Why the Working Poor and Banks Are a Bad Match
Many minimum wage workers have no bank account, and rely on check cashing offices to get cash, pay bills and wire money to relatives abroad. Contrary to what social scientists believe, these workers prefer check cashing services over banks, because banks do not offer them the services they need, a researcher at The New School in New York City has found.
For example, if a worker deposits her paycheck on Friday in a checking account, she can’t spend that money until Monday or Tuesday. If she instead visits a check cashing service, the money is available immediately, and she can pay her bills at the same time.
The video is about 15 minutes long. Toward the end, Prof. Lisa Servon notes that the spending power of low-wage workers has declined dramatically since 1968, which makes it even harder for them to save money in a bank account.
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