I get it; a lot of people are dealt a shit hand and it's a given that nobody on this Earth has perfect foresight. The zinger here is that the writer is throwing stones in a glass room, and does nothing but prove the (misguided) point she's trying to refute.
In case you didn't read it, the article is written by somebody who payed her own way through an appreciably expensive college for an English literature degree and student debt, and seriously considered pouring coffee in Seattle for a living a viable option. Unfortunately, the follow-your-dreams approach generally doesn't pan out well when you took on debt for an education of arguably limited use and end up living in a city with an exorbitant cost of living. In many respects, the author had it made in a way that most impoverished people never will; she had reliable access to higher education at a college that feeds most of its graduates into Boeing, Microsoft, and Amazon. At that point, you just have to put two and two together, even if you don't like that the result is four.
She's right, many people often prescribe things that are what middle and upperclass people do to reduce debt in their lives rather than what poor people can do to get out of poverty, and don't understand how life changes.
A big example is how much not having a stable, 40 hour a week job can work over a person. A lot of lower paying jobs are part time, with variable schedules and hours that often flux from 4-32 hours a week. This hurts things like planning for the future or attending college, because there's no stability to plan for; you may have to skip a semester because work suddenly dropped you to 8 hours a week in one of your jobs, or they called you in and the choice is either to skip class, or lose even more hours since they tend to punish people in these jobs by reducing their schedule.
A big part of being poor is having large amounts of unchosen instability in your life. Even a low wage of $10 an hour is survivable if you can count on 40 hours a week and long term employment, but if you can't rely on even working the same hours or you constantly need to rely on contractor or temp services that churn you out of a job every few months or weeks, that instability prevents you from getting into a stable, affordable life.
She claims her rent was half her income, but dismisses the suggestion she should have gotten a roommate. When I was poor and in college, I shared a one-bedroom apartment with 2 other students to cut expenses. We took turns sleeping on the couch. I also worked in restaurants where your compensation usually includes a free meal. But, I feel sympathy for the author. Those years, and the years just after that were tough financially. I can say that your later years will be much better financially.
...this is a wonderful example of upperclass blindness.
Here's the thing..it worked for you because in your social class and specific area in life, it is more likely than not any roommates you found would be responsible students. But if you are poor, you are risking getting into a legal contract with someone who could turn out to have an abusive boyfriend, who managed to hide his drug use or alcholism from people, who is dealing with serious mental depression, who can't stay in a job more than three weeks and sponges off his roommates, etc.
The rather nasty side to Jesus's parable about the talents is that the rich people got even richer, while the poor man who was frightened lost all that he had. Many solutions people give rely on the person possessing wealth in that sense; if just the social wealth of everyone coming from stable families, with more or less no serious addictions or issues. but if not, many of those solutions get even worse and lead to worse ruin.
Ok I've been poor, so I guess that "qualifies" me to comment: the OP is right, if you're struggling for cash in an expensive city then it's not wise to live by yourself.
The argument of "oh but something bad might happen" doesn't hold water - if you're struggling to feed yourself and have no money, then something very bad is ALREADY happening.
Glad the roommate thing worked out for you. For me, it was a series of costly disasters of flakes who didn't hold up their end of the bargain. And the headaches of getting them booted when they failed to pay their share of the rent.
It worked out the same for me as the author. Choosing to partner with other impoverished folk brought more financial friction into my life than slugging it out on my own.
The author has either not read "Nickeled and Dimed" or else has read it and summarized it in this article. I truly hope she is not simply plagiarizing the book. As for the title, it reminds me of the attitude displayed by callers to the Dave Ramsey show. They would rather flood you with anecdotes justifying their condition than listen to a word of advice. Having been poor myself, and having emerged from it through my own learning and through following the advice and example of people who were not poor, I would urge anyone who is poor to know the things in this article but to also listen to any well-meaning advice and see if any part of it, taken as is or modified to suit your situation, can help at all. You are most likely to get out of poverty in increments, so don't hermetically seal your mind inside a bubble of justification and victimization.
There are many assumptions made by this article in an attempt to build a straw man.
First, there are many places where the author references children. Yes people in poverty have children, but the points she makes, also assume that the individual is a single parent.
>Cost of an extra hour of childcare to account for the commute time (at $13/hour, as well): $260 per month
>Which equals $800 – and doesn’t take into account the fact that grocery shopping by bus is not ideal for someone with kids in tow.
If you have a partner, both of these scenarios are likely a complete non-issue.
Second, the author uses incredibly avoidable financial decisions as justification as to why poverty is expensive.
>Overdraft fees, late fees on missed bills, high-interest credit card fees, and payday lenders are just a few ways that poverty begets higher expenses. The average payday loan borrower – who is usually short just a few hundred dollars between paychecks – ends up paying more than 300% interest on their initial amount.
Why are these necessary components of poverty? This is making wild assumptions that a payday loan is the only option when short.
>Banks also find ways to capitalize on people without money. Many checking accounts require that a person carry a minimum balance – and fine customers for every month that they don’t meet the requirement.
Checking accounts are free for anyone that can provide a consistent direct deposit, regardless of balance. If the job does not offer a direct deposit, its worth noting that many Credit Unions also offer free checking just for having an account.
>Each year, immigrants pay billions into our tax coffers, only to get the short end of the economic stick.
I would pay to see factual evidence backing this statement up.
I could go on, but this is only halfway through the article...
Try getting a checking account or a share account in a credit union when you have a checkered history of overdrafts or bounced checks.
Frankly your comment reads like a person who's never been poor lecturing poor folks.
