Need Cash Fast? Ask Reddit

My friend Gustav and I laid out the hottest new place to get a payday-style loan, sometimes in just minutes: Reddit. In The Atlantic, we explain how an ad-hoc community of online lenders Paypal money to strangers based on their forum posts, and most of them get repaid.

When asked if they’d be able to cover a $400 emergency expense, Neal Gabler’s recent Atlantic cover story noted, nearly half of all respondents to a 2014 Federal Reserve study said that they wouldn’t have enough cash on hand.

So how would they scrape the money together? Most told the Fed they would try for a bank loan, use a credit card, or make a potentially embarrassing request to family and friends. Two percent of respondents said they would take out a payday loan.

To avoid this suite of unattractive choices, some borrowers are asking strangers for money on Reddit instead. Since 2011, a section of the site, r/borrow (and its predecessor, r/loans), has matched users looking for quick credit with lenders willing to put up cash. Most loans on r/borrow charge very high interest rates—usually between 10 and 25 percent, to be paid back over weeks or months. Per data collected by one r/borrow user, the subreddit facilitated 3,473 loans totaling over $780,000 in 2015. According to a moderator of the subreddit, r/borrow users, like Redditors at large, skew young, white, and male. Loans tend to range from $100 to a few thousand dollars, and cover the gamut of emergency financial needs, including car repairs, debt consolidation, medical bills, or unexpected travel costs.

Relatively speaking, these aren’t huge numbers—the consumer-credit market handles trillions of dollars each year—but they do highlight the ways in which traditional lending options can fail to give some people what they need. “It’s not surprising that borrowers are looking for alternative ways of getting access to credit,” says Paul Leonard, the former director of the California office of the Center for Responsible Lending.

When Americans need money, they often turn first to banks for a loan, but their options there are only as good as their credit. If their credit score—a figure that can be calculated incorrectly and yet is often taken as the sole indicator of a prospective borrower’s reliability—is low, they often turn to loans with much higher interest rates. Take Justin O’Dell, a cable technician living in Dexter, Michigan. He says his mother took out several credit cards in his name while he was in college and racked up about $40,000 in debt. “My choices were to press charges for credit fraud or eat the debt,” he said. “I ate the debt.” No longer able to get student loans, O’Dell was forced to drop out of college.

When O’Dell later needed some cash to pay his cellphone bill after his wife lost her job, he briefly considered a payday loan—an extremely high-interest alternative that is known to catch consumers in cycles of debt and is mostly unregulated in 32 states. (Payday loans are not equal-opportunity debt traps, either: “There is some evidence that lenders have concentrated themselves in communities of color,” said Joe Valenti, the director of consumer finance for the Center for American Progress.) But after deciding against that option, and against the embarrassment of asking his father, O’Dell ultimately opted for the comfortable distance of a Reddit loan. “You don’t have to walk back to dad with your tail between your legs and ask for help,” he said. Now, he turns to Reddit when surprise expenses arise.

The full story here.

Which Countries Are Actually Sustainably Developed?

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Havana cityscape, 2010. The upside of not fixing crumbling buildings? Less carbon emissions.

This century, nine billion of us humans are going to have to try to figure out how to maintain the basic material comforts of modern life without totally wrecking the planet we live on.

There’s still a lot more economic growing to do, and one group of scientists has identified four key ways in which we are already undermining the planetary systems that sustain us: we are emitting too much carbon, driving too many species to extinction, causing too much nitrogen runoff, cutting down too many trees.

In the rich world, no country has figured out how to deliver prosperity while at the same time using the earth’s resources sustainably. We would need more than two Earths worth of resources even if we all consumed like Norway, among the greenest of European countries.

Lately I’ve been asking myself: which of the world’s nations has the highest sustainable quality of life? If we define sustainability in terms of hectares per capita biocapacity usage, what countries provide realistic examples of how humans can thrive within environmental limits? I used data from the Happy Planet Index and Global Footprint Network to try and find some contenders.

Not Costa Rica?

