What's Debt Got to Do with It? Brett Williams "THEY WILL GLADLY TAKE A CHECK" … America's Cash Express … is a plain, grim storefront, staffed by one woman behind ceiling-high Plexiglas, offering pagers for $80, laser tear gas for $10, and myriad one- stop financial services. Customers can apply for a telephone calling card or a secured credit card for a $25 processing fee and a $300 deposit (to be charged against) in First Deposit National Bank in New Hampshire. The annual fee is $35 and the annual percentage rate is 19.8 percent. You can wire a moneygram to pay a bill (for 10 percent of the total and a 10 percent discount on Greyhound) or "wire money in minutes worldwide" through an American Express moneygram. (In some places American Express charges as much as 24 percent of the amount wired.) You can file a tax return and receive a refund anticipation loan (“After all … it's your money!” beams the promotional material). If you want ACE to prepare your return, that costs about $30. You can pay gas, water, telephone, and electric bills; play the lottery ("We've got your ticket!”); and purchase money orders with the cash you receive when you cash your payroll, government, insurance, or tax refund check. Some call these outlets "welfare banks” because of their heavy traffic in public assistance checks, and sometimes the government sends checks and food stamps directly there. … For the most routine checks, the outlet charges 2 percent of the total, but this varies quite a bit depending on the amount and type of the check and whether or not you have ID. It can cost as much as 6 percent to cash a payroll check and 12 percent to cash a personal one. The most outrageous, expensive, and quasi-legal transactions are called "payday loans," advances secured by a postdated personal check. These loans can charge interest from 20 to 35 percent of the amount advanced; a typical transaction would offer the customer $200 for a $260 check. …. Despite the shame, expense, and tedium of the process, many residents of this neighborhood conduct all their bankless business at places like America's Cash Express. Citizens in poor urban neighborhoods find it increasingly difficult to get to a bank. Even is a local bank, residents often cannot afford its minimum balance requirements, fees for checks, or high bounced-check penalties. They may not have enough money in their account at the end of the month to cash a paycheck to pay their bills. They may need immediate cash to deliver to the phone company in person. Some residents do not have the major credit card that is to serve as a second major ID; some cannot manage a bank's restricted hours. Some cannot open checking or saving accounts because of even minor problems with their credit or immigration histories. Using check-cashing outlets further impoverishes and disenfranchises residents, leaving them with no records or proof of payment, no ongoing relationship to build up a credit history, and in greater personal danger from carrying cash (itself in jeopardy from fire theft, or loss). From where they stand, residents may find it hard to connect the storefronts to the larger financial system or to the injustices they endure. … Atlanta snack-food sales.

