Broke, USA: From Pawnshops to Poverty, Inc.—How the Working Poor Became Big Business by Gary Rivlin opens in Dayton, Ohio, a city 20 miles or so to the east of my hometown of Eaton. The opening vignette is the story of a hard-working man who fell on hard times when his wife developed health problems. Eventually, the couple travel to nearby Huber Heights, where they are duped into signing a predatory loan.
When the story opens, the couple have lost their home and have moved a second time — this time into a less than ideal mobile home park — and the man, now in his early 70s, does not see retirement as a possibility. He seems resigned to his fate.
His story is just one of many sprinkled throughout the book as Rivlin crisscrosses the Midwest, including frequent stops in Dayton and Montgomery County. The author investigates the various industries that have exploited lower income workers. These industries include: Rent to Own stores, paycheck lending stories, pawn shops and loans stores dealing in subprime loans. And, as the book notes, these businesses have left behind devastated communities.
In the City of Eaton (pop. 8,200), we have three payday lending stores, a pawn shop and a rent to own store.
What really gives the books ‘its legs’ is the author also reports the other side of the story. He interviews industry leaders and travels to the various networking events each industry holds. He reports on their marketing tactics, their training methods and paints a complete picture from a consumer, industry, and consumer protection point of view. The story includes a lot of ‘unsung heroes’ who fought for the disadvantaged and duped.
After reading the book, I became very aware of the holes in our legislation, and economy, that create exploitation. And, the stories of the victims make it difficult to believe that the current legislative drive — to deregulate — will benefit the middle and lower-middle classes.
My Rating: 5 out of 5 stars. This book gets a high rating because it’s written in a way that all players get a say. Granted, some of the players do not come across as positively as others, but I am okay with that because of the loss of wealth inflicted on many from the working class.
My interest in Rivlin’s book is the unresolved foreclosure crisis Preble County still faces. According to Policy Matters Ohio, Preble County ranked in the top 10 for home foreclosures every year between 2007 and 2013. It peaked at 3rd in the state in 2013 before dropping out of the top 10 in 2014 when it ranked 16th in Ohio.
With 4.5 foreclosures per 1,000, in 2016, our foreclosure density ranks eighth in the state.
Despite the economic decline, as evidence by our foreclosure rates, Preble County saw an uptick in property values during the 2017/2018 revaluation. The uptick in values (mostly for non-farm properties) came as the farm lobby successfully drove down property values on Preble County farmland. But, some of our farmers are doing okay thanks to government handouts (see chart, click on chart to access database).
According to the EWG Farm Subsidy Database, Preble County farmers received $118 million in subsidies between 1996-2016. Ohio ranks 13th in the nation for monies received. Preble County ranks 16 (out of 88 counties) in EQIP funds received. The most common use of EQIP funds in Ohio is to build fences.