Join 3,494 readers in helping fund MetaFilter (Hide)


You have to be rich to be poor
May 19, 2009 8:38 AM   Subscribe

The High Cost of Poverty : The Washington Post explores why the cost of living is proportionately higher in poor areas. Double Jeopardy: Why the Poor Pay More (pdf): a report on payday loans, the cost of homeownership, medical debt, and banking in poor communities.
posted by desjardins (230 comments total) 76 users marked this as a favorite

 
Related - here's a recent report by the Applied Research Center on Race and Recession.
posted by lunit at 8:52 AM on May 19, 2009


See also Terry Pratchett's Vimes' Boots Paradox:
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.
posted by TheophileEscargot at 8:56 AM on May 19, 2009 [89 favorites]


I know someone who set up a payday loan company. He worked for an investment bank and did some due diligence on payday loan business.

He basically worked out that the cost of credit vs the interest payments he could get made it a no brainer and quit his job. The last I looked he and his business partner had over 100 stores, and turned over somewhere in the region of $150m, a business built in 6 years on virtually zero external funding.

He is a friend of a friend. I've met him twice. The first time we were out drinking and he ran out of cash, borrowed $50 off me and then proceeded to 'forget' about it, which is kinda ironic. He also made the big gesture of buying an expensive bottle of spirits in a nightclub that nobody really wanted. And at the end of the night demanded that the check got split.

The second time we were at a wedding, and were staying in the same place, a little family run hotel in the English countryside. The entire house woke up at 6am on a Sunday as he shouted and swore into his phone at some minion back in Florida minding the business.

I've rarely met someone I disliked as much. He boasted of dating porn stars, and a big empty home he rarely spent time in. From what I could tell, managed to run his entire personal and professional life as a series of rather unsavoury transactions.
posted by MuffinMan at 9:01 AM on May 19, 2009 [29 favorites]


This article at PolicyLink is loaded with data and footnotes on food retailing in low-income neighborhoods.
posted by exogenous at 9:04 AM on May 19, 2009 [3 favorites]


You have to buy rye bread instead of household bread, because the rye loaves, though dearer, are round and can be smuggled in your pockets. This wastes you a franc a day. Sometimes, to keep up appearances, you have to spend sixty centimes on a drink, and go correspondingly short of food. ... Your hair wants cutting, and you try to cut it yourself, with such fearful results that you have to go to the barber after all, and spend the equivalent of a day's food. ... You have strayed into a respectable quarter, and you see a prosperous friend coming. To avoid him you dodge into the nearest cafe. Once in the cafe you must buy something, so you spend your last fifty centimes on a glass of black coffee with a dead fly in it. Once could multiply these disasters by the hundred. They are part of the process of being hard up. - George Orwell, Down and Out in Paris and London
posted by Joe Beese at 9:06 AM on May 19, 2009 [18 favorites]


People don't realize how much businesses give deals to rich folks (aside from better service).

The part that amuses/saddens me the most is that no matter how rich someone is, in a business transaction, the part you should be caring about is how much money they're actually paying you.
posted by yeloson at 9:09 AM on May 19, 2009 [1 favorite]


I have always loved Vimes' boot theory. He really nailed the difference between the very rich and the very poor in that section.

Only the rich can afford to spend very little.
posted by QIbHom at 9:18 AM on May 19, 2009 [4 favorites]


I completely agree with the underlying sentiments, but:

The poor pay for caller identification because it gives them peace of mind to weed out calls from bill collectors.

Uhh.. I don't think that is going to help the cause.. there are plenty of ways poor people are gouged, why use an example as dumb as this?
posted by mbatch at 9:20 AM on May 19, 2009 [4 favorites]


So totally true.

I was wicked sick on the day my gov't health care ran out (you have to reapply every three months) I made it to my 1:00 appointment to reapply and then went to internal medicine for an emergency appointment. I was refused care because since I hadn't had a checkup there yet, I didn't have adequate records. I made an appointment to have a checkup in two weeks and then went to another dr. where I have NO coverage and will be paying many dollars.

The hospital called to change my appointment because the dr. will be out that day. They scheduled me on a day I work. By the time I called back they had "no openings until June". I now have a scheduled preliminary checkup over a month after the day I was passing out sick.

Last year, before I was laid off, I went to the dr. whenever I wanted. $10 copay. hmmmmm.
posted by debbie_ann at 9:21 AM on May 19, 2009 [3 favorites]


Muffinman, stories like that are pretty much the reason I have decided that there is no justice whatsoever in this world. Have you ever asked your friend why he is friends with this waste of flesh?
posted by adamdschneider at 9:22 AM on May 19, 2009


From the article, regarding corner stores in poor neighborhoods:

The real estate is higher. The fact that volume is low means fewer sales per worker. They make fewer dollars of revenue per square foot of space. They don't end up making more money. Every corner grocery store wishes they had profits their customers think they have.

I never really thought about it that way, before -- I just always assumed that these places gouged their customers as much as they could because their customers couldn't afford to go farther away. Which, of course, is also true.

Supermarkets in poor urban areas should get gigantic tax breaks.
posted by gurple at 9:24 AM on May 19, 2009 [8 favorites]


The US is so designed around cars that if you can't afford one, you really can't get to a whole lot of services. I live in the city and while I could survive without a car, it would be a heck of a lot more difficult. Most retail has moved out to malls and big box suburban stores so you can't just walk to the neighborhood hardware store|housewares store|dry cleaner|clothing store|shoe store|etc. Getting anywhere on the bus, if it comes, takes two or three times longer and if you are shopping, it's hard to get your stuff back. Taxis typically won't go to poor neighborhoods and the jitneys are unregulated and spotty at best. You could get stuff shipped to your house but in urban areas UPS/USPS/FedEx won't leave packages if you aren't home.
posted by octothorpe at 9:25 AM on May 19, 2009


Oh, and you don't need to resort to fiction (Vimes's boots) to get that idea (nor need it remain a theory). Barbara Ehrenreich covered the same ground vis-a-vis housing in Nickel and Dimed.
posted by adamdschneider at 9:26 AM on May 19, 2009 [3 favorites]


The US is so designed around cars that if you can't afford one, you really can't get to a whole lot of services.

I agree. The situation's especially egregious here in Detroit (and SE Michigan, generally) as the public transit system is pretty much useless unless you've got (literally) hours to kill before and after work waiting for spotty-as-it-is bus service. My SO is car-less at the moment (it was stolen and destroyed in the ensuing police chase) and works in a suburb of Detroit that you simply can't reach by bus with anything less than a Herculean effort. We can't afford to replace her car at the moment, and it's so frustrating, what with the [ poverty -> crime -> poverty -> ... ] cycle explicitly acted out in our current situation.

The observations about corner stores are spot-on, too.
posted by joe lisboa at 9:31 AM on May 19, 2009 [2 favorites]


Mbatch I can tell you've never known the terror of not knowing who it is on the phone this time. Of not wanting to answer the phone AT ALL because this time it is going to be another collector, asking you to pay something you can't pay.

