Mandatory binding arbitration sucks, but most of us have agreed to it in numerous consumer contracts, especially with banks, credit card companies, payday lenders, etc. What mandatory binding arbitration means is that if you try to sue your credit card company for, say, reordering transactions to maximize overdraft fees, the company can pull you out of court and force you into private arbitration with no option to certify a class action.
Still, it doesn’t hurt to be aware of how coffee affects your budget. Here’s how different ways of getting coffee add up over the course of a month, or about 90 cups:
That’s from an article in the New Republic citing this study (and others) on the influence of poverty on planning for the future. It reminds me another article, this one from the Washington Post, about structured settlement purchasing. People will sell years of payments from a lawsuit settlement for an up-front lump payment. It’s nearly always a rip-off, but there is a kind of logic to it. What good is $1,000/month five years from now when you can’t even drive yourself to work right now?
I helped a client once who lost his license because he was pulled over and didn’t have insurance, which he couldn’t afford. He was still driving because he fixed cars for a living, and he needed to be able to transport parts. So he kept getting tickets, and he is probably in jail by now just for trying to earn a living. Why couldn’t he just wait until he could get another license? Because he needed to work to pay his rent, and anyway he still wouldn’t be able to afford insurance. Why didn’t he take the bus? Try transporting an engine block on a bus. What else could he do?
That image comes from this report (pdf) by the ACLU-New Hampshire, and it’s pretty much the definition of debtors’ prison right there.
The courts will say they are just trying to enforce their judgments, of course. And that’s technically true. It’s also effectively the criminalization of poverty — debtors’ prison — and it needs to stop.
From the Star Tribune:
Brad Rixmann, chief executive of Burnsville-based Payday America, is a giant on the payday lending scene, operating the largest such business in the state. He also is a major player in Minnesota politics, having doled out nearly $550,000 in state campaign donations over the last decade.
As Rixmann’s contributions have grown, so has his business, aided by state law that allows him to charge triple-digit interest rates on loans that can go up to $1,000. His customers pay an average of 277 percent interest, sometimes borrowing repeatedly against their next paycheck.
15 states have banned payday lending, which more often traps borrowers in a cycle of debt than helps them deal with emergencies as intended.
I just disabled comments on this website. I figure I should take a moment to explain why.
Even in states with higher-than-the-federal minimum wage, you will still need overtime or a second job to afford a one-bedroom apartment. Your best bet is in South Dakota, it turns out, where just 49 hours a week at minimum wage will get you a one-bedroom apartment. You’ll need to work longer hours if you plan to eat, of course.
There are (at least) two ways to interpret this report:
In the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2014” (pdf):
Forty-seven percent of respondents say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.