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Low-income
families in the Baltimore region and 11 other
major metropolitan areas pay more than their
wealthier counterparts for a wide array of
basic goods and services, from buying groceries
to cashing checks, according to a new study.
. .
. . .Tom Kertes, spokesman for the United
Workers Association, which represents
low-wage workers said he welcomed any attention
to poverty but
added the study's conclusions are "not
news to us."
"We call it the ghetto tax," he said.
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Poorer city residents pay more for goods
By Eric Siegel - Sun reporter - Originally published
July 19, 2006
Thank you Sploid for
sourcing the complete text.
Low-income
families in the Baltimore region and 11 other major
metropolitan areas
pay more than
their
wealthier counterparts for a wide array of basic
goods and services, from buying groceries to
cashing checks, according to a new study.
The study,
funded by the Baltimore-based Annie E. Casey
Foundation and released yesterday by
the Brookings
Institution, says the additional costs can
add up to hundreds or even thousands of dollars
a
year per
family -- money that could be used for education
and health-care expenses for children.
The report
called on government leaders to encourage banks
and large-scale groceries to open in poor
neighborhoods, to more closely regulate price-gouging
enterprises that are there and to improve the education
of consumers.
Matt Fellowes, a researcher at Brookings and author
of the study, said the Baltimore region "really
does stand out across the board" for the high
cost of goods and services in low-income neighborhoods.
Fellowes
said that one possible explanation was the high
poverty rate in the city, limited consumer protections
and the relative shortage of banks and credit unions
in poor neighborhoods.
In the
Baltimore region, 31 percent of neighborhoods with
family incomes
below $30,000 had a bank or
credit union, the fourth-lowest percentage among
the areas
studied, the report found. In contrast, 60 percent
of Baltimore area neighborhoods with family incomes
between $30,000 and $59,999 had a bank or credit
union.
Fellowes
said a $15,000-a-year Baltimore-area wage-earner
could save $600 a year by going to
a bank instead
of relying on a check-casher, and that the
same worker would save more than $400 a year in
auto
insurance
if he or she lived in a high-income suburban
community rather than a poor city neighborhood.
Bonnie
Howard, a senior associate at the Casey Foundation,
which works to improve the lives
of disadvantaged
children, said the issue of financial well-being
was an "important element in the family-strengthening
agenda."
"The children who are most vulnerable are those who
don't have economic stability," she
said.
The Abell
Foundation is funding a similar study that will
take a more in-depth look
just at
Baltimore.
Tom Kertes,
spokesman for the United Workers Association, which
represents low-wage
workers said he welcomed
any attention to poverty but added the
study's conclusions are "not news
to us."
"We
call it the ghetto tax," he said.
The Brookings
study also found that low-income families were
more likely to purchase
high-cost mortgages
and to pay more to insure their homes.
The
study noted several innovative approaches to
address the problem.
They include
an effort in
San Francisco to sign up 10,000
new low-income banking
customers and one in New York in
which the state agrees to deposit
public
funds in branches
that
agree to open in underserved areas.
"It's a whole lot more complicated than traditional
antipoverty programs," said
Fellowes.
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