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Wal-Mart and the Poverty Business

The cover article in this week’s issue of BusinessWeek examines businesses that profit off poverty, and Wal-Mart is among the worst of these. Wal-Mart is one of the biggest companies in the poverty business: poverty is essential to their business model. Wal-Mart relies heavily on targeting poor consumers, often selling poor quality merchandize which may be cheaper, but in reality reflects a significantly lower quality product.

Aside from selling cheap merchandise that must be frequently replaced (eventually costing more - both environmentally AND economically - than more durable products) Wal-Mart has also been contemplating entering the pay-day loan business, which many poverty advocates call “legalized loan sharking”. Wal-Mart does have a desire to enter the finance sector with loans and other financial services, but the types of services they would offer lean more towards the predatory financial services involving high interest loans.

Wal-Mart has also offered space for third party pay-day loan businesses, most notably Ace Payday Loans, which was the subject of a final judgment brought by the Securities and Exchange Commission on the basis of fraud. Having pay-day lending services readily available inside Wal-Mart stores means Wal-Mart is responsible for the exploitation of its core client base, as well as its own employees. Between paying assocaites low wages, selling low-quality merchandise, and opening its in-store space to pay-day lenders, Wal-Mart is without question one of the largest players in the poverty business.

The Poverty Business: Inside U.S. companies’ audacious drive to extract more profits from the nation’s working poor [BusinessWeek]

Roxanne Tsosie decided in late 2005 to pull her life together. She was 28 years old and still lived in her mother’s two-room apartment in a poor neighborhood in southeast Albuquerque known as the War Zone. She survived mostly on food stamps and welfare. The Tsosies are Navajo, and Roxanne’s mother wanted to move back to a reservation in western New Mexico where the family has a dilapidated house lacking electricity and running water. Roxanne, unmarried and with four children of her own, could make out her future, and she didn’t like what she saw.

With only a high school diploma, her employment options were limited. She landed a job as a home-health-care aide for the elderly and infirm. It paid $15,000 a year and required that she have a car to make her rounds of Albuquerque and its rambling desert suburbs. A friend told her about a used-car place called J.D. Byrider Systems Inc.

The bright orange car lot stands out amid a jumble of payday lenders, pawn shops, and rent-to-own electronics stores on Central Avenue in the War Zone. Signs in Spanish along the street promise “Financiamos a Todos"—Financing for All. On the same day she walked into Byrider, Tsosie drove off, jubilant, in a 1999 Saturn subcompact she bought entirely on credit. “I was starting to think I could actually get things I wanted,” she says.

In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge.

Federal Reserve data show that in relative terms, that debt is getting more expensive. In 1989 households earning $30,000 or less a year paid an average annual interest rate on auto loans that was 16.8% higher than what households earning more than $90,000 a year paid. By 2004 the discrepancy had soared to 56.1%. Roughly the same thing happened with mortgage loans: a leap from a 6.4% gap to one of 25.5%. “It’s not only that the poor are paying more; the poor are paying a lot more,” says Sheila C. Bair, chairman of the Federal Deposit Insurance Corp.

Once, substantial businesses had little interest in chasing customers of the sort who frequent the storefronts surrounding the Byrider dealership in Albuquerque. Why bother grabbing for the few dollars in a broke man’s pocket? Now there’s a reason.

Armed with the latest technology for assessing credit risks—some of it so fine-tuned it picks up spending on cigarettes—ambitious corporations like Byrider see profits in those thin wallets. The liquidity lapping over all parts of the financial world also has enabled the dramatic expansion of lending to the working poor. Byrider, with financing from Bank of America Corp. (BAC ) and others, boasts 130 dealerships in 30 states. At company headquarters in Carmel, Ind., a profusion of colored pins decorates wall maps, marking the 372 additional franchises it aims to open from California to Florida. CompuCredit Corp., based in Atlanta, aggressively promotes credit cards to low-wage earners with a history of not paying their bills on time. And BlueHippo Funding, a self-described “direct response merchandise lender,” has retooled the rent-to-own model to sell PCs and plasma TVs.

The recent furor over subprime mortgage loans fits into this broader story about the proliferation of subprime credit. In some instances, marketers essentially use products as the bait to hook less-well-off shoppers on expensive loans. “It’s the finance business,” explains Russ Darrow Jr., a Byrider franchisee in Milwaukee. “Cars happen to be the commodity that we sell.” In another variation, tax-preparation services offer instant refunds, skimming off hefty fees. Attorneys general in several states say these techniques at times have violated consumer-protection laws.

Some economists applaud how the spread of credit to the tougher parts of town has raised home- and auto-ownership rates. But others warn that in the long run the development could slow upward mobility. Wages for the working poor have been stagnant for three decades. Meanwhile, their spending has consistently and significantly exceeded their income since the mid-1980s. They are making up the difference by borrowing more. From 1989 through 2004, the total amount owed by households earning $30,000 or less a year has grown 247%, to $691 billion, according to the most recent Federal Reserve data available.

“Having access to credit should be helping low-income individuals,” says Nouriel Roubini, an economics professor at New York University’s Stern School of Business. “But instead of becoming an opportunity for upward social and economic mobility, it becomes a debt trap for many trying to move up.”

HAPPY AS SHE WAS with the Saturn (GM ) she bought in December, 2005, Roxanne Tsosie soon ran into trouble paying off the loan on it. The car had 103,000 miles on the odometer. She agreed to a purchase price of $7,922, borrowing the full amount at a sky-high 24.9%. Based on her conversation with the Byrider salesman, she thought she had signed up for $150 monthly installments. The paperwork indicated she owed that amount every other week. She soon realized she couldn’t manage the payments. Dejected, she agreed to give the car back, having already paid $900. “It kind of knocked me down,” Tsosie says. “I felt I’d never get anywhere.”

The abortive purchase meant Byrider could dust off and resell the Saturn. Nearly half of Byrider sales in Albuquerque do not result in a final payoff, and many vehicles are repossessed, says David Brotherton, managing partner of the dealership. A former factory worker, he says he sympathizes with customers who barely get by. “Many of these people are locked in a perpetual cycle” of debt, he says. “It’s all motivated by self-interest, of course, but we do want to help credit-challenged people get to the finish line.”

Byrider dealers say they can generally figure out which customers will pay back their loans. Salesmen, many of whom come from positions at banks and other lending companies, use proprietary software called Automated Risk Evaluator (ARE) to assess customers’ financial vital signs, ranging from credit scores from major credit agencies to amounts spent on alimony and cigarettes.

Unlike traditional dealers, Byrider doesn’t post prices—which average $10,200 at company-owned showrooms—directly on its cars. Salesmen, after consulting ARE, calculate the maximum that a person can afford to pay, and only then set the total price, down payment, and interest rate. Byrider calls this process fair and accurate; critics call it “opportunity pricing.”

So how did Byrider figure that Tsosie had $300 a month left over from her small salary for car payments? Barely a step up from destitution, she now lives in her own cramped apartment in a dingy two-story adobe-style building. Decorated with an old bow and arrow and sepia-tinted photographs of Navajo chiefs, the apartment is also home to her new husband, Joey A. Garcia, a grocery-store stocker earning $25,000 a year, his two children from a previous marriage, and two of Tsosie’s kids. She and Garcia are paying off several other high-interest loans, including one for his used car and another for the $880 wedding ring he bought her this year.

Asked by BusinessWeek to review Tsosie’s file, Byrider’s Brotherton raises his eyebrows, taps his keyboard, and studies the screen for a few minutes. “We probably should have spent more time explaining the terms to her,” he says. Pausing, he adds that given Tsosie’s finances, she should never have received a 24.9% loan for nearly $8,000.