man Ronald Hayes … makes a weekly visit to cash his $400 paycheck and buy a money order to pay a bill per week. The total cost to Hayes is $15 a week. … He fails to recognize that he is probably paying ten times more than a bank would charge. Even if some poo residents recognize the cost, others bow to hand-to-mouth demands for immediacy, safety or convenience. One homeless man, coping successfully with the dangers of carrying cash. purchases a money order made out to himself each month, cashes it repeatedly at a 2 percent rate, and then buys another money order to carry the balance. He carries his money more safely, but at a huge cost. Hudson interviewed two men in Manassas, Virginia, who paid $270 to cash a $4,500 insurance check because they didn't have time to wait for the check to clear. At the Eagle Outlet, where they cashed their check, owner Victor Daigle claimed that his customers "would rather pay a little bit more to us and have their convenience. They go to McDonald's because they want their hamburger right now. … They can come to us and get their money right now.” "THAT'S WHY THEY'RE MY CUSTOMERS" Another, more venerable fringe bank is the pawnshop, a familiar sight in cities for many years. … These have proliferated in Washington, D.C., and throughout the nation, doubling during the 1980s to number 10,091 in 1994 and certainly many more today. They have changed in other ways as well, to become centralized and chain-operated, backed by upscale marketing, ruthless acquisitions, and persistent pressure on local governments to raise usury rates. Like check-cashing outlets, they displace small businesses, family-owned pawn-shops, and local chains, offering young residents of urban neighborhoods downscale, minimum wage, no-benefits financial services jobs. For example, Cash America, founded in 1983, operates hundreds of shops. One of five chains to be publicly traded, it boasts NYSE: PWN (for "pawn") as its symbol, turns lush profits for investors, and has tried to upgrade the pawnshop image as it eyes markets all over the world. If you multiply its monthly rate by twelve, its average annual percentage rate (APR) hovers at around 200 percent, not unusual in an industry that often charges 240 percent, and it recorded $5 million in net income from lending activities in the last quarter of 2000, up 17 percent from the year before. In Washington, D.C., Famous Pawn has been enormously successful by gobbling up mom-and-pop stores including pawn shops in poor neighborhoods. … The store is stuffed with former collateral for these expensive secured loans: from gold chains, wedding bands, and watches to baseball cards, leather jackets, computers, VCRs, television sets, compact discs, cameras, pianos, guitars, saxophones, power tools, and lawnmowers. Customers pawn these items for 10 percent interest each month, a relatively low rate set by Maryland and the District. A borrower would receive $100 for a pawned item and redeem it in thirty days for $110. One customer complains: “They don't give you nothin’ for it. But when they sell it, that's when they mark it up." If a customer is unable to redeem it after thirty days, the shop will keep it on hold for as long as he or she can pay each month's interest. Often, pawn-shops' profits lie in nurturing these long-term relationships

with borrowers, who come in to pay their "dues” on the first of each month but eventually give up and let their treasures go. Their misfortune allows Famous Pawn to bulge out of its space, overflowing with pawns, featuring a long line of borrowers every day, and swallowing its neighboring establishments. Secondary buyers cruise through periodically, buying up items in bulk and boosting profits in the retail side of the business, long less profitable than the interest-collecting side. The vast majority of borrowers are poor, with incomes between $9,000 and $17,000 a year, according to fringe-bank researcher John Caskey. They are young, in and out of work, and disproportionately of color. Cash America's Annual Report describes them this way: “The cash-only individual makes up the backbone of America. He's [sic] the hard- working next door neighbor, the guy at the corner service station, or the lady who works as a checker at the local supermarket." Caskey quotes Jack Daugherty of Cash America to somewhat different effect: "I could take my customers and put them on a bus and drive them down to a bank and the bank would laugh at them. That's why they're my customers." "AND YOU DON'T NEED CREDIT TO GET IT" By redefining what they are doing as "renting,” rent-to-own stores have emerged to evade usury laws that limit the interest paid by people who buy appliances and furniture on credit. Profits in this $3.7 billion-a-year business stem from astounding markups, as customers often pay five times what they would for retail. By the mid-1990s rent-to-own stores had tripled in number, so that by 1994 there were some seventy-five hundred rent- to-own outlets nationwide. Like check-cashing outlets and pawnshops, they increasingly come in corporate chain sizes. The Rent-A-Center chain boasts twelve hundred stores, a large share of this market. But another patriotic chain, RentAmerica, dominates the Washington, D.C., area. Mostly located in two poorer suburbs (including Jenkins's) and southeast D.C., RentAmerica is a temple to consumption. To walk in is to discover a lush cornucopia of household consumer goods: florid bedroom furniture; leather couches; brightly colored, blaring television sets; giant, gleaming refrigerators; and shimmering gold jewelry. The store offers impoverished customers a shot at the postwar American dream. But the American-flag sign that soars from the parking lot, the giddy interior, the slick brochures, and the "convenience” (or urgency?) of instant purchases and free delivery belie RentAmerica's harsh and greedy terms. … The terms explain that the baby-bear TV requires seventy-eight weekly payments of $9.99, or $779.22 (plus tax); the twenty- seven-inch TV costs seventy-eight weekly payments of $15.99, or $1,247.22 (plus tax); and the thirty-two-inch TV will not be yours until you have paid in full: 104 weekly payments of $24.99, or $2.598.96 (plus tax). Retail prices are much lower. RentAmerica has the good sense not to mention either the alleged or actual prices for gold jewelry, refrigerators. freezers, the bedroom suite,” or the “living-room group.” The brochure recommends: "Ask for Details!"

