4 Ways the Poor Get Screwed That Everyone Takes for Granted

I'm not in the 1%. At the lower end of what I think of as the upper middle class, I nevertheless take daily advantage of a raft of systems intended to ensure that people who have less money than I do pay more than I do. Since my economic advantages result from public policy, it's fair to call them taxes, levied on people least able to afford them and applied upward for the benefit of people like me. Since the glory days of feudalism are long over, and we don't like to revel in high position, matters are arranged to keep me and people like me from noticing the systemic nature of our economic advantage.

Here, therefore, are four quotidian things we deal with half-consciously every day that move money upward and keep it there:

1. ATM's. Some readers have reason to think the lowest amount that can be withdrawn from an ATM is a twenty-dollar bill. Others have reason to know that in less privileged parts of town, ATM companies set the machines to dispense ten-dollar bills, with ads calling attention to the fact. The reason is fairly obvious: many people's balances and obligations don't permit them to withdraw $20 at one time, and ATM companies and storeowners don't want to miss out on collecting fees in such a large -- and these days, and in those neighborhoods, such a growing -- population.

The up-front fee for withdrawing $10 is the same as the up-front fee for withdrawing other amounts. That gives me a distinct, recurring financial advantage over less well-off neighbors. This morning, for example, on my way to the subway, I withdrew $120 at a local ATM, paying $1.75 on the transaction -- around 1.5%, a reasonable fee for the convenience. I usually take out as much cash as I can when using an ATM not at my bank. It saves money. And if I keep a certain balance in my account, I pay no transaction fee to my own bank for using the ATM.

An up-against-it neighbor, by contrast, made a ten-dollar withdrawal, paying the $1.75 fee too. Where my cost was less than 2%, his was 17.5%. If his bank account is less “preferred” than mine, he’s paying his bank a fee on the transaction too, a fee not announced at the ATM. The act of taking out cash costs him proportionally more than ten times what it costs me, and possibly far more. Because I can afford it, my money is cheap to get. Because he can't, his is expensive.

Changing that situation would require a law changing how ATM fees work. That law's nonexistence is an act of financial-regulation policy. I'm not in the 1%, but that famous -- or infamous -- banking-government connection is operating to my financial benefit.

2. Subway Cards. My pockets full of cheaply accessed folding money, I proceeded this morning to the subway station to buy a MetroCard, which is how we pay for public-transportation in New York City. When you put more than $10 on a MetroCard, you receive a 7% bonus. I put $80 on the card, the maximum. That way I get what I think of as two free rides, plus part of another one.

The fantasy that I'm getting nearly three free rides, on top of 35.5 rides that I think I purchased for $80, is predicated on the false premise, advertised by the Metropolitan Transit Association, that subway fare is $2.25 per ride. In reality, the fare is capped at $2.25 per ride for a round trip -- but it isn't set there. Nothing’s free: the fare per ride varies, of course, depending on how much you put on the card.

Fares go down for those who can afford more, up for those who can afford less. If you can afford only a round-trip card, your fare will indeed be $2.25 each way. If you put a large amount on the card -- and, a key consideration, if you can tolerate the concomitant risk of losing that card -- you can get your subway fare down to about $2.00 per ride.