Perpetually poor
Computer retailer Blue Hippo is not the only company that offers credit to people with poor or no credit histories.
BH, which settled with the Federal Trade Commission after accusations of taking consumers' money for computers and plasma TVs and not delivering the goods, was featured in a BusinessWeek story last year about businesses that target the poor.
It discusses several companies, including BlueHippo, that extend credit and thus a wider range of consumer goods to poor people. But as the story puts it:
"... this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge."
Contrast this with the story of Adam Shepard, a college graduate who takes $25 and a gym bag with him on a poverty experiment, a la Barbara Ehrenreich's "Nickeled and Dimed" ...
He comes out ahead -- saving $5,000, renting an apartment and buying a truck within 10 months working as first a day laborer and then a mover. (Thanks, Consumerist.) Several journalists have given it a try as well.
Shepard seems to think that people would succeed if they just have the right attitude, but it's clear he benefits from several advantages that the folks in the first story do not have. He wasn't dealing with other issues that complicate the escape from poverty, like a criminal record or health problems or even children that need to go to child care.
Some of the commenters pointed out that it's not so much the ability to climb out of poverty once but to stay out. I wonder what would have happened if he had faced a major dilemma in that time period, such as an accident. Would he have turned to credit then, and experienced what the folks in the BusinessWeek story described?
And seriously, as another commenter pointed out, isn't it kind of immoral to take a bed in a homeless shelter away from someone who really needs it, just to prove a point?
A native of Vietnam, 
Comments
Good points, especially the last one. I tried to read "Nickel and Dimed," but got through about 10 pages before tossing it in disgust. It just feels cheap.
Posted by: mary | February 28, 2008 9:58 AM