Frequently what we'd describe as a "financial decision" isn't a decision for poor people so much as a desperate attempt at keeping one's head above water. It's hard to do what you might call "the rational thing" when one is starving, has hungry kids, or has to choose between food, utilities, or medicine.
You have moved to an ad hominem approach regarding my past, normally I wouldn't even respond to this, but in this instance you are completely wrong.
I actually grew up very poor. As in my next meal was a privilege and not a guaranteed thing. I think its easy to dismiss my points by assuming that I have no experience with poverty, (or the pain of not having eaten a substantive meal for several days).
Again you reference
>checkered history of overdrafts or bounced checks.
Believe it our not, these are choices. You have a choice whether or not to write a check for more than you have in your bank account. You have a choice whether to with draw more than your current balance.
>> You have a choice whether or not to write a check for more than you have in your bank account.
It's a 'choice' if you are choosing to buy a shiny thing you didn't really need. It's hardly a choice if you have to write that check to buy medicines for your sick kid.
>> It's hardly a choice if you have to write that check to buy medicines for your sick kid.
This is certainly a tough scenario to argue against (way to choose a truly heart-wrenching emotional situation ;-), but the fact is, if you are writing a check (even for a good cause), knowing that you don't have money in the account, that also is a choice. Certainly there must be another way... use a credit card, get in a time machine and convince last_year_you that you need to create a small (or large) emergency fund for these sorts of things... etc.
Surely you jest ...."use a credit card"???? Most people who are poor don't even have bank accounts because they cannot manage them or they cannot afford the monthly fee. And no, bank accounts are not universally free if you have a direct deposit. My parents receive social security via direct deposit and they have never ever had an insufficient check in more than 50 years of maintaining a bank account. They still have a monthly fee.
In the words of Maya Angelou, "when you know better you do better." Maybe we should not only look into solutions to help people pull themselves out of poverty but maybe we should help with education to make the interim just a little bit easier.
Sure, "use a credit card". I'm listing options here. < that's what the "etc" was for> Some will work for some people, some will work for others. I a little surprised you chose to argue against credit card rather than time machine though...
What I was really trying to get at though is this: if you write a check with insufficient funds, you are just making the situation worse for yourself.
I agree that we should help with education but we should start with something simple like "don't write checks that are going to bounce". Second would be "don't spend money you don't have", so obviously the credit card scenario itself is not ideal, but better than a bounced check.
I don't argue against things that don't exist (time machine). And you are missing my point, most people who are poor do not have a credit card. There options are few and far between.
What I am suggesting by education is financial education such as don't spend what you don't have (if you have an account, don't write bad checks). Don't borrow money from payday lenders, etc. How to reduce expenses by having a roommate, utilizing public transportation, starting a community garden, etc. Then adding things such as you can go for dental care that is income based? Where you can go for annual flu shots etc?
I am not trying to make excuses for the decisions people make. What I am saying is to give alternatives (credit cards) that are not likely available to the majority of people who are poor does little to advance efforts to help find solutions that should be aimed at education and the development of safety nets for those all too common but expenses expenses (dental care).
When people know better, they do better. It has been repeated time and time again in these comments. People learned a better way and with that knowledge they were able to make much better choices and change their lives.
> And you are missing my point, most people who are poor do not have a credit card.
I repeat... < that's what the "etc" was for>. I don't think you read my entire comment...
I didn't miss your point. I think we actually agree for the most part. My bit about the time machine was basically saying, if you could go back in time and tell yourself, "hey, buying shiny things is less important than establishing an emergency fund" and similar other wisdom, that would be ideal. Obviously, we don't have a time machine so we can only tell people these things going forward. Sounds a lot like the "financial education" you refer to.
It does but that is not necessarily a lesson that needs to be learned by those who are poor. If you read the thread here about those of us who have had to clean out our aging parents home it is amazing how much stuff they have that they hold on to forever and really did not serve a purpose other than to have it.
We all make financial mistakes. It is just that the mistakes of the poor have much more profound consequences.
When you are saying "that is not necessarily a lesson that needs to be learned by those who are poor".... are you referring to my statement that "buying shiny things is less important than establishing an emergency fund"?
If so, we definitely disagree. Those are the people in most need of an emergency fund.
You mentioned safety nets earlier
> the development of safety nets for those all too common but expenses expenses
I would argue that a personal emergency fund is the first form of safety net that everyone should have.
> If you read the thread here about those of us who have had to clean out our aging parents home it is amazing how much stuff they have that they hold on to forever and really did not serve a purpose other than to have it.
It's your choice to have a kid. My wife and I are waiting to meet a certain household income before having kids. I have little sympathy for people who are poor, have kids, and complain about how expensive it is.
They're "choices", frequently, in name only. If you have ever been as poor as you claim you'd know and understand that. That's why I am skeptical of your claim. You can interpret it as an ad hominem or not.
> You have a choice whether to with draw more than your current balance.
Banks reorder transactions to create overdrafts. This includes delaying deposits and processing payments highest to lowest. This can cascade into multiple "overdraft protection" fees from payments that happen days after a direct deposit.
> You have a choice whether or not to write a check for more than you have in your bank account.
My next meal was always a guaranteed thing, yet I've experienced rent, power, insurance, gas bills coming in at the same time that have left me hoping that somebody doesn't deposit that check for a few days.
A late fee on a utility is ALWAYS better than an overdraft or a bounced check. I see this argument so much. I can only speak from my experience, but if I was ever short, I would call the company and explain, 9 times out of 10 I would be granted an extension. I found it especially likely if I simply explained that my check had not cleared. Many times, I was not even charged a late fee. Again this is my experience, and I can't speak for everyone.
