March 16, 2015
by Marijke Rijsberman 2 Comments

Good with Money

FAIR Money has just published its first report, Good with Money: Getting by in Silicon Valley. The report, which is based on interviews and a diary study with 10 people struggling to gain or hang on to firm financial footing in a booming local economy, focuses on the most striking finding: how skilled people are with money and how little their skill set overlaps with the money management skills traditionally taught in financial literacy classes.

The report’s introduction sums up the central arguments:

The “master narrative” of financial probity that dominates American culture at this historical moment makes it almost impossible to see the financial behavior of low- and middle-income Americans without a strong punitive bias. This dominant narrative focuses on living well within one’s means, using credit cards responsibly, saving for financial milestones, and managing one’s credit score. It refuses to acknowledge that wage stagnation, underemployment, and rising costs of health care and education leave vast numbers of Americans with insufficient income to cover basic expenses. When we consider financial actions and decisions from the inside out, in their full complexity and in the context of meaningful relationships and life choices, it becomes readily apparent that struggle, hard work, ingenuity, and bad luck are much more common than financial irresponsibility or ignorance.

One of the practical manifestations of this master narrative of (assumed lack of) financial probity is the financial literacy industry, both for-profit and not-for-profit. Financial literacy education makes a foundational assumption that adverse financial outcomes are due to ignorance and/or irresponsibility and that education can effectively eradicate both. This report argues that offering education as a solution to financial struggle is a fairy tale that does real harm. It obscures the massive 30-year-long redistribution of wealth to the very top of American society. It blames the victims of this redistribution for their misfortune and distorts our thinking and our judgment. In obscuring the causes of the financial struggles experienced by average Americans, financial literacy education also makes it much more difficult to think about true solutions.

Good with Money discusses particular “scripts” in the master narrative condemning people who struggle financially, and it proposes a different way to think about their choices and decisions. The report also contains the financial stories of the research participants told through a lens of empathy and historical understanding.

We look forward to your comments.

The FAIR Money Research Collective

August 25, 2014
by Jeffrey Greger

Who are we?

FAIR Money dedicates itself to citizen anthropology. We are committed to observing and elucidating the process by which decades of organized redistribution of wealth pushes the majority of Americans into ever more precarious financial situations.

July 8, 2017
by Kristine Kilanski Leave a comment

Tales from a Tilted Economy: Getting by in Austin and Silicon Valley

Join the members of Fair Money for a community-engaged discussion focused on the common causes of growing inequality in our communities, the experiences of being left out of the economic rewards of growth, and how we as members of the community can respond. The event will feature the authors of two recent publications:

A co-author of Invisible in Austin (UT Press), which describes the lives of people left behind in the recent economic boom in Austin, Texas.

Also present will be members of Fair Money, who co-authored the report, Good With Money: Getting by in Silicon Valley, about the strategies people are drawing on to make ends meet in the Bay Area in the midst of a similar boom.

Find more about this exciting event here.

March 21, 2017
by Kristine Kilanski 1 Comment

Resistance: A Pre-Inauguration Gathering

On January 15, Fair Money founder Marijke Rijsberman opened up her home in Redwood City for a pre-inauguration gathering. The event aimed to bring together Bay area residents concerned about the direction the country appears to be taking, and interested in working alongside their neighbors to make the region a more fair, inclusive, and equal place for those who live here.

Advertised widely using sites such as Nextdoor.com and Meetup.com, the event attracted many new faces to Fair Money, along with lots of old friends. After a period of mingling and munching on a delicious spread of food prepared by Fair Money members, the floor was opened for a round of introductions. Attendees were asked to share their names, how they had heard of Fair Money, and the concerns that had inspired them to attend the event.

After a series of common concerns were identified—such as rising rental and home costs, the experience of racism and xenophobia, and inequality in educational access—attendees split into small discussion groups to brainstorm potential individual- and group-level responses that could be taken to address these deeply entrenched social problems. Having a mixture of researchers, people working with non-profits, artists, and concerned citizens in the room contributed a diversity of knowledge and perspectives on issues, leading to rich conversations. For example, in my group—which was focused on the housing affordability crisis—, I learned a lot about the various ways different community groups were already engaged in working with city councils in the region to address housing issues, as well as the different challenges each city context presents for developing workable solutions to the affordability problem. On the other hand, as a sociologist who has studied the impact of economic booms on inequality in other cities in the U.S., I was able to share how the Bay Area experience was similar and different to other regions undergoing similar population and job increases.