That still leaves her $900 in Byrider’s till. “No excuses; I apologize,” Brotherton says. He promises to return the money (and later does). In most transactions, of course, there’s no reporter on the scene asking questions.

A QUARTER-CENTURY ago, Byrider’s founder, the late James F. Devoe, saw before most people the untapped profits in selling expensive, highly financed products to marginal customers. “The light went on that there was a huge market of people with subprime and unconventional credit being turned down,” says Devoe’s 38-year-old son, James Jr., who is now chief executive.

The formula produces profits. Last year, net income on used cars sold by outlets Byrider owns averaged $828 apiece. That compared with only $223 for used cars sold as a sideline by new-car dealers, and a $31 loss for the typical new car, according to the National Automobile Dealers Assn. Nationwide, Byrider dealerships reported sales last year of $700 million, up 7% from 2005.

“Good Cars for People Who Need Credit,” the company declares in its sunny advertising, but some law enforcers say Byrider’s inventive sales techniques are unfair. Joel Cruz-Esparza, director of consumer protection in the New Mexico Attorney General’s Office from 2002 to 2006, says he received numerous complaints from buyers about Byrider. His office contacted the dealer, but he never went to court. “They’re taking advantage of people, but it’s not illegal,” he says.

Officials elsewhere disagree. Attorneys general in Kentucky and Ohio have alleged in recent civil suits that opportunity pricing misleads customers. Without admitting liability, Byrider and several franchises settled the suits in 2005 and 2006, agreeing to inform buyers of “maximum retail prices.” Dealers now post prices somewhere on their premises, though still not on cars. Doing so would put them “at a competitive disadvantage,” says CEO Devoe. Sales reps flip through charts telling customers they have the right to know prices. Even so, Devoe says, buyers “talk to us about the price of the car less than 10% of the time.”

Tsosie recently purchased a 2001 Pontiac from another dealer. She’s straining to make the $277 monthly payment on a 14.9% loan.

Nobody, poor or rich, is compelled to pay a high price for a used car, a credit card, or anything else. Some see the debate ending there. “The only feasible way to run a capitalist society is to allow companies to maximize their profits,” says Tyler Cowen, an economist at George Mason University in Fairfax, Va. “That will sometimes include allowing them to sell things to people that will sometimes make them worse off.”

Others worry, however, that the widening income gap between the wealthy and the less fortunate is being exacerbated by the spread of high-interest, high-fee financing. “People are being encouraged to live beyond their means by companies that are preying on low-income consumers,” says Jacob S. Hacker, a political scientist at Yale.

Higher rates aren’t deterring low-income borrowers. Payday lenders, which provide expensive cash advances due on the customer’s next payday, have multiplied from 300 in the early 1990s to more than 25,000. Savvy financiers are rolling up payday businesses and pawn shops to form large chains. The stocks of five of these companies now trade publicly on the New York Stock Exchange (NYX ) and NASDAQ (NDAQ ). The investment bank Stephens Inc. estimates that the volume of “alternative financial services” provided by these sorts of businesses totals more than $250 billion a year.

Mainstream financial institutions are helping to fuel this explosion in subprime lending to the working poor. Wells Fargo & Co. (WFC ) and U.S. Bancorp (USB ) now offer their own versions of payday loans, charging $2 for every $20 borrowed. Based on a 30-day repayment period, that’s an annual interest rate of 120%. (Wells Fargo says the loans are designed for emergencies, not long-term financial needs.) Bank of America’s revolving credit line to Byrider provides up to $110 million. Merrill Lynch & Co. (MER ) works with CompuCredit to package credit-card receivables as securities, which are bought by hedge funds and other big investors.

Once, major banks and companies avoided the poor side of town. “The mentality was: Low income means low revenue, so let’s not locate there,” says Matt Fellowes, a researcher at the Brookings Institution in Washington, D.C. Now, he says, a growing number of sizable corporations are realizing that viewed in the aggregate, the working poor are a choice target. Income for the 40 million U.S. households earning $30,000 or less totaled $650 billion in 2004, according to Federal Reserve data.

John T. Hewitt, a pioneer in the tax-software industry, recognized the opportunity. The founder of Jackson Hewitt Tax Service Inc. (JTX ) says that as his company grew in the 1980s, “we focused on the low-hanging fruit: the less affluent people who wanted their money quick.”

In the 1990s, Jackson Hewitt franchises blanketed lower-income neighborhoods around the country. They soaked up fees not just by preparing returns but also by loaning money to taxpayers too impatient or too desperate to wait for the government to send them their checks. During this period, Congress expanded the Earned-Income Tax Credit, a program that guarantees refunds to the working poor. Jackson Hewitt and rival tax-prep firms inserted themselves into this wealth-transfer system and became “the new welfare office,” observes Kathryn Edin, a visiting professor at Harvard University’s John F. Kennedy School of Government. Today, recipients of the tax credit are Jackson Hewitt’s prime customers.

“Money Now,” as Jackson Hewitt markets its refund-anticipation loans, comes at a steep price. Lakissisha M. Thomas learned that the hard way. For years, Thomas, 29, has bounced between government assistance and low-paying jobs catering to the wealthy of Hilton Head Island, S.C. She worked most recently as a cashier at a jewelry store, earning $8.50 an hour, until she was laid off in April. The single mother lives with her five children in a dimly lit four-bedroom apartment in a public project a few hundred yards from the manicured entrance of Indigo Run, a resort where homes sell for more than $1 million.

Thomas finances much of what she buys, but admits she usually doesn’t understand the terms. “What do you call it—interest?” she asks, sounding confused. Two years ago she borrowed $400 for rent and food from Advance America Cash Advance Centers Inc. (AEA ), a payday chain. She renewed the loan every two weeks until last November, paying more than $2,500 in fees.

This January, eager for a $4,351 earned-income credit, she took out a refund-anticipation loan from Jackson Hewitt. She used the money to pay overdue rent and utility bills, she says. “I thought it would help me get back on my feet.”

A public housing administrator who reviews tenants’ tax returns pointed out to Thomas that Jackson Hewitt had pared $453, or 10.4%, in tax-prep fees and interest from Thomas’ anticipated refund. Only then did she discover that various services for low-income consumers prepare taxes for free and promise returns in as little as a week. “Why should I pay somebody else, some big company, when I could go to the free service?” she asks.

The lack of sophistication of borrowers like Thomas helps ensure that the Money Now loan and similar offerings remain big sellers. “I don’t know whether I was more bothered by the ignorance of the customers or by the company taking advantage of the ignorance of the customers,” says Kehinde Powell, who worked during 2005 as a preparer at a Jackson Hewitt office in Columbus, Ohio. She changed jobs voluntarily.

State and federal law enforcers lately have objected to some of Jackson Hewitt’s practices. In a settlement in January of a suit brought by the California Attorney General’s Office, the company, which is based in Parsippany, N.J., agreed to pay $5 million, including $4 million in consumer restitution. The state alleged Jackson Hewitt had pressured customers to take out expensive loans rather than encourage them to wait a week or two to get refunds for free. The company denied liability. In a separate series of suits filed in April, the U.S. Justice Dept. alleged that more than 125 Jackson Hewitt outlets in Chicago, Atlanta, Detroit, and the Raleigh-Durham (N.C.) area had defrauded the Treasury by seeking undeserved refunds.