Okay, but what if you are on disability and your check is 5 days, for example, after the due date. Do you really think they are going to give you an extension every month? I use to work with people with disabilities and believe me, this happens more than you know. They may not cut off your service but adding $10-12 a month your already over stretched budget just continues to compound the issues.
It is a snowball and it only takes an event or two to begin rolling down hill much faster than you can.
And a major electric company in our area was having such a problem with late payments that they started a program that allowed people who received social security to submit documentation and their bill could be deducted from their account automatically on their social security pay date with zero late fees. The only catch was that the account had to have a zero balance in order to sign up.
The easy solution is on social security pay day, pay your current bill with the late fee and sign up thus eliminating all future late fees from this electric corporation. Out of the more than 34,000 eligible accounts less than 1,600 signed up. That is probably partially because the program was not well known and the misconception that a party would have to pay 2 months electric bill at one time to subscribe. I helped a number of people sign up but some people just are too nervous to give the electric company the right to auto draft on their social security pay date. Whoever failed to sign up will pay an extra $8-12 a month I would guess.
I have worked with people with disabilities the majority of my career. I wish this was an extreme example. I could probably name upwards of 2,000 people just in my area of the state that have this very problem monthly. And that is just one region of our state. And that does not count the number of elderly who receive their retirement on a rolling basis monthly who also experience this issue. I would venture to guess that more than half a million people experience this issue. So in my opinion, not so extreme.
Checking accounts are handled by banks in the way that best benefits the banks. For example, you could get charged for an overdraft because they applied all your withdrawals before they applied your paycheck deposit, even though the algebraic sum of the day would be positive. That means you need some level of cushion, which you cannot achieve using the bank account itself (see above). Bank policies create uncertainty in the availability of the funds, such that if you need the paycheck to pay a bill due on Friday you can't deposit the check on Thursday, because the bank won't take account of the deposit until Monday.
If you have a partner it is an option to have one of the partners do the child care, but there are opportunity costs and other things that go into it. I think one thing that is seldom explicitly considered is, there is a degree of security in having two employed adults in the household.
I don't understand your point here? Yes banks try to benefit themselves as far as checking goes. But as long as you only spend what you have in your account, (as in available funds), then you will never have a scenario like this. I have never had uncertainty in the availability of funds, (could be just that my bank says "available funds" as well as "current balance"), and it is almost always better to be late on your bill payment than to overdraft or write a bad check.
To you second point, I wasn't referring to childcare in general, just in these specific instances, (e.g. earlier start time for commute and periodic grocery shopping).
Coming from poverty, the tiniest issues: flat tire, injury, etc. will easily take that sliver of cash you had left and that's when things like overdraws start. You then get stuck in an endless cycle of loans, credit cards, etc. to cover basic expenses while you try to rebound.
It'd be very easy to say "Don't spend what you don't have." but unfortunately many people need more than they're given.
Or a hurricane comes through and gas jumps to $3.00 a gallon and you have to buy diapers w your last $15 so now you have to choose. Or heaven forbid you get the flu and miss a day or two of work....you don't work then you don't get paid. In cases like these payday lenders may not be ideal but they are quick and easy (for a reason I might add).
Now you out have another bill you probably can't pay but if your kids are hungry today...well tomorrow if a different problem.
You pointed out one major thing. US reliance on cars is actually worsening this. As opposed to gas prices and car maintenance, public transportation tends to have somewhat predictable prices and term discounts.
I am just saying that something as obscure as a hurricane can throw a family with no safety net into a free fall financially.
But for better examples,
1. You get the flu and miss a days work.
2. Your child needs their teeth cleaned or worse a cavity filled and you don't have entail coverage or a $50 deductible etc.
3. Your 1st grade child is sick and can't go to school so you now can't go to work.
4. Your parent passes and you have funeral arrangements to make and service to attend, etc.
5. Your get in a car accident (not your fault) and now you have no transportation.
6. You are injured at work and short term disability is a fraction of your pay and that is only after a number of days unpaid.
7. You find out you or your child need glasses.
8. Your child needs shoes, school supplies, medicine, a haircut, etc.
9. Bus drivers are on strike and now you cannot find a way to work so you can't get paid.
10. The laundromat close to you shuts down and now it is a 20 mile ride to the next closest one with two kids in tow (along with all of your laundry) and the closest you can get is 4-6 blocks from it.
11. Your wallet is stolen.
12. Your company cuts your hours or worse, it is closing and you are losing your job.
Or if none of those are good, how about
You or your child (or both) have life threatening allergies and you need an epi pen with the ridiculous out of pocket that comes with that.
The point is that risk is around every corner for people living paycheck to paycheck. You cannot fault people for making poor choices when the choice a) is really bad and choice b) is disastrous.
People in the hurricane are not necessarily who I was talking about. I was not affected by a hurricane other than gasoline in my area has increased 80 cents a gallon in ten days. Any person who purchases gasoline has been impacted. I am simply saying that this increase hits those with less padding in their budget are hit harder than those who have more discretionary income.
I understand issues come up, that doesn't mean that you must overdraft or take a crappy loan. There are so many options for every scenario. Also coming from poverty, one of the hardest life lessons I had to learn was how to be self reliant. I started by changing my thinking. Overdraws and loans are one option and not the only option is most cases.
>but unfortunately many people need more than they're given.
I have a problem with this statement. I don't think many people in poverty are "given" anything. They need more than they "earn". To say given trivializes the blood, sweat and tears that many people shed just to survive.
Banking point: Let's work this through. Start the banking day with $10. You have $11 in checks clearing and $11+N in pay automatically deposited. You should end the day with $10+N balance. You would have an overdraft because the checks are recognized ahead of the deposits. You'll end up ahead on the day, but at least one check didn't get paid and you'll have costs from that. How do I keep this from happening?
