Predatory Lending, Part II
Today's guest post is by Jon Zerolnick of the Los Angeles Alliance for a New Economy, co-author of "Foreclosure on Wheels." On Friday I discussed how the Port of Long Beach - a public, government entity which once had a goal of reversing the economic conditions that created our environmental crisis - signed on the dotted line with Daimler/Mercedes Benz in a financing scheme that would make drivers poorer. Remember the Consumer Federation of California's numbers-crunch on a real port driver? It compared the independent hauler's earnings now, against how that trucker would fare under a Daimler loan, using public, conservative estimates. Even with all the touted "fuel savings," her take-home pay would actually fall from $10.68 to $8.46, because of the crushing new monthly truck payment averaged over the lifetime of the loan (even assuming the cheapest possible truck!). The good news is Ms. Dominguez is among the 16,611 drivers out of 16,800 who have said "thanks but no thanks" to the wheelers and dealers over at the Long Beach leasing location, preferring instead to drive a clean, company-owned truck as an employee in Los Angeles. (If you haven't spent time over at the port trailer, it's eye-opening: Contracted personnel have been spotted chasing drivers out to the parking lot when they refuse to sign up, hence the phrase "predatory lending practices.") But what if this Latina driver was among the 189 workers who have fallen victim to these nefarious reps, and would have to cough up an average of $650 a month over the next seven years? What expenses would she have to cut from the family budget, now that her income would drop roughly 26 percent? Would she have to take a second job despite working 48 hours a week to pay for the other half of rent? A 2-bedroom apartment goes for $1,200 in Long Beach. How would she keep food on the table? A month of groceries for an average family of four total $648 a month (or higher, with prices rising). But who could go without shelter and food? Perhaps Ms. Dominguez could sacrifice all utilities ($200), diapers ($84), infant formula ($150), and gas for the family car ($128). That's just $562! No one had better get sick though. Just to be seen by the doctor if you're uninsured costs $90 alone. Let's not get started on tests, X-rays, medicine and the like. Medicine or milk. Fuel or formula. These are the choices that Long Beach and its buddies over at the German symbol of wealth and luxury are imposing on at least 189 drivers - 189 too many.
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