Agreed on the Vimes' Boots theory. I've been having to teach Mr Strixus about buying good quality things rather than scrimping, because he grew up very poor compared to myself. However, I learned to buy well made things and spend extra money on them simply because my parents never learned the Vimes' paradox until I was in my mid teens, even though they were upper middle class by that point. And damn it, I got tired of having money but not being able to buy a pair of shoes that would last a summer.

There is deep satisfaction in buying a pair of boots that I know will last me until my PhD is done. There is an even greater feeling in showing someone else that joy.

I also remember seeing an article not too long ago explaining the relationship between obesity and cost of food to the poor, but I can't find it atm. Something my sister reminded me of recently, when she said the way she saves money to buy something extra is to eat at McDonalds for a week. I then proceeded to poke her in her love handle and tell her that's why she needed to go on a diet that didn't involve fast food.
posted by strixus at 9:31 AM on May 19, 2009 [3 favorites]


Supermarkets in poor urban areas should get gigantic tax breaks.

NYC just announced a plan to do just that.
posted by ThePinkSuperhero at 9:36 AM on May 19, 2009 [9 favorites]


Yea. It's true. Part of it is the sheer open audacity of many wealthy people. I know some very wealthy people. Hanging out with them it is crazy how much shit on the top end of the scale they get for free. How much they ASK to get for free. And in most cases it makes sense to give them stuff for free becuase when they spend they spend big. So businesses think of it as an investment.


Supermarkets in poor urban areas should get gigantic tax breaks.


If there were supermarkets in poor urban areas.
posted by tkchrist at 9:37 AM on May 19, 2009 [4 favorites]


adamdschneider: I wondered what they had in common too. They worked together as interns in a bank in London in the early nineties. The other guy went back to the US, finished his studies and joined a bank. My friend had a brief foray into management consulting, now specialises in helping companies motivate and retain their employees and in his spare time volunteers for a charity.

I guess they enjoyed a fun summer and then went their different ways. I think my friend's wedding is probably the last they saw one another and although I've never asked, I'd venture they probably established they didn't have much in common these days.
posted by MuffinMan at 9:39 AM on May 19, 2009


NYC just announced a plan to do just that.

Hey, cool! Go, reality! Or, at least, go reality in NYC.
posted by gurple at 9:39 AM on May 19, 2009


I don't think there's anything wrong with this article but I don't know what it contributes to the poverty discussion that hasn't already been covered over and over again. Honestly, this vibes like yet another well meaning journalist with no real commitment to poverty or social justice issues who just got the itch to do the Serious Poverty piece and did the old parachuting-in-to-spend-a-couple-days-in-the-hood thing. These articles print in the Inquirer like every other week, basically a journalist trips over a homeless dude on his way into work and is like, hey! There's homeless people out here! And then goes and summarizes everything that everyone else has said on the subject a hundred times already and then walks off giving himself what he feels is a well deserved pat on his own back. I could be wrong, maybe just feeling a little cynical today.
posted by The Straightener at 9:42 AM on May 19, 2009 [16 favorites]


This isn't just a rich/poor issue, it's a rich/everyone else issue. Middle class homeowners can boast about the great deals they find at Costco, but they're paying hundreds of thousands of dollars in interest for a 30-year mortgage.

On a more positive note, AskMe's Cheap but bombproof thread, for examples of things worth paying for.
posted by djb at 9:45 AM on May 19, 2009 [3 favorites]


I was just having a conversation about this while waiting for the bus in my working class neighborhood. Apparently the gentleman I was speaking with was so impoverished he couldn't even pay attention. He also said that he went to KFC to lick other people's fingers. When I pointed out that he had lost a shoe, he replied, "no, I found one."
posted by Pollomacho at 9:47 AM on May 19, 2009 [23 favorites]


I have a good friend who, for a time, got trapped in the payday loan cycle. For lack of about $500, he was paying something like $50 every two weeks to service his debt to the place. It took him several months to get out of that cycle, which got him further behind on his credit card debt, car payments, and everything else.

I would love to see some legislation with teeth take those places down. A single payday loan is possibly a service and a gap-bridger that justifies the cost. A cycle of payday loans is predation at its finest.
posted by gurple at 9:50 AM on May 19, 2009


strixus, I've received innumerable collection calls for a) debt that was not mine (nor even assigned to my name) and b) incorrect and/or paid off debt. Believe me, it was really bothersome, but come on.. I can tell that you think you can tell all sorts of things about me.

Also, Nickel and Dimed, while interesting, was a bit off the mark as far as I am concerned - at least the section about the author's little stint in Maine. Look, I don't think she was on the wrong side of the issue, not at all, but I also think exaggeration and the over-illumination of the weakest arguments are counter-productive.
posted by mbatch at 9:52 AM on May 19, 2009 [1 favorite]


I should say, after trotting out those oldies, that I really did have a conversation with a neighbor of mine in which he did trot them out, so I'm not making fun of the situation here.

My neighborhood has two full-service grocery stores within one bus ride and a long walk's distance. We are lucky. We are also, as I said, working class, so we actually have mostly employed residents. Other parts of the Eastern 2/3 of Washington have neither the retail access nor the employment level.
posted by Pollomacho at 9:52 AM on May 19, 2009


My guess is they're gonna say something about the "risk" being distributed amongst the poor population.

Cuz, if it were distributed by the rich, it would be "socialism"

Also? "the golden rule" (he who make the gold...)
posted by symbioid at 9:54 AM on May 19, 2009


Supermarkets in poor urban areas should get gigantic tax breaks.

"Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!" -- Winston Churchill, 4 May 1909

Tax breaks might go more to the landlord. To solve the problem we should tax land values a lot and improvements zero. This would make all poor areas economically attractive without giving subsidies to the landowners who, per being landowners, engage in wealth-collection not creation.
posted by toroi at 9:55 AM on May 19, 2009 [5 favorites]


The Straightener: On one hand... yeah, you're right. On the other hand, this is - IMHO - the kind of thing that could do with a little repetition, to pound it through the heads of people who Do Not Get It. I've got more than a few friends who don't understand why poor people make such bad economic decisions, and frankly I'd love it if every time they opened their web browser they had yet another IT IS NOT THAT EASY staring them in the face.
posted by Tomorrowful at 9:56 AM on May 19, 2009 [6 favorites]


These topics always seem to lead me back to what Teddy Roosevelt observed in his speech on behalf of progressive taxation and what he termed "the new nationalism":

The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means.

As The Straightener rightly points out, this has all basically been said before. There was even a time in history when these kinds of economic realities were well understood across the entire range of the American political spectrum.