To understand their excesses, it might be helpful to contrast rent-to-own terms and interest rates to the consumer credit available to residents of wealthier neighborhoods, who can receive a 10 percent discount on a purchase up to $300 at Woodward and Lothrop for example, just by applying for a store card-though if they do not pay on time and full, they owe 21 percent interest. Or at CompUSA, a computer store in the Maryland Virginia suburbs, approved customers can charge a computer and pay no interest for six months; they pay accumulated interest, however, if they do not pay in full at that time Seeing RentAmerica helps put these admittedly harsh, austere, and misleading terms into perspective. A FESTIVAL OF DEBT Poor neighborhoods in Washington, D.C., are plagued by finance companies peddling loans, to consolidate debt or to make home repairs, to people who are financially desper. ate or credit starved. These firms target minority, fixed- or low-income, low-wage, and Social Security-dependent households who often hold substantial equity in their homes as their sole resource. Not surprisingly, the finance companies charge high interest: from 36 to 50 percent. They tack on worthless, expensive "credit insurance." They offer shoddy work and pursue ruthless, haranguing collection policies. Sometimes they refinance these loans several times, piling on fees along the way: prepayment penalty fees, more credit insurance, and loan origination fees. They front for some of the country's largest financial institutions: NationsBank (after it acquired Chrysler First), Ford Financial Services (whose Associated Services division may keep it afloat), Chemical Bank, ITT, Fleet Financial Services, BankAmerica (through its Security Pacific division), General Motors, General Electric, Westinghouse, and Citicorp. These large lenders front money through lines of credit to finance companies, then buy up and bundle the loans and sell them on Wall Street via secondary securities markets. The customer may be left with shoddy repair work, a huge debt, the threat of foreclosure, and nobody to hold responsible. While the poor have developed many creative strategies to provide the essentials of life, such as doubling up, working under the table, managing collective living, and negotiating ongoing exchanges with friends and kin, they are increasingly vulnerable in the current economic climate. When intergenerational network flows, employment, and government assistance fail them, when relatives can no longer provide small loans between checks or the exchange of food stamps for cash, poor people develop strategies to work the fringe banking system: pawning televisions and VCRs when between checks, redeeming them when they can; cashing their checks at America's Cash Express; paying their bills with money orders and moneygrams they purchase at ACE; using the poor person's telephone, the pager; and "renting” their grossly overpriced furniture and appliances for as long as they can. … The same developers who refused to maintain or build low-cost urban housing have gone bust on overpriced condominiums, unnecessary office space, and underutilized

shopping centers in the suburbs. The same lenders who disinvested in cities, jobs, workers, and infrastructure squandered their money on junk bonds and takeovers. Now they're back, extending credit to fringe banks for loans of last resort and thus passing on high-cost debt to the poor.

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However, many women employers simply perpetuate the sexist division of labor by pass- ing on the most devalued work in their lives to another woman-generally a woman of color. Thus, white middle-class women escape the stigma of "women's work" by laying the burden on working-class women of color.

36

White Poverty

The Politics of Invisibility

bell hooks

In the southern world of racial apartheid I grew up in, no racialized class division was as intense or as fraught with bitter conflict as the one between poor whites and black folks. All black people knew that white skin gave any southern "cracker or peckerwood" (ethnic slurs reserved for the white poor) more power and privilege than even the wealthiest of black folks. However, these slurs were not the product of black vernacular slang, they were the terms white folks with class privilege invented to separate themselves from what they called poor "white trash." On the surface, at least, it made the lives of racist poor white people better to have a group they could lord it over, and the only group they could lord it over were black people. Assailed and assaulted by privileged white folks, they transferred their rage and class hatred onto the bodies of black people.

