Stealing from the Young

The economy clearly is rigged against young people, as has been demonstrated in a spate of recent media stories.

First, the interest rate on student loans doubled today because of congressional inaction and stupidity. That's bad enough, but the fact that students are graduating with gigantic amounts of debt is the larger problem. Marketplace this morning told of the way Australia handles student debt: The loans are in forbearance until the person makes $50,000 a year. Their repayment rate is 85 to 90 percent, despite what some would see as a policy that encourages slackers. Maybe that's because it's not that hard to find a job that pays at least $50,000 in Australia, since they as a society aren't transferring all of their wealth to the .1 of the 1 percent.

Second, it's become common for large employers, especially in retail and fast food, to pay employees using prepaid debit cards instead of paychecks or direct deposit. That might not be a problem if the banks behind the cards didn't charge fees to get access to your money, plus extra fees for inactivity, overdrafts, and much more. But they charge every fee they can, of course, on people making minimum wage, resulting in them being paid under the minimum wage, in effect. As the New York Times reported, "Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card. “It’s pretty bad,” he said. “There’s a fee for literally everything you do.”

Using cards saves the employers money while it costs their employees, most of whom are under 40. Another example given was a McDonald's employee who was denied direct deposit to her credit union account, which would have allowed her to use ATMs without charge. Even when direct deposit is available, it's only as an alternate option that requires a bunch of paperwork. Like colleges that distribute financial aid via fee-laden cards, it's another way of sticking it to young people who can least afford it.

Third, the cost of labor and delivery has tripled since 1996, and insurance coverage has eroded at the same time. When Daughter Number Three-Point-One was born in 1993, my insurance covered every cent of it. Now, the average out-of-pocket cost for a woman with insurance is $3,400. And almost two-thirds of women with non-employer insurance aren't covered for childbirth at all. Who is it that bears the cost of all this? People under 40, for the most part.

As Barbara Ehrenreich has written, "Individually the poor are not too tempting to thieves... [but] the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them." Ehrenreich describes these policies and charges as the opposite of a safety net -- they're a greased chute preventing people from making their way into the middle class.