But maybe, with so many flashing lights and brightly-colored attractions conspiring to divert our attentions away from plain reality these days, we need more reminders like this WaPo article. And the article does a fairly decent job of enumerating concrete examples of how the economics come out disproportionately to the disadvantage of people with less spending power.
posted by saulgoodman at 10:00 AM on May 19, 2009 [2 favorites]


Tax breaks might go more to the landlord. To solve the problem we should tax land values a lot and improvements zero. This would make all poor areas economically attractive without giving subsidies to the landowners who, per being landowners, engage in wealth-collection not creation.

What about poor land/home owners? How about farmers who build no improvements?

Also, don't "improvements" by nature raise the value of land, thus raising the tax rate?
posted by Pollomacho at 10:03 AM on May 19, 2009 [1 favorite]


"Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!" -- Winston Churchill, 4 May 1909

But was there a downward shifting in rent at the margins of the higher cost areas on the north side of the river?
posted by biffa at 10:04 AM on May 19, 2009


The argument that "there's no supermarkets in the 'hood" misses a colossal point, which is, if there were money to be made, someone would be making it (or trying to make it).

The fact that you don't see supermarkets in the bad parts of town is indicative that the people running supermarket chains have looked at the numbers, and simply don't like what they see.

It's not a matter of poor people buying less -- people gotta eat, period. No, the problem is that supermarkets (the ones not named Trader Joe's or Whole Foods) have razor-thin profit margins. And the additional costs associated with maintenance, security and theft ruin those profit margins.

It's the definition of a vicious circle. If there weren't so much crime, poor people would be better off in several ways. But poor people commit more crime (and/or attract more crime to them), so poor people suffer more than they already do.

My perspective is colored by having grown up in Los Angeles, and I think the solution is more policing and more education. But no one wants the former, meaning that (despite what you might think) Los Angeles is one of the most under-policed big cities in the U.S. And no one is willing to pony up for the latter; moreover, when you do offer more education, no one takes it, for various cultural reasons (in an era of increased post WWII education spending in California, only the Asian minorities climbed to the top).
posted by Cool Papa Bell at 10:29 AM on May 19, 2009 [3 favorites]


CPB, you are correct in that there are market reasons why supermarkets don't locate in inner cities but that doesn't change the fact that the people living there get screwed.
posted by octothorpe at 10:34 AM on May 19, 2009


This article strikes me as somewhat sensationalist. If you are not willing to pay a premium to have food stocked at your inconvenient location, of course you will need to walk to the supermarket. If you have no purchase history but want to buy property, the bank should be able to charge you higher interest, because you carry more credit/default risk. Egregious exploitation aside, why is the expectation that basic economics should be broken here?

I don't know what Southeast Washington is like, but I grew up in the lower class neighborhoods of NYC. My mother and I would waste hours at the nearest laundromat, push our little cart many blocks to the supermarket, and even pick out discarded furniture from the streets to put in our apartment. When we couldn't afford a couch, we wouldn't seek financing from some shady dealer, but see if anyone was throwing out anything still worth sitting on. It wasn't easy or pretty or fun, but contrary to the article, these practices were certainly a lot cheaper than having a washer/dryer, car insurance, and a purchase history at IKEA.
posted by gushn at 10:38 AM on May 19, 2009 [1 favorite]


The fact that you don't see supermarkets in the bad parts of town is indicative that the people running supermarket chains have looked at the numbers, and simply don't like what they see.

Right, and that's why tax incentives are a good idea - they ideally take some of the burden off of the supermarket owners and will allow at least a few more to open stores in these neighborhoods, which benefits both the owners and the people living in these neighborhoods.
posted by lunasol at 10:39 AM on May 19, 2009


The poor pay for caller identification because it gives them peace of mind to weed out calls from bill collectors.

If anyone here gets in that position (which is, I assure those of you who have not experienced it, soul-draining), I recommend a cheap answering machine. Goodwill and the Salvation Army usually have working models.
posted by shetterly at 10:40 AM on May 19, 2009 [1 favorite]


Attracting Supermarkets to Inner City Neighborhoods (pdf)
posted by desjardins at 10:41 AM on May 19, 2009 [1 favorite]


CPB, you are correct in that there are market reasons why supermarkets don't locate in inner cities but that doesn't change the fact that the people living there get screwed.

I never said they weren't. But in order to get screwed, you must be screwed by someone. And in this case, it's not a nebulous conspiracy of evil corporations doing the screwing. It's just we, ourselves, doing the screwing. And we, ourselves, that can fix it. But we won't. Because we hate cops and teachers.
posted by Cool Papa Bell at 10:43 AM on May 19, 2009


There's a term for urban neighborhoods where affordable, good food is not available: food deserts.

Some random food desert links.

if there were money to be made, someone would be making it (or trying to make it).

You speak the truth, but public policy can break the vicious cycle and change this reality. Tax breaks and special improvement districts are one excellent approach. Also, what about jobs programs investments and infrastructure improvement grants? The right array of incentives and inducements can shift the profitability balance for these stores. Right now public policy is fairly hostile to everything urban - it's no coincidence that urban neighborhoods have seen such lack of inducement and investment while new suburbs boom up all the time, securing easements, free municipal support work like new roads, stoplights, and parking lots, and tax breaks like nobody's business. When policy makes the urban climate more hospitable to business, business will be able to turn a profit.

In fact, if anyone here gets involved in drafting improvement-zone statutes, be careful. As soon as it does become profitable, think about who's going to be poised to jump in the game.
posted by Miko at 10:46 AM on May 19, 2009 [2 favorites]


CPB, I think you have your causations slightly mixed up. Poverty doesn't lead to crime. The great depression had relatively low crime rates while the boom times of the gay 1990's saw escalating violence.

It may be true that crime drives businesses away, but that leads to poverty, not results from it.
posted by Pollomacho at 10:47 AM on May 19, 2009


It's not just theft that drives down profitability at supermarkets in poor areas. It's also the fact that poor people tend to buy cheaper foods, and thus the supermarket makes less profit. Poor folks aren't going to buy $12-a-pound steaks or pricey microbrews.
posted by MrMoonPie at 10:47 AM on May 19, 2009 [1 favorite]


Egregious exploitation aside, why is the expectation that basic economics should be broken here?

Because otherwise the cycle of poverty is extremely hard to break.
posted by desjardins at 10:48 AM on May 19, 2009 [2 favorites]


Poverty doesn't lead to crime. The great depression had relatively low crime rates while the boom times of the gay 1990's saw escalating violence.

As someone who lives amidst both, I'm curious how these sort of massively macro- analyses are relevant to this discussion. I mean, I understand your claim, but pointing to national crime rates and national economic conditions seems to miss the (to me, largely local or localized or regional or whatever) point. But I could be wrong.
posted by joe lisboa at 10:49 AM on May 19, 2009


As soon as it does become profitable, think about who's going to be poised to jump in the game.