The flaw in your point is that you should not have $11 in checks clearing with only $10 in balance. This means that you wrote the check without enough money. People its your responsibility to keep track of your balance, not your banks. This seems to be a common misconception in modern times.
The reason I mentioned clearing is that the day that the bank sees the check is not the same as the day it is mailed, or the day that it is handled by the recipient. There are variables. If you are trying to achieve a decent financial status, you might want keep your cash in the savings account that earns better interest, instead of keeping excessive funds in the checking account. I'm engaging on this because I'd like to hear if there is some option besides having a benefactor provide me with a spare 'N' dollars to allow my checking account to have a buffer against the bank's unfriendly policies and the other random effects.
I think you missed my point. You should not write a check for more money than you have, (you can but you are taking a risk that it will bounce). You do not need a buffer, you need to track your money better. The second that you write a check, it should be deducted from your, (your meaning the record you keep not the banks record), balance. In this scenario, when you wrote the check, the balance would be -$1. That is the problem here. The bank can clear or not clear things in any order, but if your recording is better, you will never have an issue. The benefactor you speak of is your own records, if you do not keep them, you are doing yourself a disservice.
> The second that you write a check, it should be deducted from your, (your meaning the record you keep not the banks record), balance. In this scenario, when you wrote the check, the balance would be -$1. That is the problem here. The bank can clear or not clear things in any order, but if your recording is better, you will never have an issue.
For this to work, you also have to not apply deposits to your working balance until you have confirmed that the bank has applied them to your available balance.
And you have to make sure you correctly account or any fees, service charges, or temporary holds (the last often catches people out.)
A good summary of the article's thesis comes at the end: "instead of telling poor people what they should do to work around a system that’s leaving more and more people behind every year, we need to consider how the system can bend and change to better fit the needs of all people."
I think this thesis is well supported by the rest of the article, which is much more measured than the somewhat click-baity title suggests. I also think that it's generally a bad idea to tell people what they should do without understanding their circumstances in general, and even worse when you don't experience their circumstances. This article doesn't claim that people who haven't lived in poverty can't study it or have an opinion.
I would be interested in the writer's opinion of JD Vance's "Hillbilly Elegy" and similar work.
The title is mis-leading and click-baity, but the article argues a more reasonable position. A more appropriately named title would be "Before giving advice on how to climb out of poverty, think a little harder about all of the consequences of a given decision before recommending it to the poor, especially if you haven't had experience living in poverty."
She uses the example of "getting rid of your car", which sounds great until you tally up the costs of increased child care, reduced hours, and limited comparison shopping.
That is a fallacy though, a cardiologist has extensively studied to treat heart attacks and made it his professional calling to tell you how to recover. Most rich people honestly have little to no idea about poverty at all; no real observations or professional/scientific data. They extrapolate based on what they do, rather than what is out there, and assume since they did it, it's a universal law that applies to everyone.
I feel like agreeing with your sentiment, though your example seems a bit off. Becoming cardiologist is like a decade of school and certifications, so in my opinion, the better analogy would be criticizing a movie without writing/directing a Hollywood-scale production.
But you would expect your cardiologist to tell people without a record of cardiology experience/practice to not mislead people at risk of heart problems with ideas the armchair cardiologists have never used once, let alone to depend on for survival.
I have to say that I'm a little confused about the point of this article.
In my experience, the people who make the type of argument she describes tend to advocate hard work, education and financial prudence. In fact the sort of attributes that the author exhibited to remove herself from poverty. If anything she's a good advert for the kind of advice that tends to be foisted on people in poverty.
My pet theory is that the key issue is really about time horizon. If you live your life day to day then you're much more likely to be poor in the long term than if you have a time horizon of years or decades. This time horizon is largely culturally determined i.e. if your parents/peer group didn't think about the future then you are less likely to. But it can be substantially affected by personal characteristics e.g. the dissolute rich kid as well as illness e.g. depression.
Interestingly, I came to this conclusion because of a conversation with someone at the other end of the time horizon spectrum. I was chatting to a member of an English aristocratic family about farm husbandry (a subject about which I know absolutely nothing). It occurred to me that he made decisions that had a time horizon of a century or more. Something completely alien to my way of thinking but entirely natural to him.
I realised that my time horizon, which has always been oto 20-30 years, was just a point on a spectrum. Probably typical of a child of professional parents but not special in any way. And if you have a substantially different horizon than me then you're very likely to make substantially different life decisions than me.
Whenever I open up about some of the hard times I've been through (usually trying to motivate or encourage a freelancer who is experiencing a rough patch) somebody inevitably pipes up claiming I don't _really_ know what it's like to be poor, one time somebody told me "You don't know anything, you only have the backs of your eyelids to go off of". I'm not even sure what that means, but it can be frustrating for those of us who HAVE been to rock bottom and found a way up again to try to show the ropes to others if every time you get questioned, disbelieved, and even shouted down because somewhere at this moment there's somebody poorer than you, or a spectator doesn't truly think you've experienced hardship.
When somebody says they've been through hard times and is trying to help another person out - that's NOT the time to interrogate them and try to disprove them, it's the time to focus on the person presently in need, and to find ways to help them get back on their feet or at least get their wits back.
Please don't be a 'poverty skeptic', it's a little hurtful and a lot unhelpful.
The author was poor because the author chose to get a degree in English lit and rather than getting a full time job in Starbucks she chose to get an internship. Her experience demonstrates that it is largely a choice.