Unlike the stereotypes projected by the dominant culture about poor black folks, class stereotypes claimed poor whites were supposedly easily spotted by skin ailments, bad dental hygiene, and hair texture. All these things are affected by diet. While poor southern black folks often had no money, they usually had homegrown food to eat. Poor whites often suffered from malnutrition. Living under racial apartheid, black children learned to fear poor whites more than other whites simply because they were known to express their racism by cruel and brutal acts of violence. And even when white folks with class privilege condemned this violence, they could never openly oppose it, for to do so they would have had to take the word of black folks over those of white folks, thus being disloyal to white supremacy. A white person of privilege opposing violence against blacks perpetuated by poor whites might easily ruin their reputation and risk being seen as a "nigger lover."

When I was a small child we lived in the hills without neighbors nearby. Our closest neighbors were "white trash," as distinct from poor whites. White trash were different because they flaunted their poverty, reveled in it, and were not ashamed. Poor whites, like poor blacks, were committed to trying to find work and lay claim to respectability-they were law abiding and patriotic. White trash saw themselves as above the law and as a consequence they were dangerous. White trash were folks who, as our neighbors were fond of saying, "did not give a good goddamn." They were not afraid to take the Lord's name in vain. Most poor white folks did not want to live anywhere near black folks. White trash lived anywhere ….

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Our "hillbilly white trash" neighbors lived by their own codes and rules. We did not call them names, because we knew the pain of slurs. Mama made it clear that they were people just like us and were to be shown respect. While they did not bother us and we did not bother them, we feared them. I never felt that they feared us. They were always encouraging us to come over, to play and party with them. To most respectable black people, poor whites and white trash were the lowest of the low. Even when they were nice, black folks felt it was important to keep a distance. I remember being whipped for being overly friendly with poor white neighbors. At that time I did not understand, nor did our parents make it clear, that if anything had happened to us in their homes, as black folks we would just have been seen as in the wrong; that was the nature of Jim Crow justice. While we were encouraged to keep a distance from all white children no matter their class, it was clear that black people pitied and often felt contempt toward the white poor.

Desegregation led to the closing of all black schools. Busing took us out of our all-black neighborhoods into worlds of whiteness we did not know. It was in high school that I first began to understand class separation between whites. Poor white kids kept to themselves. And many of their well-to-do white peers would rather be seen talking to a black person than speaking to the white poor, or worse, to white trash. There was no danger that the black person they were talking to would want to come and hang out at their home or go to a movie. Racial lines were not crossed outside school. There could be no expectation of a reciprocal friendship. A privileged white person might confuse the issue if they showed attention to an underprivileged white peer. Class boundaries had to remain intact so that no one got the wrong idea. Between black and white there was no chance of a wrong idea: the two simply did not meet or mix.

Since some folks saw mama's family as backwoods, as black hillbillies, she was always quick to punish any act of aggression on our part toward an underdog group. We were not allowed to ridicule poor whites-not even if they were taunting us. When we began to ride the bus across town to the white school, it was a shock to my sensibilities to interact with black children who were scornful of the misfortune of others ….

To this day I have sad memories of the way Wilma, the white girl who was in my class, was treated by aggressive black children on the bus. Their daily taunts reminded her that she was poor white trash, the lowest of the low, that she smelled bad, that she wore the same dress day after day. In loud mean talk they warned her not to sit next to them. She often stood when there was an empty seat. A big girl with dark hair and unusually fair skin, she endured all the taunts with a knowing smirk. When she was pushed too far she fought back. She knew that with the exception of her ten minutes on that predominately black bus, white power ruled the day. And no matter how poor she was, she would always be white.

The white poor make up the vast majority of the poor in this society. Whereas mass migration of poor blacks from southern states to northern cities created a huge urban poor population, the white poor continue to live in isolated rural and suburban areas. Now and then they live hidden in the midst of white affluence. From their invention to the present day, the world of trailer park homes has been the territory of the white poor. While marking class boundaries, trailer park communities do not carry the stigma of degradation and deprivation commonly associated with the "ghetto"-a term first used to identify poor white urban immigrant communities. Indeed, in the not so distant past the psychological and economic self-esteem of the white working class and the white poor has been significantly bolstered by the class politics of white supremacy. Currently, we are witnessing a resurgence of white supremacist thinking among disenfranchised classes of white people. These extremist groups respond to misinformation circulated by privileged whites that suggests that black people are getting ahead financially because

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of government policies like affirmative action, and they are taught to blame black folks for their plight.