Like the forward-thinking European countries, Costa Rica has earned some deserved praise for its progress toward sustainability. Its bounty of hydropower even allowed Costa Rica to power its entire electric grid with renewable sources for three months this year. Costa Ricans also live long lives and are among the happiest people in the world.

But similar to countries like Norway, we tend to conflate Costa Rica’s relative enlightenment with actual environmental sustainability. Costa Ricans each need 2.5 hectares of land to neutralize their impact on the planet, well above the sustainable threshold of 1.8 hectares of biocapacity.

Vietnam, etc

The World Bank considers Vietnam a “lower middle income” country. Its residents each earn about $2,000 per year, and can expect to live to be 76. Vietnam’s citizens each use 1.4 hectares of biocapacity, well below the per capita sustainable share of about 1.8. Vietnam’s future is uncertain though, as the nation’s booming capitalist economy has meant a steadily increasing environmental footprint since the 1990s.

A number of countries have similar profiles—Albania, Syria, Sri Lanka, Tunisia, Armenia, Nicaragua, Colombia, Georgia, Jamaica, Guatemala. These countries are not quite as wealthy or as healthy as we in the West are, but deliver relatively comfortable lives to most of their citizens. In general, the greatest sustainability challenge these countries face is that their economies and populations are growing rapidly. In a few decades they are likely to enjoy much more of our affluent and unsustainable western lifestyles.


The United Nations considers Cuba a country with “very high human development,” due to health and education indicators that in many cases best those of the US. The UN Human Development Index suggests that Cubans enjoy a quality of life higher than any of the countries mentioned above, and they do it at least in the ballpark of sustainable limits at 1.9 hectares per capita biocapacity usage. Cuba’s uniquely sustainable development has been noticed by at least a few academics.

The downsides of life in Cuba are pretty well known, and are reflected in the data that suggest Cubans are less happy than many of the other countries listed in this post. But because of the nation’s success with the raw numbers, I’m planning on doing some more research on the implications Cuba has for sustainable development in the rest of the world.

09/23/2013 // Skyline // Lima, Peru


From our apartment roof. Peru is growing like crazy and in Lima there is construction everywhere. More on that later. (Click for lightbox)


On Poverty And Gun Death

I wrote about the correlation between gun violence and economic insecurity:

Even in cities with strong gun laws, the correlation holds. Buzzfeed notes that “the average rate of gun deaths in Chicago’s five poorest neighborhoods was over 12 times the rate in its least poverty-stricken.” A map of murders in Washington, D.C. shows that killings hardly ever occur in the city’s wealthy western swath of neighborhoods.

Mind you, this is correlation and not causation. But there’s plenty of reason to believe that poverty leads to gun violence and greater economic security decreases it.

In his classic study of inner city Philadelphia, sociologist Elijah Anderson demonstrates how racism, social alienation, and the absence of economic opportunity combine to create a “code of the street” in which wielding the “credible threat of violence” is the only way to ensure one’s safety. Needless to say, the code leads to a pattern of confrontation and killing.

“Only by reestablishing a viable mainstream economy in the inner city, particularly one that provides access to jobs for young inner-city men and women, can we encourage a positive sense of the future,” Anderson wrote.

Continued at Generation Progress.

What High Youth Unemployment Means For Our Economy


Probably not what you intended to do with that BA in English. When the economy recovers, will there still be college graduates working low wage jobs?

More than a quarter million American college graduates worked for minimum wage last year—that’s 70 percent more than ten years ago. We can all agree that’s a sign of an unhealthy economy.

But what kind of unhealthy? Is degreed underemployment just a product of the Great Recession, or does it reflect more fundamental economic problems?

In a recent paper, economists Paul Beaudry, David A. Green, and Benjamin M. Sand argue that there has been a “great reversal” in the demand for skilled labor. That is, fewer employers need to hire employees with college degrees. The Daily Beast’s Megan McArdle suggested that the findings mean “A BA is now a ticket to a job in a coffee shop.”

Ominously, the reversal began well before the recession started.

“Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000,” the researchers wrote. “In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow.”

So does that mean we’re headed for an education surplus? Are those college-educated minimum-wagers here to stay?

