Glass
30th May 2016, 08:08 PM
From NPR
JACOB GOLDSTEIN, HOST:
Hey, it's Jacob Goldstein. Today's show is a rerun. It originally aired all the way back in 2010. It's a good one.
(SOUNDBITE OF ARCHIVED BROADCAST)
ALEX BLUMBERG, BYLINE: Hello and welcome to NPR's PLANET MONEY. I'm Alex Blumberg.
CAITLIN KENNEY, BYLINE: And Caitlin Kenney. Today on the show, life at the poverty level. We hang out with a woman named Edith, a single mother who makes $16,000 a year and yet managed to fund a vacation at a Caribbean resort with an interest-free loan from one of the world's largest banks. She is a fascinating woman, and you are going to hear all about her.
(SOUNDBITE OF MUSIC)
KENNEY: This woman's name is Edith Calzado, and she is perhaps the single most successful and productive beneficiary of government transfer payments you'll ever meet. Transfer payments - think of welfare and food stamps.
BLUMBERG: Some people in the country earn more than they need to cover their basic necessities. And the government taxes those people and gives some of that money to people the government thinks don't earn enough to cover their basic necessities. Those are transfer payments.
KENNEY: And there's obviously a really contentious debate about transfer payments. One argument you hear is that transfer payments just don't make economic sense, that they punish productive work by taxing it and then reward other people for not being productive. Some people argue that it takes away the initiative to go out and get a job if you know you're going to get this money anyway. And so the argument goes that everyone just ends up poor - the rich, the poor - that these payments aren't good for anyone.
BLUMBERG: No, and this is an economic argument, not a moral argument. There is a moral argument that says it's fine if everyone is poor as long as we live in a fair society. So transfer payments make sense just on that. But there is also an economic counterargument as well, that transfer payments, if done right, actually improve the economy in the long run.
And this argument says basically, poverty itself is inefficient. Trying to keep your family fed while living at the margin, it doesn't allow you to develop your human capital. In other words, extreme poverty keeps you from getting the education you need to get a good skilled job that would help make you and the whole society at large richer.
KENNEY: Edith Calzado is the poster child for that second argument. So Alex, you and I met Edith at an antipoverty program that's run by the city. It's called a Financial Empowerment Center. And it's a place where people who live in New York and have low incomes can come in and get free financial counseling and advice. She was there having her first interview with her counselor, Michelle Murio (ph).
BLUMBERG: And at first blush, Edith seemed to be in pretty bad shape. She was a single mother. She had a restraining order against her husband, who'd abused her. And she was earning very little money, as we found out when Michelle asked Edith about her income.
MICHELLE MURIO: How much do you make, roughly, on average, a month?
EDITH CALZADO: This year I make, like, 11,000.
MURIO: No, per month.
CALZADO: Oh, per month? It's like 900.
MURIO: OK. And how much do you spend money on groceries per month? How much do you spend? You don't?
CALZADO: I don't spend.
MURIO: Because you get...
CALZADO: I get food stamps. And also there is some place - they have a food pantry.
MURIO: OK.
CALZADO: And I go there too.
MURIO: And your debt, the stuff that you think you owe out there, what do you think it is around? How much do you think you owe out there, roughly?
CALZADO: Like 2,300.
KENNEY: So initially, this was a pretty grim picture, Alex. We were just sitting here, hearing how little she makes and how much she owes. And it turns out that Edith does have other ways she makes income on the side. She cleans offices and sells baked goods around her neighborhood.
But even with this extra money, she told us she only brings in about $16,000 a year, which - this was pretty scary for me to learn - but apparently, in New York City,
that is still considered above the poverty line. It's just barely above the poverty line. But making $16,000 a year puts you above the poverty line for a family of two.
BLUMBERG: And, as she said, she has $2,300 in debt. And that was credit card debt. But as she continued this counseling session, more and more emerged about Edith. And the picture started to change. So for example, she has $900 in savings. She puts away at least 20 to $30 a month. And then that debt, that credit card debt, it turns out it's all interest-free. So Edith is really good at taking those teaser rates from banks - you know, when they say 0 percent interest until January 2011 or whatever. And she milks them for all they're worth.
KENNEY: She's also really good at getting those store credit cards. You know, when you're shopping in Filene's and they're like, if you sign up today we'll give you a 10 percent discount. She would do that. She would sign up for the store card, use it for the discount and then just pay off the balance and close the card out.
BLUMBERG: Michelle, the counselor, pulled Edith's credit report. And she wouldn't tell us the number on tape. But her credit report was excellent.
MURIO: That's your credit score.
CALZADO: Oh.
MURIO: Excellent, OK? So let's go over what you got going on here. You have a Sears card that has been closed by you, zero balance, right? Chase, Toys R Us, closed, zero - GAP, closed, zero - Kohl's, zero, and it's open.