The afternoon’s event ended with a share out in which members of each group presented what they had discussed and suggested potential next steps forward and collaborations for working toward solving the issue they had selected. The event closed with an open question: What next? While the pathway ahead for solving the sometimes seemingly intractable barriers to a more fair, inclusive, and equal Bay Area region is long, windy, and uphill, it was inspiring to meet so many people, from so many backgrounds and walks of life, interested in forging ahead together. There are a lot of people that want to make the Bay Area great—not again—but for once, and for all.

October 10, 2016
by Marijke Rijsberman 1 Comment

Bank Robbery

In May of this year, Rose graduated from college with a Bachelor’s in Business Administration. She was flying high: she had her degree, she had started her own business, a nail salon, which was close to running a profit, she liked living in San Jose with her boyfriend. Life was good, and she was taking a vacation with her parents to celebrate her achievements.

The first thing that augured a problem was pretty innocuous: a credit card purchase was declined. These things happen, and Rose didn’t pay too much attention. She was on vacation after all. Next, she got an email that her credit limit was increased to $1900, from $1500, without further explanation. A week or so later, she found out that the Wells Fargo bank account she used for internet purchases was wildly in the red. How could this have happened?

Someone had gotten into Rose’s bank account, which had $25 in it at the time, and siphoned about $1400 to Western Union, where it becomes essentially untraceable. The bank account is linked to her credit card–the one for which the credit limit was raised. The fraudulent transaction went through, but since the credit limit on her card was insufficient to cover the amount, she ended up maxed out on her credit card and in the red on her bank account.

Rose appealed to Wells Fargo for help, but all they did was slap her with one overdraft fee after another. Everyone she talked to said it was not their fault. They said they would investigate, but only after she had reported the theft to the police and to the FBI. Even so, they didn’t offer her much hope of recovery. She went to the police, to see if they would help her, but they said there was nothing they could do. And the overdraft fees kept coming. She went to the FBI, because the money had crossed state lines, given the involvement of Western Union, they said there was nothing they could do. And the overdraft fees kept coming.

Now Rose had to borrow money to stop the overdraft bleeding. She requested a personal loan, to get back into the black, but the overdraft fees had ruined her credit score and the bank declined to give her the loan. And the overdraft fees kept coming. She tried other banks, but they declined to help her for the same reason. And the overdraft fees kept coming, the overdraft fees kept coming. So Rose tried to get a payday loan, but all they can give you is $400 and by now she needed thousands. She tried crowdfunding to come up with the money, but she didn’t make her goal and came up with zero. And the overdraft fees kept coming.

In more and more desperate straits, Rose turned to her family and asked for help. She had hesitated, because in her community it is embarrassing to owe money, even if it’s not your fault. At first, her family didn’t understand her situation. When they finally did understand, they told her they didn’t have anything to spare. And, remember, all this time, the overdraft fees kept coming. In all, it took about a month for the bank to put her $3000 in the red.

Eventually Rose gave up and turned to an online usury outfit, loanme.com, which offered her a $3100 loan, took $100 off the top in fees, and then started charging her an interest rate of 135%.

By now Rose has two jobs. She’s a carrier for Amazon, with irregular hours. She has another part-time job, also with irregular hours. She’s running her nail salon–which generates just enough revenue to allow her to pay her employee. And she’s looking for a better-paying job to be able to pay back that loanme.com loan. She hopes to pay off that loan before the end of the year, because in January her student loans kick in. So far, she has paid $800 to loanme.com, of which $2.00 went to reduce the principal, meaning she still owes $3098. What if she can’t pay it off before January? “Then I’m screwed,” Rose explains.

So here’s the score:

Thief takes about $1400 (illegally, but with impunity).
Bank takes something on the order of $3000 (totally legally).
Loanme.com takes at least another $3000 or so (legally) if Rose pays off the loan by December. Much more if she can’t (also legally).

They are pretty much indistiguishable, except the legal ones seem to have more leverage.

So what to do? There are a few things:

We can help Rose out. (Email fairnetwork at gmail dot com if you want to know how.)
We can stop giving ourselves hostage to a major bank and go to a credit union instead.
We can support postal banking proposals (read How the Other Half Banks, by Mehrsa Baradaran and join the FAIR Money reading group to talk about it on October 12).
We can push the CFPB to do something about bank fees. Maybe.

Any other ideas? Please let us know. We’d love to hear them.

