Corporations and the U.S. Poor

Payday Profiteers: Payday Lenders Target the Working Poor

by Kari Lydersen

With gaudy neon signs and hand-lettered posters promising money that seems too quick and easy to be true, payday loan outfits have sprung up like mushrooms on corners and in strip malls in low-income neighborhoods in the United States over the last few years. While payday lenders were relatively rare just a decade ago, today an estimated 8,000 to 10,000 ply their trade around the country, recording a profit of over $9 billion a year.

Payday loans are supposed to be quick, relatively small (average $200 to $300) infusions of cash for emergencies such as car repairs or medical bills. The loans are usually payable in two weeks, presumably after the borrower’s next paycheck, and usually at an interest rate of around 15 to 20 percent over the two-week period. Come payday, the majority of borrowers are unable to repay the loan, so it is refinanced again at an additional 20 percent. This process, called a “rollover,” is often repeated many times before the borrower is finally able to pay back the loan — or declares bankruptcy. Over a year-long period, that means a borrower may pay as much as 2,000 percent in interest — $4,000 on a $200 loan. MORE>>

Renting to Owe: Rent-to-Own Companies Prey on Low-Income Consumers

By Jake Lewis

Most consumers would feel that they had been badly cheated if they paid $1,000 for a washing machine that in reality carried a maximum retail price of $400. But millions of low-income U.S. consumers face such costly scams daily. It is all part of a rent-to-own industry that preys on customers who lack the money to buy items like furniture, televisions, refrigerators, washer-dryers and other household goods — even pots, pans and dishes.

What few protections consumers have against rent-to-own abuses are being threatened by legislation pending in Congress. Under provisions lobbied by the industry, stronger state laws would be preempted (wiped out) by weaker federal provisions. MORE>>

The View from Below How the U.S. Working Poor Don't Get By

An interview with Barbara Ehrenreich

Barbara Ehrenreich is the author of a number of books, including Nickel and Dimed: On (Not) Getting By in America, Blood Rites and The Worst Years of Our Lives. In Nickel and Dimed, she reports on her experiences trying to live on the income she earned while working at various entry-level jobs. MORE>>

Migrating from Exploitation to Dignity Immigrant Women Workers and the Struggle for Justice

An interview with Miriam Ching Yoon Louie

Miriam Ching Yoon Louie is the author of Sweatshop Warriors: Immigrant Women Workers Take on the Global Factory. She works with the Women of Color Resource Center in Berkeley, California, and formerly served as national campaign media director of Fuerza Unida and Asian Immigrant Women Advocates. MORE>>