Out of sight of the eyes of anything resembling reporters the poverty industries in the USA are cranking along in high gear. Most of these are protected from any harm by Republicans from the county courthouse through the state house and on up to the Congress. Within the halls of power Republicans do all they can to stop anything they can to make those that are down stay down. From blocking minimum wage raises to busting unions, to cutting food stamps, unemployment insurance or using line item veto to cut donations to food pantries, Republicans really kick people when they are down.
The kind of vultures that make up the poverty industry includes folks like predatory lenders, temporary hiring agencies, rent-to-own shops and employers that pay starvation wages or steal wages while their CEOs and upper management receive compensation in the millions. There wouldn’t be a poverty industry without politicians that make it all legal and acceptable.
Poverty is debilitating in so many ways. Yet our politicians have legalized preying on the poor. They have not only made it legal, but by keeping wages low, allowing atmospheric interest rates, loosening wage and hour laws, tightening bankruptcy laws and making poverty a crime, politicians have made the poverty industry very profitable.
With those profits come the legalized bribes that are known as campaign contributions. Donald Trump said it himself during that Republican debate – he gives politicians campaign contributions so he can get a favor from them when he needs one. It is business. So to keep the favors coming those in the poverty industry are sure to lay out the campaign contributions.
The concept of an industry devoted to profiting off the misfortune of others and thus dedicated to keep those misfortunate in poverty or near poverty came to me while I was discussing the proposed Johnson County minimum wage. One aspect I had not seen discussed much were wages for tipped employees, specifically the waitresses and waiters in restaurants. Iowa allows them to get paid an incredibly generous $4.35/hour – other states surrounding Iowa pay as low as $2.13, a wage set in 1991. How would that be handled under the Johnson County proposal? The answer is that tipped employees would get the same proportionate wage they do now – which is 60% of federal minimum, I believe. Thus they would still be way underpaid.
Why? Mostly because of the power of the NRA. No, not that NRA, but the National Restaurant Association and its state affiliates. Through intense lobbying and well placed campaign contributions they have been able to keep the wages at their member businesses well below the poverty line for decades. Surely this NRA is liable for as much misery as the more well known NRA, they just don’t get the publicity because their victims don’t die in spectacular and horrible ways. prwatch.org/news/2014/04/12444/nra-political-spending
That got me to thinking and it dawned on me that there are many businesses that specialize in preying on the poor. They make big money doing it and have in recent years become some of the biggest lobbyists in congress and in the state houses. Industries like the “pay day” loan industry. Where usury (or excessive interest rates) were once illegal, now the sky seems to be the limit. Here is a short excerpt from a diary on dailykos about this industry:
When I looked up the annual percentage rate (APR) for Cash Net.com I was absolutely shocked!
A $600 loan would end up costing you $951.57. A 388.93 percent APR—I thought the 35.99 percent APR I paid some twenty years ago was bad. Of course it could be worse: According to the disclaimer on their website, the interest rate could be as high as 449 percent.
If this is not predatory lending, I don’t know what is. Cash Net is not the only company to do this. Money Mutual, endorsed by Montel Williams, states on its website that the typical representative APR range is somewhere between 261 percent and 1,304 percent for a 14-day loan.
What are some other businesses that make a killing off the misfortunate? How about temporary employment agencies? These folk get a cut of the person’s wages and offer no benefits. How about those “rent to own” businesses where products often cost triple or quadruple what it would in a regular business.
Employers in low wage industries also take a pound of flesh from their employees through practices such as having folks work off the clock and through forcing their employees to wait by a phone in case they get called in, while not being paid. Blogforiowa had a post on this earlier this week featuring the thought of former Secretary of Labor Robert Reich.
Then as if things weren’t bad enough, poverty often leads to jail when fines or fees can’t be paid. This also helps to fill the pockets of the profitized prison system, yet another beneficiary of the poverty industry.
Unless a major correction is made, the future will be even more bleak. Over 50% of the country’s school age children now live in low income households. Iowa fares only slightly better than the US as a whole with a rate of 42%. Most people understand that coming from a low income household is a strike against doing well in school.
All in all this is truly a sad state of affairs. Especially in a nation that claims to live by Christian principles.