“Poor being hit by crisis says IMF”

This morning’s headline on the BBC News is hardly surprising; in times of crisis it is always the weakest and most vulnerable who are hurt most.  Instability and uncertainty always favour the strong.  Putting the figures in perspective, the additional financing the International Monetary Fund judges necessary for poor countries is only equivalent to the Irish Government deficit for the year, but that doesn’t lessen the reality of the pain of the poorest of people.

If the poorest are those who suffer most on the international stage, they are also those who suffer most at home.  A string of factors combine to create a very uneven distribution of the pain within society.

Because the poor are poor they have spent their lives living at a subsistence level, never having an opportunity to put anything aside for a ‘rainy  day’, there is no post office book or building society account to which to turn when something unforeseen comes along.  Maybe the interest on savings accounts is negligible in the current economic climate, but having savings at all is an experience unknown to many people.

Because the poor are poor, they are often caught in cycles of poverty for generations, without education and without opportunities. The poor are less likely to have someone to give them a hand when things are tough.  For generations, there were Irish people who received assistance from family members who had emigrated. To be able to send money home was important for exiles who crossed the Irish Sea, crossed the Atlantic or sailed around the world.  We had assumed such experiences belonged deep in history, perhaps the time is returning when going into exile will be the only way to support your family.

Because the poor are poor, there is no option to borrow through a crisis.  Financial institutions do not lend to people with hand to mouth incomes and with no assets to use as collateral.  The money lender with his astronomical interest rates is there in desperate moments, but his advances are likely to be no more than tens of Euro, knowing as he does that his profit depends upon a person’s ability to meet the weekly repayments.  Credit, a term derived from ‘credo’ meaning ‘I believe’, is not extended to those in whom the banks do not believe.

Because the poor are poor, they must buy cheap. They have not the option to pay extra for something where the extra expense is more than compensated for by the longer life.  It often means no option to make do and mend. A friend who has a pair of shoes that were expensive, but have lasted for years through occasional trips to the cobbler, will have spent considerably less on footwear than someone who cannot afford the initial outlay and who must buy new shoes every year.

Because the poor are poor, they cannot avail of discounts.  They have not the cash to buy in bulk. They have not the cash to take advantage of special offers on goods that are not on the shopping list for that week. They have not the credit to sign up for special deals for those who pay on direct debit or those who use more than a certain number of units of energy.

However, because the poor are poor and because they spend a far higher proportion of their income than other socio-economic groups, they are the ones on whom to target money if the economy is to start to move again.  They are the ones who will go out and spend, getting money into circulation, creating jobs, starting an upward spiral. The poor we have with us always; making them less poor can make everyone richer.