It’s too early to tell, according to Dean Baker, co-director of the Center for Economic and Policy Research.

“I do think we will need more college grads,” Baker told Campus Progress. “The question is: do we need them at the same rate we’re producing them? And that’s just much less clear.”

To find out for sure, though, we’ll have to bring the economy back to full employment.

“Let’s assume the economy does recover five, six years out,” Baker said. “I think we’ll see a lot of college grads working at jobs that would not ordinarily require college degrees.”

However, that doesn’t necessarily mean they’ll be working for minimum wage. Even if it’s not a requirement for the job, employers will likely still be willing to shell out for the skill set and credentials provided by a college degree.

But, once the economy has recovered, if college-educated Americans still find themselves in dead-end jobs, there might be a political gain in their economic pain. As The Roosevelt Institute’s Dorian Warren said recently:

“The Millennials who are more privileged and get to boomerang are finally starting to feel and realize just a sliver…of what these groups of poor black and brown kids are experiencing, and that does open up possibilities for alliance and solidarity.”

Posted at Campus Progress. Photo: Flickr / Judy Baxter

Meet SSI, The Most Important Government Program You’ve Never Heard Of


There are reasons to both love and hate SSI, one of the nation’s most vital public assistance programs for people with disabilities.

NPR provoked a firestorm late last month when they reported that Social Security disability benefits have become “our extremely expensive default plan” for dealing with our economy’s declining capacity to generate well-paying jobs. According to reporter Chana Joffe-Walt, disability insurance is the last resort for many Americans who can’t find work.

But there’s a whole population of people who don’t even qualify for what we know as “disability,” due to their lack of recent work history. For many of them, a program called Supplemental Security Income (SSI) is the only safeguard against abject poverty.

While Joffe-Walt reported on the rising number of disabled children whose families rely on SSI, the program is actually a vital source of income for eight million Americans of all ages with severe disabilities. However, SSI is also an illuminating and unflattering reflection on how America treats its most vulnerable.

For some insight, I spoke with Ashley Moore, public benefits social worker and co-worker of mine at Bread for the City in Washington, DC.

SSI is “basically one of the only welfare programs that we do have for people either disabled or elderly or blind, and who have little to no income and low assets,” Moore said. Recipients get a maximum of $710 per month, well below the federal government’s own poverty line of $958 per month for an individual.

“Seven hundred and ten dollars doesn’t get you very far at all, especially in DC,” Moore said. “A lot of clients I work with live in a shelter.”

That $710 also comes with an arduous set of strings attached, designed to ensure that only folks who desperately need the money collect benefits. Finding other sources of income, getting help with living expenses, or accumulating savings all result in cuts to a person’s SSI.

The restrictions make sense from a budget perspective, but the result is “we’ve built this underclass system where you’re stuck at that level always, and there’s no way to get out of it,” Moore said. SSI benefits are enough to prevent people from dying, but not enough to free them from the hardship brought by poverty.

A decade of increasing child poverty has seen a substantial increase in children who rely on SSI. As America’s social safety net becomes more porous, programs like SSI make up an increasingly important part of the patchwork.

“I spend most of my week trying to help people get this benefit,” Moore said. “I don’t know what people would do without it, but it’s not even close to enough.”

Posted at Campus Progress. Photo: Flickr / Rachel Groves

For Freelancers Without Benefits, This Might Be The Solution


Freelancers Union members rally in Albany, NY. They don’t have any picket lines, but a motley crew of 200,000 contingent workers have banded together for solidarity and health insurance. Their vulnerability, like their existence, is a recent invention.

Are you a temp worker, freelance writer, “independent contractor” for 40 hours a week, perpetual intern, aspiring entrepreneur, artist waiting for your big break, or otherwise precariously employed? There’s a union for that.

One union for all of that, in fact: the Freelancers Union and its founder Sara Horowitz were profiled in Sunday’s New York Times. The 200,000-strong group is not a union in the conventional sense—it doesn’t bargain collectively and members don’t pay dues—but the group provides affordable health insurance and a sense of camaraderie for a population that often needs both.

