Poverty – This condition is fundamental to defining a society, and ultimately a country!
The cost of poverty to society is clear: It prevents children from achieving a great or even good education. Poverty during one’s working years makes it difficult to earn a living wage. And poverty in retirement creates a drain on government resources at all levels.
Some people live in poverty because they don’t expect more out of life. Others may have lived comfortably for most of the their lives, but now find themselves with much less and have to make painful adjustments. And some have been held back by illness or disability. Many are stuck in poverty because the federal and state governments have failed to help them. They lack either the will or the resources to help the least among us.
To illustrate, I want to introduce you to Chris, who has worked hard in her hairstyling business for many years but has little to show for it. Like many others, a lifetime of physically demanding hard work has worn her down prematurely, and she has little or no savings and a low Social Security retirement income. Chris was born in 1948. She left West High School in Denver after 11th grade in order to attend a trade school and become a beautician.
Message 1: It’s important to introduce the concept of trade schools to high school students. Some students will thrive in high school and others will do well in a trade school.
She completed her training and went to work as a full-time beautician. She has been an independent contractor for her entire career, paying a monthly fee to the shop owner, developing her own clientele and buying her own supplies. She got married, but was divorced within five years and back on her own. At age 42, Chris was able to buy a small house in the Observatory Park neighborhood when it was a more affordable bungalow area. She owned it for 18 years, never missing a payment.
Message 2: There was a time when good housing was within reach of ordinary people that earned enough income, were frugal and able to save for a down payment. But today, much of Denver’s housing has inflated value, making it difficult for people to buy.
She even raised her three grandchildren for awhile in that house after their father (Chris’ son) was killed by a drunk driver. The kids eventually went to live with their mother.
Message 3: Food stamps provided necessary resources for a healthy home environment while she cared for her grandchildren. Had Chris been able to retain ownership of this property, she now would be financially secure. The neighborhood transformed into a location for large, expensive homes, partly because of its large lots and proximity to central Denver.
In 2008, Chris developed ovarian cancer. The bill was approximately $129,000. Her health insurance policy was inadequate, basically providing no coverage for significant medical costs.
Message 4: The Affordable Care Act tried to solve this problem by requiring better coverage and providing a subsidy for those that need one. To pay this bill, she obtained a second mortgage that she did not fully understand. It was her undoing. It was an adjustable-rate mortgage with a balloon payment. She couldn’t meet the higher payments or refinance the balloon portion.
So she lost the house. At age 58, with no assets other than personal items and a car, bankruptcy was inevitable.
Message 5: This will be a cost to society at some point and Chris likely will need significant financial support as she ages. This example also shows the need for strong regulation of lending practices.
An unscrupulous small business owner made things worse, renting out Chris’ space to another beautician, though Chris had paid for three months in advance. The owner offered her “floating” space, meaning whatever space was available, which wasn’t helpful to Chris. She couldn’t build and maintain a business under that arrangement. To make matters worse, the owner refused to give her a refund for the three months she had paid for in advance.
Message 6: Too many business people lack basic ethics. Stronger regulations could require them to act in a honorable manner.
Cancer struck Chris again at age 70, and the outlook was bad. She was able to retain her space at the shop where she was working by having her son, a professional painter, paint the shop. But she was victimized again when those who said they would service her clients while she was ill made sure they kept those clients for themselves. Meanwhile, her home rent was raised from $700 to $1,200 per month.
Message 7: Rent increases in much of Colorado have risen faster than wages and even inflation. This has resulted in a significant transfer of wealth and resources to landlords.
So I ask you to consider: Would the right government policies and legislation have significantly enhanced Chris’ quality of life?
I believe that yes, those would have helped Chris and many people in her situation.