The cycle of poverty

I read these two stories back-to-back in the New York Times on Sunday. Together, they highlight how strongly the game is rigged against the "little people": the less you have to start with, the more every move costs you.

1) Held Captive by Flawed Credit Reports

[I]naccuracies often show up in consumers’ credit reports, and these errors have real consequences, like increasing borrowing costs or barring people from financing a home or renting an apartment. And once an error is found, getting it fixed can take months of exasperating work.

Last year, the Federal Trade Commission found that 5 percent of consumers — or an estimated 10 million people — had an error on one of their credit reports that could have resulted in higher borrowing costs.

The F.T.C., which oversees the industry along with the Consumer Financial Protection Bureau, has been busy bringing cases in this arena. Since 2000, it has filed 18 enforcement actions against reporting bureaus; 13 were district court actions that generated $25.7 million in penalties.

Consumers have also won in the courts, on occasion. Last year, an Oregon consumer was awarded $18.4 million in punitive damages by a jury after she sued Equifax for inserting errors into her credit report. But the fines, settlements and judgments paid by the larger companies are not even close to a rounding error. Experian generated $4.8 billion in revenue for the year ended March 2014, and its after-tax profit of $747 million in the period was more than twice its 2013 figure.

Not discussed in this article is the fact that when you're poor, you consequently have fewer resources to devote to getting a mistake on your credit report fixed, if and when you even become aware of it. Also not discussed: the widespread practice of requiring a credit check as part of the hiring process, which further disadvantages already-marginalized groups.

And the cycle continues.

2) A Job Seeker's Desperate Choice

On the morning of March 20, Shanesha Taylor had a job interview. It was for a good job, one that could support her three children, unlike the many positions she’d applied for that paid only $10 an hour. The interview, at an insurance agency in Scottsdale, Ariz., went well. “Walking out of the office, you know that little skip thing people do?” she said, clicking her heels together in a corny expression of glee. “I wanted to do that.”

But as she left the building and walked through the parking lot, she saw police officers surrounding her car, its doors flung open and a crime-scene van parked nearby.

Taylor, who had no permanent housing at the time of the interview, was arrested and charged with two counts of felony child abuse for leaving her young sons in her car while she went to the job interview. She spent ten days in jail, and her three children were removed from her custody. Why were the boys in the car? Because she had nowhere else to leave them.

The night before the interview, she put the children to bed at her parents’ house and went to a Walmart parking lot, where she spent hours scrounging up recyclable cans and asking passers-by for gas money, to make sure she had enough for the 35-mile drive to the interview. Her parents would be at work the next day, so she had arranged to leave the boys at a babysitter’s house, she said. But when she arrived, she said, no one answered the door.

“I felt like this was my opportunity to basically improve life for all of us, and the one key part of it is now not available, so what do I do now?” Ms. Taylor said. “That was my only thought: ‘What do I do now? What do I do now?’ That was kind of what started the whole chain of events that day.”

I strongly encourage you to read the whole article and hear Shanesha Taylor's story in her own words.