What’s more, that population is growing wildly. “In 1963, the total number of temps employed per year was 400,000. By 1980 that number was the total employed per day,” said journalist Bryce Covert, whose recent report “We’re All Women Workers Now” chronicled the rise of the American temp worker.

In 2005, the Bureau of Labor Statistics found that 2 to 4 percent of workers are contingently employed, including a disproportionate amount of young Americans. Other estimates of the total are far higher.

Like many recent travails of American workers, it wasn’t always this way. As the Times put it, “the post-New Deal model of employers providing health insurance, pensions and other benefits is breaking down.”

But why?

The rise of temp work coincided with the conservative counterrevolution against union power and Franklin Roosevelt’s New Deal. As we’ve reported, the backlash—beginning in the 1970s—has meant sputtering job prospects for most Americans and huge gains for the richest. The era also marked a philosophical shift for many employers.

“We have shifted to a business model where companies aren’t thinking of employees as things that they invest in and keep long-term,” Covert told Campus Progress. “They are thinking of them as assets that they either bring on or let go depending on what they need and how the economy is doing.”

According to Covert, this new model has its roots in a temp industry that thrived on gendered conceptions of labor. Beginning in the 1960s, temp agencies “were able to skirt a lot of the protections in place for blue collar workers by branding themselves as offering work to women in particular—young single women who hadn’t married yet or housewives working for pin money,” she said.

Due to wariness about women in the workplace, these jobs were billed as temporary side gigs for women, not careers. But after the recessions of the 1970s, temp agencies changed their tune and the model spread throughout the whole economy.

That’s where the Freelancers Union comes in. The group may not be well-equipped to force employers to hire more full-time workers, but Horowitz “is trying to address what the new economy looks like,” Covert said, “and figure out: If most of the workers are temp workers or freelancers or part-time workers, how do you help them get the kinds of benefits that used to come with a full-time job?”

Posted at Campus Progress. Photo: Flickr / Freelancers Union.

Did NPR Get It Wrong on Disability?

A Social Security check. NPR reports that the number of Americans getting disability benefits has been growing for decades. Is it due to economics or demographics?

Dr. Perry Timberlake has an unorthodox way of evaluating whether his patients qualify for federal disability benefits. “I always ask them, ‘What grade did you finish?’” he told NPR’s Chana Joffe-Walt.

The idea is basically that job seekers with college degrees can get desk jobs that will minimize physical pain; less educated Americans cannot. The anecdote is central to Joffe-Walt’s extensive NPR feature on the growth in federal disability benefits. The story—which aired last weekend on This American Life, All Things Considered, and Planet Money—argues that the decades-long rise in disability payouts reflects a changed American economy.

“There are now millions of Americans who do not have the skills or education to make it in this country,“ according to the story. Disability benefits, Joffe-Walt reported, have become “our extremely expensive default plan” for dealing with the American jobs deficit.

But not everyone agrees with that assessment. The NPR report has drawn fire from a wide range of progressive groups, like Media Matters, the Center on Budget and Policy Priorities, and the Consortium for Citizens with Disabilities.

According to Rebecca Vallas, staff attorney at Community Legal Services in Philadelphia, Joffe-Walt misdiagnoses the cause of growth in people on disability. She told Campus Progress that the real drivers are demographic: “the aging of the baby boomers into their high-disability years, and the entry of women into the workforce in greater numbers in the ‘70s and ‘80s.”

“Those two factors taken together explain virtually all the growth that we’ve seen in the disability programs,” Vallas said.

A corollary concern: the NPR piece could be interpreted to say that the federal disability threshold is nebulous or even excessively lenient. “It’s squishy enough that you can end up with one person with high blood pressure who is labeled disabled and another who is not,” Joffe-Walt reported.

Not true, reply disability advocates. The government has a strict standard for disability (and high blood pressure doesn’t cut it, said Vallas). In total, less than 40 percent of applicants are approved. In some low-income communities, the rumor even circulates that Social Security denies everyone’s first benefit application.