NPR (http://www.npr.org/templates/transcript/transcript.php?storyId=479349851)
JACOB GOLDSTEIN, HOST:
Hey, it's Jacob Goldstein. Today's show is a rerun. It originally aired all the way back in 2010. It's a good one.
(SOUNDBITE OF ARCHIVED BROADCAST)
ALEX BLUMBERG, BYLINE: Hello and welcome to NPR's PLANET MONEY. I'm Alex Blumberg.
CAITLIN KENNEY, BYLINE: And Caitlin Kenney. Today on the show, life at the poverty level. We hang out with a woman named Edith, a single mother who makes $16,000 a year and yet managed to fund a vacation at a Caribbean resort with an interest-free loan from one of the world's largest banks. She is a fascinating woman, and you are going to hear all about her.
(SOUNDBITE OF MUSIC)
KENNEY: This woman's name is Edith Calzado, and she is perhaps the single most successful and productive beneficiary of government transfer payments you'll ever meet. Transfer payments - think of welfare and food stamps.
BLUMBERG: Some people in the country earn more than they need to cover their basic necessities. And the government taxes those people and gives some of that money to people the government thinks don't earn enough to cover their basic necessities. Those are transfer payments.
KENNEY: And there's obviously a really contentious debate about transfer payments. One argument you hear is that transfer payments just don't make economic sense, that they punish productive work by taxing it and then reward other people for not being productive. Some people argue that it takes away the initiative to go out and get a job if you know you're going to get this money anyway. And so the argument goes that everyone just ends up poor - the rich, the poor - that these payments aren't good for anyone.
BLUMBERG: No, and this is an economic argument, not a moral argument. There is a moral argument that says it's fine if everyone is poor as long as we live in a fair society. So transfer payments make sense just on that. But there is also an economic counterargument as well, that transfer payments, if done right, actually improve the economy in the long run.
And this argument says basically, poverty itself is inefficient. Trying to keep your family fed while living at the margin, it doesn't allow you to develop your human capital. In other words, extreme poverty keeps you from getting the education you need to get a good skilled job that would help make you and the whole society at large richer.
KENNEY: Edith Calzado is the poster child for that second argument. So Alex, you and I met Edith at an antipoverty program that's run by the city. It's called a Financial Empowerment Center. And it's a place where people who live in New York and have low incomes can come in and get free financial counseling and advice. She was there having her first interview with her counselor, Michelle Murio (ph).
BLUMBERG: And at first blush, Edith seemed to be in pretty bad shape. She was a single mother. She had a restraining order against her husband, who'd abused her. And she was earning very little money, as we found out when Michelle asked Edith about her income.
MICHELLE MURIO: How much do you make, roughly, on average, a month?
EDITH CALZADO: This year I make, like, 11,000.
MURIO: No, per month.
CALZADO: Oh, per month? It's like 900.
MURIO: OK. And how much do you spend money on groceries per month? How much do you spend? You don't?
CALZADO: I don't spend.
MURIO: Because you get...
CALZADO: I get food stamps. And also there is some place - they have a food pantry.
MURIO: OK.
CALZADO: And I go there too.
MURIO: And your debt, the stuff that you think you owe out there, what do you think it is around? How much do you think you owe out there, roughly?
CALZADO: Like 2,300.
KENNEY: So initially, this was a pretty grim picture, Alex. We were just sitting here, hearing how little she makes and how much she owes. And it turns out that Edith does have other ways she makes income on the side. She cleans offices and sells baked goods around her neighborhood.
But even with this extra money, she told us she only brings in about $16,000 a year, which - this was pretty scary for me to learn - but apparently, in New York City,
that is still considered above the poverty line. It's just barely above the poverty line. But making $16,000 a year puts you above the poverty line for a family of two.
BLUMBERG: And, as she said, she has $2,300 in debt. And that was credit card debt. But as she continued this counseling session, more and more emerged about Edith. And the picture started to change. So for example, she has $900 in savings. She puts away at least 20 to $30 a month. And then that debt, that credit card debt, it turns out it's all interest-free. So Edith is really good at taking those teaser rates from banks - you know, when they say 0 percent interest until January 2011 or whatever. And she milks them for all they're worth.
KENNEY: She's also really good at getting those store credit cards. You know, when you're shopping in Filene's and they're like, if you sign up today we'll give you a 10 percent discount. She would do that. She would sign up for the store card, use it for the discount and then just pay off the balance and close the card out.
BLUMBERG: Michelle, the counselor, pulled Edith's credit report. And she wouldn't tell us the number on tape. But her credit report was excellent.
MURIO: That's your credit score.
CALZADO: Oh.
MURIO: Excellent, OK? So let's go over what you got going on here. You have a Sears card that has been closed by you, zero balance, right? Chase, Toys R Us, closed, zero - GAP, closed, zero - Kohl's, zero, and it's open.
NPR (http://www.npr.org/templates/transcript/transcript.php?storyId=479349851)