It is the payday loans and other check cashing
companies, in addition to the existing pawn shops, that weren't there 40 years ago that point to an increase in the number of working poor, living paycheck to paycheck, that shows the slide to a society with what is beginning to look like a 3rd world economy.
I don't know.
A lot of business that would possibly have gone to pawn shops is on eBay instead - fortunately. There's obviously a big market in the sale of used stuff.
As Andrew points out, pawn shops have been around for ages. Check Cashing shops have been around in big cities for ages as well, though in the past they often weren't dedicated shops (e.g. large department stores would cash checks for customers (at least Rich's did in the 1960s)). I do think they're more visible in smaller cities than they were 30 years ago, but that's just my impression.
I think Yunus has a valid point, but I don't think it illustrates a slide of the US economy as a whole. There's certainly a market for things like [link|http://www.grameenamerica.com/AboutUs.aspx|Grameen America]. I think [link|http://www.businessweek.com/magazine/content/05_06/b3919046_mz011.htm|WalMart] recognizes that as well...
Too many traditional banks have poorly served poor and lower-middle-class areas in the US. But there seems to be a structural issue, or a lack of imagination, as well. Otherwise, one would think that smaller organizations like credit unions would serve that market far more than it does.
I am concerned that a Loan Star Cash Loans for Car Titles just moved in on the corner of the local shopping center. How low-rent can you get? I live in a lovely suburban neighborhood with good schools. This atrocity is just more proof that we are indeed sliding. I'll bet, though, that if I watched the clientele it would be the people on fixed incomes or those who are being affected by the sub-prime debacle. Let's face it, in our economy today, any one of us is only a few paychecks away from disaster. Instead of being an atrocity, Loan Star will be a god-send.
Maybe I should have said shift instead of slide
I don't see ebay taking away business from pawn shops. The bulk of the customer base of the pawn shops who is not someone is going to be able to sell on ebay. The pawn shops customers still have a hope of being able to get their stuff back.
The check cashing shops of today is a lot different than checking cashing from years ago when it was mostly a service to customers. Today it is a big business.
IMO the banking issue is representative of the problem. I don't believe it is a structural issue. It is a result of the short term mentality of the banking industry in general. Forty years ago we still had the remains of local companies that served local interests. During the past 40 years there has been a consolidation as companies use acquisition as a growth strategy. It has left large cities, esp. in the rust belt without local access to, for lack of a better phrase , small time capital. Because of the decline of urban education, there really isn't a large source of local entrepreneurs looking for that capital either.
In places like Detroit, there aren't a lot national grocery stores nor are really any small independent grocery stores either. There doesn't seem to will or the capital to create a localized economy.
A 3rd world united states is not going to look other 3rd world countries. It is going to look like Detroit and other rust belt decaying cities.
I do...but not for the reasons specified...
Pawn shops have always been around....it's their poliferation that has increased...and their protection as sellers of stolen goods. (They didn't know that particular necklace was stolen.....honest)
As for the check cashing, it's growing from a change in the usury laws. (1000% interest is enough to get any businessman's attention)
It's these laxing of rules that indicates the decline...the pawn shops and check cashing stores are indicators of the laxing of rules.
you are overlooking the obvious
the payday loans are replacing the local shy's. Since drugs went national the shy's arnt working the 20-100 loans like they used to. Also neighborhoods arnt as adhesive as they used to be so shy's dont have a steady base except in the immigrant communities, not the mainstream.
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