Jackson Hewitt stressed that the federal suits targeted a single franchisee. The company announced an internal investigation and stopped selling one type of refund-anticipation loan, known as a preseason loan. The bulk of refund loans are unaffected. More broadly, the company said in a written statement prepared for BusinessWeek that customers are “made aware of all options available,” including direct electronic filing with the IRS. Refund loan applicants, the company said, receive “a variety of both verbal and written disclosures” that include cost comparisons. Jackson Hewitt added that it provides a valuable service for people who “have a need for quick access to funds to meet a timely expense.” The two franchises that served Thomas declined to comment or didn’t return calls.

VINCENT HUMPHRIES, 61, has watched the evolution of low-end lending with a rueful eye. Raised in Detroit and now living in Atlanta, he never got past high school. He started work in the early 1960s at Ford Motor Co.’s hulking Rouge plant outside Detroit for a little over $2 an hour. Later he did construction, rarely earning more than $25,000 a year while supporting five children from two marriages. A masonry business he financed on credit cards collapsed. None of his children have attended college, and all hold what he calls “dead-end jobs.”

Over the years he has “paid through the nose” for used cars, furniture, and appliances, he says. He has borrowed from short-term, high-interest lenders and once worked as a deliveryman for a rent-to-own store in Atlanta that allowed buyers to pay for televisions over time but ended up charging much more than a conventional retailer. “You would have paid for it three times,” he says. As for himself, he adds: “I’ve had plenty of accounts that have gone into collection. I hope I can pay them before I die.” His biggest debts now are medical bills related to a heart condition. He lives on $875 a month from Social Security.

Around the time his health problems ended his work as a bricklayer eight years ago, Humphries picked up a new hobby, computer programming. The shelves of the tidy two-room apartment where he lives alone, in a high-rise on Atlanta’s crime-ridden South Side, are crammed with books on programming languages Java, C++, and HTML. He spends most days at his PC on a wooden desk nestled in the corner.

When his computer broke down in 2005, Humphries fretted that he would never be able to afford a new one. A solution appeared one night in a TV ad for a company with a catchy name. BlueHippo offered “top-of-the-line” PCs, no credit check necessary. He telephoned the next day.

He remembers the woman on the other end describing the computer in vague terms, but she was emphatic about getting his checking account information. She said BlueHippo would debit the account for $124, and Humphries then would owe 17 payments of $71.98 every other week. At the time, $800 would have bought a faster computer at Circuit City Stores, (CC ) but he didn’t have the cash.

It wasn’t until a week after placing his order that he realized that BlueHippo’s terms meant he would pay $1,347.66 over nine months, Humphries says. He called to cancel. The company told him that would take as many as 10 days, he says. When he called again, a week later, a customer-service representative said cancellation would take an additional 15 days. “I sensed then that I had my hand in the lion’s mouth,” Humphries says. During his next call, a phone rep told him BlueHippo had a no-refund policy. He would lose his $124, even though he had never received a computer.

Humphries takes some responsibility for this frustrating encounter. “I should have done my homework” before ordering, he says. But he also believes he was “strong-armed” out of $124. He was angry enough to send a detailed complaint to the attorney general of Maryland, where BlueHippo is based. That led to his becoming a lead plaintiff in a private class action pending in California against the company. The suit alleges that scores of customers were similarly duped. BlueHippo denies the allegation and says it treats all customers fairly.

The attorneys general of New York and West Virginia are investigating the company, and the Illinois AG has filed a consumer-protection suit in that state. In response to a Freedom of Information Act request by BusinessWeek, the Federal Trade Commission says it has accumulated 8,000 pages of consumer complaints about BlueHippo. The FTC is investigating whether the company has engaged in deceptive practices.

Chief Executive Joseph K. Rensin started BlueHippo four years ago at the same Baltimore address where he had operated a company called Creditrust Corp. Creditrust, which bought other companies’ bad customer debts, enjoyed some success but ultimately slid into Chapter 11 bankruptcy proceedings. In 2005, Rensin and his insurer agreed to pay $7.5 million to settle shareholder allegations that he made misleading statements in an attempt to inflate Creditrust’s stock. Rensin and the company denied acting improperly.

Rensin established himself anew with BlueHippo, whose cartoon mascot adorns a sign in the lobby of its Baltimore building. Most of the 200 employees inside answer phones. Call-center training materials reviewed by BusinessWeek refer to BlueHippo’s prime prospects as families, “typically $25k/yr income & less” who “have had trouble getting credit.”

BlueHippo sells well-known brands such as Apple Inc. (AAPL ) computers and Sony Corp. (SNE ) televisions. Gateway Inc. (GTW ) became a major supplier in December, 2003. “We’ve clearly been aware of their business model from the get-go,” says Gateway spokesman David Hallisey. More recently, Gateway became troubled by customer complaints and decided earlier this year to sever ties with BlueHippo. Given its knowledge all along about BlueHippo’s methods, why did the separation occur only this year? Hallisey explains: “We’re publicly traded and trying to make a profit, so that’s a consideration.”

Three former workers say BlueHippo typically tries to commit consumers to regular electronic debits, then, as in the Humphries case, stalls when they cancel orders or ask about receiving shipment. Many customers give up, according to these employees. Refusing refunds, the company keeps whatever money it receives, whether or not it ships a computer, the trio of former employees say. “We knew we were misleading people. They weren’t getting their computers,” says Quinn Smith, a former call-center salesman who says he was fired last December after complaining about these practices. Smith has provided information to the plaintiffs in the California class action but isn’t a party to the suit.

Rensin declined to comment. In a written statement, the company denied any impropriety. It said it ships purchases when promised, though it acknowledged that consumers who can purchase products outright “are better off” doing so, rather than using its “hybrid” layaway and installment financing. The company confirmed that it refuses refunds but said customers may “use any funds paid to purchase other items from BlueHippo.” It added that its prices are relatively high because of the “added risk of dealing with customers who have poor credit.” In contrast to its training materials, the company said its typical customer earns more than $40,000 a year.

A few months after his BlueHippo experience, Humphries did buy a new computer. He borrowed $400 from a friend and bought a General Quality PC from Fry’s Electronics, a retail chain. The loan covered the purchase of a 17-inch flat-screen monitor, a DVD burner, and a desktop computer with a 40-gigabyte hard drive. Humphries tightened his belt and paid his friend back in $100 installments over four months, interest-free.

JUST LIKE EVERYONE else, the working poor find their mailboxes stuffed with “pre-approved” credit card offers. Luisa and Rose Ajuria have trouble saying no. The Ajuria sisters live in a brown-brick bungalow on Chicago’s financially pressed South Side. They care for a niece named Caroline and five cats. Neither sister studied past high school or married. “Momma said I wasn’t college material,” says Luisa, 57. She and Rose, 54, lived most of their lives under the strict supervision of their father, Manuel, who died in 1993. A Mexican immigrant and former sheet-metal press operator, he dutifully paid all the bills. Every week, Luisa handed him her paycheck from Warshawsky & Co., an auto-parts seller where she worked as a supervisor.

The sisters now manage their finances themselves—by their own admission, badly. Their father had paid off the $60,000 mortgage. But twice in the past six years, Luisa refinanced the cluttered bungalow, using the money to pay bills and repair aging fixtures in two bathrooms and the kitchen of the 75-year-old house. Now there’s a new $140,000 mortgage, with Wells Fargo charging 8% interest. The $1,130 monthly payments eat up more than half of Luisa’s paycheck from her current job as a secretary at the IRS. If she also made full payments on a $9,000 home-equity line of credit from HSBC Finance Corp. (HBC ) and a half-dozen credit-card accounts, they would consume the rest. In total, Luisa owes creditors $169,585. “I don’t read things. I just sign them,” she says.

