Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - 19th Mar 18
2018 Reversal Dates for Gold, Silver and Gold Stocks - 19th Mar 18
This Tech Breakthrough Could Save The Electric Car Market - 19th Mar 18
Stocks Set to Open Lower, Should You Buy? - 19th Mar 18
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt - 19th Mar 18
Affiliate Marketing Tips and Network Recommendations - 19th Mar 18
Do Stocks Bull Market Tops Need Breadth Divergences? - 19th Mar 18
Doritos Instant £500 Win! Why Super Market Shelves are Empty - 19th Mar 18
Bonds, Inflation & the Market Amigos - 19th Mar 18
US Housing Real Estate Market and Banking Pressures Are Building - 19th Mar 18
Stock Market Bulls Last Stand? - 18th Mar 18
Putin Flip-Flops Like A Drunken Whore On Bitcoin Cryptocurrency Legalization - 18th Mar 18
How to Legally Manipulate Interest Rates - 18th Mar 18
Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - 18th Mar 18
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18
DasCoin: A 5-Minute Guide to How It Works - 15th Mar 18
Stock Market Downward Pressure Mounting - 15th Mar 18
The Stock Market Trend is Your Friend ’til the Very End - 15th Mar 18
6 Easy Ways to Get What Women Want, for Less! - 15th Mar 18
This Isn’t Your Grandfather’s (1960s) Inflation Scare - 15th Mar 18
Eye Opening Stock Market Index, Volatility, Charts and Predictions - 15th Mar 18
Gold Cup At Cheltenham – Gold Is For Winners, Not For Gamblers - 15th Mar 18
Upcoming Turnaround in Gold - 14th Mar 18
Will the Stock Market Make Another Correction this Year? - 14th Mar 18
4 Ways To Writing An Interesting Education Research Paper - 14th Mar 18
China Toward Sustainable Economic Growth - 14th Mar 18
Stock Market Direction Is No Longer Important - 14th Mar 18
Trade Tariffs Defeat Globalists and Return Prosperity - 14th Mar 18
Stock Market Crash is Underway and Cannot be Stopped! - 14th Mar 18
Are Energy Sector Stocks Bottoming? - 14th Mar 18
Nasdaq Stocks Soars to New Record High After Strong Job Reports - 14th Mar 18
Bitcoin BTCUSD Elliott Wave View Calling for Rally toward $15,000 - 13th Mar 18
Hungary’s Gold Repatriation Adds To Growing Protest Against US Dollar Hegemony - 13th Mar 18
Record Low Volatility in Precious Metals and What it Means - 13th Mar 18
Tips for Writing and Assembling the Classification Essay - 13th Mar 18
Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story" - 13th Mar 18
Stock Market Selloff Showed Gold Can Reduce Portfolio Risk  - 13th Mar 18
Silver Does it Again! Severe Consequences - 12th Mar 18
Has the Stock Market Rally Run Out of Steam? - 12th Mar 18
S&P 500 at 2,800 Again, Stock Market Breakout or Fakeout? - 12th Mar 18
The No.1 Energy Stock To Buy Right Now - 12th Mar 18
What Happens Next When Stock Market Investor Sentiment is Neutral - 12th Mar 18
Economic Pressures To Driving Gold and Silver Prices Higher Long-Term - 12th Mar 18
Labour Sheffield City Councils Secret Plan to Fell 50% of Street Trees Exposed! - 12th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

How McDonald’s and JPMorgan Chase Help Keep America Poor

Companies / Social Issues Jul 08, 2013 - 12:19 PM GMT

By: Money_Morning


Greg Madison writes: Natalie Gunshannon, a McDonald's worker from Pennsylvania, has just won the right to... draw a paycheck. Work-for-pay is a fairly straightforward system that the Western World has been using for the past six or seven centuries, give or take.

Ms. Gunshannon was an hourly employee at a McDonald's franchise in Shavertown, Pennsylvania. Her degree is in massage therapy, but jobs in that field are scarce. A single mother, she took whatever work was available, which brought her to McDonalds, where she worked the line for $7.44 an hour, 30 to 70 hours per week.

After her first pay period, she was given not a paycheck, but a "debit" card loaded with her wages. This card, backed by JPMorgan Chase & Co. (NYSE:JPM), could be used anywhere Visa was accepted - including ATMs. It all seemed very convenient.