September 26, 2016
by Jeffrey Greger Leave a comment

Join Us to Discuss How the Other Half Banks Oct. 12 @ 7pm in San Mateo

At 7pm on October 12, we will be hosting a casual group discussion at Kaffeehaus in San Mateo about the challenges low-income people face when attempting to access affordable financial services that meet their needs. Lacking alternatives, many people are forced to take out risky, high-interest payday and title loans to make ends meet. FAIR Money is currently conducting a series of interviews with payday loan recipients to understand why people turn to these services and the effect they have on their lives.

Mehrsa Baradaran explores these issues and potential solutions book How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy.

“…the banking industry, fattened on public subsidies (including too-big-to-fail bailouts), owes low-income families a better deal. She recounts the slow but steady demise of “banks with souls” — the community-based banks and credit unions that have been displaced by larger institutions…” –The New York Times

Should we go back to the days when the local post office offered banking services (like they still do in many European countries)? Are better regulations the answer? FAIR Money would like to include the Bay Area community in this conversation. For those with already full reading schedules, we have included a few videos below of Mehrsa Baradarian speaking about some of the topics in her book.

Please RSVP if you can make it. We hope to see you there!

http://www.democracynow.org/embed/story/2015/10/30/how_the_other_half_banks_how

May 19, 2016
by Jeffrey Greger Leave a comment

Explosion in Payday Lending Coverage

I just listened to a great podcast from NPR’s On Point that handily sums up the recent attention payday loans have been getting. They start off with Google’s recent ban on payday loan advertising and the recent Atlantic article on payday lending, then dive into a far-reaching discussion about the payday loan industry and its effects.

Source: The New York Times

Plenty of attention is given the systemic issues leading to people taking out payday loans (even the payday industry rep agrees). Lots of attention for postal banking as a potential alternative, too.

There’s a beautiful moment in the piece where one of the guests fields a call from a financial planner. The caller trots out the tired personal responsibility line, in response, the guest makes it known that low-income people are, generally, Good with Money, and the problems go far beyond the individual.

One of the guests is Mehrsa Baradaran, author of How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy. This looks like a great book for the summer reading list.

August 10, 2015
by Marijke Rijsberman Leave a comment

Open House – August 23!

Want to learn more about FAIR Money? Think you might want to participate? Are you frustrated and offended by inequality and want to find a way to do something about it? Want to hang out with some really interesting people and exchange ideas for a few hours?

If you’re in the San Francisco Bay Area, then come to FAIRMoney’s Open House:

August 23, 2:00 – 6:00pm, 1414 W Selby Lane, Redwood City, CA

If you’d like, you can RSVP via the FAIRMoney Meetup. But you can also just swing by and come say hello when the spirit takes you.

(And if you’re not in the San Francisco Bay Area, then drop us a note at fairnetwork at gmail.com to say hi and let us know you want to be a part of the solution too.)

August 7, 2015
by Marijke Rijsberman Leave a comment

Program Description: Survival Skills

Do you support FAIR Money’s mission? Would you like to be a part of it? Then drop us a line at fairnetwork at gmail.com. Or perhaps you would like to contribute financially? Send your donation via PayPal or Square Cash to fairnetwork at gmail.com.

Project “Survival Skills” Mission

Create insight and empathy into the financial realities of Americans struggling with low wages, shrinking income and rising expenses, and the fallout from the 2008 financial crisis.
Facilitate conversation about money and money management options and so break through isolation.
Inform the work of organizations that provide aid or develop tools meant to alleviate struggle.

Project Description

In FAIR Money’s earlier research, it became apparent that people who struggle financially, for whatever reason, have important financial skills that are not typically recognized by standard financial literacy education and that are in fact more relevant to real-life situations that are common under our current conditions of high inequality. Project [name] is an extension of that earlier research. It seeks to build a knowledge base of financial skills and knowledge that:

Is cognizant of and suited to the financial realities people face when they find themselves trapped by low wages, wage stagnation, and a variety of external forces they cannot control.
Contributed and tested by the people who are living those realities.
Takes into account the local context of Silicon Valley, with its exceptionally high cost of living and high proportions of relatively recent immigrants.

In three distinct phases, Project [name] will gather skills and knowledge that are relevant to different contexts:

Skills, tactics, tools, connections, and knowledge that help a person weather a financial crisis
Conceptual models and financial tools that facilitate long-term financial stability
Parenting approaches that contribute to resilience and sound financial decision-making in young adults

Data will be gathered through a variety of interactions with participants, including interviews, participatory design workshops, and online diaries.

