Life With No Safety Net

Unknown-1“When you ain’t got nothin’, you got nothin’ to lose,” goes the Bob Dylan song. Rochelle certainly has nothing, but, because she has three children, she has everything to lose. In a perfect month she can balance her budget. She earns only $7.65/hour and works just thirty hours a week, but her monthly income meets her monthly expenditures. At least it does on paper in an ideal month. If she did not receive federal assistance she and her children would be on the streets and starving. Her net income is $1818/month. Her fixed expenditures are $1656/month. These figures show nothing spent for clothing and nothing extra. Her estimated expenditure for food is only $40/month more than her food stamps, but surely this can’t be right, even though her children qualify for free school breakfast and lunch.

Rochelle receives $248 in food stamps, now called SNAP; her rent is only $220 due to qualifying for Section 8 housing subsidy; plus she receives Social Security (SSI) for her disabled daughter. In a month, with no financial surprises, Rochelle makes ends meet. Most months do have financial surprises. It might be a car repair or an unexpectedly high electric bill due to an extremely hot Texas summer. In the real world, Rochelle’s income almost never matches her required cash outflow. Today she is driving 30 miles in her unreliable car to a church in a nearby town that has agreed to pay her $400 overdue electric bill.

Rochelle has no safety net. Her relatives and friends are also poor. They are in the same desperate position she is, and she can’t turn to them in an emergency. She has no savings because she has always worked low paying jobs. She has awful credit, partly because she was never taught how one gets and keeps good credit. She grew up seeing her friends and family surrounded by the “fringe banking” world of payday loans and pawnshops. All it takes is one extra expense a month for Rochelle to have a financial crisis. When this happens the only place she can go is to high interest finance companies, higher interest payday loans, or pawnshops. Currently she spends $433 each month to make payments to five different finance companies. When a new crisis arises she re-finances one or more of these loans and then owes even more in interest payments. The five finance companies are like balls she is constantly juggling. “This is just what we do,” she told me. As the title of David Caplowitz’s 1967 book puts it, “The Poor Pay More”, They pay a lot more.

Rochelle’s financial hole is dug deeper every year because life never progresses ideally. Minimum wage and low wage jobs are not living wage jobs. If there were another wage earner, even a minimum wage earner in Rochelle’s household, life would be tolerable. But Rochelle’s situation is much like that of the other 25% of American households headed by single women, where the median income is $23,000, just slightly higher than Rochelle’s. That’s less than half the overall US median income for 2013, estimated at roughly $51,000 . Working hard at low wage jobs has not allowed Rochelle to move forward. I’ve worked with Rochelle, and she is smart and very hard working, but she needs to see some light at the end of the tunnel for her hard work. So far, after losing her job when the department store closed, she has actually moved backwards.

Tomorrow will be Rochelle’s first day at her new job. She’ll be working as a cashier for a very successful grocery store chain. This job provides higher pay but fewer hours than her current job. She plans on working at least some hours in her old job so that she can try to get ahead. Rochelle hopes she will get full time work with the grocery store if she shows them what a good employee she can be. She is keeping her fingers crossed and so am I. Living with no safety net is an exhausting life.

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