located in better off neighborhoods. This is no isolated incident.
I definitely believe that toilet paper isn't an isolated incident. Most things go on sale at some point and buying in higher quantity is always more cost efficient.
ReplyDeleteLow income families live paycheck to paycheck and buy things when needed. They can't wait for the deals or know to buy in bulk because they just can't.
I found an interesting article on the economist that explains why it is expensive to be poor, but focuses on the banking industry. About 8% of households and one in three with incomes lower than $15,000 do not have a bank account. One reason is because they cannot afford any overdraft fees. However, not having a bank account is costly for them because in order to get their pay check they have to pay two types of fees, rather than one if they had a bank account. This article proves that food isn't the only unfair thing that the poor pay more for.
http://www.economist.com/news/united-states/21663262-why-low-income-americans-often-have-pay-more-its-expensive-be-poor