Although the research will be conscious of local conditions, we expect that many of the financial skills, concepts, and approaches will be more widely applicable and can form a foundation as the model is replicated in other locations.

Phase I: Crisis Skills

This phase will consist of a round of individual interviews with people who find themselves in a financial crisis or have recent experience with financial crisis to gather initial data. It will be followed by several series of group discussions to identify, trial, and evaluate crisis-management skills put forward within each group. Group findings will be published by FAIR Money and will be made available, in the form of workshops, to other organizations that offer aid or create financial management tools for low- and moderate-income Americans.

The anticipated outcomes of the project are as follows:

Identification of financial information and concepts that are most helpful in dealing with a financial crisis [other than the fake solutions offered commercially], with insights into how the information makes a positive difference.
Identification and definition of skills that are important in order to regain more stable financial footing, illustrated with testimonials and step-by-step instructions.
Identification of the most useful financial management tools (whether high-tech or low-tech), affordable financial services, and organizations that offer assistance.
[Identify how findings apply to other contexts/locations.]

Phase I Timeline

Data gathering for Phase I is anticipated to take approximately 4 months, followed by an analysis, collation, and publication phase of approximately 2 months. The project start date is contingent on fundraising success, but is assumed to be September 2015.

Initial Interviews: October/November 2015
Group Meetings: December 2015/January/February 2016
Analysis and Publication: Summer 2016

June 7, 2015
by Marijke Rijsberman Leave a comment

What Would Happen … ?

This Sunday’s New York Times has an editorial by Lee Siegel about refusing to repay one’s student loans, as Siegel himself has done. He suggests that if only more people would follow his example, a long sequence of good things would start to happen. At the end of this sequence, like the pot of gold at the end of the rainbow, we will find affordable higher education.

The collection agencies retained by the Department of Education would be exposed as the greedy vultures that they are. The government would get out of the loan-making and the loan-enforcement business. Congress might even explore a special, universal education tax that would make higher education affordable.

There would be a national shaming of colleges and universities for charging soaring tuition rates that are reaching lunatic levels. The rapacity of American colleges and universities is turning social mobility, the keystone of American freedom, into a commodified farce.

If people groaning under the weight of student loans simply said, “Enough,” then all the pieties about debt that have become absorbed into all the pieties about higher education might be brought into alignment with reality. Instead of guaranteeing loans, the government would have to guarantee a college education.

Sounds nice. But it might perhaps be a slight bit optimistic.

May 4, 2015
by Marijke Rijsberman Leave a comment

Poverty Apps and What’s Wrong with Them

The New York Times magazine for May 3 has an article Want a Steady Income? There’s an App for That, about the app Even, which means to tackle extreme income volatility and the attendant risk of having to resort to short-term loans like payday loans and title loans and similar forms of subprime exploitation. As Even explains their (currently non-existent) service:

With Even, you can stop worrying about low paychecks. Because you’ll get the same consistent money, every payday. For $3/week. No interest. Zero fees. Less stress.

In essence, Even looks at the history of your income, calculates the monthly average, and pays out that amount to you regardless of how much you make. When make more, it holds back money to build a cushion. When you make less than the average, it makes up the difference out of your savings–and there’s a suggestion it might even kick in some money if you haven’t built up your cushion yet. In other words, it’s a short-term savings account that costs you money: $3/week. (I’m not sure how “zero fees” manages to add up to $3/week.)

The article’s author, Anand Girigharadas, is appropriately skeptical and point out that if you don’t have enough money, smoothing it out won’t help you. He quotes Heather, one of the people he portrays: Thinking about money gives her a jolt, “like you’re about to get into a car accident.” And she feels this way, not because she foolishly spent money she needed to save up, but because she’s got a crappy job and a boatload of debt, incurred in part to receive the training that would qualify her to do that crappy job.

Income volatility is bad, of course, but only if you live near the edge or are already way off the cliff. The real problem is the disappearance of good jobs that pay a predictable living wage. As Girigharadas puts it:

People in Silicon Valley may believe there’s an app for everything. That’s their hammer. But improving the lot of the poor will require other tools, including an old one the valley often wants to wish away: politics.

Efforts to tackle some of the negative consequences of inequality (such as income volatility) without trying to tackle the underlying causes (stagnating wages, shifting more and more risk from the corporation to workers, shifting more and more profits from the workers to the corporation), just end up papering over the ugly truths of unregulated capitalism.

FAIR MONEY

Face to Face with Inequality