The debt has forced the Ajurias to consider selling their house and moving to an apartment. But it hasn’t stopped companies from offering more credit. Last year, Rose received a come-on for a Tribute MasterCard. She was surprised a company would offer her credit, since she brings in only about $7,500 a year in disability benefits and wages as a part-time worker at an adult-day-care center. She signed up for the card.

Caroline, the 32-year-old niece, who is agoraphobic and rarely leaves the house, quickly ran up $1,268 in charges on the Tribute card, shopping online for Christmas and birthday gifts. Of her newest card, Rose says: “I regret this one. Truly, I do.”

Terms of the Tribute MasterCard are a world away from the money-back and frequent-flier offers familiar to more prosperous cardholders. Marketed by Atlanta-based CompuCredit, a giant in the subprime card business, Tribute MasterCard offers no such fringe benefits. Rose Ajuria’s card carries an interest rate of 28%, compared with about 10% on a typical card. Since she’s paying only a nominal $10 a month, the debt her niece incurred is growing swiftly. “I think we’ve painted ourselves into a corner,” Rose says. Many Tribute MasterCard customers pay a lower 20% interest, but CompuCredit typically charges them a $150 annual fee, a separate $6 monthly fee, and a one-time payment of $20 required before using the card.

This is the sort of choppy water where many of CompuCredit’s customers paddle—and where the company manages to find profits. CompuCredit was co-founded 11 years ago by David G. Hanna, scion of a family that made a fortune in debt collection. Its 55-member analytics team has devised models to assess more than 200 categories of customer data, from the duration of past credit-card accounts to the number of bad debts. The algorithms apparently work: Last year, CompuCredit reported earnings of $107 million on $1.3 billion in revenue.

Whether the company will make money on Rose Ajuria’s account is uncertain at this point. CompuCredit says that customers offered the Tribute MasterCard at 28% generally have middling credit histories and that it is willing to work with those who have trouble paying their bills.

Executives say the company clearly discloses interest rates and imposes fees up front so consumers won’t be surprised later. But in February CompuCredit disclosed that the FTC and the FDIC had launched separate civil investigations into the marketing of one of its other credit cards. The company denies any wrongdoing. As a goodwill gesture, it says it has stopped charging late fees and interest on accounts more than 90 days past due.

On its Web sites and in its marketing brochures, CompuCredit says it helps customers “rebuild credit” by reporting all of their loan payments to credit bureaus, unlike traditional payday lenders. Not that altruism drives the operation, says co-founder Hanna. “We’re not going to chase somebody where we can’t make money.”

EVEN FOR THOSE WHO climb above the lowest rungs of the economic ladder, a legacy of debt can threaten to undercut progress. Connie McBride, a 44-year-old computer programmer who lives near Tacoma, Wash., grew up in foster homes and has led an adult life notably lacking in stability. She has held decent jobs but sometimes has subsisted on food stamps. She earns $47,000 a year as a freelance programmer, working from the weather-beaten aluminum trailer she rents for $590 a month. Wind whistles through small holes in the walls, and she keeps warm in the winter by feeding a wood-fired stove on a cracked cement foundation.

McBride showed an early aptitude for math and received a GED at age 16. In the late 1980s, she studied computer science at Washington State University, sometimes arriving for class with her three young children. “Taking those classes, given my life, I felt this was the only way out,” she says.

She graduated in 1992, owing $45,000 on student loans. That debt became her main financial burden, she says. The 9.5% interest rate isn’t particularly steep, but she tended to view the payments as less pressing than putting food on the table or paying rent. Late fees piled up. Today she owes $159,991, up from $117,000 only 18 months ago. When dunning notices arrive, she tosses them in the stove.

Personal bankruptcy proceedings in 2003 dissolved dozens of McBride’s liabilities. But by law her debt to student lender SLM Corp. (SLM ), better known as Sallie Mae, wasn’t affected. Every month, $450 is garnisheed from her wages, reducing her take-home pay to $1,338. The garnishment doesn’t even cover interest and penalties, let alone the principal. Says McBride: “There’s no way this thing will ever be paid off.”

New obligations are piling up. She pays $385 a month on a 21% car loan. And now she’s buying baby supplies. McBride says her adult son can’t deal with his 4-month-old daughter, who has medical problems. McBride can’t bear the thought of her granddaughter going to a foster home. So she is postponing nonessential expenditures such as fixing a badly chipped front tooth.

McBride acknowledges her mistakes. “My life is full of bad decisions,” she says. But if she had started out with the funds for college, she wonders whether she would at least be able to afford an apartment and a trip to the dentist. “If you have money to begin with, you don’t have these issues or these kinds of bills,” she says. “You don’t have to worry about the rent or pay double for a car.”

Posted by Alex Goldschmidt on Friday, May 18, 2007

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COMMENTS

Walmart charges the same price to the rich as well as the poor.

I sell cars at a Used Car lot. Everyday I sell a car such as a 1998 Ford Taurus for about $11,000 that is only worth $1,200 wholesale.

Now, only poor and stupid people buy such a cheap car for such a high price. Mainly, because they have to finance and have bad credit.

Walmart helps these stupid and poor people by not charging them $20 for a box of Frosted Flakes.

Also, it seems blacks and a few americanized hispanics seem to be the most foolish.

Miguel in Dallas
Friday, May 18 at 03:51 PM

ALL companies keep money from layaways and gift cards. A company cannot book revenue from gift cards until the money is actually spent; therefore, they can earn interest on the gift card money. Starbucks makes tens of millions per quarter on gift card interest.

Of course, only Wal-Mart profits from this. Other companies give the interest back to their customers out of generosity.

Nick in
Friday, May 18 at 05:45 PM

Connie McBride
44 years old
Freelance Computer Programmer

Yearly income = $47,000
Take home pay = $1,338/Month before garnishment
Add back in $450/Month garnishment = $1,788/Month

$1,788 * 12 Months = $21,456 Yearly take home

$47,000* .0765 (SSA + Medicare) = $3,595.50

$47,000 - $3,595.50 = $43,404.50

$47,000 - $3,595.50 - $21,948.50 = $21,456

So let me get this straight… she makes $47,000/year yet pays $21,948.50 in federal (and possible state and local taxes). That’s roughly 46% of her gross to pay federal, state and local taxes. Who writes this fiction???????

WMW, please tell us all who created this story for you because it’s laughable and destroys any reason why people should hold your organization as even a bit credible.

Mary in
Friday, May 18 at 07:47 PM

“In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor.”

This has replaced ‘Delayed Gratification’!!

“In 1989 households earning $30,000 or less a year paid an average annual interest rate on auto loans that was 16.8% higher than what households earning more than $90,000 a year paid. By 2004 the discrepancy had soared to 56.1%. Roughly the same thing happened with mortgage loans: a leap from a 6.4% gap to one of 25.5%. “It’s not only that the poor are paying more; the poor are paying a lot more,” says Sheila C. Bair, chairman of the Federal Deposit Insurance Corp.”

And, when someone is paying those high interest rates, most of their usable income is going to pay interest, or paying only for the advantage of having it sooner!! Therefore, anyone who cannot WAIT until they save up the money and would rather pay twice as much to get it sooner, have no one to blame, but themselves for remaining ‘poor’. Why should Wal-Mart cover peoples ‘Bad Choices’? Shouldn’t people LEARN how to handle their money more responsibly? It just amazes me, that people can act so irresponsible and then complain that someone else should cover for them, so they can continue to keep doing it!! And, then Wal-Mart comes along and offers the opportuntiy to get an ILC and give out low interest loans and everyone is up in arms, that it will hurt those high interest banks, rental centers and payday loan centers, unbelieveable!!