Yeah, that'd be terrible, allowing poor people to purchase low priced goods and groceries at their convenience.
posted by electroboy at 10:50 AM on May 19, 2009 [6 favorites]


This wasn't much of an article, honestly. There was a really good book I read whose author did much more in-depth research. He described how poverty can create and be perpetuated by a cluster of problems: lack of education, poor health, substance abuse, and poor life management skills. His case studies involved people who were doing everything possible to better their situation and still struggling as well as people who could have been doing quite well but for poor management. I'd recommend the book to anyone who is interested in this topic if I could only remember the name and author.

I don't think we have quite the same situation for poor people in Canada, largely because of universal health care and cheaper education and less violence, of course, but there are other factors too. Here in Toronto the public transit, while not great, is certainly useable. I very much doubt that anyone buys the bulk of their groceries at any of the corner stores. (Though on my street there seems to be one on every corner and I can't imagine how they all stay in business.) I live in a working class neighbourhood and there's a wonderful No-Frills within a few miles of me. I've lived in other less than illustrious neighbourhoods and always had a Food Basics or No-Frills within a half hour's trip. Probably this is a problem in more remote areas, though. In Newfoundland food is extremely expensive because it all has to be shipped in. Someone I knew who lived in Nova Scotia said that though housing was much cheaper there food was much more expensive so the living costs worked out to the same as they were in Toronto.

Also, some of the things this writer says don't ring true. The retiree has no time to mail his bill payment but does have time to make a trip to pay it? The guy who lost his driver's licence can't access his chequing account?

Some of the other factors are more universal, though. It does cost far more to use a laundromat than your own machine. And saving money almost always involves up front costs. You can save money by buying a monthly bus pass, but if you never have that much money in hand to buy one at the beginning of the month, you end up getting tickets. You can save money by buying stuff in bulk and of better quality but if you need to buy a bunch of things and have very little money with which to buy them you're probably going to buy the smaller packages and/or the cheaper versions. You're better off buying one good cooking pot than a whole set of cheap ones, but I know so many people who bought the cheap ones when they were starting out. (I might have done the same if I hadn't had my mother around insisting that I not do that. Someone I knew who grew up in a very poor home with a mother who was a poor manager made all the same mistakes as her mother.) And you also have to consider how you're going to get things home without a car. This is also a problem when you try to buy thrift shop furniture.

And sometimes people just don't know what they need to know to save money and to make their housekeeping cost and time efficient. They've never realized there are unit prices in tiny print on the grocery store shelf labels. They don't realize the no-name brand is practically the same thing as the heavily advertised brand name, and they're afraid to try the no-name brand in case it isn't good. So many people just don't seem to have the mental flexibility to be able to figure out alternate ways of getting something they need, or to know how to go about researching things. Or they don't know how to cook from scratch, or to fix and mend things. And if you're squeezed for time and stressed out trying to get by, you're not in a good position to learn.

It's a complex problem and one that isn't to be fixed by throwing money at it. I think a good place to start is with proper city planning. Cities must have reliable public transit and accessible grocery stores in all areas of the cities. And there should be mandatory lfe skills courses in schools where kids learn things like basic personal finance and household management. It's every bit as important as knowing about birth control.
posted by orange swan at 10:54 AM on May 19, 2009 [14 favorites]


I'm not saying it would terrible to meet that need at all. I'm saying that it's important to think hard about what type of employer or service provider you'd like to invite to be part of this solution. Because the type of business you encourage and provide incentives for is not a neutral choice with equal impact.

In Wal-Mart you have a low-wage employer which provides very little in the way of benefits, is negligent about labor rights, and uses the might of many stores to wrangle changes in local policy so that it can dictate its terms. The ownership is not local and the profits do not remain local and won't get reinvested in the community. You don't develop an owner/manager/investor class locally, because you're developing it in Bentonville, Arkansas.

Wal-Mart is certainly not the only choice. Locally driven, owned, and managed solutions could also bring low-priced goods to neighborhoods, and also pay dividends in community development and the local multiplier effect which you'd never see with a national chain.
posted by Miko at 10:57 AM on May 19, 2009 [2 favorites]


I'm curious how these sort of massively macro- analyses are relevant to this discussion.

Poverty rates do not correlate to crime rates. You can have high poverty and low crime or high crime and low poverty. The mocro- examples were just that, examples of high poverty and low crime and low poverty with high crime. Assuming that poverty will lead to crime is a false assumption. On the other hand, high crime can limit the attractiveness of an area to retailers, driving the business opportunities down in that area, limiting economic growth and causing poverty.

As a micro- example, I live in a realatively low income neighborhood, but I often forget to lock my car with no ill consequences. Go a short distance away in the same town and I couldn't afford a house, but I'd also be a lot more suceptable to mugging.
posted by Pollomacho at 11:00 AM on May 19, 2009 [1 favorite]


Louis CK on how banks treat customers with insufficient funds
posted by any major dude at 11:02 AM on May 19, 2009 [7 favorites]


Arabbers were entrepreneurial merchants who would bring fresh groceries into areas not serviced by traditional markets. They used to be common along the East Coast, but they've all but disappeared. The numbers speak for themselves: While there were approximately 50 arabber stables in the 1940s, only three remain in Baltimore today.
posted by now i'm piste at 11:06 AM on May 19, 2009


Because otherwise the cycle of poverty is extremely hard to break.

People aren't dying here, they just won't be able to live in homes they can't afford, or purchase groceries in the most convenient way.

If anything, I'd advocate spending more attention on education so that people can raise their own standard of life. Other solutions are artificial: you can't create a market where a market doesn't exist (i.e. food deserts), and you can't help someone make more rational decisions in life by providing financial incentives to his counterparties. The problem isn't that people are poor or live in a poor area, it's that they don't have the skills, the knowledge, or the desire to practice sound financial judgment.
posted by gushn at 11:10 AM on May 19, 2009


"Could" is the key word here. I agree that Walmart may not be an ideal solution, but it's not as if people are lining up to open grocery stores in underserved areas.
posted by electroboy at 11:10 AM on May 19, 2009


It's not just theft that drives down profitability at supermarkets in poor areas. It's also the fact that poor people tend to buy cheaper foods, and thus the supermarket makes less profit. Poor folks aren't going to buy $12-a-pound steaks or pricey microbrews.
Don't be so sure. The price on those items may be high but the margins can still be razor-thin for stores. The highest margin items are generally the bargain-basement house-brand items.

Another random tidbit: when I was working in the grocery industry on the IT side we had a simple metric for income levels: frozen, canned, and fresh.
posted by verb at 11:13 AM on May 19, 2009


Also, some of the things this writer says don't ring true. The retiree has no time to mail his bill payment but does have time to make a trip to pay it? The guy who lost his driver's licence can't access his chequing account?

