Abuses at McDonald’s and JPMorgan Chase Help Keep America Poor

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Natalie Gunshannon, a McDonald's worker from Pennsylvania, has just won the right to… draw a paycheck. Work-for-pay is a fairly straightforward system that the Western World has been using for the past six or seven centuries, give or take.

Ms. Gunshannon was an hourly employee at a McDonald's franchise in Shavertown, Pennsylvania. Her degree is in massage therapy, but jobs in that field are scarce. A single mother, she took whatever work was available, which brought her to McDonalds, where she worked the line for $7.44 an hour, 30 to 70 hours per week.

After her first pay period, she was given not a paycheck, but a "debit" card loaded with her wages. This card, backed by JPMorgan Chase & Co. (NYSE:JPM), could be used anywhere Visa was accepted – including ATMs. It all seemed very convenient.

It wasn't.

A "Fine" Service

The problem was the JPMorgan debit card itself. It's a fine card… There are "fines" every time it's used:

  • ATM withdrawals: $1.50 each
  • Over the counter cash withdrawals: $5.00
  • Balance inquiries: $1.00 per inquiry
  • Online bill payment: $0.75 per bill
  • Lost or stolen card: $15.00 replacement fee
  • Inactivity fee (not using the card enough): $10.00 per 30-day period

At $7.44 per hour, these fees could easily send a person like Natalie Gunshannon right under the water. Losing her card would cost her better than two hours' worth of work. She has a checking account, and access to a debit card issued by a federally-backed financial institution.

Why would she want to be paid under this usurious system? She had no choice.

Ms. Gunshannon asked her manager if she could be paid with a check, as is the custom in these parts. Pennsylvania law says a worker can be paid in cash or check upon request.

She was told that checks weren't available, and that there was no way to transmit her wages other than this JPMorgan debit card…

Join the conversation. Click here to jump to comments…

  1. fallingman | July 8, 2013

    JPMorgan is a demonic institution. How long does it take people to figure that out? They were the principal driving force behind the creation of the Federal Reserve, which is the number one enemy of people who don't have special access to the corrupt financial system, which is most of us…the 99%.

    They routinely screw their own clients. Talk to Jefferson County Alabama where they paid bribes to local officials to agree to an interest rate swaps scheme that devastated the county. They've rigged the silver market for years. They've been up to their eyeballs in all the mortgage backed securities scams. They assert to regulators that the London Whale trades were "hedges" when that was patent BS. The list goes on and on and on and on.

    And now, they're screwing the welfare poor and the working poor through their card fees.

    Thank god Money Morning … Mr. Madison and Mr. Gilani … don't hesitate to hold Morgan to account. Almost nobody else does. They get away with anything and everything, because, for all intents and purposes, they ARE the Fed and they control the government. The government certainly doesn't control them, political theater notwithstanding.

    The quiet coup is complete. Bankers and the insider "elite" rule the country and the world.

    The rest of us are on Hayek's road to serfdom.

    • cairodai | July 11, 2013

      It is a disgrace. After all the bad publicity banks encountered when charges were revealed through complaints made by customers, you would think they would want to be seen to help rather than hinder the customer. It is worse now than ever for customers.
      We should boycott McDonalds until they change the method of payments to their staff.
      It's easy with the social networks we have in place now.
      Look at what happened and is still happening in Cairo.
      We have the power to make things better. All we need is unity.

  2. Greg Madison | July 8, 2013

    Thanks for the kind comments, Fallingman. The way I see it, the taxpayers are essentially subsidizing the profits of companies like McDonald's, JPMorgan Chase, Wal-Mart… the list is long and sad.

    When they pay substandard wages, or put the screws to the working poor, taxpayers have to pick up the slack. Why would Wal-Mart or Mickey D's want to pay a living wage when they can fob workers off on the welfare rolls and keep the balance? Is it any wonder why the rolls keep expanding, when it's in a company like Wal-Mart's interest to see that happen?

    It's disheartening to see the working poor demonized, when the finger should go squarely at these companies. I can't imagine someone working 40 – 60 hours per week at $8.25 an hour wanting to stay on increasingly meager public benefits, stigma and all. Doesn't add up to me.

    It seems reasonable that a company can pay a living wage and still rake in the money. Suppose all the hourly employees at Wal-Mart made enough to live on – maybe even enough to get ahead. So what, Wal-Mart banks $465 billion instead of $469 billion? Feel the squeeze, Waltons!

    Having taxpayers subsidize crappy salaries is having a demonstrable drag effect on the U.S. economy. It's called the "Wal-Mart Effect," but they're far from the only guilty party… McDonald's goes right up there, too.

    You should check out this piece from my colleague, David Zeiler. He goes more into Wal-Mart's hand in this drag-down:

    http://moneymorning.com/2013/06/13/how-the-wal-mart-syndrome-pushes-millions-more-onto-food-stamps/

    Meantime, if you keep reading, we'll keep holding their feet to the fire!

    • fallingman | July 9, 2013

      Thanks Greg. I'll keep reading…and I really do thank you guys for going after the big boys who run the show. It takes more than a little courage.

