On April 10, the House of Representatives Financial Services Committee held a hearing on holding megabanks responsible for the lingering effects of the financial crisis.
Though the global financial crisis was the focus, Katie Porter, a congresswoman from California’s 45th congressional district, made sure to ask Jamie Dimon, the CEO of JP Morgan Chase & Co., about a personal financial crisis.
Katie Porter described the situation of one of her constituents, who is a low-level bank teller at J.P. Morgan Chase.
The woman, who has a 6-year-old daughter, apparently makes $2,425 each month. The congresswoman slowly added up all the costs that the constituent must face.
The largest is rent. Porter said that the woman rents a modest one bedroom in Irvine, California. Because of the small size, she and her daughter sleep in the same room. The amount the woman pays each month on rent is $1,600, far below the average one bedroom price of $2,026.
Porter continued, explaining that the woman must spend an additional $100 on utilities. This means, the congresswoman stated, that after rent and utilities, the bank teller has just $725 remaining.
But the $725 quickly dwindles. The woman, who drives an old 2008 minivan, pays $400 in gas and insurance, meaning she now only has $325 left from her monthly paycheck.
If the woman follows even a low-cost food budget, described essentially as ramen noodle-type foods by the Department of Agriculture, she still spends $400, officially putting the bank teller in the red.
Porter continued, explaining the the woman opts for the cheapest cell phone she can get. It still comes to $40, meaning the employee falls further into debt.
The last expense is childcare for the employee’s 6-year-old. The cost is $450 a month. The congresswoman concludes that a bank teller, living in as modest means as possible, still ends up at negative $567 per month.
The congresswoman concluded her time with a simple question.
“My question for you, Mr. Dimon, is how should she manage this budget shortfall while working full time at your bank?”
Dimon replied by saying that though he was “sympathetic,” he was not sure all the numbers given were accurate. He then went on to ask if the constituent was at a starter job in the company.
Porter confirmed that it was a starter job for the woman.
Dimon explained that these types of jobs are normally meant for recent high school graduates, and suggested that the low salary was temporary and she may work her way up the corporate ladder.
Porter, however, was determined to get her answer.
“She may, Mr. Dimon, but she doesn’t have the ability right now to spend your $31 million. She’s short $567. What would you suggest she do?”
“I don’t know. I’d have to think about that,” Dimon replied. When Porter asked him further questions, he repeated the same line again and again.
“I don’t know. I’d have to think about it.”
But Porter was unsatisfied with that answer, and made it clear in her conclusion.
“Mr. Dimon… this is a budget problem you cannot solve.”