Preying on Poor People Is the Basis of Many Local Businesses

By Kim Supermutt Goodman

If you take a walk or drive through low-income areas you will see how the value of a dollar is more valuable than the human life. In the low-income neighborhood the first thing you will notice that there are a lot of corner stores. These little independently ran stores carry a lot of items that are of convenience to the people in the area. Then there are the bigger one stop shops where everything is under one roof. Many have groceries, a state liquor agency, cell phones and any other item the owners feel the people within the community need. A lot also offer check cashing and bill payment services. Look a little farther and you’ll find gas stations that sell, gas, snacks, beer, wine, lottery and hot food. Small or big these stores of convenience make their owners rich but contribute to the poverty levels of many residents.

The stores are centered in a convenient area where the residents of the community can easily get there and they are open at hours that are convenient to the neighborhood. People can walk or ride their bikes there or it’s a short drive so the person saves time or gas. Anything that saves time, is too easy or provides instant comfort comes with a price, many times an expensive price. If a person gets off work at midnight and need a loaf of bread for their sandwich, the local grocery store is closed so they buy the loaf of bread at the corner store or gas station. At the grocery store the loaf of bread might be $1.29 but at the corner store or gas station it might be $2.49.

Here is an example of how these one stop shops operate. A young single mother just gets off work and picks her kids up from daycare. She’s tired and the kids are hungry so she heads over to one of these places. She stands in line to cash her check, a fee is taken out. Then she decides to pay a few bills and a fee is added. She gets a few groceries and since this is the only grocery store in the neighborhood the prices are slightly higher. While shopping for groceries the kids smell the hot food cooking and beg for it. The mother who is tired gives in and buys the hot food which adds an extra $20 to her grocery bill. Then on her way to the checkout line she sees a bottle of wine and gets it to relieve her stress.

If this type of store didn’t exist the young mother might have chosen to open a bank account where she could have cashed her checks without a fee and paid her bills through automatic bill pay or even chose to have her check direct deposited into her account. This could have saved her about $10. Saving $10 per month adds up to $120 per year. Then after the mother left the bank she could have gone to a major chain grocery store where she could have caught a sale or to a cheaper store like Aldi’s or Save-a-Lot and saved a little more money. She also could have gotten a better grade of wine and on the way home grabbed a pizza for the kids or purchased a healthy prepared meal at the bakery in the grocery store. Since the one stop convenience store does exist, the mother paid about an extra $50 for her one stop shopping trip.

The next type of business that exists in the low-income community is those store front pre-paid cell phone shops. Many stores also have a buy, sell and trade policy. If a person has a certain model of phone the store owner will buy it from them or offer them a certain level of credit towards a new phone. The amount of money or credit offered is usually a low amount. Then the owner of the store will unlock the phone, reprogram the phone or refurbish the phone and sell it at a much higher price. Some stores extend their services to tablets, iPads, iPods and mp3 players. A few stores added video game systems and laptops. The problem with these types of stores is that the phones that a person buys have no warranty. If the person buys a phone (which most of the time is a used phone) and it breaks in 6 months, the person has to buy a new phone. Many of these stores make their money by selling people phones that will break or become outdated in less than a year.

The third type of business you’ll see in the low-income neighborhood is payday loan businesses. These business offer people of all income levels the opportunity to borrow $100-$500 each pay period with a hefty interest fee. Then once you have developed a relationship with these companies they will offer to increase your loan amount. Many poor people fall victim to these businesses because there are times where they need extra money but don’t have anyone they can turn to for help. What usually happens is a person borrows the money, then pays it back, still needs the money so they take the same amount out again and it becomes a cycle. Some people find themselves needing extra money so they take out a second payday loan and the cycle continues.

The fourth type of business that exists in the low-income neighborhood is rental businesses. These types of businesses usually set up near apartment complexes. The owner of these businesses offer their customers furniture, appliances and electronics and let them rent to own. It sounds good, but it comes with a price. Sometimes the customer can pay up to three or four times the product’s actual cost. Here is an example of how this business works: picture a single person who just signed their lease after a period of homelessness. The person is restarting their life and only owns the clothes on their back and the items in their duffle bag. They want a bed, a couch, a TV and a microwave, but can’t afford it so they go to the rental business across the street. The rental business delivers a bed with a dresser and night stand (which was a part of a package deal), a TV with a stand and Blu-ray player and a microwave. Now the person must pay $100 a week for all their stuff for a whole entire year.

If you take a walk or drive through a higher income neighborhood you’ll see a different scene. You will see supermarkets, big box retailers, shopping centers, malls, restaurants and gas stations without chicken wings and fries. You’ll see independently standing cell phone companies from major companies like AT&T, Verizon and T-mobile. A lot of people move from the inner city to the suburbs in search of a better life, but businesses there take advantage of people too. The biggest rip off there is apartment complexes. A big multi-million dollar company buys a large apartment building or a series of buildings that can house 500 or more people. They rent the units out to people with jobs sometimes offering discounts if you are employed by certain companies. Some offer added amities such as an indoor pool or indoor parking and charge you a fee for a pool pass or a monthly parking rate. When a person chooses to rent from these companies their rent goes up a little each year when they renew their lease. If they are late on their rent, they get charged a fee.

If a person lives in a privately own apartment building the owner might work with them if they get sick and is off on medical leave. An independent property owner might be understanding and let a person break their 12 month lease if they lose their job and need to move. A big corporation will not. They will tell a person they can pay their rent late but there will be heavy fees involves. Then after the person goes back to work after recovering from an injury, illness or surgery, they have to work hard to pay their back rent and fees. If a person loses their job the big company doesn’t care. They will charge the person for the rent they missed along with the late fees and if the person move out and break their lease they will charge them big fees for breaking their lease and in some cases hold the person responsible for future rent. Then when the person is unable to pay, the large corporation sues them in court and waits until the person get another job so they can garnish their wages.

It is sad that we live in a society that values money over human life. I hope the next set of entrepreneurs and business owners develop a heart so they can see that human life is much more valuable than money.    

Copyright Cleveland Street Chronicle April 2016 Cleveland, Ohio