The poor end up paying more

The Incredible Greed Of The Poor

Low income households are severely disadvantaged in the American economic system, which has shifted benefits to the richest one percent and large corporations at the expense of nearly everyone else.

Low income households per-roll for toilet paper and paper towels than middle income households, according to researchers from the University of Michigan who have published a new study.

The study shows that less affluent households are severely disadvantaged in the American economic system, which has shifted benefits to the richest one percent and large corporations at the expense of nearly everyone else.

“You know when you’ve got $20 to spend on groceries, and you need paper towels? So you head over to that aisle and, of course, it’s cheaper per-roll to to buy the huge bulk package. But you just don’t have $17 to drop on paper towels this week. That $20 needs to buy food, too,” eplains Kate Wells, reporter for Michigan Public Radio. “So you buy the 4-package roll, or if you’re really strapped, the single roll.”

That’s a common and costly cycle in which poor people get trapped.

University of Michigan professor Yesim Orhun and Ph.D. student Mike Palazzolo used data on more than 100,00o American households over seven years to track purchases of toilet paper, which has the great benefit of being non-perishable and steadily consumed (it’s hard to go without, but we also don’t use more just because we happen to have more in the house). That’s nearly 3 million toilet paper purchases.

When Orhun and Palazzolo compared households with similar consumption rates shopping at comparable stores they found that the poor were less likely than more affluent households to buy bigger packages, or to time their purchases to take advantage of sales. By failing to do so, they paid about 5.9 percent more per sheet of toilet paper — a little less than what they saved by buying cheaper brands in the first place (8.8 percent).

Perhaps this sounds like a subtle discovery about minor household goods but it supports a larger point about poverty: It’s expensive to be poor. Or, to state the same from another angle: Having more money gives people the luxury of paying less for things.

In the case of toilet paper, or any number of other storable goods like canned tomatoes, rice or paper towels, shoppers have to pay more up front to reap savings over time.

The poor often can’t afford to do that — to pay $24 for a 30-pack instead of $5 for a four-pack. Then, because they can’t stock up, they can’t afford to wait until the next sale comes around.

When the toilet paper runs out, they have to run to the store for another small quantity of it — whatever it costs in that moment. Because they can’t use one money-saving strategy, they can’t use the other, either.

“Say they save about $50 dollars a year because they buy cheaper products,” says Yesim Orhun, a professor at the Ross School of Business. “They actually could have saved an additional $25 dollars, if they also bought more often in bulk.”


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