      If I might offer a personal observation. My mother is 97 1/2 and the real heroes of our economy are the CNAs (certified nursing assistants) who take care of her. I talk with them every day at meals and in the halls. I'm there so much I'm practically indistinguishable from staff, so they talk freely with me and around me. They're my pals.

      These folks are absolutely bustin' their humps to make ends meet. I see so clearly how any jump in the price or gas or stretching to buy organic produce to improve their diets maxes them out. God forbid the car needs repairing or the kids get sick.

      Most of them are getting some sort of government assistance and it's pretty clear that they work because they can't imagine sitting around all day not working. It isn't because they take in materially more money. Some may actually be worse off as the result of working when you figure in the expenses related to getting to work and the extra benefits they'd qualify for if they had zero income.

      Yes, the system subsidizes the corporations in so many ways. People go on and on about socialism, but they mistake the KIND of socialism we have. It's state socialism, otherwise known as corporatism (Mussolini's preferred term)…national socialism (Nazism…yes, Hitler was a socialist)…fascism. Pick a name. They're all the same. But the latter terms conjure up images of the Brown Shirts and violent repression. We don't have that here (yet…exactly), so people assume it can't be fascism.

      But fascism is just the system you have when government's in league with and in bed with the corporations. I use it as a purely descriptive term, not an inflammatory one. In our case, the corporations effectively own and control the government. It's the same in most countries, to one extent or another, around the globe.

      Socialism of any kind is a form of slavery, just with cushier shackles. It's an abomination. But how can we ever get back to some semblance of free market capitalism where people pull their own weight and no special favors or protections are granted…and failed businesses are actually allowed to fail and be liquidated?

      You tell me. I see no way out of this mess.

      The worst thing of all is the free market capitalism gets blamed when we get meltdowns like 2007-2009…not fascism. As if we've ever really seen free market capitalism, much less have it now.

      It gets so crazy that people call Alan Greenspan…the guy at the helm of the most quintessentially fascist of all institutions, the Federal Reserve, the people who arbitrarily set short interest rates by fiat…a "free market capitalist."

      Uh, I don't think so. He just wants total freedom …and immunity … for the BANKERS and his insider corporatist cronies. Not for the system as a whole. Certainly not for the unwashed lumpenproles.

      • Greg Madison | July 9, 2013

        Privatize the gains, socialize the losses. The order of the day…

      • ak | July 10, 2013

        Fallingman, you are so right about the CNA's and other health workers, and especially the home healthcare aides. While there are some abuses, these people generally go above and beyond in their care of their elderly charges, often providing all kinds of meaningful extras in terms of time and devotion.

        People with a conscience and an elderly relative who needs looking after would do well to look for providers who are paying their workers and furnishing appropriate employee benefits. If they are, they're probably also hiring qualified people.

    • theboys | July 9, 2013

      What is a living wage? Having lived all over this country in my lifetime, it really would vary a lot.

      Typically, kids, retirees, part-time moms were the employees of such companies featured in this article. We have all been there and most have gotten out due to education and intelligence. I personally have fond memories of working in retail in high school, college and even thereafter when I was a young mother. We were never paid well but got great in-store benefits. I furnished my house, and dressed my family on those benefits.

      I am familiar with the restaurant business. Our family pays our employees above minimum wage, offers healthcare, some vacation days, int free loans, all the food they can eat, gym membership for some, etc. and frankly a lot of personal bailing out of not good situations. It is not easy. Remember that most people working in the food industry are young and frankly not good with what money they do earn and need a lot of guidance. My point is that making a profit in the food industry with low margins is tough. When the recession hit, we never laid off, but had to kick in our own money to keep things going.

      If you want to see much better wages in the food industry along with benefits, that will mean the price of the products will increase – substantially. Our prices are NOT cheap because of what we support. I am not sure how much more consumers can tolerate with rising prices.

      We follow a good rule. Do unto others as you would like them to do unto you.

      BTW, I hate banks. If you think the poor are getting a bad rap, which they are, you should be a small business owner. Between government wanting to raise taxes, increase regulations, increase yearly fees, assessments, banks every single month come up with creative ways to increase fees. It starts small, and seems insignificant, but multiple those increases and they have made a tidy profit.

  3. Mario Cazares | July 8, 2013

    But it still amazes me how a great part of the U.S. public will leave this issue alone & say nothing but dwell on the poor,the minorities,the immigrants & blame them for everything that's wrong in the USA.Wake up America & quit drinking the corporate cool-aid.It'll do for you as it did for the Jim Jones followers.But most US citizens are stupid to say the least so I'm sure somewhere in the near or not so near future people will do the same for corporate America as the followers of Jim Jones did for good ol'JJ.My personal opinion,not soon enough.

  4. Roger Freed | July 9, 2013

    Thank you for catching this and reporting on it.
    It almost reads like something from an anti-capitalism organization, but here it is on a economics website. That only emphasizes how dire it is.
    I will pass it on. The low wage owners are oppressed enough as it is.

    • Greg Madison | July 9, 2013

      We're free-market folks here at Money Morning. Emphasis on "free." Deliberately depressing wages, keeping millions on the welfare rolls, and having taxpayers subsidize your profits is anything but free. THAT notion strikes me as profoundly anti-capitalist. The free market is the great level playing field. Whatever this is, it ain't level.

