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Jonathon Nix: The high cost of not having money

”Anyone who has ever 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 chose to move from a middle-class Boston suburb to a poorer, post-industrial satellite city. Our new apartment was comfortable and modern, we liked our neighbors, and nothing I observed would lead me to think that the neighborhood wasn’t safe.

So it was a shock when, during the change-of-address process, I found out that our annual car insurance premium went up by a thousand dollars. Our agent told me that the reason was our new address. The rate of car theft and uninsured-driver accidents was higher than in our former town. A thousand dollars for a zip code!

I believed that car insurance was a statewide shared-risk pool, as it was when Massachusetts originally became the first state with compulsory car insurance. But the commonwealth is now one of many states that allow insurers to discriminate geographically.

Drivers who live in higher crime — i.e., poorer — zip codes, or who have a low credit rating (also a mark of poverty), are deemed to be a higher risk. So insurers raise their premiums and reduce their coverage. People who live there, who might never be either the victim or the cause of an insurance claim, have to include that extra thousand in their annual expenses. That’s equivalent, for many of my neighbors, to a 13th month of rent. Annual premiums have been quoted as much as 500 percent higher in poor cities than in rich ones.

Since that unsettling discovery about higher car insurance premiums, I often notice other high costs imposed on the poor — the taxes on poverty, as I think of them. Examples include food prices in small urban grocery stores with no supermarkets nearby; rent-to-buy housing or home furnishings; higher apartment rents per square foot; and, in less affluent coastal Massachusetts towns, higher flood insurance rates.

Those who have been priced out of car ownership have to pay for taxis to get to the grocery store, doctor visits, even job interviews. (Taxis, which might be a minor luxury or a business tax deduction in Manhattan or Boston, are poor people’s transportation in low-income areas.) Pedestrian-hostile urban renewal street redesigns often lead to injuries and citations. Job opportunities are limited because getting to work is so much more difficult.

For those with low-paying jobs, there are severely curtailed family and medical leave benefits. Part-time or contract jobs often come with no benefits at all. The working poor with children pay just as much for child care as middle-class parents, which can amount to a much higher proportion of their income.

Even government assistance comes with higher costs for the poor: more stringent pharmaceutical reporting requirements and Medicaid prescription exclusions in areas with high drug-crime rates; housing subsidies that actually raise the base rent rates; income eligibility limits, which punish employment.

Just gaining access to the banking and credit systems is often an obstacle for poor people, with few bank branches located in their neighborhood and fees for overdrafts consuming a disproportionate percentage of a small balance. For those without access to a bank account, the alternatives are notoriously usurious payday loans and check-cashing fees.

Then there are the punitive costs of the legal system, in which a higher proportion of the poor find themselves entrapped: cash bail, compounded fines for late payments of court fees, the scandalous profiteering on telephone calls to and from jails and prisons.

All these costs and many more aren’t just inconveniences or discomforts of being poor in America; they are direct, out-of-pocket monetary costs. When considered as the percentage of income spent on basic necessities, they can balloon to enormous proportions. (That thousand dollars of increased auto insurance represents 3.3 percent of a $30,000 income but only 0.7 percent of $130,000.) Added to the increasing difficulty of moving from the under-class to the middle-class, they collectively represent a huge impediment to the pursuit of happiness for millions of poor Americans.

The theme of the rich being more deserving than the poor runs through American history. But this is more than a political issue; it’s a moral one. America subsidizes the well-off and their neighborhoods in many ways: better public schools, superior infrastructure, lower interest rates, business entertainment tax deductions, to name just a few.

When did we abandon fairness? Why have we added the burden of a higher cost of living to the many disadvantages of poverty? Exactly what is the moral code that directs us to punish the poor for their poverty and disadvantage the less fortunate for the unintentional crime of having the wrong zip code?

Jonathon Nix is a multimedia freelancer living in Becket. He would like to thank FranAllen Acosta, co-founder of the Lawrence housing nonprofit Mi Casita, for assistance and support.

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