This issue: Interest rates threaten American farmers, bag lady syndrome – women over 50 fear living in poverty, Walmart offers employees college degrees for $1 a day, 43% of Americans are barely making it, Instagram community helps grad pay down student loan debt.
In the 1980s, when interest rates rose to high double digits, American farmers experienced a crisis that landed most of them in chronic debt, if they survived at all. This is because farmers usually have to borrow money each year to buy seeds, fertilizer and fuel, and then pay back their loans to the bank after they harvest and sell. When interest rates are high, farmers lose money.
Although interest rates are much lower today than in the 80s, so is the selling price of harvested crops. Farmers are making less. With the Fed suggesting that it will raise rates 5 more times through 2019, farmers may be in trouble. More than 70% of farm loans are now over $100,000. The bigger the farm, the bigger the loan.
Farm Aid, an organization that tries to help family farms, has warned that America might be “on the cusp of the biggest wave of U.S. farm foreclosures since the 1980s.”
Statistics show that the rates of living in poverty are higher for those who are unable to obtain a higher education. In an effort to retain employees, Walmart recently announced that both full time and part time Walmart and Sam’s Club employees can now pursue associate’s or bachelor’s degrees in business or supply-chain management for only $1 a day. Walmart will subsidize tuition, books and fees, and provide support with the application and enrollment processes. Classes can be taken online or on campus. Three years ago Starbucks Corp. began a similar program to pay full tuition for its workers to get a degree from Arizona State University online. With student loan debt going through the roof, savvy high school grads could use this to their advantage.
For many women over 50, talking about money and seeking solutions to financial challenges is taboo. But statistics are proving that this is critical to address:
- The median income of women 75 and older is about $13,000 less than men 75 and older ($19,043 vs $32,572.)
- Men in preretirement age (50 to 64) have 1½ times the wealth of women that age ($60,500 vs $38,200)
- Black women over 65 – highest rate living in poverty (21%)
- Hispanic women over 65 – 2nd highest rate living in poverty (20%)
- Native American women over 65 – 3rd highest rate living in poverty (19%)
- White women over 65 – least highest rate living in poverty (10%)
The “bag lady syndrome” so many women fear is not unfounded for females over 50. Low pay, lack of employer-provided retirement plans, and increasingly longer lifespans and higher medical costs than men, squeeze them from all sides. In addition, women are 66% of all family caregivers and nearly twice as likely as men to provide care from their 40s through their 60s. This can result in lost hourly wages, reduced Social Security benefits and the missed opportunity for 401(k) contributions. Taboo or not, this is a problem and we need to talk about it.
The United Way has come up with a new acronym ALICE. ALICE stands for Asset Limited, Income Constrained, Employed. What does it mean to be Asset Limited, Income Constrained and Employed? It means that you cannot make ends meet. You literally cannot fit everything into your monthly budget. We are talking about housing, food, child care, health care, transportation and a cell phone.
When you combine the number of people living in poverty with the number of people who are ALICE, you get 43% of the population of the United States. Seriously, 43% of the most affluent and powerful country in the world can barely survive. So, even though the unemployment rate is 3.9% people are simply not earning enough.
When Natalie Tomko got her Masters in Journalism, she found herself $110,000 in debt. $60,000 in student loans and $50,000 in credit cards. After realization of her plight really sunk in, she dried her tears, reached out to her bank and applied to its hardship program, and took every side hustle she could find, earning an additional 50% of her income to throw at her debt.
But in the end, she insists that her key to success was finding a community of people on the same debt-free mission to share her struggles and triumphs with. Joining the Instagram community #DebtFreeCommunity gave her the courage, motivation and accountability to keep going. Her advice? Face your debt, find your tribe to support you, and get mad at your debt. Then hustle, sweat and rid yourself of it. “You are not alone. You can do this. You are going to be OK.”