While anti-black racism has intensified among whites of all classes in recent years as part of civil rights backlash, overall the white underprivileged are … far more likely to see immigrants as the group taking needed jobs. Their racism toward non-white immigrants who are perceived to be taking jobs by virtue of their willingness to work for less mirrors that of black workers who blame immigrants. More and more the white and black poor recognize that ruling class greed ensures their continued exploitation and oppression.

More and more Americans of all colors are entering the ranks of the poor. And that includes white Americans. The evidence is in the numbers. In the essay "Trash-0-Nomics," Doug Henwood states what should be obvious but often is not: "Of course, the aver- age white person is better off than the average non-white person, those of Asian origin excepted, and black people are disproportionally poor. But that sort of formula hides as much as it reveals: most officially poor people are white, and these days, a white household should consider itself lucky if its income is only stagnant rather than in outright decline." It serves white supremacist capitalist patriarchal ruling class interests to mask this reality. Hence, the almost invisibility of the white poor in mass media.

Today, most folks who comment on class acknowledge that poverty is seen as having a black face, but they rarely point to the fact that this representation has been created and sustained by mass media. Concurrently, reports using statistics that show a huge percent- age of black folks in the ranks of the poor compared to a small percentage of whites make it seem that blacks are the majority group in the ranks of the poor. Rarely do these reports emphasize that these percentages are based on population size. The reality they mask is that blacks are a small percentage of the population. While black folks disproportionate to our numbers are among the poor, the vast majority of the poor continue to be white. The hidden face of poverty in the United States is the untold stories of millions of poor white people.

Better to have poor and working-class white folks believe white supremacy is still giving them a meaningful edge than to broadcast the reality that the poor of any race no longer have an edge in this society, or that downsizing daily drags previously economically sound white households into the ranks of the poor …. Undue media focus on poor nonwhites deflects attention away from the reality of white poverty.

No doubt ruling class groups will succeed in new efforts to divide and conquer, but the white poor will no longer direct its class rage solely at black people, for the white poor is divided within its ranks. Just as there are many poor whites who are racist, there are a substantial group of poor whites who refuse to buy into white supremacist politics, who understand the economic forces that are crippling the American working class. Progressive white poor and working-class people understand the dynamics of capitalism. All over the United States class unrest is mounting ….

Ending welfare will mean that more white women than ever before in our nation's history will enter the ranks of the underclass. Like their black counterparts, many of them will be young. Workfare programs, which pay subsistence wages without the backdrop of free housing, will not enhance their lives. As the future "poorest of the poor" they are far less likely to be duped into believing their enemies are other economically disadvantaged groups than their predecessors ….

Given that today's culture is one where the white and black working class and poor have more to say to one another, there is a context for building solidarity that did not

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exist in the past. That solidarity cannot be expressed solely through shared critique of the privileged. It must be rooted in a politics of resistance that is fundamentally anti-racist, one that recognizes that the experiences of underprivileged white folks are as important as those of people of color. The class segregation that historically divided the white poor from their more privileged counterparts did not exist in predominately black communities. And while generations of white families have historically remained poor, a host of black folks pulled themselves out of poverty into privilege. In solidarity these folks have historically been strong advocates for the black poor even though that too is changing. More often than not they did not encourage solidarity with the white poor because of persistent anti-black racism. Now they must become advocates for the white and black poor, overcoming their anti-white prejudices. Concurrently, the black and white poor must do the work of building solidarity by learning more about one another, about what brings them together and what tears them apart. We need to hear more from all of us who have bridged the gap between white and black poor and working-class experience.

