It's Expensive Being Poor

It’s expensive being poor

Recently I saw a post on one of the community Facebook pages that have proliferated throughout the region from a person seeking an oil delivery on a weekend. One respondent demanded to know why the homeowner had waited until a weekend to get oil when only emergency deliveries are available.

I thought the respondent’s “critical parent” was working overtime in giving such an unhelpful response. I don’t know the personal circumstances of the person who needed the service but I can think of several reasons why one might need an oil delivery on a frigid weekend.

Perhaps, the inquiry was made by a weekend resident who didn’t realize how much oil had been consumed by the persistent cold. Or maybe it was a person on a fixed income who was hoping to stretch their last tankful until their funds replenished. Or maybe, just maybe, the question came from one of the many area residents who struggle to keep up with the rising cost of living, stretching every reserve as far as possible.

All of which led me during some wakeful hours in the middle of the night to contemplate how expensive it is to be poor. The United States is still the world’s wealthiest nation but approximately 36 million among us—just under 11 percent of the population—exist at or below the poverty level.

Among the most impoverished are households headed by single women (23 percent); young adults without a high school diploma (25 percent); those living in households whose head is unemployed (30 percent), and minorities (19.5 for Black people).

For these folks, life is often precarious and, ironically, more expensive than it is for Americans with adequate incomes and social safety nets such as insurance. It simply costs more to be poor.
In the case of the emergency oil delivery, a response could have entailed a delivery fee of up to $100 in addition to the cost of the fuel—an unneeded burden for anyone with a marginal income.

And that is not the only “poverty tax” on marginal households. Late payment charges on credit cards can be vicious but are just the tip of the iceberg—from the beginning poorer people are charged higher interest rates than their “more credit-worthy” counterparts for every kind of transaction.

Some of the added costs are hidden. For instance, stores usually raise their regular prices to cover credit card costs instead of charging some customers more at checkout. That means cash users, debit users and people with low-reward cards often subsidize the cash back rewards given to high-reward cardholders. Because wealthier people use credit cards more lower-income, cash-dependent, households unfairly end up paying a larger share of the cost of rewards they will never enjoy.

Housing and transportation are major drains for lower-income households. It may well be impossible for a lower-income household to get a mortgage (even if they can find a house they can afford), forcing them to live in apartments where the rents are often higher than a mortgage would be for housing of comparable value.

And living in a rural area such as ours, where public transport is intermittent at best, requires a car, leading to high-interest loans and costly insurance policies for low-income purchasers. Indeed, a recent report found that auto insurance companies charge up to 30 percent more to cover people living in poor neighborhoods.

Lower-income families often purchase older vehicles with lower fuel efficiency and more frequent need of repairs—repairs that may be deferred and lead to more serious problems later, an almost-guaranteed financial trap.

I remember the day my husband and I came up behind a car stalled in a cloverleaf entrance to a freeway. The driver was standing on the side of the road, phone to her ear.

My husband is handy at almost everything so we pulled up behind them to see if he could help. It was an old car; they were people of modest means. My husband did what he could to get them started with the tools he carries with him but to no avail. All we could do was gently push their car to the side of the interchange and leave them to sort it out as best they could. As we pulled away, she was calling a relative to come get her.

I suspect the car ended up with an orange sticker on its mirror, signifying that the vehicle was deemed "abandoned" and must be moved within a specific time frame—usually 24 to 72 hours—or be impounded with towing charges and daily storage fees added.

For this pair, troubles were piling on top of troubles. The mother and daughter were on their way to the hospital to visit their husband and father and now their car required repairs. Troubles snowball when there are inadequate means to meet them.

Fifty-seven percent of Americans say they cannot cover a $1,000 unexpected expense with their savings. The average emergency fund for an American family is $500, with nearly one in four adults having no emergency savings at all. With rising costs, 58 percent feel that saving for emergencies is "almost impossible."

And nowhere can unexpected costs compound faster than with a medical emergency. Health care has always been problematic for uninsured or underinsured people but the picture is poised to darken still further as the One Big Beautiful Bill unfolds.

In 2025, it was still common for uninsured or low-income families—those lacking the clout of an insurance company behind them—to face higher prices for medical services, often twice higher than what insurance companies pay.

Federal, state and hospital policies—including the No Surprises Act and mandatory charity care for non-profit hospitals—can lower costs but negotiating the labyrinth to gain relief may be left to a patient totally unfamiliar with the process, leading to significantly higher, often insurmountable, financial burdens.

Uninsured medical emergencies are already the leading cause of bankruptcy, a situation that will only worsen as coverage becomes more costly or disappears under the One Big Beautiful Bill.

Health outlooks, already precarious for lower-income families are likely to worsen. Many providers demand immediate payment for services, so we can expect more and more lower wage earners to delay preventive care and to ultimately need more costly procedures.

You get the picture. Even without factoring in rising food prices, the cost of childcare and the many other inequities faced by those of modest means, being economically disadvantaged is a costly, stressful, frequently unjust situation. It leads to lost opportunities, lowered educational expectations and less ability to create greater wealth and security.

And it affects not only the less-affluent—society is paying for this imbalance. The Poor People’s Campaign estimates that roughly $1.442 trillion is lost annually to poverty and resulting effects such as hunger, education costs, healthcare, crime, homelessness and related issues. Surely a nation as powerful and wealthy as the United States could, if only in the name of self-interest, even the playing field a little bit.