The Stress of Being Poor

By Ned Calonge, MD, MPH and Kristin Jones

Niki Okuk hires felons.

After earning her MBA degree, Okuk knew she wanted to go back to her hometown of south-central Los Angeles and start an environmentally conscious business. So she launched a tire recycling company called RCO Tires.

Many of the people Okuk grew up with were incarcerated at some point or another, often for crimes that would have been treated as minor transgressions in a different neighborhood. Her husband was once charged with 10 felony counts of vandalism—for graffiti. So Okuk doesn’t ask applicants about their criminal records when hiring people to drive trucks and staff the warehouse. She also hires people who are homeless or recently homeless.

Okuk ran into a problem, however: Her employees miss a lot of work. Why?

One employee missed work because his roof caved in on his bathroom—three times. His child was suffering from asthma, likely exacerbated by the mold in his substandard apartment. And yet, recounted Okuk, he refused to report his landlord—knowing that as a Black man in one of the most expensive cities in the country, he was unlikely to be able to find another landlord willing to rent to him for what he could afford.

Another employee had to miss work to get his children back from state custody. Okuk said they’d been taken away after the employee’s landlord complained about the family created when he and his new wife—each with two children—moved in together.

Often, employees missed work to attend probation hearings scheduled during work hours. Or they were arrested on the way in, sometimes because their car registration was a few days expired, and sometimes for no apparent reason other than the color of their skin.

It isn’t just routine criminal background checks that’s keeping people with histories of incarceration out of the workforce, said Okuk.

“It’s about the fact that they live in an American apartheid system,” she said.

Okuk was the latest speaker in The Trust’s Health Equity Learning Series. The series invites speakers from around the country to Denver to address topics related to how inequities persist in American society, how they impact our health and what can be done about it. The talks are then re-broadcast in viewing parties around the state, and are part of a curriculum training local leaders in health equity issues.

Okuk’s talk at History Colorado Center on Sept. 5 illustrated how poverty can affect health. Her starting point was the lived experiences of herself, her family and her employees as they navigate discrimination and unequal treatment.

“The very context of our lives, which is full of unstable housing and unstable transportation—which then translates into difficulties in finding and keeping employment, shortages of resources in our families and our social networks—those things combine to create what has been desribed as a calculus of poverty,” she said. “It is the stress of being poor that makes us ill.”

In the second part of her presentation, Okuk discussed solutions that would create and keep wealth—and, by extension, health—in communities that have been deprived of it.

Inequality has been growing in the United States. The richest 1 percent have nearly doubled their share of the national income since 1980, according to the 2018 World Inequality Report. The bottom half of earners have seen their share of the national income decline sharply.

The divide is most pronounced along race lines. For every 100 dollars in white family wealth, Black families in this country hold just five dollars, and this inequality has been getting worse. The Institute for Policy Studies found that between 1983 and 2013, the median wealth of Black households in the U.S. declined 75 percent, and 50 percent among Latino households. In that same period, the median household wealth among whites increased 14 percent.

This inequality affects not only the health and mortality of people who live in poverty, but all of us living in unequal communities.

Okuk’s experience offers just one example of how poverty—not simply the lack of money, but the various brutal punishments that accompany it—can affect the ability of small businesses to thrive and create wealth.

“How does a business like RCO function when the state continues to kidnap my employees?” Okuk asked.

Over the past six years, Okuk has built a successful company. RCO takes old truck tires and makes new products out of them—rubber bumpers on loading docks, the bottoms of traffic cones, rings for weighing tarps down on dairy farms. The company has diverted around 300 million pounds of rubber from landfills, saving the equivalent of almost 70 million gallons of oil.

The company operates on a thin margin, but Okuk is committed to paying her employees more than minimum wage. She also encouraged them to unionize, which they did.

Still, the average wage among RCO’s workers is about $14.50—not enough for a family to live on in L.A. Many of her employees work side jobs in a family restaurant, or their wives operate day cares to make ends meet. That’s often not enough to show landlords who are looking for high incomes, no criminal backgrounds and sparkling credit.

The problem of poverty is more than one company can solve. So what would solve it?

“The best way to help people without money is to give them money,” said Okuk. “Our communities are just going to need some serious capital injections.”

Wealth that would allow a company like RCO to grow bigger without taking on crippling debt, to employ more people and to pay them a living wage.

Wealth, too, that would allow workers to live in safe and stable housing, and to be free from the harassment that follows people thought guilty of being poor.

One solution that Okuk has championed is creating worker-owned cooperatives. In that model—not yet a reality at RCO—workers would share in the profits made by the companies that extract their labor.

In the U.S., cooperatives are rare. But they’ve been tried in other countries. The Mondragon Corporation, founded in the 1950s in the Basque town of Mondragon, Spain, is a federation of independent cooperative businesses. The worker-owners make decisions about the business—including whether to increase or cut wages—and take in more money when the company does well. That’s in contrast to shareholder-owned companies, which accrue wealth for their executives and their investors but rarely their workers.

Homeownership, says Okuk, is another way to build wealth. But homeownership has often been denied to people of color, historically through redlining and racially restrictive housing covenants, and more recently through discriminatory lending practices. Wells Fargo Bank, for instance, has repeatedly faced complaints that it steered African-American and Latino home buyers into high-fee subprime mortgages, even when they would have qualified for prime mortgages.

Okuk didn’t build her company out of nothing. She spoke of living in her white grandmother’s house for free, taking advantage of generational wealth that wasn’t available to her Black grandparents. The idea that hard work and ingenuity is enough to build successful businesses is a myth, she said.

“When we ask ourselves, ‘How are we going to build more companies like RCO?’ We have to ask ourselves, ‘Where is the wealth going to come from?”

Our shared health and prosperity may depend on answering that question.