By Anthony Mangano
As prices continue to rise while wages remain stagnant, it’s no wonder that workers are more and more often running short of money at weeks or months end, causing a terrifying debate between keeping the electricity on or feeding their children. Not satisfied with driving workers to the edge of starvation or homelessness, greedy capitalists have created a new system to rob the workers -the “payday loan”. Touted as an “emergency stopgap measure”, the interest on these short-term loans is so usurious as to force borrowers into permanent debt, a modern day version of debt peonage or sharecropping.
While big banks and corporations can borrow OUR money at 1-2% from the Federal Reserve Bank, payday loan interest rates can be almost 400% plus hidden fees, entrapping workers in an unending cycle of poverty and misery. Nationally, 83% of payday loans are paid to borrowers already stuck in several other loans. In Louisiana, which sucks $240 million yearly from workers, 79% of payday loans are lent to borrowers on the same day as they pay back a previous loan. In fact, 87% of borrowers are forced to seek new loans within two weeks of paying off an old loan. As the economic crisis worsens, more and more workers find themselves in desperate circumstances. In response, payday lenders flood TV and radio with ads offering workers a “magic solution”. Of course, more than two times as many offices are located in Black and LatinX communities. The 12 million workers who use payday loans every year are most commonly characterized by being separated or divorced renters who do not have a four-year college degree and earn less than $40,000. A majority are African-American.
While payday loan and auto title companies don’t break workers legs (yet) for falling short on their payments like organized crime syndicate loans of TV legend, the results are often no less devastating including homelessness, job loss, family breakup and depression. Payday loan vultures give millions of dollars to politicians for laws making these practices “legal”.
The Workers Voice demands that the Louisiana Legislature outlaw all predatory loans as part of our overall fight to improve the economic conditions of the workers. However, we also know only socialist revolution will end this criminal exploitation of the workers.