Bob in
Friday, May 18 at 09:32 PM

I have not studied all of this in depth but I have a couple of salient points.

Though I agree with Bob to the extent people have to be responsible for themselves and their own actions. No need to keep elaborating.

However, Wal-Mart should not encourage “bad” habits by making pay day loans easy with an in store unit. WM should have higher ideals, let some one else be the one to abet poor behaviour.

Examples how WM is extorting money from people that they never did before:
1) Giving easier credit—no money for a year (but you will get stuck later with payments and huge interest rate )
2) $20.00 Cash credit for opening a credit account. Isn’t this nice --dangle that carrot.
3) Get a pay day loan and be indebted forever. What a way to treat the lower income people.
4) A ton of money is made on gift cards (not only WM is to blame) -the card gets down to a few pennies, less than a dollar and many customers pitch the card (I know this as a postive fact) look at the millions of dollars that companies get as a result.
5) WM if forcing their employees to have every customer buy a service plan warranty on a comglomerate of products.
This most often is a waste of money (read various reports about the uselessness of them), but it makes millions and millions for WM. Do the math.
6) Rent space in a WM store for a few years and if it is profitable, watch WM find a way to “squeeze” you out and take over the operation.

Don’t believe that WM was out to give low interest loans on the ILC. I have very mixed feelings about this and truthfully the way Lee Scott is directing WM I honestly would not trust his motives. (Bob and Nick you need to do more homework relative to Lee Scott)

I wish WM would return to it’s “roots” way of doing business.

The Sage in
Saturday, May 19 at 01:06 AM

Walmart charges the same price to the rich as well as the poor.

Sorry, Miguel, that one won’t fly.

Wal-Mart’s prices vary from store to store and area to area and the lowest prices aren’t always in the poorest areas. If you’re poor with limited options you pay more.

Wal-Mart’s pricing is based on spending patterns, not customer’s needs.

Ken V in Texas
Saturday, May 19 at 03:37 AM

Republicans such as Nick, Bob, Mary & Miguel are like cancer......if you shrink the tumor, but let it stick around… it will always come back to haunt you....

You have to eradicate every last mutant cell… that won’t be easy… it will involve chemotherapy for the country which is painful and destructive… but it must be done to save the patient… our country.

Republicans are like cancer.

Ellen in St. Louis, MO
Saturday, May 19 at 05:13 AM

Ellen are you related to SDV because I see alot of the same illness in you. Have you two sought medical help because you’ve got some issues

Mary in
Saturday, May 19 at 07:24 AM

Mary

We could poke holes in this post all day long. I really don’t know what Wal-Mart has to with check cashing joints, Blue Hippo, JD Byrider and STUPID DUMB MORONS WHO ARE TOO DUMB TO READ WHAT THEY SIGN AND TOO DUMB TO NOT SPEND MORE THAN THEY EARN! IF YOU ARE THIS DUMB, IT IS YOUR OWN FAULT AND IT IS NO SUPRISE THAT YOU ARE STUCK IN POVERTY.

However, I will address the woman who cannot live on what she earns. Connie McBride, the computer programmer, takes home $1,788 per month. Per federal law, in all 50 states, her garnishment is limited to 15% of take home pay. This comes to $268.20 per month, or $181.80 per month less than she claims. This is an additonal $2,181.60 per year she lies about having. If she is lying on this point, how can you fail to question the rest of her claims?

Almost every single one of these people admits to borrowing money they knew they could never afford to pay back, even doing it after they had already been bailed out once (see the two illegals whose father paid off their house and then ran up a $160,000 mortgage). These people almost all admit to not reading things before they sign and getting loans and credit cards at 20%+ interest when they are earning $8.50 per hour. These are the same people who can’t delay gratification and save up $500 for a TV. Instead, they get one through Rent A Center and pay $40 per week for 2 years. Then, if they do pay it off, they say “I bought dis here TV! I paid fo it!” Yeah, idiot, you just paid $4,000 for a $500 TV because you couldn’t wait 4 months to buy it!

MORONS!!!!!!!!

Nick in
Saturday, May 19 at 07:53 AM

With an image of mud wrestling in my head, I had kinda hoped Ellen and Mary would bump into each other.

Have you two met?

(I’m giving 8 to 5 on Ellen.)

Ken V in Texas
Saturday, May 19 at 08:25 AM

Nick,

Notice how those morons blame the lenders, etc., instead of blaming themselves, for being stupid? Then, they think it is unfair that everyone doesn’t feel sorry for them and sacrifice to bail them out!! Then we are put down, for pointing out why these people are idiots and have no sympathy for them!! We are wrong, because we are not “Bleeding Heart” liberals!! No wonder they want to start to let more foreign intelligent people into this country, the ‘dumbing down’ of people here in America, has reached epidemic proportions!!

Bob in
Saturday, May 19 at 08:36 AM

I feel sorry for these people, but I make a lot of money from them.

Miguel in Dallas
Saturday, May 19 at 09:31 AM

8 to 5 on Ellen. Come on Ken, I want better odds than that <g>

Mary in
Saturday, May 19 at 09:44 AM

Nick, I am not familer with the laws when it comes to garnishment but it was pretty obvious to see that the $ numbers presented made no sense.

I truely believe alot of people suffer from the stories mentioned above but to have to lie when presenting the details leaves me with little sympathy for the people who write this story and WMW for presenting it without doing their homework.

The real tragedy is our education system and lack of family involvement that puts these people in such bad positions. Yes they have made huge dumb mistakes and for every government social welfare step this country has made over the past 60-70 years there are still people this dumb. What a failure it has all been. I’m still shocked that a class called “real life” is not made mandatory for every child educated today where details of interest rates, mortgage, credit cards, checking accounts, loans, bill paying etc. are fully taught. Our society and the education system has failed them.

Mary in
Saturday, May 19 at 09:52 AM

Once again, the banks and wal-mart’s future financial apsirations have little to worry about w/ bad loans. Having worked 6 years in collections I can tell you that the banks write off those unpaid loans, and the goverment often reinburses them for half....
Just like the goverment gives wal-mart employees their heath care benefits.

One way or another.. we pay for WM’s bad business.

K Heller in LI NY
Saturday, May 19 at 05:16 PM

KenV in Texas

Thanks for your chauvantisic statement about 2 women mud wrestling-it’s comments like yours that set our efforts back a hundred years

As a representative of Walmart Watch who says they are a defender of womens rights I hoped for much better than getting advice from a chauvanist PIG

Susan G.
Fresno CA

Susan in Fresno CA
Saturday, May 19 at 05:30 PM

As a representative of Walmart Watch who says they are a defender of womens rights....

You obviously have me confused with someone else, Susan. I am neither a representative of WMW nor a defender of women’s rights.

There is no need for a “chauvanist PIG” to defend women when you have people like Betty Dukes. Were you aware she is not only the namesake of the largest class-action suit in history but she still works at Wal-Mart? She hardly needs defending by a mere man.

(My money is still on Ellen.:o)

Ken V in Texas
Saturday, May 19 at 07:25 PM

Ken

I know that, somewhere in corporate America, there is a man who won a discrimination case against his employer. Because I am a make in corporate America, I must also have been discriminated against. I demand payment!