When I left the segregated world of my poor and working-class home environment to attend privileged-class schools, I found I often had more in common with white students who shared a similar class background than with privileged class black students who had no experience of what it might mean to lack the funds to do anything they wanted to do. No matter our color, students from poor and working-class backgrounds had common experiences history had not taught us how to sufficiently name or theo- retically articulate. While it was definitely easier for folks from poor white backgrounds to assimilate visually, we all experienced estrangement from our class origin as Well as the fear of losing touch with the worlds we had most intimately known. The bonds we forged in solidarity were and are not documented. There is no record of our conversa- tions or how these solidarities shaped our future politics. Many of us used this bonding through class across the boundary of race as a groundwork for a politics of solidarity that has stood the test of time.

While racism remains an integral fact of our culture, it too has changed. Xenophobia more so than racial hatred often characterizes where white citizens stand on race. The utterly segregated black neighborhoods of my upbringing are no more. The white poor in need of shelter move into places where once no white face was ever seen. This contact does not mean an absence of racism. But it does mean that the criteria and the expression of racism has changed. It also means that there is more of a concrete basis for positive interaction between poor black and white folks. When I walk in these communities created by class division, I see grown white and black folks refusing to interact with each other even as I see more interaction than in the past. And I see white and black children freely crossing the boundaries of race to meet at that class juncture which brings them together in a common landscape they call home.

These bonds may mean little given the fact that there are so many more race-segregated white working-class and poor communities. Even in the places where white and black do not meet, there are more diverse opinions about class and race. Nothing is as simple as it was in the past when the needs of the white poor were pitted against the needs of the black poor. Today, poverty is both gendered and racialized. It is impossible to truly understand class in the United States today without understanding the politics of race and gender. Ultimately, more than any previous movement for social justice, the struggle to end poverty could easily become the civil rights issue with the broadest appeal-uniting groups that have never before taken a stand together to support their common hope of living in a more democratic and just world-a world where basic necessities of life are available to everyone, to each according to their need.

See Chapter 7 in Teaching for Diversity and Social Justice for corresponding teaching materials.

SECTION 3

CLASSISM

Introduction

Maurianne Adams, Larissa E. Hopkins, and Davey Shlasko

INTRODUCTION: ECONOMIC INEQUALITY IN THE AFTERMATH OF RECENT RECESSION

Before the great recession that started in December 2007, many people felt uncomfortable talking about classism and uncertain about their specific class locations. But now, since the uneven eco- nomic recovery benefitted some while leaving others far behind (Fry & Taylor, 2013; Kochhar, 2012; Tatum, 2017), attention to class inequality is out in the open. Town meetings, rallies, and debates during the 2016 national election focused upon the glaring inequities of wealth and income that the recession and its aftermath exacerbated and highlighted. One major candidate on the left, along with his supporters, openly identified with socialism and argued for greater economic equality, raising topics that had been taboo for a generation; the successful candidate on the right made populist appeals to working people who had been left behind by the economy and felt ignored and forgotten by the major political parties.

Unfortunately, public discussion of economic inequality conducted by sound bites in the heat of electioneering is not as nuanced or accurate as one might hope. Much of the political rhetoric evokes ill-defined, one-dimensional class categories – "working class " or "middle class" – without examining what those categories actually mean. Another strain of political rhetoric paints sharp distinctions between the wealthiest 1 % and everyone else, as in the Occupy Wall Street slogan "We are the 99%" (selection 40), which glosses over significant differences within the 99% major- ity. Within the US, the understanding of class categories has been conflated with race, national origins, dialect or accent, immigrant status, generational expectations, and occupation, such that economic status is not a stand-alone class marker (Pew, 2015). This complexity stands in contrast to the simplifications of political rhetoric, and demonstrates that only an intersectional analysis can make sense of our inherited class identities and positions.

For example, the downturn of 2008 had disproportionately negative and long-term conse- quences for families of color. After decades of being denied mortgages for home investments, they

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were targeted for high interest subprime home mortgages, so that the bursting of the subprime financial bubble had disastrous consequences for them especially. Latino families lost $75-98 billion in home-value wealth and black families $71-92 billion, the "greate