I Owe My Soul to the Company's Banker

The people responsible for the system described in this New York Times story are the worst people in the world:

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.

For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers....

But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.'s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.

These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account....

The people being subjected to this have jobs in the service economy -- at McDonald's, Walmart, Victoria's Secret, and so on. They're the people least able to afford this.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.

"It’s pretty bad," he said. "There's a fee for literally everything you do."

...Many employees say they have no choice but to use the cards: some companies no longer offer common payroll options like ordinary checks or direct deposit....

The old "company store" system, immortalized in the song "Sixteen Tons," at least made sense in terms of pure greed: the employer paid workers in scrip that could be exchanged only for goods on sale (at inflated prices) at the company store. The employer kept that inflated profit -- and kept the workers in debt, which, as Charles Hugh Smith notes, was a means of "insuring a lifetime of profitable servitude" to the employer.

But the employers running this system don't have any interest in keeping their workers around forever -- in a permanently recessed economy, low-wage workers are a dime a dozen, and easily replaceable. In this case, the employer just wants a cheaper payroll system -- as the Times story notes, this payroll system is much cheaper for the employers.

Well, of course it's cheaper. The banks -- the story names Bank of America, Wells Fargo, and Citigroup -- are cleaning up. They offer the employer a great deal and the employees a raw deal.

And then, if you're an employee, you owe your soul to them.

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Kevin Drum looks at this -- and at some Citibank overdraft hanky-panky recently experienced by Reuters economics blogger Felix Salmon, which Drum seems to find much more relatable -- and says,

I dunno. Maybe Matt Yglesias is right. Maybe we really do need some kind of basic, no-frills postal banking service. I'm really not a fan of the idea, but I'm also increasingly skeptical that any amount of regulation can prod banks to act decently toward their customers.

Yeah, that would be nice. But it would deprive the megabanks of business, so it will never happen.

Do you know what we really need? We need an angry mob with torches and pitchfork marching on the Hamptons, or wherever the hell the scumbags responsible for this system frolic and gambol.

Seriously, what we need is a genuinely populist political leader who makes this sort of thing a top priority -- not whining about the deficit, or about the existence of the Fed, or about big government, or hemp still being illegal, but about ordinary people being screwed.

And that political leader needs to be someone who connects with heartlanders -- which means I'm not talking about Elizabeth Warren, alas. I think Warren could connect with heartlanders, but she's been too nice, too polite, not sufficiently egotistical or ambitious. She lacks the vaulting ambition of Pat Buchanan or Ross Perot or Ron Paul or Ted Cruz. She connects with Massachusetts residents and with the residents of that Portlandia of the mind known as culturally sophisticated liberal America (i.e., you and me). She's still a boutique taste. (Most of our heroes are -- Wyden, Feingold, and Grayson among the pols, Maddow and even Ed Schulz among the media types, etc., etc.)

Somebody has to get the word out to Middle Americans that it doesn't have to be this way. No national figure has done that, and there's no sign of any such national figure on the horizon. But we're screwed until "real Americans" are awakened, or wake up on their own.