Experience of truly poor people is also largely a choice. I used to be very poor. It is called "crap happens". And it was a choice during those years to put one's head down and do it over again and again and again and again regardless of how helpless it felt.
The biggest issue that poor people have is misallocation of time. They have a crapload of time and very little money. Unfortunately, instead of leveraging their time, they try to leverage the money the way those who are not poor do. That's a mistake.
How do you leverage time when already working multiple jobs to make ends meet?
Sounds like you've never even met actually poor people. Most of them actually do work back-breaking hours or are completely incapable of most work for health or age reasons.
The reason why they are working those back to back jobs is because they do not leverage their time and instead trade it for money at a terrible rate.
For someone who is poor figuring out where it is possible to buy groceries for pennies on a dollar using coupons is more important than making extra twenty dollars a day. By spending 10 hours a month finding the right coupons and advertisements to save $300/mo on products he or she buys a poor person achieves a rate of $30/dollars an hour after taxes.
That's how one gets out of poverty, not by taking another back breaking job to get effective rate of $4/hour.
Had Taylor found herself in a good stable marriage after her poor one your comparison would match the authors. But I guess it doesnt and you're being flippant.
Often I have the feeling some people are just magnets for bad luck.
My ex girlfriend for example. Failed two degrees, started a badly paid apprenticeship, lived in a few flats with bad roommates and bad land-lords and had always bad bosses at work. She came from a upper-middle-class family, but somehow everything she touched went bad.
I met a bunch of such people, they fail the moment they start something and I just don't know how or why.
Some of the issues discussed in this thread evolve quickly, or may be highly situational. As a consequence, problems that appear to result from negligence may be difficult even for reasonably conscientious people to avoid.
For example, overdraft of a bank account may have been more difficult to predict in some periods than others. When I was younger, I was payed by check (direct deposit was not available from some of my employers), I payed my rent with a check, had automatic bill pay for a small utility bill, and used a debit/check-card to buy food and sundry necessities. The timing to post these transactions was inconsistent; the time to clear the checks varied, and the auto bill pay occasionally failed. One month my rent check cleared quickly, but my paycheck took a few days. I bought a small amount of groceries with my checkcard, which authorized, but overdrew my account by a few dollars. It was not my intent to overdraw my account, and I thought that “authorized” meant that sufficient funds were available. Even one or two NSF or overdraft fees would not have been a huge problem, but because the bank reordered transactions from largest to smallest, I had several hundred dollars in bank fees which consumed my income for the rest of the month.
The account was free, and as far as I can understand and recall, the transaction reordering was mandatory, and “Overdraft Protection” was offered as a value added opt-in service for higher cost account types. I made at least some effort to understand the account documentation I was given when I signed the contract, but I failed to understand that transactions were reordered, let alone recognize the risk implications of that policy. When I told my dad about this story, he thought it was just a mistake, and that the bank might fix it if I called them. He hadn’t found out about transaction reordering because he had ample savings since before it was invented.
Another example: prepaid cellphones were extremely expensive at that time and place, pay phones were disappearing, and I was not able to have a home phone for practical reasons (moved too much, installation delays, not on the lease, etc). I needed a contact phone number for employment reasons, and I accepted a contract cell phone plan because it was so much less expensive then prepaid.
The contract plans available changed occasionally, and to save money I changed my plan a couple of times; eventually, I was erroneously told by an agent of the provider that unlimited “off peak” hours of my plan began at 7pm, but in fact they started at 8pm. My efforts to cut my expenses resulted in a surprise bill for several hundred dollars. I couldn’t even take my business elsewhere because the contract had a deposit and a $500 cancellation fee. (In general, I have learned to suspect that when services are predicated on a mandatory line of credit, it is in order to drive up consumption using price obfuscation.)
I’m offering these as examples of cases where consumers must make a poorly understood cost/risk trade off in order to access basic financial or utility services. It seems to me that this disproportionately affects people with less money because they are more price sensitive and less resilient to unexpected costs.
The rules and conventions tend to change overtime, so depending on our circumstances we might have no idea of the details of these kinds of problems as they exist now if we aren’t having them. Since I can now easily keep several thousand dollars cash in a back account, I wouldn’t know first hand about transaction reordering if it had been introduced more recently. Similarly, the pricing structure for phones has changed completely since I had “bill shock”, and I can now easily afford more service then I ever use in any case.
A few members of my extended family grew up poor enough to have serious problems securing food and housing; sometimes they lived in a barn and survived on wild game. These options were totally unavailable to me when I needed them. They are now middle class retirees, and they have no more current experience then I do with the kinds of financial issues discussed here.
A couple of years ago, an acquaintance of mine who lost his job was advised by his grandmother to try selling oranges by the freeway. He was an adult man with bills to pay and an estranged family – his grandma offered a simple, well meaning suggestion that demonstrated her total misapprehension of the nature of the problem. If my experiences with financial distress are not in the same place and time as another person, I assume that I am probably somewhere on the knowledge spectrum between that person, and my friend’s grandma.
The point I mean to make is that if people seem to have problems that could be trivially avoided, it could be due to negligence, or it could be that we don’t fully understand the problems.
A poor person isn't responsible for the hollowing out of the economy through increased productivity, and the switch to lower paid service jobs over well paying service and industrial jobs. There's only so much adapting you can do to this, and how much your own power to change the world exists.
And to be honest, a lot of people here really coasted on their parent's wealth and social capital to get where they are. If you are poor here, it was more in the ways an english lord can be poor; they have plenty of capital, connections, and a stable life, they just made mistakes with money. If you don't have any of that, it's another world entirely.
I call BS on this: "We accept that because, for the most part, it's true."
There but for the grace of god go I.
