They may be poor but they ain't stupid

The Star Tribune writes how the poor in America are finding ways to exploit the wrinkles in the system to make a living - not a great living, just a few bucks a time, but it's a start:

There are the return stringers -- people on the front end of loose-knit shoplifting gangs -- hired to return purloined merchandise for store credit using a driver's license. Recently, a pimple-faced, tattooed and gap-toothed young man returned more than $60 of Oil of Olay age-defying cosmetics.
I did not ask what would have been obvious questions. Do you have a receipt? Did you pay with a debit or credit card? Have these improved your skin? I gave him a gift card.
There are non-criminal entrepreneurs too - a grandma purchasing a gift card, buying small value items to turn most of the card into cash, then returning the items for cash. Free ATM withdrawals! Yes, UK citizens, ATM withdrawals in the USA generally cost you a buck or two unless you can drive 10-40 miles to a branch of your own bank.
But the newest entrepreneurial poor at our East St. Paul Target are the couponers, who, individually or in groups, purchase multiples of same items at little or no cost using high-dollar or "free" coupons found online. Then they return the items for full cash value.
A fantastic bit of arbitrage here. Couponing has for decades been a way of life for the very poor in America - and hold no illusions, the "poor" in the UK have no idea what poverty in a first-world country can be like. There are even mainstream TV shows on the subjects such as Extreme Couponing. The economic premise is price discrimination - the very poor can trade time clipping coupons for relatively small monetary savings. Now they have found a way to amplify those savings into cash rather than cheap purchases.

Article author Doug Champeau hypothesises that the increase in entrepreneurship is at least partly due to the newly-impoverished former members of the American middle-class; business nous and economic literacy translates into being able to analyse and exploit an overly complex system of discounts and benefits for the poor. Perhaps this tells us a lot about how people stay in poverty - the opportunities to rise are there, but they haven't been equipped by their high school education to be able to find them.

No comments:

Post a Comment

All comments are subject to retrospective moderation. I will only reject spam, gratuitous abuse, and wilful stupidity.