Comment by eropple | Hacker News Reader

Comment by eropple | Hacker News Reader

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> The capitalist system writ large would much prefer that these people made $40,000 a year instead of $20,000, because then it could sell those people iPhones and whatnot.

Only if the marginal cost of getting there is outpaced by the marginal return. If that wasn't the case, no volume-but-cheaper business could work. When you can have a ton of poor people, they are an exploitable resource for people who aren't selling iPhones (and if you pay attention to the description of eviction as a social problem maybe you'll catch a little more of the "exploitable resource" part). And it's nothing surprising--the historical examples abound of captive, poor populations who are used as revenue generators with no real recourse of their own. I get nothing out of the article that's "trading entirely on the ickiness" of selling goods and services to poor people. But I do get a lot of "poor people have basically no options because of systematic economic incentives to keep them there."

> But I do get a lot of "poor people have basically no options because of systematic economic incentives to keep them there."

Poor people might not have good options, because they have no money, but they have options. If the check cashing place on your block charges too much, you can go to the one down the street. The barrier to entry in these markets is so low that there is no argument that they are "gouging" customers who have no other options.

...Dude. The usurious, bullshit check-cashing places are one of the parts of the system that profits from keeping poor people where they are. The charges at all of them are effectively too much to not be a severe burden on folks who are too down to afford a bank account. You're not covering yourself in glory here with this sort of lack of empathy.

If banks could make a profit giving poor people bank accounts, they'd do it. Moreover, there is tremendous competition in the check-cashing market. Walk down a street in Baltimore and you'll hit one every few blocks. If one of those shops could get more of the market by charging lower fees than their competitors, they'd do it.

Focusing your ire on check cashing places is the archetypal example of a bullshit solution crafted based on emotions rather than rational analysis. Forcing check-cashing fees below the market price is just going to reduce the number of check cashing places, taking away options from people who need them. Any real solution is going to either require the government writing a check e.g. by subsidizing bank accounts for poor people, or reducing regulation to lower the transaction costs in check depositing and withdrawals.

Again (maybe I can say this more succinctly):

These are businesses that survive by making lots of irresponsible loans to people who have no business taking out loans, funding them out of the enormous fees and interest payments charged to the subset of their customers who aren't total write-offs.

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