Those who are approved are the Americans with the most severe handicaps, according to Vallas—so severe that one in five men and one in seven women die within five years of being approved for benefits.

For now, This American Life’s Ira Glass is standing by the story. “We know of no factual errors,” he said in a statement yesterday.

Published at Campus Progress. Photo: Flickr / David Ciani.

Here’s Your Crisis: Student Loan Debt Isn’t A Myth [Infographic]

The student loan crisis is a myth.

So say Nicole Allan and Derek Thompson, who argue in this month’s issue of The Atlantic that the economic returns of college far outweigh the burden of student loan debt.

“Horror stories of students drowning in $100,000+ in debt might discourage young people from enrolling in college, but they are as rare as they are terrifying,” Allan and Thompson wrote in the article. “The economic value of college, meanwhile, is indisputable.”

Allan and Thompson looked for crisis in the wrong places. Six-figure calamities are indeed rare, but millions of Americans are caught between stubbornly weak labor markets and increasingly costly higher education.

1. The employment prospects for young grads are pretty gloomy. According to an Associated Press analysis, 53 percent of recent college graduates are either unemployed or not putting their degree to use

2. Because of the weak job market, borrowers are struggling more and more to keep up with payments. According to TransUnion, federal student loan delinquencies shot up 27 percent between 2007 and 2012. (Private loan delinquencies dropped 2 percent.) 

3.Ddon’t expect the problem to go away once the economy picks up. As Campus Progress recently reported, the growth in Americans with degrees is far outpacing the growth in jobs that require them, meaning jobs that offer a secure path to debt repayment will become ever more competitive.

4. But repayment is already causig hardship: 13 percent of students whose loans came due in 2009 to default on their debt by 2012. Another 26 percent are delinquent, on the cusp of default.

5. It’s not just a debt crisis—it’s an affordability crisis.

CNN Money found that the cost of attending a public university has more than doubled since 1988, even as Americans’ median income stagnated. If our incomes had kept pace with the cost of higher education, the average American would now make $77,000 yearly. 

Finally, the cost of college prevents many low-income Americans from even seeking a higher education. Forty-eight percent of adults aged 18 to 34 without degrees told the Wall Street Journal that they can’t afford to go to college.

Among high schoolers who score highly on the SAT and ACT, 80 percent of kids from wealthy families go on to get college degrees, compared with just 44 percent of those from low-income families. Student loan debt not only makes life miserable for many graduates, it prevents some Americans from even setting foot on a college campus. That’s what we call a crisis.

Posted at Campus Progress.

Why Can’t College Graduates Find College-Graduate Work?

Recent grads

Good luck on the job hunt, grads. You’re gonna need it.

Kate really wants to work in Washington. This young Ivy League alumna, recently profiled in the Washingtonian, has been interning for a year and a half—at a political outfit, a media company and now a law firm. Until she finds salaried professional work, Kate is waiting tables in the evenings to make ends meet, which means she often works 15-hour days.

About half of recent grads are, like Kate, in jobs that don’t require a four-year degree, and the problem is only going to get worse. In the next decade the number of degree-holders will grow more than twice as fast as the growth in jobs that require them.

Why then, are so many young Americans like Kate dead set on college-level employment? And why are they willing to take on tens of thousands of dollars of potentially crippling student loan debt in order to secure a college education?

Here’s a hypothesis: What if the overstock of American college graduates is not a reflection on the market for educated labor, but rather on the decreasing quality of alternatives?

In the eyes of many Americans, “It’s either ‘I have to go to college or I’m going to work at Wal-mart,’” Janelle Jones, researcher at the Center for Economic and Policy Research, said. Jones co-authored the report “Where Have All the Good Jobs Gone?” which found that since 1979, the economy’s ability to generate what the authors consider “good jobs” has diminished by about a third. This is due to deregulation, privatization, a declining minimum wage and a decrease in union membership.

The Atlantic’s Richard Florida wrote last year that with the decline of American manufacturing, workers in the U.S. now fall mostly into one of two classes. The creative class, about a third of working Americans, averages more than $70,000 in take-home pay. Meanwhile, everyone else—about 60 million people—are in the service class, and make an average of just over $30,000.