It wasn't.

A "Fine" Service
The problem was the JPMorgan debit card itself. It's a fine card... There are "fines" every time it's used:

  • ATM withdrawals: $1.50 each
  • Over the counter cash withdrawals: $5.00
  • Balance inquiries: $1.00 per inquiry
  • Online bill payment: $0.75 per bill
  • Lost or stolen card: $15.00 replacement fee
  • Inactivity fee (not using the card enough): $10.00 per 30-day period

At $7.44 per hour, these fees could easily send a person like Natalie Gunshannon right under the water. Losing her card would cost her better than two hours' worth of work. She has a checking account, and access to a debit card issued by a federally-backed financial institution.

Why would she want to be paid under this usurious system? She had no choice.

Ms. Gunshannon asked her manager if she could be paid with a check, as is the custom in these parts. Pennsylvania law says a worker can be paid in cash or check upon request.

She was told that checks weren't available, and that there was no way to transmit her wages other than this JPMorgan debit card. McDonald's managers and assistant managers can be paid by direct deposit, but hourly employees can't at this franchise.

Cost-Cutting Run Amok

This McDonald's franchise wanted to cut down on the overhead, the cost needed to actually have a payroll company cut a check and send it.

Not willing to roll over for McDonald's or JPMorgan Chase, Ms. Gunshannon took her case to court. Since doing so, employees at other local McDonald's are coming forward, which may lead to the case being a certified class action.

McDonald's Corporation
(NYSE:MCD) itself is not being sued, rather the franchisee. Under the "It wasn't me!" paradigm used in the fast food business, the specific franchise is named in the suit. McDonald's line is that the individual franchisee is responsible for its own payroll methods and practices.

The franchisee has already backed down, although the suit hasn't been tried or settled yet. As of this week, employees of the local franchises will have the choice of paper check, direct deposit to account, or payroll debit card.

But it's a fairly safe bet that practices like this persist elsewhere, away from the media glare. CNN reports that fast food employees often have to contend with abusive practices like union-busting and wage theft, where overtime is illegally and unethically paid at the straight-time rate. These practices are being investigated, but they continue in the meantime.

This isn't the only way companies like JPMorgan are colluding to make a buck off those who can least afford it.

It's Expensive to Be Poor

We've reported that companies like JPMorgan Chase have a vested interest in keeping Americans on public assistance and under-banked.

The Electronic Benefits Transfer cards that many receive instead of paper checks are operated by large banks like JPMorgan. The bank collects a small fee every time the customer uses the EBT card, which functions much like a debit card. The fees don't seem like much at first, or to those who are in trouble, but they add up.

Multiply this by a few tens of millions for those who are on at least some form of public assistance, and you can see that the poverty game makes banks like JPMorgan a lot of money.

According to the FDIC, nearly 29% of American households are unbanked or under-banked. The unbanked have no checking or savings accounts open in federally-backed banks, while the under-banked may have at least a checking account, but limited or no access to credit or capital.

These people use check-cashing outlets, payday lenders, rent-to-own services, pawn shops, and "refund anticipation loans" to process financial transactions. These businesses charge a relatively steep premium for any of their services.

A 30-day, $200 loan may cost the borrower $60 at the end of the term, an annualized rate far north of 300%. When a check is cashed, the check casher collects a 1% - 10% fee. If an unbanked individual were to use rent-to-own services for, say, a refrigerator, the cost at the end of the term would invariably be more than double the retail price.

No Easy Solution

To be fair, these services are taking a pretty big risk by lending to this demographic. There is a better than average chance that a payday lending customer will default or fall behind. Some consumer advocacy groups have stepped in to influence legislation which would reduce or mitigate these high rates.

But cities like Washington, D.C. that have attempted to re-regulate or crack down on payday lending and other alternative financial services have seen these outlets disappear in droves. A community which may have relied on the services of, say, ACE Check Cashing for cashing paychecks or cash advances may be completely cut off from any financial services now.

There's no easy fix to this problem. Wages have to rise, financial literacy has to take root, regulations must be carefully considered. None of this is likely to happen in the near future, not when there's just so much money to be made from poverty.

Source :

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules