The High Cost of Poverty

The poorer you are, the more things cost. More in money, time, hassle, exhaustion, menace. This is a fact of life that reality television and magazines don’t often explain.

So we’ll explain it here. Consider this a primer on the economics of poverty.

“The poor pay more for a gallon of milk; they pay more on a capital basis for inferior housing,” says Rep. Earl Blumenauer (D-Ore.). “The poor and 100 million who are struggling for the middle class actually end up paying more for transportation, for housing, for health care, for mortgages. They get steered to subprime lending. . . . The poor pay more for things middle-class America takes for granted.”

Poverty 101: We’ll start with the basics.

Like food: You don’t have a car to get to a supermarket, much less to Costco or Trader Joe’s, where the middle class goes to save money. You don’t have three hours to take the bus. So you buy groceries at the corner store, where a gallon of milk costs an extra dollar.

A loaf of bread there costs you $2.99 for white. For wheat, it’s $3.79. The clerk behind the counter tells you the gallon of leaking milk in the bottom of the back cooler is $4.99. She holds up four fingers to clarify. The milk is beneath the shelf that holds beef bologna for $3.79. A pound of butter sells for $4.49. In the back of the store are fruits and vegetables. The green peppers are shriveled, the bananas are more brown than yellow, the oranges are picked over.

(At a Safeway on Bradley Boulevard in Bethesda, the wheat bread costs $1.19, and white bread is on sale for $1. A gallon of milk costs $3.49 — $2.99 if you buy two gallons. A pound of butter is $2.49. Beef bologna is on sale, two packages for $5.)

Washington Post: The High Cost of Poverty

(via OVO)

See also: Nickeled and Dimed by Barbara Ehrenreich.

3 Comments

  1. Thanks for the link.

  2. Bill Whitcomb

    May 21, 2009 at 3:28 pm

    Exactly. It costs much more to be poor. If you wanted to put it other terms, money has gravity. The more money you have, the more money it attracts. The money you have, the more it is attracted by larger concentrations of money. By that rationale, if we figure that E=M$^2, the faster your money is moving, the more mass it has. Hmm. The physics of networking and investment?

  3. Yes. All true. And straight up, it’s absolutely terrible for the economy. The GDP would skyrocket if there were jobs that paid well for everyone. The downside? The lack of a large pool of unemployed and poor seriously impairs the ability of business owners to take advantage of their workers, which drives up the cost of doing business for large corporations. It radically shifts the balance of power away from the moneyed interests towards the workers and poor. It would be vastly more difficult to leverage advantages in access to capital to shut out small businesses (though distribution chain efficiencies would still tend to favor larger organizations).

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