12 Million Americans Take Out Payday Loans

A new Pew Charitable Trusts report demonstrates the surprisingly high number of Americans who utilize payday loans.  These payday loans are generally short-term, high-interest cash advances that average $375.  The typical borrower takes out eight of these loans each year and spends $520 on interest.  The report states that 12 million Americans use payday loans annually.  69 percent use these loans for everyday expenses, such as credit card bills, mortgage payments, groceries and the like, whereas only 16 percent take out a payday loan to cover unexpected expenses such as unanticipated medical costs or car repairs.  The most common borrower is white, female and between 25 and 44 years old, but the study also found five other groups of Americans that are more likely to take out these loans: those without a college degree; Africans Americans; home renters; those who earn less than $40,000 a year; and those who are divorced or separated. 

Almost 1 in 4 American Children in Poverty

Saki Knafo, writing for the Huffington Post, focuses on UNICEF’s recent report on child poverty in developed countries.  The report displays the shockingly high child poverty rate in the U.S., along with many other first world nations.  America’s child poverty rate stands at 23.1%, second only to Romania with 25.5%.  The rate was also marked at above 15% in Italy, Spain, Greece, Bulgaria, Lithuania, Latvia, and Japan.  The report does acknowledge that the term “relative child poverty,” which refers to a child living in a household that possesses a disposable income of less than half the national median income, does have its weaknesses.  The term is less effective when comparing rates between countries, but when taking each country into account separately, the relative child poverty is quite accurate.  Additionally, UNICEF calculates how social welfare programs affect the rate.  While Canada and the U.S. have the exact same child poverty rate before taxes and transfers (25.1%), when taking into account benefits from social welfare programs and taxes, the poverty rate in Canada drops drastically to 13.1%, whereas the rate in the U.S. falls only to 23.1%.