Mary

Our society has failed people but not through lack of funding. Education spending, both overall and per capita, has increased 20 fold, adjusted for inflation, since 1950, yet our test scores have shown no measurable increase. Lack of money is not a problem. Union control of unconstitutional public schools and lack of parently responsibility have harmed our children. Until we demand accountability from parents and demand that they invest time and money in their childs’ education, we will fall behind. I can’t begin to count the number of today’s youth who can’t balance a checkbook, can’t properly read or speak, can’t write to save their lives, have no interest in books, see no need to improve their intellectual capacity and place no value on education. It begins with poor parenting but as long as we have the government acting as an absentee father to welfare children, we will never improve our standards.

Contrast that with the Chinese, who place the highest value on education and sacrifice and scrimp and save and borrow and work extra to get a few bucks to pay for their kids’ education. In China, you have to contribute to your own education. In the US, an unconstitutional system of public education controlled by unions and populated by spoiled, indulged, lazy brats, is a burden on taxpayers and produces very little benefit for this nation.

Nick in
Saturday, May 19 at 09:38 PM

Payday loan places and check cashing store fronts and their money wire services all
depend heavily on illegals without proper ID,or a desire to
keep their money in a US bank in case they are caught
and shipped out.

Guess that is a fit for WMT.

Phil in WA in
Saturday, May 19 at 11:24 PM

Contrast that with the Chinese...

Interesting article in today’s Washington Post, Nick.

Tainted Chinese Imports Common

These were among the 107 food imports from China that the Food and Drug Administration detained at U.S. ports just last month, agency documents reveal, along with more than 1,000 shipments of tainted Chinese dietary supplements, toxic Chinese cosmetics and counterfeit Chinese medicines.

Ken V in Texas
Sunday, May 20 at 04:12 AM

What a bloodlusting cult the Republicans like Nick (AKA Mary & Bob) are.

For a party that’s supposedly so big on defending “the culture of life”, they seem to promote war, death and torture with almost unrestrained glee.

And for the Jesus-freak knuckledraggers who make up the GOP base, that’s truly all that matters. It’s all about the faux masculinity and the Reagan/cowboy/Rambo/John Wayne fantasy world that they’ve been living in since 1980.

Bloodlust, as long as it isn’t their blood, or their children’s blood.

The Republicans, like some sort of football game.

Ellen in St. Louis, MO
Sunday, May 20 at 06:28 AM

Ellen, seriously you need to get some help with your anger and violence issues because it’s not healthy! I’m really starting to worry about you

Mary in
Sunday, May 20 at 07:39 AM

“The Republicans, like some sort of football game”

Ellen are you sure you don’t have a relative named SDV?

Mary in
Sunday, May 20 at 07:40 AM

“You obviously have me confused with someone else, Susan. I am neither a representative of WMW nor a defender of women’s rights. “

Ken, a simple “I’m sorry and I was wrong to make that statment” would have sufficed.

Mary in
Sunday, May 20 at 07:41 AM

Nick I absolutely agree a lack of funding is not the issue. That was my point with the spending that has taken place over the last 50+ years look at what good (aka waste) it has been.

It all starts in the family that is failing and then sending their kids to schools that have been failing. Why do you think private education is so big in this country.

Mary in
Sunday, May 20 at 07:46 AM

Tainted Chinese Imports Common

food supply
Walmart Pulls Contaminated Frozen Catfish From China

Walmarts nationwide are pulling their supply of 4oz frozen catfish fillets due to recent finding in Alabama that the catfish may be contaminated with an anti-biotic banned in the US. From CBS4:
http://consumerist.com/consumer/food-supply/walmart-pulls-contaminated-frozen-catfish-from-china-256123.php

Wal-Mart to add Chinese Dining to its 3400 stores nationwide-
December 26, 2006, By Yeshua Yosef

Wal-Mart to add Chinese Dining to its 3400 stores nationwide. The biggest retailer in America is ending the fast food reign of McD’s and even its submarine vendors; in favor of a new Chinese Restaurant Chain. This food chain will serve Chinese food fast, but not of the McD’s Quality. We will serve food fast, but not fast food, is the claim of the Wal-Mart source who disclosed the story. Wal-Mart has reportedly been looking for an alternative to just subs and burgers; because of the anti-fast food sentiment created by the movie “Super Size Me,” which showed the hazards of eating just fast food. According to the source, “We are already 90% Chinese, so we might as well go all the way, to 110%”, some say, this move may change the face of America, and it’s pant size. Wal-Mart supposedly will save money by shipping smaller sizes to America, as there are claims the 60 % profit they make by buying Chinese is cut into by shipping costs.
http://www.andnetwork.com/index?service=direct/0/Home/recent.titleStory&sp=l111971

This will explain WalMart’s planning for in store clinics for the nauseous customers that want to return Chinese food that WalMart sold them the day before. The parking lot/vomit gardens will be full despite high gas prices.

WalMart- Yu want flies wit dhat?

SanDiegoView in
Sunday, May 20 at 08:22 AM

Ellen

Given your propensity for judging people on the basis of their membership in the Republican party, it is not a stretch to wonder if you are uncomfortable with people of different races, colors or religions. Do you really believe that you know anything about me?

I am now a registered Republican so that I can vote in the Republican primaries. The Democrats have done all they can to sell us down the river. I don’t trust them on national security or the economy. I cannot support a party whose official platform in 2004 was almost word for word the same as the Communist party USA’s platform. I cannot support a party that believes in the US taking orders from the UN, that personal safety is more important than national liberty, that peace at any price is desirable, that war must be avoided at all costs, that private property does not exist, that an unborn child deserves no consideration (unless a jerkoff husband kills a pregnant mother-then the unborn child is a LIFE!), that people are incapable of managing their own finances, their own lives, their own retirement and their own families. I cannot support a party that believes in political correctness at any cost, that America is evil, that terrorists are morally superior to us, that we stole everything we have, that we are the world’s worst offender in every area, that our government should own and control our lives, that does not support the same Constitution I have studied and believe in, that does not believe in morals, values, family values, individual liberty or choice in media, entertainment, religion, education or union membership. I cannot support a party that believes our rights come from man and not from a power greater than man.

In short, I can never support the Democratic party.

I don’t believe that yesterday’s Democrats would recognize their party today. While I am not a supporter of FDR or LBJ, they at least had some belief in national security. JFK, RFK and Harry Truman would be more comfortable as Republicans today. In fact, if JFK ran for President as a Democrat today, he would be ridiculed by the Michael Moor/George Soros/ Cindy Sheehan wackos of the party. I have a lot of respect for FDR’s handling of WW II (but not his domestic policies), for LBJ’s tough stand on Vietnam and Civil Rights, for Harry Truman’s stance against Communism and for his decency and for JFK’s optimism and willingness to cut taxes and stare down the Communists. Where are these Democrats today?

The Democrats have moved far to the left; the Republicans have followed them, moving way to close to the center. I am a Republican but I believe in free market economics. I am against abortion in all cases but rape or incest; I am 100% in support of the war against Islamic fanatics (war on terrorism is a really stupid term-how can you have a war on a tactic?). I believe in the Constitution as written and on the intent of the Founders. I believe that the US is the most generous world power that has ever existed. I am anti social welfare, anti-immigration, anti-affirmative action, anti-ACLU, and pro-gun. I am an Agnostic and I served in the Army. I am also a college graduate.

So, Ellen, take another mental drug and judge me as you will. I only concern myself with the opinions of those who matter to me. You obviously do not fit that criteria.

Nick in
Sunday, May 20 at 11:53 AM

Ken, a simple “I’m sorry and I was wrong to make that statment” would have sufficed.

