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A technological challenge for low-income Americans

Melvin B. Miller

Cell phones, tablets and computers have transformed the American economy. While the young seem to be technologically proficient, it is distressing to watch senior citizens struggle to induce cellphones to perform properly. As technology becomes more sophisticated, and undoubtedly more expensive when considering the associated charges, the poor, especially those without a bank account, will suffer a great disadvantage.

One development is that America is moving toward a cashless society. Consequently, most transactions will be digitally consummated. Stores in some states already refuse to accept cash, but that policy is still a violation of law in Massachusetts. Usually, one’s bank account is at the other end of a debit card purchase.

This commercial development has an unfavorable impact on the poor. According to the latest study by the Federal Deposit Insurance Corporation in 2017 there are still 8.4 million American households in which no member has a bank account, either in a commercial or a savings bank. Those without a bank will have to pay substantial fees to cash paychecks.

As one might surmise, the group with the highest number of the unbanked is African Americans, with 16.9 percent not having
bank accounts. Only 3.0 percent of whites fall into that category. The likelihood of low income blacks opening accounts in large banks is not great. Their deposits are often not substantial enough to avoid fees.

Consumers never know for certain what technological innovation is coming next. That is a frailty also afflicting the technologically astute. IBM invented the computer, which was originally a gigantic machine. Then came the Digital Equipment Corporation of Maynard, Mass. which developed minicomputers that did not require the capital investment of the huge IBM product. However, Ken Olsen, the president of DEC, did not envision the demand for a personal computer, so DEC lost out on that market.

It is unreasonable to expect the average person to be ready for whatever change comes. If a brilliant MIT graduate like Ken Olsen could get blindsided, what hope is there for the rest of us?

Black leaders should be attentive to the impact on the poor of coming technology innovations.

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