A new way to nickel-and-dime low-wage workers


This is from a report by the New York Times.

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For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers.  Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.

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, according to interviews with consumer lawyers, employees, and state and federal regulators.

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.

Click on Paid via Card, Workers Feel the Sting of Fees for the full New York Times article.

Click on More Than 286K People Ask McDonald’s Franchisees to Stop Paying Employees With Debit Cards for more.


If it were up to me, employers would be required to give employees the option of being paid by check, and all employers above a certain size would be required to offer to cash those checks for free.

[Update 7/19/13] Click on Minimum wage workers teach economics to the economists for more about what it means to live on minimum wages.

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7 Responses to “A new way to nickel-and-dime low-wage workers”

  1. EthnicConflict Says:

    My last two jobs were Starbucks and an electronics store. Thankfully, neither of these places issued a card like this. But “ChattelCard” sure does seem appropriate. You really have to live with at least 3 other people in order to get a large enough scale of economy to afford anything.

    I’ve found that living with people who have a lot of money can be a double-edged sword, since rich people are inevitably egotistical and evil. They damage cooperation and attempt to take control over everyone’s life. It happens inside and outside the residence.


  2. mark adams Says:

    I grew up in coal country. Butcher,dry goods, individual downtown stores etc. Back in the day the coal company owned what was called a ‘company store.’ It was the only place to shop in rural areas Your paycheck literally went to the store. In fact, most had a credit account so that your next paycheck went to your account in an endless cycle of poverty and despair. This is what Wal-mart is trying to do. Now McDonalds is teaching employees to manage money with $20 per month for healthcare and $25 per month for utilities and so forth. Does anyone know how this cycle of poverty ends? It is called a revolution.


  3. mark adams Says:

    It is refreshing to hear intelligent comments such as from EthnicKonflict. My daughter studied in Finland. Holy cow did she open my eyes when she returned with her Masters degree. Their healthcare, educational system and they way they take care of each other is way ahead of the U.S.A. Socialism is not the evil system they taught us. Capitalism was never meant to be run by corporations. I see Capitalism as an overloaded luxury cruise ship rotting while sinking. Everyone on deck has great ideas while they look at the pretty sunset and drink to ignore their problems. Great ideas such as selling the other passengers boots while their shoes are getting wet.


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