The High Cost of Being Poor

In her book, Nickel and Dime, Barbara Ehrenreich (2006) went undercover as a working poor with a minimum wage. She mentioned that there wasn’t a sufficient underground economy through which the minimum wage workforce can routinely makes ends meet. Further, she (2006) described the ways her co-workers coped up with such situation. To deal with that depressing situation, her co-workers stayed in the motel rooms since they thought that living in an apartment was more expensive. Moreover, instead of providing themselves with refrigerators and microwaves at their own homes, they obtained their foods from convenience stores. (Klein, 2001)

But, she corrected these actions. She found out, based on her experienced, that living in a motel room was more expensive than living in an apartment since it came to an abrupt end when she can’t pay for her rented room on her salary. On the other hand, the problem in living in an apartment was having the resources for paying the first month’s rent and security deposit required. In the case of buying food in convenience stores she found out that aside from the compensated nutritional value obtained from that food, it was even more expensive than cooking at home. Considering such ways, Ehrenreich pointed out that food prices are relatively stable. On the other hand, rental costs are subject to inflation. (Klein, 2001)

5. Ehrenreich (2006) mentioned several high costs of poverty. Some of these were the costs in buying furniture and appliances though pricey rent-to-own business such as in Wisconsin where a $200 rent-to-own TV set can cost $700 with the interest included; the fact that poor people are less likely to have bank accounts which can be expensive for those with low balances so they tend to cash their paychecks at check-cashing businesses, charging them $5 to $50 for a $500 check; the fact that poorer people pay an average of one percentage point more in mortgage interest and that poor people rely more on expensive and lower quality offerings of small grocery and convenience stores since they have less access to large supermarkets. Other high costs of poverty were the factor that low-income car buyers like the people earning less than $30, 000 a year pay two percentage points more for a car loan than more affluent buyers do and low-income drivers pay more for car insurance (they pay an average of $400 more a year) to insure the same car and driver risk than wealthier drivers. These costs made the living conditions of poor people more expensive. (Ehrenreich, 2006)