What was offensive to you, Mary, the idea of mud wrestling Ellen or the fact I gave odds against you?

Ken V in Texas
Sunday, May 20 at 06:16 PM

Ken, nothing was offensive to me. Pretty much things “roll off my back”. But in this PC world we live in you pretty much offended alot of women, Susan in Fresno CA being at the top of the list.

So you can thank the bleeding heart liberals for creating our PC world and just say “I’m sorry to all of the women I offended with my non-offensive remark even though you consider it offensive”.

Mary in
Sunday, May 20 at 08:24 PM

These people are stupid for taking out these loans. How is this Wal-Mart’s fault? If they can’t read then they need to learn how. Jesus Christ. We need to quit being a nation of victims.

Diablo in El Paso
Sunday, May 20 at 08:46 PM

“We need to quit being a nation of victims. “

Diablo, don’t tell that to people like Jesse Jackson and Al Sharpton let alone the Democratic party. How do you think they make so much money and have so much power? If it were not the creation of “victims” they would lose it all. I would love to be a fly on the wall in their private quarters to hear how they probably laugh everyday how they have hoodwinked another sucker.

Mary in
Sunday, May 20 at 09:00 PM

Everyone one here needs to think about their last days on this earth. As you lay on your death bed you will be asking yoursleves why you spent so much time worrying about some retailer.

Get a life in
Sunday, May 20 at 09:09 PM

Global Warming is going to kill us all, and it is going to kill everyone in Walmart as well.

Al Gore is a prophet.

Heidi Cullen in The Weather Channel
Sunday, May 20 at 09:43 PM

Global Warming: A Commandment of the new religion, Liberalism, in which Al Gore plays the high priest.

I have always said that Global Warming is a scam and that most left wing Democrats are so stupid, they will follow any trend. Gore’s first mistake is saying “the debate is over. It’s over! Globabl warming exists and there is no doubt that it is caused by human activity”. Okay, Al. The first thing you people need to recognize is that science never stops attacking theories. Even Stephen Hawking, arguably the most brilliant scientist of the last 50 years, has gone back and determined that his most solid theory may not be so solid. Science never stops questioning theories. Al Gore would know this if his college grades weren’t lower than George Bush’s and he wasn’t kicked out of a seminary for poor academic performance.

Why is it that liberals buy this crap? What idiot really believes that they can pollute, then buy “carbon credits” (indulgences) from an “indepdendent” broker co-owned by Al Gore? Liberals are hypocrites. These Hollywood types have 5 mansions, 20 vehicles, a helicopter, a yacht and two jets and each of their homes (including Al Gore’s) use about 20 times the energy of the normal US home. Yet, they tell us to cut back on our energy use! Let me just say that Global Warming itself is not an absolute certainty. I would say it is 90-95%. The percentage is even smaller when we try and determine what is causing warming. Is it sunspots? Human activity? How did the Earth warm several times previous, before human activity could have an effect? Has anyone ever answered this?

Al Gore is a moron who stumbled his way into a sure moneymaking scheme. He plays on the hypocrisy of Hollywood morons, who can’t wipe their own asses, and suckers them into giving up millions of dollars. The carbon “credits” or “offsets” are nothing more than indulgences. They do nothing to stop global warming and Al Gore pockets much of this money. Even if the offsets were exchanged to balance out the pollution, why is it that rich people can pollute all they want but poor people, who need the energy more, have to cut their usage? Democrats apparently believe that you can pollute so long as you pay the toll to Al Gore. Does this mean Wal-Mart can pollute as long as they pay money? We could get rid of the EPA! Just write a check and pollute!

Maybe Al Gore isn’t so dumb after all!

Nick in
Monday, May 21 at 05:03 AM

When Republicans like Nick (AKA Mary & Bob) get caught with their pants down--though not necessary because they have no moral core. Rather, because they believe they are inherently good, their failings can be forgiven as lapses, their strength restored, and their moral superiority reclaimed.

The belief in their own goodness comes from their Strict Father foundations. They are the ones fighting evil in the world. And it’s only natural that evil should have it out for them. So, when they fall, it’s understandable, with Satan and welfare state out to crush them (not to mention George Soros and the liberal media). But as long as they pick themselves up to fight again, evil will not triumph.

Therefore, they have a moral duty to make excuses for themselves--excuses they would never tolerate on behalf of anyone else. Those excuses might sound to us like systematic thinking. But they are really just their own self-excuse put into socially acceptable terms--the same sort of way that a psychopath would say anything to get out of a jam.

Republicans - America’s Nazi Party

Ellen in St. Louis, MO
Monday, May 21 at 05:16 AM

I think Ellen and SDV are still off their meds. But I’m pretty much starting to think they are one in the same...... and just plain WEIRD

Mary in
Monday, May 21 at 05:52 AM

Christians and Republicans have a great deal in common. They both live in a fantasy world. Neither the bible or our constitution agrees with anything they are currently doing. How hypocritical can they be? They are supposed to believe in God, but their actions are completely the opposite of what God really wants. I have come to believe that Republicans and christians deserve each other because they are the world’s biggest liars and the most corrupt people I have ever met.

Pauline in Las Vegas Nevada
Monday, May 21 at 10:02 AM

I forgot to mention that I really enjoy Ellen’s posts. She is always so accurate. The world need more people like her.

Pauline in Las Vegas Nevada
Monday, May 21 at 10:04 AM

Quoted from the SAGE on May, 19th

I don’t really get where your comeing from Sagee

1)Wal-Mart doesn’t have a credit card company its from GE Capital
2)GE Moneybank sends a check in the mail for opening a credit card.(Not Wal-Mart)
3)The payday loan is a 3rd party company that leases spaces inside Wal-Mart. Its not Wal-Mart.
4)With Wal-Mart if the gift card has less than 2 dollars on it you can cash out in any State. Washington you can have less than 5 dollars, and in Cali, and Mich. you can have any amount.
5)Wal-Mart forcing their assoicates(I don’t see a gun to their head), the service warranty is held through the manufacture that made the product which it should, so if the company made their products in china and have lower quailty than the company will pay to fix the problem.(Which it should i hate the companies that move their factories overseas.)
6)???????I don’t see Wal-Mart taking over any hair salons(SmartStyle)Nail Salons(Regis Nails)Banks, McDonald’s, Subway, and any other companies?

Purma in Rogers, AR
Monday, May 21 at 10:04 AM

Now I bet SDV, Ellen and Pauline are one in the same. As for Ellen’s posts being accurate.... it’s pretty easy being accurate when you say nothing and with no factual basis. So for that matter Ellen… I mean SDV… I mean Pauline must be accurate.

You’ve got to love liberals living in their own wacky world of logic

Mary in
Monday, May 21 at 11:51 AM

Sure thing bob.

Amused by Mary in
Monday, May 21 at 04:25 PM

Pauline

Come off it. Don’t speak to me about the Constitution. You will lose every time. By the way, I am not a Christian. So much for your preconceptions.

If you support the TVA, the REA, the Dept. of Agriculture, Commerce, Energy, Health & Human Services or Education, you do not support the Constitution. So much is made of the “General Welfare” clause but the Founders clearly resented this clause in later writings. Madison and Jefferson believed it would be used to excuse abuses of the public treasury. The Founders clearly wrote the function of government into the document. How can anyone say that the federal government has a right to be involved in public education when the powers granted to it by the document make no mention of this and provide no means by which to pay for it?

You cannot support today’s $3 trillion federal government and, at the same time, believe in the Constitution. Of course, since more than 50% of Americans get some form of check from the federal government (every dollar paid for by taxpayers), and 50% of Americans pay less than 3% of the overall taxes (payroll taxes included), people have ZERO interest in tax or spending cuts.