If everyone treated everyone else in this way, the world and especially this country (USA) would be a better place.
I've been reasonably successful in life. I chose solid parents (race, economic class, locale), an unexceptional gender and sexual orientation, a high functioning brain, a performant body, a fully paid-for education at a top institution.
Yes, that's sarcasm. I feel I just got really f'ing lucky. My luck didn't end in school. I managed to build and sell several technology ventures in several industries. I picked lucky friends with good connections. I have seen much better ideas than the ones I built fail, and also seen much worse ideas make vastly more than I ever have.
I have attributed almost all of my success to the luck of my circumstances. Yes, I'm sure I have worked to influence this in many ways, but the outcomes were not predictable and indeed in several cases were not even predicted by me when I was working toward them! There are many people I can and have named who have contributed to my success, but my having found them and my path does not smack of precognition but really of a lucky drunken walk.
I always try to remember that, "There but for the grace of god go I." (I'm an atheist, sorry if I offend with the capitalization.) This is reflected in my behavior in numerous ways. I am a progressive liberal. I give outsize tips, especially to service personnel who make my life nicer (e.g., the dinner delivery person on a cold, rainy night). I always try to have a smile for people who have to deal with customers (like the airline agent after your flight is cancelled). I participate in civic programs to help transport people who need medical treatment. I vote for politicians who will help everyone regardless of their ability or willingness to help themselves, even at the cost of higher taxes.
We have a quite unequal economy. We have poorly educated fellow citizens and humans. We have many challenges facing us as a society. The USA is the richest country in the history of the world (I think). I can't believe we still allow these things to exist, when it would take so little (relatively speaking) from so few (relatively speaking) to make things so tangibly better for so many.
Do you think you'd be at least as well off as you are now if you grew up in a significantly poorer household, to significantly less emotionally stable parents?
Personally, I do. Homeless or approaching homeless is where you're getting to the point of unworkable. Until that point, you have options, even if you're not informed of them, and even if they're not quick, easy, and convenient.
A family member of mine lived a fairly poor life, and both of his parents passed away by the time he was 15, leaving him to take care of his three younger siblings while living with an uncle that could be outright emotionally abusive. He did good in high school in hopes that an opportunity would present itself, cashed in on his good GPA/ACT score, and pursued a growing field where he knew the pay was survivable (major in computer science). His backup plan was an apprenticeship with the IBEW (linemen eat good in our area), but it never came down to it. He was self-supporting by the time he was 19, and pulling $22 an hour by the time he was 20 doing full time embedded development.
I have other friends who have had to do the same. It takes a lot to be entirely, completely, and totally without options. Whether or not you like your options, or think you're above them, is a different story.
"You are more likely to be poor as an adult if you grew up in a poor household."
How can you also agree with:
"the only thing standing between a poor person and the life of their dreams is their own decisions, their own choices, and their own failures."
Clearly personal responsibility plays a role, but to deny outside influence and put the entire burden of poverty on choice is a bit much.
I think that the article actually brings up one of the largest points - being poor is expensive. It's hard to move when you don't have the money to put down a deposit, even if that is the long term cheaper option. Being poor can force your hand into a lot of economically bad decisions.
Because IQ is largely heritable, and the best indicator of your income and health later in life is your IQ. It's not that growing up in a poor household makes you poor - it's that you're going to be poor for the same reason your parents were poor.
Its incredibly naive to say that IQ and poverty are causally related. Yes there is correlation between higher IQ's and higher incomes, but you are making a sweeping generalization here implying causality.
I would say it's incredibly naive to think that IQ and poverty aren't causally related. If you've ever worked with lower IQ people it should be pretty obvious the jobs they're capable of doing don't pay well.
And if a person is even capable of holding a job they need supports through waivers to do the work and keep the job let alone get to their job. These waivers have unreasonably long waiting lists (10-20 years in a number of states). Plus this is assuming there is a company willing to give a job to a person w an IQ of say 60 who needs a personal assistant to perform his/her job and keep that person on task.
Really? Are you aware that children who are born with permanent disabilities draw Supplemental Security Income (basically a form of welfare through Social Security based on their disability) once they turn 18. Most of these individuals are incapable of employment let allow caring for themselves. They draw a whopping $735 a month. Some states provide small bumps to this payment but the majority do not.
How would you live if you received $735 a month to cover rent, food, clothing, transportation, prescriptions, etc.? I can tell you from seeing it thousands of times; you would have a few clothes and by that I mean two to three outfits, likely no winter coat, one set of shoes, you would have a few personal luxuries (likely books or the truly lucky a DVD). You would have a toothbrush but probably cannot afford toothpaste, you eat the cheapest food around, you have furniture that is given to you and likely in shambles, you buy only generic stuff and you water down your shampoo, soap to make it last longer. You wash your clothes only after wearing them 2 times. You are virtually a prisoner in your home because you cannot afford bus fare to go anywhere and you have nowhere to go because you have no real friends. You never celebrate a birthday or Christmas because it is just another depressing day in a lonely existence. Your money, what little you have, is stolen from you either outright or you are talked into "helping" someone whose sole intent is to get your money and run.
Get the picture.....people who have very low IQs and have a birth injury have zero chances of a good life and yes, they are poor. They are dirt poor. The very few who still have involved family have parents who are stressed beyond what anybody should be because they have no idea what will happen to their child when they die. Who will house them, prepare their food and in some cases feed them, ensure they take a bath, have clothes to wear, pay the utilities, etc.? Talk to a parent and I assure you it'll be a common expression that their greatest prayer is that they outlive their child even though no parent should have to bury a child. They know that their child is going to be relegated to a group home with no sense of individuality and likely become a victim of abuse.