  5. Brig | July 9, 2013

    NJ Disability does the same thing. When I had my son, instead of getting a check into my account, I had to use the stupid debit card with all the fees and nonsense as described. I lost about 10% of that income, which was already a lower % of my usual income amount. Its not just private franchises that use this practice. However, the debit card used by the state of NJ was through Bank of America, not JP Morgan.

  6. Chris | July 9, 2013

    30-70 hours per week? Where I work, and many other companies, 30 is the new 40.

  7. Donald Webb | July 10, 2013

    Look at Solyrnda, the workers there were paid a living wage and held their jobs for two years until the 535 million dollars in tax money ran out. JP Morgan is one of the five to big to fail banks listed in the Dodd-Frank bill, nice to know their behavior can be as reckless as they want and the taxpayers will bail them out. Government is what is increasing the working poor, not McDonalds orWWalmart. Whether, it be new healthcare regulations or special tax breaks. Maybe it is time to let the market work and get government out of the way.

    • Greg Madison | July 10, 2013

      Sounds good to me… that is, if the market was really working. Instead, the market – and all of us in it – is a victim of this collusion along the Government/Financial axis. It seems to me, in a truly free market, forces would usually work to lift wages, given the demand for labor. Bailouts and too-big-to-fail are just different symptoms of the same disease, if you will.

  8. me3tv | July 10, 2013

    This was correct to file the suit. And JP Morgan is a monster that depends on subsidised poor and its own government direct support subsidies for banks too big to fail in a Crony Capitalist system. I believe a lot of the corrupted capitalism in America is DRIVEN by GOVERNMENT policy. Our tax laws encourage poor social and economic choices rather than allowing the market to choose efficiencies. I do think the current version of the FAIR TAX will do a lot to correct for crony capitalism and for subsidized multi generational poverty. We point fingers at businesses for making absurd choices in labor management and we point fingers at the banks for raping the system and we point fingers at the poor for being disheartened. It all comes back to a root cause of government policy and BIG part of that is the manipulation of the tax code for social engineering and for "fat cat political buddies" to prosper (like – for instance – Warren Buffett who goes on and on about higher taxes on "millionaires" while he takes an official salary of $100,000 and masks his other income under corporate expenses or offshore shelters, or any of dozens of crony capitalist shelters the small business "millionaires" cannot access.) Government policy is the driver here. And government policy is about votes and right now the votes that win elections are coming from the ultra-wealthy policy shapers who benefit from Joe Poor buying an LCD TV for every room in his subsidized flat AND Joe Poor who appreciates the check because he can't get a decent job from the "millionaires" who are the small business owners who are not hiring.

  9. Fran ross | July 10, 2013

    GREEDY CAPITILIST SCUM…PROFIT FROM KEEPING THE POOR AND WORKING CLASS DOWN.

  10. Pat Haarhaus | July 11, 2013

    The really big picture is that JP Morgan is under the big umbrella owned by Bank One. It is one of five owned by them. I learned of this through business courses. I lost my home through them and their illegal practices. The Federal Reserve board went through my mortage papers and rulled that there were descrepenscies in the forclosure. Then they awarded me a puny check of $600. Really !?! That won't even pay a month rent on the apartment where I had to move with my multiple handicapped disabled sononeand his two service dogs. They failed to follow home equity guidelines in the Texas State Constitution. They closed me in a parking lot as I sat in my van seat. They made a mistake in the paperwork overcharging me and i pointed it out through a signed return receipt letter to cure the loan within 60 days or lose the home to me. They never cured the loan. It was a Veteran home loan I retained from the divorce of my husband. They transfered the title ot me without his signature. During the course of 6 years fighting them in court, five financial banks sued me for foreclosure: Bank One, Bank USA, Wells Fargo, USA Securities, America's servicing Company and JP Morgan. All are part of the big one. This was a preditor loan. They even used my food stamps to qualify me for this loan and changed the per cent rate 3 times (switch and bait).

  11. John delano | July 20, 2013

    JP Morgan Chase this month August 2013 will a financial collapse the same as

    the 2008 financial collapse. Sub -Prime mortgages collapse is "small " , because this time look at what will happen in August, 2013.

    1] JP Morgan will be insolvent*. To big to file Bankruptcy The US will collapse.
    2] "16 trillion in debt and 80 trillion due ongoing to your Medicare, your sons
    unemployment checks, the food stamps all stop because the US borrows
    47% of these funds." China stops buying our treasury bills. China backs its
    Yuan, there dollar with gold. Saudi Arabia drops our dollar to price oil
    in par with gold!
    * JP Morgan holds 80% of the gold futures -with this paper gold exceeding the physical gold is leveraged by 2,000% when you consider gold plunging to $200 per ounce. "You can't eat it, use it in your car's fuel tank, and it does look nice on that Indian bank teller who wears only 24 karat jewelry ."
    India is poor because it imports gold instead of tractors, bulldozers, machinery to employ people.
    I am sorry that I am right…

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