> I can't even imagine what this is supposed to look like in places like that.You open a shop, don't pay the right people when asked, your shop gets burnt or your car gets smashed. You are asked to hire this or that guy "as a favor to X"; you don't get hired here or there because "friend of X" got it instead. You may or may not build here or there, because X decided so. You know certain illegal activities are going on in certain places, but you cannot stop them nor complain to authorities, or there will be consequences. In the worst areas, wearing any expensive item without the protection of X is a recipe for getting assaulted and robbed. You go to the wrong cafe at the wrong time, you might get shot at. In certain professions (accountancy, law, politics, hospitality), getting killed is a distinct possibility, and you might be asked to perform unethical acts very often. Public-office holders are determined by X; a lot of town infrastructure rots away, because maintenance funds have been siphoned off (organised crime makes money from building and demolishing, not from maintenance); town improvements cost twice as much as they should, which means other budget items get half as much as they should. Ignorance is widespread and encouraged, since education breeds "troublemakers". And if X decides to publicly humiliate you, he will do that with impunity.
It's not that people live in fear, but you feel the limit to your personal freedom in very practical terms. The frequency of that feeling depends on your personal circumstances and how bad the situation is in that particular area, but it will be there.
> Is the income too poor to maintain a sneaker collection and latest FitBit
Your school is decrepit, and occasionally will literally fall on your head. Drugs are cheap and plentiful since you're 12-13, and by then you're probably smoking anyway. When you go to the hospital for a procedure, unless you have friends who can guarantee you a good doctor, you might come back with something worse. The chances of your bicycle or scooter getting stolen as soon as you drop your guard, are very high. Your playground is routinely vandalised as soon as it's fixed. You finish school and there are no jobs. You start a business and there are no customers - just taxes. You end up working illegally, with no protections - if you get injured on the job (or die) there will be no insurance payout, and if the authorities find out, they'll want a bunch of money you don't have. Your employer says this month he ain't paying you, good luck. No regular contract means that, by the time you retire, you will have a minimal pension that won't allow you even to live on ramen. The buildings you live and (not) work in, are not compliant with building regulations, with all that it entails. You cannot get a mortgage, because no legal job; so you borrow money from a dodgy "friend", buy a house cash-in-hand, and then find out it was built illegally and is now worthless - unless you find another sucker... Dodgy Friend after a while asks for twice the interest, and if you can't pay your physical health will suffer pretty dramatically. Broadband is a luxury (although 4G helped there). Public transport, where it still runs, has the same frequency of snow in California. Litter is everywhere. You're utterly bored on most days. Everyone is out to scam you, and you're out to scam everyone. You're not hungry - food is actually cheaper and tastier in those areas, if you don't mind the fact that it's often not as quality-controlled as elsewhere (and occasionally dangerous). You may or may not be able to buy the stuff you need. You live in houses you cannot afford to repair. If you're disabled, good luck surviving. If you have mental health issues, you'll likely end badly.
As a paradox, the only way to escape the daily reminder that you're poor is to incessantly pursue the pointless display of (often illegally or violenty obtained) wealth - like flashing a new iPhone or driving a new Mercedes - which makes you even poorer; or to do drugs, which makes you poorer and sicker. When you try to complain that you're poor, you are told "but why did you get an iPhone/buy drugs then?".
Eventually you give up, jump on a train, and go be a better-respected slave in a richer city or country. If your family has a bit of money, at 18 you go study in the rich North and just stay there. Your support network is now broken, possibly forever.