The economics of poverty are complicated, the Washington Post reports, but it boils down to this: “The poorer you are, the more things cost.” The poor spend more in time, money, hassle, and exhaustion than do the middle class or wealthy on everything from a loaf of bread to a bank loan. Lacking transportation, the poor often shop for groceries at corner stores where a gallon of milk can cost a dollar more. Hours that could be spent working are whiled away at the laundromat.
Lacking a bank account, many of the nation’s 37 million living below the poverty line depend on fee-heavy check-cashing services and “payday” loans that carry an effective annual percentage rate of more than 800%. With no credit and no down payment, the poor can’t make the important leap from renting to homeownership—unless, of course, they can secure a subprime loan.