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How many more ways can we find to make it seem reprehensible to be poor?

The working poor used to be admired for their grit and perseverance in the face of remarkable road-blocks. People talked about the "dignity" of working poverty (this was generally said by those who had never experienced the soul-corrosiveness of genuine poverty).

Today, we seem to specialize in finding new ways to nickel-and-dime the people who are barely making it by as it is.

Today's New York Times has a lengthy, depressing, but valuable article by Jessica Silver-Greenberg and Stephanie Clifford on the new way to pay workers: not with a paper check, or by direct deposit, but prepaid cards, similar to a debit card.

Companies and card issuers, which include Bank of America, Wells Fargo and Citigroup, say the cards are cheaper and more efficient than checks — a calculator on Visa’s Web site estimates that a company with 500 workers could save $21,000 a year by switching from checks to payroll cards.

Savings like that can get the attention of corporate financial officers. 

The cards are particularly popular with retailers and restaurants, which have large numbers of minimum-wage employees. According to the Times, "$34 billion was loaded onto 4.6 million active payroll cards [in 2012], according to the research firm Aite Group." And the total is expected to grow to $68.9 billion( and 10.8 million cards) by 2017.

But what does it mean for the workers? In theory, it should be just as easy to use as a debit card. In practice... not so much:

...In the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards. These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account...

As an example, the Times reporters spoke to a young man who works at a McDonald's in Milwaukee, earning $7.25 an hour (which is the current minimum wage in Wisconsin). He gets paid via a prepaid card, and spends "$40 to $50 a month on fees associated with his JPMorgan Chase payroll card."

Do the math. $7.25 per hour for a standard 40-hour week is $290. Multiply that by 52 for a year, without any vacation time, and you're up to $15,080. Forget about Social Security or other payroll tax deductions for the moment, and you try living on that. $45 a month in fees adds up to $540, which is more than 3.5% of his gross earnings, and a substantially higher bite on net earnings. Do the math backwards, and this young man is now earning $6.99 an hour. A 3.5% drop in earnings may not sound like much, but when you're living this close to the edge, it can easily mean the difference between having enough to eat and not.

To be fair, it's worth noting that some 10 million American households are now "unbanked", and

Some employers and card issuers say that the payroll cards are useful for low-wage workers who do not have bank accounts. They also say that the fees on the cards are usually lower than those associated with check-cashing services, which are often the only other option for people who do not have bank accounts. 

But I think the more important factor for the issuing banks is that prepaid cards have been virtually untouched by recent financial regulation.

The lack of regulation in the payroll card market, while alluring for some of the issuers, can potentially leave cardholders swimming in fees. Take the example of inactivity fees that penalize customers for infrequently using their cards. The Federal Reserve has banned such fees for credit and debit cards, but no protections exist on prepaid cards. Cards used by more than two dozen major retailers have inactivity fees of $7 or more, according to a review of agreements. 

Some employees can also be hit with $25 overdraft fees, called “balance protection,” on some of the prepaid cards. Under the Dodd-Frank financial overhaul law, banks with more than $10 billion in assets are barred from levying overdraft fees on customers’ checking accounts [but not on prepaid cards].

So the people who are least able to pay the fees are the ones getting hit with the fees. And those cost savings for the companies? If you're wondering where they go, I suggest you check out a headline on page-one of the business section in Sunday's New York Times: "That Unstoppable Climb in CEO Pay".