Are low-income people disadvantaged in the job market?
Tale of woman in U.S. highlights challenges of finding and keeping a job
Jan 20, 2015
By Brian Kreissl
They say it takes money to make money.
While that is definitely true on a bigger scale when it comes to investing, starting a business or even pursuing game-changing post-secondary education such as law school or business school, it can also apply to a lower-income person’s ability to earn a living and make ends meet. Someone’s lack of resources is likely to negatively impact her ability to find and keep a job.
Even just having decent clothes and bus fare for job interviews is a challenge for some people. Because of that, it can be very difficult for them to climb out of poverty.
Why poor people stay poor
I read an interesting article the other day written by Linda Tirado. The article is an excerpt from Tirado’s book entitled Hand to Mouth: Living in Bootstrap America, which chronicles her experiences as a low-income fast food and restaurant worker. In the article, entitled “Why Poor People Stay Poor: Saving Money Costs Money. Period,” Tirado tells the story of when her truck was impounded and she couldn’t afford the fees to get it back.
The debt accumulated to the tune of about $200 per day, which was more than she earned at the time. Eventually, she lost the truck and she ended up losing her job as a result. Because Tirado no longer had reliable transportation, she had trouble finding and keeping jobs and she and her husband eventually became homeless.
Tirado argues that not being able to come up with the fees to get her truck back is something a wealthy or even a middle income person just wouldn’t understand. She also argues that opportunities to save money by buying in bulk or borrowing money at low interest rates paradoxically can’t be taken advantage of by the very people who could use them the most.
Let’s face it, even if we didn’t have the money at the time, if we needed a few hundred dollars to cover a minor emergency, most of us could access that kind of money quickly and easily through credit — without having to pay punishing interest rates. But the reality is quite different for most low-income people.
While owning and operating a vehicle may seem like a frivolous luxury to people in large cities, the reality is people in rural and even some suburban locales need a car or truck to travel to and from work and purchase the necessities of life.
A negative impact on earning power
According to an interview published in the Observer by Rachel Cooke, Tirado wasn’t able to land a front-of-house job in a restaurant or office because of the poor state of her teeth as a result of a car accident. She simply couldn’t afford to get her teeth fixed at the time, which had a negative impact on her earning power.
Yet it is surprising just how judgmental some of the commenters were with respect to the articles mentioned above and her original comments on a message board which went viral. Some people have disputed the authenticity of her story (such as this New York Times article) and several others have criticized her for profiting from telling her story or the fact that some of her writing was done after she was no longer living in poverty.
But, to me, such criticism misses the point, which is that many people in so-called rich Western countries such as Canada and the United States do live in poverty and are at a disadvantage in the labour market because, even in a minimum wage job, it takes money to make money. Many others believe Tirado’s story is genuine, but even if it isn’t completely factually accurate, her anecdotes are at least plausible and believable.
Even lower-middle class people experience the same problem to some extent. I don’t know how many times I’ve read financial or career advice written by people who obviously come from money and don’t have a clue how to make ends meet with limited resources.
Employers need to keep this principle in mind when recruiting and employing low- and modest-income employees and avoid being judgmental. It is also important to be understanding and accommodating when lower-income candidates and employees run into challenges not typically faced by those with higher incomes.
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Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.