It's the last part that has always confused me the most. A lot of these transactional fees that nickel-and-dime you to death can be avoided by having a checking (or even savings) account with a bank, and the barrier to entry on a checking account is almost nonexistent. As a newly-minted college graduate with net worth somewhere near $-30,000, I walked into a bank known for charging fees for everything, and set up a checking account that was free because I promised to have my paycheck direct-deposited into it. I can see that there would be difficulty (read: fees) if you were working for cash-under-the-table, but even at $12 a month for a checking account, it's still leaps and bounds better than paying 5% to a check-cashing place every Friday afternoon. Is there an unspoken distrust of banks among the working poor? If so, why?
posted by Mayor West at 11:14 AM on May 19, 2009



strixus, I've received innumerable collection calls for a) debt that was not mine (nor even assigned to my name) and b) incorrect and/or paid off debt. Believe me, it was really bothersome, but come on.. I can tell that you think you can tell all sorts of things about me.

mbatch - If you cannot tell the difference between your examples a&b above and being dunned for a real debt you are in fact very late on and unable to deal with then you are clueless.
posted by notreally at 11:19 AM on May 19, 2009


Is there an unspoken distrust of banks among the working poor? If so, why?

Because they're legalized theft.
posted by Dark Messiah at 11:29 AM on May 19, 2009 [1 favorite]


now i'm piste

The traditional arabbers don't much exist anymore, for a variety of reasons, the main one being the difficulty of keeping horses in the city. Although you do see them occasionally, they've been mostly replaced by guys with a pickup who perform a similar service.
posted by electroboy at 11:30 AM on May 19, 2009


It's the last part that has always confused me the most. A lot of these transactional fees that nickel-and-dime you to death can be avoided by having a checking (or even savings) account with a bank, and the barrier to entry on a checking account is almost nonexistent. As a newly-minted college graduate with net worth somewhere near $-30,000, I walked into a bank known for charging fees for everything, and set up a checking account that was free because I promised to have my paycheck direct-deposited into it.

Despite your net worth, your experience does not accurately reflect poverty. With sufficiently bad credit, many banks will refuse to issue a checking or even savings account.
posted by Izner Myletze at 11:30 AM on May 19, 2009 [3 favorites]


Also, some of the things this writer says don't ring true. The retiree has no time to mail his bill payment but does have time to make a trip to pay it?

I think it's a pretty crappy article, quality-wise (typical of the slop WaPo has their Nth-stringer cubs write, unfortunately) but it doesn't shy away from displaying poor choices on the part of the people being written about. There's another anecdote in there about a guy in the grocery with a total higher than he can pay. After the initial discovery of this fact he has them take items off to get to an amount he can cover, then has a meltdown of sorts and demands all his money back.

I think it's a good show-don't-tell bit in the article that demonstrates that these aren't necessarily people making good decisions, but that they're given ample opportunities to make bad ones and far fewer to make good ones.
posted by phearlez at 11:34 AM on May 19, 2009 [2 favorites]


Just FYI - My neighborhood rejected the construction of a Wal-Mart.
posted by Pollomacho at 11:38 AM on May 19, 2009


>Is there an unspoken distrust of banks among the working poor? If so, why?

>The problem isn't that people are poor or live in a poor area, it's that they don't have the skills, the knowledge, or the desire to practice sound financial judgment.


Many of the folks living below or even just above the poverty level don't have the financial literacy to open a chequing account or even figure out something like compound interest. This is not to say they are stupid, it's just they have not been taught basic financial literacy in school, or at home. And it must be somewhat intimidating to walk into a bank and try to figure out how to create a chequing account.

I base this observation having lived overseas and experiencing integrating into an almost totally foreign culture. It can be such a pain in the ass navigating an unfamiliar situation like a bank that it's easier to pay a little (or a lot) more money for something simple.

The lack of supermarkets and access to fresh, affordable fruits and vegetables is probably the reason why so many poor people are obese.

McDonalds (or other fast food options such as frozen pizza) is cheaper than "real" food, and contains about ten times as many calories per dollar.

It kind of makes sense to sue McDonalds for obesity.
posted by KokuRyu at 11:41 AM on May 19, 2009


Seems to me the problem isn't poverty, but the tight grouping of poverty. Here's my idea for what's needed to fix this:
1. Better mass transit
2. Instead of consolidating our public/affordable housing in one area or town, we distributed it throughout an area
posted by ShadowCrash at 11:42 AM on May 19, 2009 [4 favorites]


electroboy: thanks for the tip. i still think it's an interesting biz model.
posted by now i'm piste at 11:42 AM on May 19, 2009


Is there an unspoken distrust of banks among the working poor? If so, why?

Yes, there is and it's a big one. There's a lot behind it, but one main reason is that the state can freeze your bank account and seize your assets for back taxes, child support, court fees or whatever. Once that happens, your money is gone, leaving you nothing to pay your rent and you're out on the street. Credit card companies and other debt collectors can do the same thing. Also, as soon as you overdraw your account one time you get immediately locked into a vicious cycle whereby other checks will bounce; every single bounce costs $40 and before you know it you owe the bank $300. If that happens and you don't pay it back immediately no bank will give you an account, period. A lot of people I know just prefer to have all their money in hand; that way they can budget to some extent, paying off part of one bill here and part of another one there without the looming possibility of the whole lump sum just disappearing.
posted by mygothlaundry at 11:44 AM on May 19, 2009 [30 favorites]


A cycle of payday loans is predation at its finest.

When I read of payday loans, I'm always reminded of an article in Harper's magazine (Feb. 2000) about GW Bush's business deals. It was a long, sordid article but mentioned that he bought the Rangers team in partnership with Rusty Rose, who made his fortune with Ace Cash Express.
posted by Houstonian at 11:52 AM on May 19, 2009 [2 favorites]


Is there an unspoken distrust of banks among the working poor? If so, why?

There is, and there are a few reasons for it.

The biggest one is that having a bank account requires some very basic accounting and poor people often don't have the educational or emotional ability to deal with that. You work all in cash, you always know exactly how much you have.

Related to that, when you don't have much money, it's especially precious and poor people feel more comfortable having their money right next to them so they can always access it and keep an eye on it. It's short-sighted, but many poor people are conditioned to live in the moment.

Lastly, poor people often have a trail of debt and judgments against them, and having a bank account means that it's easier for someone to seize their money.
posted by Mayor Curley at 11:54 AM on May 19, 2009 [1 favorite]


Also, as soon as you overdraw your account one time you get immediately locked into a vicious cycle whereby other checks will bounce; every single bounce costs $40 and before you know it you owe the bank $300. If that happens and you don't pay it back immediately no bank will give you an account, period.

Yup. I moved cross-country. Closed my old bank account (the bank didn't have any branches on the West Coast), and when I went to open a new bank account in my new city, they wouldn't let me. My old gym had "accidentally" forgotten to cancel my membership, and continued to charge my old account. It finally got all straightened out, and fortunately my partner was willing and able to open a joint account with me on it so I'd have somewhere to direct-deposit my paychecks. The straightening-out process required hours on the phone and at the bank branch. Fortunately, I had a boss who was willing and able to do some schedule rearranging for a brand-new employee, so I didn't have to risk losing my job because of missed hours at work. All of this - the generous and bank-account-holding partner, the tolerant boss, my own ability to get on phones and talk to people knowledgeably about what was happening (and knowing when and how to ask to to speak to a supervisor) are all things I have because I was not brought up in a poverty-locked community where not many people have these skills or connections.
posted by rtha at 11:55 AM on May 19, 2009 [5 favorites]


It wasn't easy or pretty or fun, but contrary to the article, these practices were certainly a lot cheaper than having a washer/dryer, car insurance, and a purchase history at IKEA.