Nick in
Tuesday, May 22 at 05:30 AM

You’ve got to love liberals living in their own wacky world of logic.

In my wacky world the Republicans are winding down after 13 years of complete control of the government and by all conceivable measurements the United States is in worse shape than it was before the Contract with America (with the possible exception of the number of billionaires).

How did the Contract work out in your wacky world, Mary?

Ken V in Texas
Tuesday, May 22 at 09:26 AM

WELL ALWAYS LOW PRICES TRUE BUT THAT SHOULD NOT MAKE THE POOR WORK TWICE AS HARD TO

PAY UP FRONT

!!! BRING BACK LAYAWAY!!!

HANDITWATER in EARTH
Tuesday, May 22 at 11:38 AM

Purma

Without goiing into a lot of explanation:
It is a Wal-Mart Credit card to be used only at WM.
(Thus who benefits from the interest?)
It isn’t that WM operates the “Pay Day” loan business—do
you understand that WM promotes “bad behavior” by making these loans easy to get by having the facility in their stores and you can be sure WM will eventually take it over.

I am sure you don’t know how the extended warranty works,
who the money goes to in the “trust fund”, who gets this after the 2 yr extended warranty expires. It is pure and simple a money making program for WM, and that is why they push it (most retailers do because of the free money, not because of any great benefit to a consumer)

Why do so many who post on here have to be so “dumb” that they can’t read the written word, and what they read they add something else into it.

Why can’t we all be fair to each other and to WM, whether it be good or bad—the truth is the best and sometimes we don’t know it, then we should so post.

Read the caption under the photo above—how did layaway in and of itself cause a customer to pay how interest rates?
I never heard of any interest rate being charged if the item was paid for at time of pick up.

The Sage in
Wednesday, May 23 at 05:03 PM

WALMART and SYSTEMIC POVERTY

Study finds Wal-Mart contributes to poverty
St. Louis Business Journal - May 17, 2006

A study focused on the effects of Wal-Mart stores on poverty rates found that an estimated 20,000 families nationwide have fallen below the official poverty line as a result of the chain’s expansion.

Authors, Goetz and Swaminathan write that the presence of Wal-Mart was “unequivocally associated” with smaller reductions in family-poverty rates in counties nationwide during the 1990s relative to places that had no stores.

During the last decade, dependence on the food stamp program nationwide increased by 8 percent, while in counties with Wal-Mart stores the increase was almost twice as large at 15.3 percent, according to the study. Although Wal-Mart employs many people living in its communities, for most, the hours worked and the wages paid do not help these families transition out of poverty, the study said.

Poverty rates will rise if retail workers displaced from existing mom-and pop-type operations work for Wal-Mart at lower wages because they have no alternatives, all else equal, according to the study.

In addition, the Wal-Mart jobs may be part time as opposed to full time, leading to lower family incomes, all else equal, the study said.
http://stlouis.bizjournals.com/stlouis/stories/2006/05/15/daily29.html

“Henry Ford made sure he paid his workers enough so that they could afford to buy his cars. Wal-Mart is doing the polar opposite of Henry Ford. Wal-Mart brags about how its low prices help poor Americans, but its low wages are helping increase the number of Americans in poverty.”
William McDonough, executive vice president of the United Food and Commercial Workers union

If you are looking for where your better wages and healthcare benefits went- FOLLOW THE MONEY that went from your labor to these people-

Samuel Robson (Rob) Walton (born 1945, in Tulsa, Oklahoma) is the eldest son of Sam Walton, founder of Wal-Mart, the world’s largest retailer. According to Forbes, his net worth is $15.8 billion as of 2006.
http://en.wikipedia.org/wiki/S._Robson_Walton

John Thomas Walton (October 8, 1946 – June 27, 2005) was a son of Wal-Mart founder Sam Walton. He was the chairman of True North Partners, a venture capital firm.
Just before his death, Walton was estimated to be worth US$18.2 billion by Forbes magazine, and he was tied with his brother Jim as the 4th richest person in the United States [2] and 11th-richest person in the world.
http://en.wikipedia.org/wiki/John_T._Walton

continue-

SanDiegoView in
Thursday, May 24 at 02:34 AM

If you are looking for where your better wages and healthcare benefits went- FOLLOW THE MONEY that went from your labor to these people-

continued-

Christy Ruth Walton is the wife of late John T. Walton. After his death, she became the 17th wealthiest person in the world with a net worth of USD $15.9 billion. As of 2006, she is the 7th richest American and the richest woman in America with a net worth of $15.6 billion [1].
http://en.wikipedia.org/wiki/Christy_Walton

Alice Louise Walton (born October 7, 1949) is the daughter of Wal-Mart founder Sam Walton and Helen Walton, and sister of S. Robson Walton, John T. Walton, and Jim Walton. She and her mother each have an estimated net worth of about $18.0 billion.
http://en.wikipedia.org/wiki/Alice_Walton

Jim Carr Walton (born 1948) is the youngest son of Wal-Mart founder Sam Walton. He is the CEO of Arvest Bank. With an estimated current net worth of around $15.7 billion, he is ranked by Forbes as the 6th-richest person in America. He is married to Lynne McNabb Walton and has several children, including Alice Anne Walton, Thomas Layton Walton, and Stewart Lawrence Walton. The family resides in Bentonville, Arkansas

http://en.wikipedia.org/wiki/Jim_Walton

Two daughters of Sam’s brother Bud Walton, Ann Kroenke and Nancy Laurie, hold smaller shares in the company and are also billionaires in their own right.

http://en.wikipedia.org/wiki/Samuel_Moore_Walton

Helen Robson Kemper Walton (born December 3, 1919 in Claremore, Oklahoma) is the widow of Wal-Mart founder Sam Walton. She is the eleventh richest American and one of the oldest among the wealthiest persons in the world with an estimated net worth of $15.6 billion.
http://en.wikipedia.org/wiki/Helen_Walton

Nancy Walton Laurie is the daughter of the late Bud Walton, the brother and business partner of Wal-Mart founder Sam Walton. At Bud’s death, she and her sister Ann Walton Kroenke inherited a stake in Wal-Mart now worth over USD$6 billion.
http://en.wikipedia.org/wiki/Elizabeth_Paige_Laurie

WalMart- Dumping impoverished ‘associates’ onto state health care systems for the taxpayer suckers to pick-up the bill. Can’t get out of poverty? The Waltons and Lee Scott
thank you for your capitalistic/patriotic subsidies and labor contribution.

SanDiegoView in
Thursday, May 24 at 02:46 AM

The Sage,

You are wrong. Even though it is a “Wal-Mart Credit Card” to be used at Wal-Mart, GE Money Bank owns the actual caredit card portfolio, meaning GEMB pockets the money earned from the misc. fees/interest.

Wal-Mart only benefits from the fact that it is a card to be used in their stores, only.

Big W

Big W in your head
Thursday, May 24 at 09:28 AM

LAYAWAY!!!!

HELLO!!!

Look at me, I am going to give WM my money for the next 3 months so they will hold something I could buy the day before Christmas anyway. I like WM so much, I would rather they get any interest on that money than me.

People. put the money into a simple savings account. Show some intestinal fortitude and leave it there until you can buy what you wanted as well as a couple other things with the interest YOU will earn.

It’s the same freaking thing as LAYAWAY...except YOU get the benefits of the interest and not WM.

Dan in
Saturday, May 26 at 12:02 AM

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