Social Safety Net Or Bed of Nails? It’s Costly Being Poor

Being billed for room and board in jail might sound like a joke. It is not. In fact, it’s increasingly common in America, among cash-strapped local governments. Raising taxes is politically hard because taxpayers vote, organize, and donate to campaigns. It’s easier to extract cash from politically powerless people at the bottom of society.

That surely includes folks already ensnared in the criminal justice system, billing them not only for jail time, but all sorts of “user fees” for administrative processing. This often makes small fines for minor offenses balloon into money hemorrhages these usually poor victims can ill afford. Many simply cannot pay, so are hit with yet more fees and penalties for nonpayment, or even jailed – generating still further charges.

An article about all this in The Economist cited an Alabama case where a $200 misdemeanor fine metastasized into a 41-month $2100 ordeal, through a system that one judge labeled a “judicially sanctioned extortion racket.”

I used the word victims. Some “conservatives” would have little sympathy – after all, they’re lawbreakers. Those who’d say this cannot envision themselves in such a position, and have no idea what it’s like. Most of the minor infractions we’re talking about (often motor vehicle related) happen not because these are bad people but because it goes with the territory of being poor. When government compounds their plight of poverty by preying upon them,* they are indeed victims. This turns the whole idea of a “social safety net” upside down.

The foregoing is part of a broader phenomenon, highlighted by (bite my tongue) Barbara Ehrenreich. I generally loathe her bilious negativism, but here she actually has a point: it’s costly to be poor in America.

Just one example: financial services. Bounce one check, or miss one credit card payment, and you face a cascade of hefty charges making your already precarious financial situation even worse. Thus do banks and credit card companies frankly exploit the less affluent. If you’re too poor to have a bank account, that’s expensive as well, in money order and check cashing fees, etc. Payday loans might also be mentioned. I don’t agree with attacks on payday lenders; they provide a needed service and their charges reflect costs and risks without excessive profit. But all these kinds of things, and many more, do make being poor a costly proposition, and something of a self-perpetuating trap.

I have argued that out-of-control government spending presages economic ruin. Many “conservatives” respond with a war on the disadvantaged. It’s the wrong target. In fact they’re a small fraction of our population, and spending on them is a small fraction of the total. Far more goes on welfare for the rich. We shame ourselves with the latter while scrooging the disadvantaged.

I have also criticized the “progressive” inequality obsession as reflecting less compassion for the poor as envy for the rich. But I do think there isn’t enough compassion for the poor. We should help them not because that’s “social justice,” or wealth is criminal, but because helping them is humane. We are a very rich society and could afford what it takes – if only, again, we controlled giveaways to the better off.

This essay points to some things we could do. For example, if you hate payday lending, how about government offering low-income people small loans at cheaper rates? Though I’m not actually keen on complicated bureaucratic programs. I’d favor a more global “negative income tax” approach that simply puts more cash in poor people’s hands.

But at least let’s stop taking it out of their hands by charging them for the privilege of being punished.

*Government also rips off the less affluent by pushing lottery ticket sales.

Tags: poverty