So where does college fit in to all this? To oversimplify, young Americans once faced a choice between going to college and working a unionized manufacturing or government job with benefits and a middle-class wage. The choice now is between trying to angle your way into the creative class, or working for tips at a restaurant with no benefits or job security.

“The restaurant offered me something full-time, but that’s not a field I want to go into,” Kate told the Washingtonian. Can you blame her?

Mirrored from Campus Progress. Photo: Flickr / scot2342

A Setback For Public Services

The New York City school bus drivers’ strike is over, with drivers giving in after more than a month of striking. The bad news is immediate for drivers, but I suspect that there’s a broader significance here:

As Campus Progress reported last month, the strike is a pitched battle in a wider ideological conflict over how public services should be managed. Are New York City parents and drivers locked in a zero-sum game, as Bloomberg would suggest, in which a dollar more to drivers is a dollar less for taxpayers? Or do they have a symbiotic relationship, in which an investment in drivers is also an investment in children?

“In the city’s entire history, the special interests have never had less power than they do today, and the end of this strike reflects the fact that when we say we put children first, we mean it,” Bloomberg said in a statement last week.

“School transportation is not a luxury, particularly for students with disabilities—it is a civil right recognized under several federal and state statutes,” said Sara Catalinotto, an organizer with Parents to Improve School Transportation and Manhattan mother of two. “There are places that you could trim the fat, but not in the salaries of workers. That’s ridiculous,” she told Campus Progress.

Read the whole thing.

Photo: Flickr / Jason Kuffer.

Obama’s Sequester-Mention Forecasts a Looming Crisis

Before launching into climate change, immigration reform, and gun violence in his State of the Union address, President Obama dropped a mention of “about a trillion dollars worth” of federal budget cuts that are set to “automatically go into effect this year.”

Sound familiar? It should.

Inside the beltway the measure is called the “sequester”: a package of cuts divided more or less equally between domestic and military spending, set to go into effect March 1st unless a new deficit-reduction agreement is reached. It totals over $1 trillion in the next decade, and this year’s installment, if implemented, would trim budgets by about $85 billion.

“These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They’d devastate priorities like education, energy, and medical research,” Obama said Tuesday night. “They would certainly slow our recovery, and cost us hundreds of thousands of jobs.”

Ironically, Democrats and Republicans already agreed on the cuts in the sequester, and President Obama signed it into law as part of a deal to raise the federal debt ceiling in 2011. But it was intended as a measure of last resort, “designed to be abhorrent to both parties,” and therefore force them into more cooperative, benign means of deficit reduction.

So far, no alternative has emerged; that abhorrence explained President Obama’s urgency last night, and the willingness of Republican leaders like John Boehner to try to reach a deal by March 1st. If no bargain is hatched for 2013, we’re looking at:

  • Up to a million jobs lost, according to the Congressional Budget Office.
  • Seventy thousand kids bumped off Head Start and thousands of teaching positions in peril, according to the Obama administration.
  • Food inspectors absent from their posts because of furloughs.
  • Half a million mothers with young children cut off from welfare benefits through WIC, according to Congressional Democrats.
  • Cuts to financial aid grants and federal work study funds for young Americans.
  • Potential loss of access to mental health treatment for up to 373,000 Americans, according to the White House.
  • $1.6 billion less for health research, according to Think Progress.

And on the military side:

  • Postponed deployment of the USS Harry S Truman, leaving just one lonely aircraft carrier in the Persian Gulf.
  • A hiring freeze in the Army, Air Force, and Navy.
  • Up to 30 days unpaid leave for civilian Air Force employees, and potential furloughs for all 800,000 civilian Department of Defense workers, according to the Washington Post.

Senate Democrats are set to offer a bill this week to replace the sequester and Republicans will likely counter with a bill of their own. A deal must be reached to avoid the cuts, but there’s still hesitancy from both parties to settle the matter. Senate Minority Leader Mitch McConnell said Tuesday that the two sides are unlikely to reach an agreement.

Mirrored from Campus Progress.