Poverty Simulations Address Survival Struggles and the Impact of Payday Loans

Inside Subprime: March 12, 2019

By Lindsay Frankel

Poverty simulations are popping up across the country to provide people with immersive experiences that highlight the everyday financial struggles of indigent Americans, from purchasing food to finding childcare to taking out a payday loan.

One such simulation, which took place through the Center for Community and Civic Engagement at Bowling Green State University in Kentucky, allowed participants to take on the role of a low-income American. The goal was to pilot the program and then make it available to other groups.

The simulation was set up in 15 minute chunks, with each segment representing a week in the life of a family member living in poverty. Participants were given new life circumstances each week that complicated their financial struggles, such as job loss, pregnancy, incarceration, homelessness, or trying to get an education.

Community partners were asked to participate by simulating community resources such as banks, child care centers, health centers, utility companies, and alternative financial services such as payday lenders and title lenders. To make interactions with participants realistic, instructions were given for the various roles. For example, the person taking on the role of the pawnbroker was instructed to provide  “less than half the value of each item and charge them a fee if they wish to redeem the items.” And the rent collector simulated illegal evictions by evicting participants outside of court.

And at the University of Michigan, during a simulation conducted by Ann-Arbor based Interfaith Council for Peace and Justice, volunteers acting as mortgage collectors, policemen, employment officers and others were allowed and even encouraged to exacerbate the financial difficulties of participants. Helen Simon, one of the organizers, was in charge of running “Quick Cash” during the event, a made-up location that provided food stamps and transportation passes.

“I think we try to make it as realistic as we can,” Simon said. “I’m a Quick Cash person and I’ve never done this particular job before, but (the simulation guide) says that if you can get away with it, try to cheat the person. I’m too kind-hearted, I’m not going to try and cheat, but evidently it does happen.”

Later this month in Minnesota, Scott Carver Dakota Community Action Partnership will host a similar simulation, which is intended to increase awareness for staff, community partners, and elected officials. This simulation will highlight the adversity faced by low-income families trying to get by.

And in Midland, Texas, a community credit union recently presented a poverty simulation that showed participants how difficult it can be to meet a family’s basic needs on a limited income.

These simulations go further than basic awareness education, giving participants a chance to experience for themselves what it’s like to access resources on a limited income, navigate confusing systems, and seek alternative financial services that often do more harm than good.

“I think what we can learn and teach about is what low income families have to go through, the tough decisions they have to make on a day-to-day basis that we might not necessarily think about,” said Sarah Stauffer, a graduate assistant working with the Center for Community and Civic Engagement at Bowling Green State University.

For more information on payday loans, scams, and cash advances and check out our city and state financial guides including FloridaIllinois, MichiganTexasWashington D.C. and more.

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