Obviously sitting on garbage is cheaper then getting a good deal on furniture, but I guarantee you washing your clothes in a laundromat would have cost more in the long run then owning a washer. If that wasn't the case, the laundromat would have gone out of business.
posted by delmoi at 12:00 PM on May 19, 2009 [4 favorites]


People aren't dying here

Not immediately, anyway.
posted by oaf at 12:00 PM on May 19, 2009 [1 favorite]


“When we couldn't afford a couch, we wouldn't seek financing from some shady dealer, but see if anyone was throwing out anything still worth sitting on. It wasn't easy or pretty or fun, but contrary to the article, these practices were certainly a lot cheaper than having a washer/dryer, car insurance, and a purchase history at IKEA.”
I always wonder why people spend so much money on movers. I can easily lift a hide-a-bed or other large pieces of furniture.
&
“And sometimes people just don't know what they need to know to save money and to make their housekeeping cost and time efficient.”
Indeed. I don’t know why all these people are so weak. I can practically lift a freight car.
Seriously - I’m not saying you or gushn or anyone's making those kinds of arguments (or their equivalent) here. (And good point on city planning).
But one can’t treat ignorance as though it were merely a symptom. Of course poor people don’t know certain things. Of course they may have lesser mental capacity (for a plethora of reasons from stress to genetics). That’s one reason why they’re poor.

I marvel at how some folks will point these things out and yet are completely understanding of someone’s lesser physical capacity. Or, indeed, become enraged when someone physically stronger self-congratulates, or they prey on someone physically weaker. And yet – mentally – nada.
Same sort of blindness (generally speaking) when it comes to mental health. I tell people I can’t sleep nights. Yeah, whatever, that’s tough. They get a look at my scars – holy cow, you poor guy.
I think many poor folks suffer the same problem. But the simple fact is it’s so much easier to do something physical for someone. Doing something mental is… I dunno. There seems to be a stigma there. And a pride sort of thing. I did an older woman’s books a bit ago (and I’m no prize in accounting, but I know some very basics) and she seemed so put out. As though she should be able to do it despite some of the things going on with her. I think it helped that I got angry.
Sort of put things in perspective I suppose. I mean, she didn’t want pity, so my anger sort of helped. I said (angrily) ‘You want to carry your groceries yourself?’ Two weeks worth there so – no, she didn’t. ‘Then let me help you where I can.” I think she got it then.

People do put this on the backs of the poor though. Even where well intentioned.

That “teach a man to fish” thing is a nice saying, but almost no one follows it. So much easier to just hand a fish over. 2nd those mandatory life skills courses. And citizenship courses that teach community services and support. A sort of sweat equity thing. You help old women with their groceries, say. And when you get old, there’s a program where some high school kid comes and helps you. More the structure of the social support than the act itself I’m talking here.

“But we won't. Because we hate cops and teachers.”

I’d like to refute this. Nothing comes to mind though. I do find it ironic that those ideologically pre-disposed to hate cops often seem to love teachers. And vice versa. If I’m not hearing “cops are pigs” I’m hearing “teachers are overpaid.”

“There's a term for urban neighborhoods where affordable, good food is not available: food deserts.”

Pretty ubiquitous problem though. I live in a fairly affluent neighborhood. I have to drive past McDonalds, McJagoff’s chain pizza, McStylish pseudo-bakery chain, etc. etc. to go buy bananas. Traffic coming in and out of those places is infuriating. F’ing stupid way to live and it’s socially supported by this whole “market” idea. Oh, the market wants us to shove cheap, greasy, unhealthy food down people’s gullets. – thanks asshole – guess who has to foot the bill for the emergency room visits these people can’t afford.

You always wind up paying for bad choices one way or the other. You pay for teachers or you pay for cops. If you don’t “the market” suddenly discovers how opportune it is to house young black men in prison. Or you think Hilton makes all that money off the f’ing hotel business?

“Is there an unspoken distrust of banks among the working poor? If so, why?”
If you can’t afford to keep a minimum balance – you get fees. If you aren’t good at balancing your checkbook – you get fees. Etc. etc. etc. And typically this gets played off – e.g. When I was in school I had a bank account and I’d deposit my paycheck on a Friday. I’d order a pizza Monday night and the check would bounce because the bank would hold deposit on my paycheck an extra day. Oh, those darn irresponsible college kids. Same deal with the poor. Plenty of other things on top of that. Suffice it to say, they don’t provide the services poor folks need.

Hell, I’m having to call my bank once in a while and straighten them out. For me it’s inconvenient. For someone poor, not being able to access certain funds right away, that could be catastrophic and lead to a chain of events. Many folks who are not poor have an invisible web of support to halt those chains. Poor folks don’t have it. Or it has holes.
posted by Smedleyman at 12:09 PM on May 19, 2009 [14 favorites]


(plus what mygothlaundry & Mayor Curley sed on specifics)
posted by Smedleyman at 12:13 PM on May 19, 2009


Education.

And stringing every conservative up by their thumbs.

That is the solution.
posted by kldickson at 12:19 PM on May 19, 2009 [5 favorites]


I had never heard that explanation for not using banks before, mygothlaundry (and others), thanks for that. It makes sense.
posted by emjaybee at 12:20 PM on May 19, 2009


There was a really good book I read whose author did much more in-depth research. He described how poverty can create and be perpetuated by a cluster of problems: lack of education, poor health, substance abuse, and poor life management skills.

Bah. What a crock. Poverty is an inevitable feature of any zero-sum economic system like ours. All the symptoms and specific forms of poverty are beside the point: What matters is there's only so much wealth to go around. And the greater the share of that wealth controlled by a smaller percentage of the population, the greater the disadvantage and the more intractable the position of those at the bottom of the ladder.

All the life management skills, education and crime prevention in the world, won't change the fact that some significant proportion of the population has to be disproportionately poor if some proportion of the population gets to be disproportionately rich. Education and crime prevention don't change the basic arithmetic.

Unless we introduced some mechanism for creating and distributing money out of thin air (which would just deflate the value of our money and eventually bring us right back where we started from anyway), or unless we're willing to accept policies aimed at discouraging the hording of wealth, it only stands to reason that, in an economic system with X number of dollars in circulation every year, with approximately 80% of that amount going to fewer than 20% of the earners, 80% of the remaining population is going to have to scrap over the remaining 20% of available wealth. And having such a distinct economic disadvantage to start with, most of those 80% aren't going to be able to compete successfully with the other 20% for economic opportunities (and even if they did, at best they could only displace them).