Just saying, there are more than 1.5 million people in the US alone with a diagnosis of mental retardation. These people are destined to be poor forever because in order to get their $735 they can never have assets over $2,000. With no job and no hope of one, families cannot even gift a loved on with MR anything that would put them at risk of losing the health benefits they receive along with their $735. While a portion would gladly forgo the $735, they cannot do so because their loved one would have zero health insurance.
It's not a contradiction - if your parents made financially poor choices, you are more likely to as well, but that does not change the fact that good choices usually lead to better outcomes, and that you can still make those good choices, in spite of your parent's choices.
For example, an acquaintance of mine got a pay increase by getting a new three month contract job (in the $30,000 a year range, no heath insurance included). Before starting work, she traded in her car for a new Toyota Camery on a five year loan with 7% interest.
This was a terrible decision. She's taking home less now money now then she was with a lower paying job. She can barely make the payments. If she sells the car, she loses thousands of dollars - if she could even sell it. And if this job doesn't renew, then she's really sunk.
Importantly, it doesn't matter at if her parents were rich or poor. There were plenty of other options. If you can learn about the other options, and spend wisely, you do better.
Of course good choices are better all else being equal. The point isn't to absolve personal responsibility from the equation entirely.
You guys are trying to separate out these decisions you make from your upbringing, which is impossible. The decisions you have made, good and bad, were in some way influenced by your upbringing. Maybe you had a poorer education because your parents couldn't cherry pick a neighborhood with great schools. Maybe you had bad influences in the poor neighborhood because of the higher crime. These decisions aren't made in a vacuum, and pretending that your upbringing has no influence over your choices is just wrong.
Its easy to reconcile both of these statements. Those that grew up in poor households often witnessed their parents make poor economic decisions. If you make the same decisions as your parents, (possibly because they just don't know any better), then your poverty is still a result of your decision.
We need to focus on education and adjustment, and not on any outside influence. Frankly, I do believe that life can really make things hard, but by focusing on things within our control we can make progress rather than repeating the cycle.
This is exactly why those who haven't lived in poverty might want to hold off from telling poor people what to do.
I can make lousy economic decisions because I'm not poor. When I mess up, I can say "oops", and not worry much about the money.
Poor people don't have that luxury. Sure, some also make lousy decisions. But most have to be very careful with their money, because they don't have much.
For example, is it more worthwhile to fix the car, get dental work done, or feed the children?
That's the sort of calculation I never want to worry about, but which poor people have to consider all the time.
It is raining outside. I go outside without a coat and get wet. I tell you its ok to go outside without a coat, so you come outside without wearing a coat. Is it my fault that you are wet, or your own?
I would say that you made the decision, even if it was influenced by me. Do you not agree?
Your analogy is wrong. It's more like it's raining outside. Since you grew up poor it's also raining inside your house. This caused your food in the cupboard to rot and mold and means that your computer doesn't work because your power went out. Now sure if your parents had fixed the roof instead of buying groceries the food wouldn't have molded, but you'd still be hungry. You're forced to take on debt because the local area doesn't have any nighttime work. Then Dad gets sick. Since they didn't have the money to have mom and Dad both work, Mom doesn't have the skills needed to have a job that could provide and keep the house going, so now you've got to hold a job, keep your grades up, and try and pay Dad's medical bills.
How is any of this your fault? You're still never going to get out of debt. The American system is rigged so that you can make all the right moves and still lose. That's the problem with the system. Not that it's unfair, or that someone doesn't have the same opportunities.
I'm a perfect example of someone who came from nothing and has worked myself into wealth (or at least into a life where I'm not struggling). I made most of the right choices, but it still required immense amounts of luck and hard work. All the hard work does is set you up to be able to take advantage of the hard work.
If we really want to solve the problem of poverty without disincentivizing or punishing hard work it will require that it's easier to climb financial classes. What we have in place now only benefits those at the top and essentially pulls all the ladders up from the bottom. Our system is broken and there isn't a simple solution. It requires community reinvestment, appropriately funded community initiatives, and excellent leadership both at the state and federal levels.
But you're missing the point that even if you do everything right, you can still fail. Your decisions only matter insofar as you get lucky after making them if you start poor.
I have no idea what that argument is supposed to mean.
Here's an explanation from Terry Pratchett:
“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”
> But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
Rubbish. Whoever thinks that Good Leather Boots Last Years and Years never wore leather boots for years and years.
Nowadays, such good boots are even more expensive.
Rich also have access to time saving measures poor can only dream of... (unless they somehow cooperate, and that gets harder every day they are poor and cannot afford time or money to establish connections.)
I understand what you're trying to say but that isn't really a great example in this context.
First of all, what if you were to tell a young child the same thing, who is at fault now?
Let's say you have a father who doesn't value education at all. By the time you're in middle school you've already been conditioned to think education is unimportant and a waste of time. That's the type of influence I'm talking about, and it's not as simple as walking away from that.
Children are not usually the ones making difficult financial decisions. In this metaphor I am assuming you and I are both adults.
Being conditioned to believe something is not the same as being unable to form your own conclusions. Yes I agree parents have a huge influence on their children's values. However, at some point an adult must take ownership of their own life and their own values.
What you seem unable to grasp is that the decisions you make as an adult are shaped by your youth. Not to mention the decisions you make as a youth shape your adulthood. Fast forwarding to adulthood and pretending like everyone is at an equal footing is untrue.
