This new app could really help the poor — if it gets help from the government

Being poor is, first and foremost, about lacking resources. Low-income Americans live hand-to-mouth, and almost half of all households in major cities don't have enough savings to see them through an unexpected emergency.

But being poor is also about chaos. In the last few decades, employers have taken on more low-income part-timers, sometimes using sophisticated software that matches workers with periods of peak activity. It saves money for employers. But it makes life for the workers incredibly unpredictable, as they often don't know their schedule more than a few days in advance. At least 10 percent of U.S. workers face this problem, and the practice is common in retail and service work.

It also breaks workers' income stream up into unpredictable chunks: One week they may work 35 hours, and the next week 20 hours —and their next paycheck will reflect that. Since most anyone's life involves regular bills to pay as well as unexpected expenses, this places low-income Americans in a state of chronic financial crisis. Indeed, income volatility for U.S. households rose 30 percent since the 1970s.

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Into this breach has stepped a motley crew, including pawnshops and the payday loan industry, which often take $1,000 a year or more out of workers' pockets in fees for credit and ad-hoc financial services.

Labor organizations and lawmakers are eager to deal with this problem. But now it looks like Silicon Valley, of all places, might be able to help as well: A new app called "Even" aims to smooth out the income streams of workers caught in the maw of erratic work schedules.

Even plugs the gaps in the income stream with interest-free credit, and the app builds its $3 per week user fee into the "Even pay" it offers. Twenty percent of U.S. households (67.5 million people) have bank accounts and also rely on payday lenders and the like for financial services. These are the people Even could be of most immediate help to.

Even's 28-year-old inventor, Jon Schlossberg, seems to have his head in the right place. He says Even won't try to play the stock market with customers' money, and has no extra revenue source other than the $3-per-week fee. He's also reading the right stuff and thinking in the right direction, citing the avalanche of evidence on the unique ways living in poverty eats away at cognitive function and mental energy, often with lasting physical and psychological effects. He also noted that 77 percent of Americans say that, if they had to choose, they'd take a more consistent income over a higher one.

But there are limits to what good Even can do.

The first limit should be obvious: You need a smartphone to use an app. And smartphones and their data plans are expensive. The class divide in digital access is a chasm when it comes to smartphone ownership — only 34 percent of white Americans and 48 percent of black Americans making $30,000 or less have one, versus 74 and 81 percent for those who make $75,000 or more.

So what's Even to do? It could try to create a stripped-down version of its service for old-school cell phones. That technology is crazy cheap now, and 82 to 90 percent of households making under $30,000 have access. In fact, programs in other developing countries already use cell phones to let people pay for various services, like electricity from the local solar array.

But there's another, even deeper problem: Even can only address income volatility. It can't raise incomes. Indeed, the lack of purchasing power among America's poor and lower classes is what makes it exceptionally hard to come up with for-profit business models that actually help them. Schlossberg will be under pressure from shareholders to up Even's profits. And while the app's $156 in fees each year is a big improvement over the $1,000 a year or more that pawnshops and payday lenders bleed from low-income workers, we're still talking about people making $20,000 to $30,000 a year. When every cent counts, even $156 is no small blow.

Because it interfaces with a person's bank account, Even also can't help the 7.7 percent of U.S. households who simply have no bank account. (That's roughly 25.4 million people.)

Furthermore, Even can't fix all the non-income related ways employment volatility wreaks havoc on lives and prospects: Finding childcare is difficult; family and friends are stressed; and second jobs are nearly impossible, as is going to school and building other new skill sets.

It can't be overstated how thoroughly raw economic scarcity undergirds every other dysfunction poor Americans face. It shapes the rhythms of their lives, the opportunities they can access, the jobs they'll be offered, and the services — public, private, for-profit, and charitable — their communities will be provided. The just-so stories many of capitalism's enthusiasts tell about how free markets can solve human problems only work if purchasing power is widely and relatively evenly dispersed.

So the government needs to step in with regulations for worker scheduling, with a much more generous safety net, and with a national infrastructure of public non-profit banking for the poor. (The postal service is a good candidate for filling that last roll.) It should also offer low-income Americans work directly, rebuilding the services and infrastructure in their communities.

Between those policies and innovations like Even, you could imagine a public-private pincher move to vastly reduce poverty in America. Government could even adopt Even's technology, offering its services to poor Americans directly, perhaps in conjunction with those public banks.

Schlossberg and Even and the other innovators behind similar apps are making an honorable effort. But they can't do it alone. Ultimately, there's no substitute for proper government regulation, and its brute power to move money back down the income ladder.