That's why we established progressive taxation in the first place. If those top earners aren't willing to put much of their wealth back into circulation (and generally they aren't), and if increasingly, they aren't even willing to part with it through fairly-applied graduated taxation schemes either, then their economic advantages only continue to increase year after year, as even the ranks at the top end grow thinner, creating a smaller and smaller class of wealth holders and a widening income gap that only gets wider. Then pretty soon, real income growth at every economic level except the very top dips into negative territory, like it has in the past few years.

Even if it's not the same people living in poverty year after year, roughly the same proportion of people have to live in poverty or either the middle or upper income earners have to see a corresponding decline in their share of wealth. How could it work any other way?
posted by saulgoodman at 12:23 PM on May 19, 2009 [19 favorites]


saulgoodman, who says some proportion of the population has to be disproportionately rich? Or even gets to be?
posted by kldickson at 12:27 PM on May 19, 2009 [1 favorite]


Just wait until saulgoodman finds out that 50% of people are below average. That's going to blow his mind.

Seriously though, how is our economy a zero-sum game? Do you know what that even means?
posted by electroboy at 12:34 PM on May 19, 2009 [3 favorites]


A cycle of payday loans is predation at its finest.

One interesting feature of living in DC is that we are subjected to the advertising sponsored by various lobbiests and special interest groups. Recently, as Congress investigates predatory credit issues, we've had the pleasure of subway ads telling us all about Freedom (TM) imparted by Payday Loans and how they are so much better than banks.

Just so everyone is clear:

Econ4u=Center for Economic and Entrepreneurial Literacy=Employment Policy Institute=this asshole
posted by Pollomacho at 12:36 PM on May 19, 2009 [1 favorite]


Re: this asshole above: previously
posted by Pollomacho at 12:39 PM on May 19, 2009


Some of my friends are prosecutors. Some of them are state prosecutors. One of them is in Michigan.

Apparently, the DMV assesses what amount to driver-fuckup fees, and they're required to get your license back. They're like $1000 a pop, once a year for two years. If you can't make your payment, you don't get your license back.

The real insidiousness comes from the fact that Michigan has no public transportation to speak of. And driving while your license is suspended is a misdemeanor. And carries with it - you guessed it - additional driver responsibility fees.

So your average upper-middle-class fuckup gets his license suspended for MIP or something and gets mom and dad to take him to work. He and/or mommy 'n daddy pay off his $2000 fees. He gets his license back and life goes on.

Your average poor fuckup gets his license suspended for MIP or something but still has to drive to work. So he hopes he doesn't get caught. But he gets caught. The fees snowball, and pretty soon he has a criminal record a mile long, filled with nothing but an MIP, maybe a marijuana possession, and 10 misdemeanor convictions for driving with a suspended license. Oh, and before he can get a legit license, he needs to pay Terry Lynn Land about $20,000.

As I recall, this particular bull is pretty unpopular with prosecutors. Know what happens when you up the stakes for a traffic misdemeanor? People actually want to take them to court instead of plea to them. No prosecutor's office wants to waste time going to trial on a traffic misdemeanor when there are better things to be doing, like, I dunno, preventing robberies and assaults and things. It's truly an ill-conceived idea. But that's not the point in the context of this thread. My point is that it is one example of how systematic problems can accumulate against the lower class.
posted by jock@law at 12:42 PM on May 19, 2009 [10 favorites]


It seems that efforts to dispel pockets of poverty by tearing down public housing projects and giving their residents vouchers for rent haven't succeeded, at best they're merely distributing the same amount of crime over a larger area.
posted by Oktober at 12:43 PM on May 19, 2009


People aren't dying here

Yeah, except from asthma, diabetes, heart disease....and violence.

I don't know what Southeast Washington is like,


That's very clear.

Some parts are nice, indistinguishable from any middle- or working-class neighborhood in other parts of the city. Horrifying large areas are (or were - it's been some years since I spent any time in SE) nothing but housing projects and open-air drug markets.
posted by rtha at 12:44 PM on May 19, 2009


What the article is saying is that poor people don't have cars. So if you have a car, you're not poor, right?
posted by Brandon Blatcher at 12:47 PM on May 19, 2009


I grew up in the lower class neighborhoods of NYC. ... When we couldn't afford a couch, we wouldn't seek financing from some shady dealer, but see if anyone was throwing out anything still worth sitting on.

Which is a terrible idea now because of all the bed bugs in NYC.
posted by Jaltcoh at 12:50 PM on May 19, 2009 [1 favorite]


What if your car is an '86 Buick, Brandon?
posted by Mister_A at 12:53 PM on May 19, 2009


Thanks for the links, Pollomacho. I knew the Econ4u ads had an agenda behind them, but hadn't figured it out yet.
posted by djb at 12:53 PM on May 19, 2009


Ugh. Reading about that Richard Berman asshole has pretty much ruined my day. If there's any karmic justice in this world he'll be hit and killed crippled by a drunk driver on his way to a hospital for chemotherapy to treat cancer caused by exposure to second-hand smoke.
posted by The Card Cheat at 12:57 PM on May 19, 2009


I do find it ironic that those ideologically pre-disposed to hate cops often seem to love teachers. And vice versa. If I’m not hearing “cops are pigs” I’m hearing “teachers are overpaid.”

Cops protect us from violent criminals, occasionally enforce laws we don't agree with, and - with the rare-enough-to-make-the-news exception - are pretty good, sane guys.

Teachers are both overpaid and underpaid. The bad teachers don't deserve a paycheck at all from the education system. The good ones need to be paid at least half again as much as they are now. If we paid teachers more, we could start a synergy of selectivity and pay that would draw better educators.

posted by jock@law at 12:57 PM on May 19, 2009


mygothlaundry, excellent explanation. I have not-fond memories of a creditor taking everything in our checking account a couple of weeks before Christmas. We made payments with postal money orders after that and kept our cash in a jar.
posted by shetterly at 1:05 PM on May 19, 2009 [3 favorites]


The real estate is higher. The fact that volume is low means fewer sales per worker. They make fewer dollars of revenue per square foot of space. They don't end up making more money. Every corner grocery store wishes they had profits their customers think they have.

I never really thought about it that way, before -- I just always assumed that these places gouged their customers as much as they could because their customers couldn't afford to go farther away. Which, of course, is also true.


There are some interesting spins on this, though; one of the major supermarket chains in New Zealand are New World supermarkets, which are basically everywhere in Wellington, where I live. It's interesting that they run a 'charge what the market can bear' policy which runs counter to that; the New Worlds in poorer areas of Wellington (Porirua, Newtown, etc) charge dramatically less for the same goods as one in more expensive areas (Chaffers, Willis Street, etc).

But yes, superettes, dairies, are always more expensive than supermarkets, in my experience.

