fringe economies and community response in US and EU

fringe economies and community response in US and EU

“I have a vision for San Diego and that vision is about walkable, livable communities, not big, mega-structures that inhibit people’s lives,” said Councilman Tony Young. – newrules.org

“There were 4,500 pawnshops in the United States in 1985; now there are almost 12,000, including outlets owned by five publicly traded chains. In 2005 the three big chains — Cash America International (a.k.a Cash America Pawn and Super- Pawn), EZ Pawn, and First Cash — had combined annual revenues of nearly $1 billion. Cash America is the largest pawnshop chain, with 750 locations; the company also makes payday loans through its Cash America Payday Advance, Cashland, and Mr. Payroll stores. In 2005, Cash America’s revenues totaled $594.3 million.” Living in America’s Fringe Economy By Howard Karger,
“Somewhere along the line our country has changed from one based upon a strong sense of community and fairness to an ‘I’ve got mine so eff you’ attitude. Americans have been sold a bill of goods for a couple of generations now and it’s been financed by the liquidation of assets and overextended credit. Tens of millions that think of themselves as middle class and above the rabble are but one or two ugly blows from being in a financial trap with no easy way out. They have borrowed and leveraged everything to keep up with the Joneses and are living way beyond their real means. All the things laid out in the article above are examples of a culture based upon greed, selfishness & denial” ( reader response Posted by: NoPCZone on Dec 29, 2006 2:01 AM)   

13% of the US population falls below federal poverty threshold. Sixteen per cent of EU citizens are at risk of poverty, say the latest 2005 Eurostat figures, 55 to 72 million. In Finland, one of the richest EU countries 600.000 citizens (12%) fall below the EU net income per single adult poverty line of EUR 975 per month (2004 figures). Many of the financial strategies in these dependent situations revolve around borrowing, lending, leading up to debts which brings financial penalties resulting in even more borrowing. As such, this was never a new situation. In the last decade, however, in many rich industrial countries, the fringe economy which is characterized by excessive fees for financial services is growing so fast that according to Professor Karger “in an important sense the sector is no longer “fringe” at all: more and more, large mainstream financial corporations are behind the high-rate loans that anxious customers in run-down storefronts sign for on the dotted line:”
“Ron Cook is a department manager at a Wal-Mart store in Atlanta. Maria Guzman is an undocumented worker from Mexico; she lives in Houston with her three children and cleans office buildings at night. Marty Lawson works for a large Minneapolis corporation. (The names have been changed to protect the privacy of the individuals.) What do these three people have in common? They are all regular fringe economy customers.”
Currently there are 33,000 check-cashing and payday loan stores, just two parts of the fringe economy, in the USA, “more than the all the McDonald’s and Burger King restaurants and all the Target, J.C. Penney, and Wal-Mart retail stores in the United States combined”. As a possible strategy against further growth of the fringe economy Karger argues for more “community-based lending institutions modeled on the Grameen Bank or on local cooperatives.” There seems a powerful link between the rise in the past two decades of mega retailers and the rise of the fringe economy. Local governments hesitate more and more to welcome the supercenters unequivocally. The San Diego City Council, for example, recently voted against the construction of supercenters- over 90,000 square feet – effectively preventing Wal-Mart and Target from opening in the city. In Big-Box Swindle Stacy Mitchell shows how since 2000, “over 200 big-box development projects have been halted by groups of ordinary citizens, and scores of towns and cities have adopted laws that favor small-scale, local business development which limit the proliferation of chains.” In Europe the anti globalization movement found a new focal point on issues of work, low wages, temporary jobs, flexjobs in the Stop Précarité movement (2000), culminating in the withdrawal of the CPE – making it easier to fire workers under 26 – by the Villepin government after huge protests and nation wide strikes. Le Monde commented “that “précarité” was going to be a central issue in the upcoming 2007 presidential elections.”

Published in: on June 5, 2007 at 12:12 pm  Leave a Comment  

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