Some of the well-known systemic failures failures that contributes to a lack of economic mobility across generations are:
- as a consequence of suburbanization and racial practices like redlining, poor people live in poor neighborhoods. In many places, schools are funded by local taxes, so poor neighborhoods get less school funding, resulting in a poorer education
- those racial practices kept many black families from access to federally backed mortgages and access to properties in more prosperous neighborhoods. This made housing more expensive for black families, and reduced equity buildup that could be used to help the next generation. This, on top of earlier Jim Crow restrictions and long-term general discrimination against blacks, has reduced the upward economic mobility of poor black families.
- racism embedded in the legal system has resulted in a higher relative percentage of black men in jail, relative to white. As one example, the War on Drugs was started in part because blacks and hippies used heroin and marijuana, respectively, and Nixon considered them his enemies. This is part of the long-term change, called the Southern Strategy, for Republicans to gain support from those who didn't like the social changes, including the Civil Rights movement.
- the owners of capital have made it increasingly hard for workers to make a good living. This includes passing laws like so-called "right to work" (for less) which make it harder to unionize and exercise the collective bargaining power that would be possible in a free labor market. As Piketty argued in "Capital in the Twenty-First Century", "when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability." A consequence of this is that the poor stay poor.
- A family which has little money may not have a long-term stability in housing or food. For example, children may have to rotate among friends and family for a place to stay, or may not have enough food to eat. Long-term stress has a negative effect on one's life.
Much has been written on this topic, with a large number of studies. Since you apparently don't seem to know much of the topic to give even a hint of a counter-argument, perhaps you don't know enough to simply write "it's true".
> Much has been written on this topic, with a large number of studies. Since you apparently don't seem to know much of the topic to give even a hint of a counter-argument, perhaps you don't know enough to simply write "it's true".
The problem isn't that I haven't looked at these explanations. It's that they're more ideological than factual in nature, wouldn't explain intergenerational poverty, or (as in the case of incarceration) just plain wrong. What you perceive as ignorance on my part is simply a reflection of things you "know" that aren't true.
It is much easier for me to believe that your contrariness is "more ideological than factual in nature", especially as you haven't given any refutations.
My point about the lack of equity comes from Richard Rothstein's “The Color of Law”, concerning how the systemic discrimination against black people in housing before the Fair Housing Act of 1968 contributes to the continued lack of wealth among black people today. How is his thesis incorrect?
> Today African-American incomes on average are about 60 percent of average white incomes. But African-American wealth is about 5 percent of white wealth. Most middle-class families in this country gain their wealth from the equity they have in their homes. So this enormous difference between a 60 percent income ratio and a 5 percent wealth ratio is almost entirely attributable to federal housing policy implemented through the 20th century.
> African-American families that were prohibited from buying homes in the suburbs in the 1940s and '50s and even into the '60s, by the Federal Housing Administration, gained none of the equity appreciation that whites gained. So ... the Daly City development south of San Francisco or Levittown or any of the others in between across the country, those homes in the late 1940s and 1950s sold for about twice national median income. They were affordable to working-class families with an FHA or VA mortgage. African-Americans were equally able to afford those homes as whites but were prohibited from buying them. Today those homes sell for $300,000 [or] $400,000 at the minimum, six, eight times national median income. ...
> So in 1968 we passed the Fair Housing Act that said, in effect, "OK, African-Americans, you're now free to buy homes in Daly City or Levittown" ... but it's an empty promise because those homes are no longer affordable to the families that could've afforded them when whites were buying into those suburbs and gaining the equity and the wealth that followed from that.
> The white families sent their children to college with their home equities; they were able to take care of their parents in old age and not depend on their children. They're able to bequeath wealth to their children. None of those advantages accrued to African-Americans, who for the most part were prohibited from buying homes in those suburbs.
All I know is I would have killed for some advice growing up. I was the first person in my family to graduate highschool, let alone college. I still feel I make bad financial decisions at times at 36 because I was never taught discipline and what kinds of goals to set. I've been learning hard lessons my entire adult life. I've worked hard and I'm proud to own a home, and my son will have me in his life as a resource.
My smartest choice was giving computer science a second chance after shortly "following my dreams" and signing up for anthropology one semester. But even that was luck, because no one was advising me on the impact it would have on my life.
I tend to agree: it is largely true in the US. Not so in the rest of the world (outside of the Western world), and not necessarily so in certain parts (more precisely, social strata) in the US either, such as the ghetto.
Hmm, the numbers in the publications are not stratified. Besides, I am not sure if the father-to-son monetary delta is the only factor to estimate the mobility. The first publication seems to study a broader set of parameters but all of them except the father-to-son thing look secondary.
I wonder what the data would look like for the various strata in the American society.
Poor people, how does this proposal sound: I won't tell you what you should do, and you don't demand any unearned transfer payments that are subsidized by the taxes I pay. Fair enough?
Sorry about that. If I could still edit it, I would. The point I was trying to make, while indelicately worded, was meant sincerely. The lecturing tone of the article's title rubbed me the wrong way. I don't appreciate being told that I don't have a valid opinion to offer.
At the local level you are paying taxes for education. At the federal level you are paying taxes to keep dollar afloat. Guess what's cool? We can have the federal government spend more without raising your taxes at all!
In case you didn't read it, the article is written by somebody who payed her own way through an appreciably expensive college for an English literature degree and student debt, and seriously considered pouring coffee in Seattle for a living a viable option. Unfortunately, the follow-your-dreams approach generally doesn't pan out well when you took on debt for an education of arguably limited use and end up living in a city with an exorbitant cost of living. In many respects, the author had it made in a way that most impoverished people never will; she had reliable access to higher education at a college that feeds most of its graduates into Boeing, Microsoft, and Amazon. At that point, you just have to put two and two together, even if you don't like that the result is four.