FAIR MONEY

Face to Face with Inequality

Category Archives: inequality


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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.

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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.

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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.)


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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:

  1. Skills, tactics, tools, connections, and knowledge that help a person weather a financial crisis
  2. Conceptual models and financial tools that facilitate long-term financial stability
  3. 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:

  1. 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.
  2. Identification and definition of skills that are important in order to regain more stable financial footing, illustrated with testimonials and step-by-step instructions.
  3. Identification of the most useful financial management tools (whether high-tech or low-tech), affordable financial services, and organizations that offer assistance.
  4. [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

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.


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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.


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Measuring the Difference

Remember the Walmart siblings? Well, they are not the only ones who can give us a measure of how unequal things really are.

In “Off the Deep End,” Sarah Anderson of the Institute for Policy Studies calculates that Wall Street bonuses for 2014 are double the size of the total earnings of all full-time minimum-wage earners in America combined. The approximately 1 million full-time minimum wage workers in this country all together pulled down about $14 billion. The bonuses of the 167,000 people on Wall Street came to $28.5 billion.

So if you took those bonuses, Anderson points out, you could just double the minimum wage.


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FAIR Money Meetup on Inequality

FAIR Money is kicking off a monthly Meetup on Saturday March 21 in San Francisco. We’re hoping to meet other people who are interested in inequality and who are itching to do something constructive about it. Interested in joining us? Check out the Meetup page.

We’re planning to make it a movable feast and pick different locations around the Bay Area, so if you can’t make it this time, perhaps another month will work for you.

We hope to see you there!


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Good with Money

Good with Money CoverFAIR 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


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Reflection as a Luxury Good

Maria Konnikova has an excellent article in the New York Times today, entitled “No Money, No Time: The Poor Are Under a Deadline that Never Lifts.” She sums up the experimental work of Sendhil Mullainathan and Eldar Shafir on the effects of poverty and works her way backwards to reality, applying their conclusions to the lives of the people at the bottom of the heap. In the lab, people in artificially induced states of poverty perform worse than people operating under conditions of abundance. Mullainathan and Shafir also conclude that they tend to solve for the present moment more–meaning they borrow, handicapping their future performance.

Mullainathan and Shafir decompose poverty into three components: lack of money, lack of time, and lack of bandwidth (by which the mean the ability do dedicate sufficient mental resources to any given problem so as to make good decisions). Their argument is that a lack of money correlates with a lack of time in the real world, and that both conspire to reduce available bandwidth for decision-making.

Shafir recommends designing programs to reduce bandwidth demands and uses the FAFSA as an example:

“If I give people a very complicated form, it’s a big demand on cognitive capacity,” Mr. Shafir says. “Take something like the Fafsa” — the Free Application for Federal Student Aid — “Why is pickup for the low-income families less than 30 percent? People are already overwhelmed, and you go and give them an incredibly complicated form.”

To him, the obvious conclusion is to radically change our thinking. “Just like you wouldn’t charge them $1,000 to fill out a form, you shouldn’t charge them $1,000 in cognitive complexity,” he says. One study found that if you offer help with filling out the Fafsa form, pickup goes up significantly.

Interestingly, their work also seems to support one of the tentative findings from FAIR Money’s Payday loan study, that talking about one’s situation, even if only to a researcher who offered no comment, seemed to have an effect on decisions about how to handle one’s financial dilemmas. By paying people to participate in our study and talk about their situation, we paid them to take time to reflect, alleviating some of the pressure on two of those three dimensions of poverty.


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Economic Realities of the 21st Century

The Economic Policy Institute calculates that in 2010, six members of the Walton family siphoning profits from the Walmart empire were together worth $89.5 billion. That amount of wealth is equal to the total value held by the bottom 41.5% of Americans, a staggering 48.8 million US households.

For more insight into how Walmart beggars low-income families and lets the rest of us pay for the consequences, see the PBS documentary Store Wars or How McDonald’s and Walmart became Welfare Queens.