I also remember seeing an article not too long ago explaining the relationship between obesity and cost of food to the poor, but I can't find it atm. Something my sister reminded me of recently, when she said the way she saves money to buy something extra is to eat at McDonalds for a week. I then proceeded to poke her in her love handle and tell her that's why she needed to go on a diet that didn't involve fast food.

It's interesting the degree to which people are convinced of things that aren't true by branding and advertising - I've had a co-worker explain that people eat at McDonalds because they can't afford better food - but her examples were all around McDonalds "meals"; one of the McDs I go past most is right next to a Turkish place that will sell you a decent kebab for the same price as a burger-based meal, which will fill you up just the same, and has a load more meat and vegetable content. Triumph o' marketing.

Middle class homeowners can boast about the great deals they find at Costco, but they're paying hundreds of thousands of dollars in interest for a 30-year mortgage.

That's true, but they have the prospect of an asset at the end of it. The people who spend their lives renting are often paying as much, if not more, than the interest, and in 30 years have... nowt.

As a newly-minted college graduate with net worth somewhere near $-30,000, I walked into a bank known for charging fees for everything, and set up a checking account that was free because I promised to have my paycheck direct-deposited into it.

You're a graduate. Banks love graduates, because graduates generally turn into long-term high-value customers with mortgages and credit cards and 2.4 kids and all that yummy profitable stuff.

Actual poor people, not so much. Their $30K in debt turns into loan defaults and a loss on the books.

Many of the folks living below or even just above the poverty level don't have the financial literacy to open a chequing account or even figure out something like compound interest. This is not to say they are stupid, it's just they have not been taught basic financial literacy in school, or at home.

This is a big one. The same is true of multi-generational unemployment. I learned most of what I know about job seeking from my mother. She grew up in a working class family (her father was on kid of 13, grew up in a 2 room house, left school at 12 to start work, that sort of thing). But her father worked his whole life, she worked her whole life (left school at 15) until she and my dad could afford to retire, and I grew up in a home where she was always picking up second jobs (my dad had the same job my whole childhood, basically).

She could explain the nuts and bolts of job hunting (the jobs are in the paper on this day; if a woman's interviewing you, check her hands for a wedding ring so you know whether to call her Ms or Mrs whatever, here's how to knock up a CV, don't be afraid to just bowl into a shop and ask if they need help and leave a CV, and so on).

If I'd grown up in a family where neither of my parents had worked, where would I pick that up from? Who would be demonstrating for me what it is to get up in the morning and get organised for the day? What about my trips to work with Dad, or going to restaurants Mum worked at and having her mates say hello? There's a culture being transmitted there, and money's no different. I had my first bank account at... shit, I can't really remember. But my parents, again, took me to the bank to show how it all worked. Again, if you grow up without that framework, where do you pick it up from?

(Literacy is another barrier to using banks; New Zealand is historically a high-literacy culture by Western standards, but there are plenty of people here who are sufficiently functionally illiterate that they would be stumped trying to fill in forms in a bank. The US has a much lower literacy rate, and guess who that falls most heavily on...)

2. Instead of consolidating our public/affordable housing in one area or town, we distributed it throughout an area

This used to be the case with State Houses in New Zealand, until we sold them all in the 80s and 90s and started consolidating our poor out of the nice neighborhoods. I suspect it's good for a lot of things, including general social cohesion.
posted by rodgerd at 1:05 PM on May 19, 2009 [3 favorites]


While I tend to feel that both teachers and cops are necessary and (mostly) deserve kudos and fat paychecks for their thankless service, more money for teachers is a long term solution to problems while more money for cops helps in the short term.
posted by Pollomacho at 1:07 PM on May 19, 2009


Is there an unspoken distrust of banks among the working poor? If so, why?

Apart from the excellent and very practical reasons mentioned above, among some populations the distrust of banks extends to a point within quite recent living memory at which banks practiced institutionalized racism with great comfort and regularity. There were both structural and cultural barriers to being allowed to establish an account and, even more seriously, establish credit or secure a home loan. In fact, during the generations where a high percentage of whites could establish bank credit easily and blacks could not, there was a significant flow of interest and leverage to white people that was unavailable to black people, a major factor in leaving an entire population sector undercapitalized with effects felt to this day. When you can't build up assets through credit leverage against expected income (as with home ownership), you remain stuck in the hand-to-mouth cycle.

But basically, saulgoodman has it. Poverty problems are due, first and foremost, to the way a country distributes its income. For quite some time, we've been distributing it disproportionately to select classes and categories of people, and our fiscal policy has strained to contain and then concentrate wealth amongst a very small percentage of the population, even beyond any reasonable justification. With tax breaks and loopholes, lack of regulation, permissiveness toward an entrenched lobbyist network, a tax system that is insufficiently progressive, incentives to close down companies and export jobs rather than open new businesses and keep them here, and the like, we've ensured that most people who are not in the top, oh, 20% of income classes are not going to be able to get anywhere.

There are a lot of very bright, very hardworking, and very educated poor people. Chronic poverty in the US will not be solved by an education program. Poor education is a symptom and a result of poverty and lack of investment, not a cause. Should America's underclass suddenly be educated to the BA level, what would they do? There aren't enough jobs for even the skilled and trained workers we have. Bad public transportation is a symptom of lack of investment in city infrastructure because that money was spent elsewhere, on transportation systems favored by the affluent and made possible because of cheap oil. Food deserts are the byproduct of a food system that has increasingly industrialized, under the influence of a very few major agribusiness corporations, to streamline its supply chains, reduce costs, and raise profits.

Our real problems are not in individuals, buses, grocery stores, schools, or banks. All of those systemic problems are entirely solvable, given investment. There is no reason they have to continue to exist apart from the national will. Our problems originate in the economic policies we have in place, and the planning and resource distribution that results.
posted by Miko at 1:08 PM on May 19, 2009 [16 favorites]


Notreally - I see the exact difference, and I had meant to type "no, I haven't exactly been in that situation, but.. "

Regardless, some of you seem really backwards with who you want to argue with here. I get that I haven't been dirt poor with debt collectors hounding me - really, I get it.. I understand, too, that I should be vilified for it.. thanks.

What I don't get is the desire of some mefites to argue about stupid crap like that when there are things that are far more pressing like 800% APR payday loans. My entire point was that the article was shitty, with one reason being that the author mentions caller ID fees before - pages before - he mentions 800% APR fees. If you couldn't understand that from my simple words than I beg to differ - I think it is you who is clueless.. either that or awfully quick to judge before understanding..
posted by mbatch at 1:10 PM on May 19, 2009


Our problems originate in the economic policies we have in place,

See those articles about US social mobility dropping below that of European nations.
posted by rodgerd at 1:12 PM on May 19, 2009 [1 favorite]


Seriously though, how is our economy a zero-sum game? Do you know what that even means?

Yes, I know what a zero-sum game is. Don't be a prick.

It's a game in which the players compete for a fixed number of chits. And that's essentially what our economy is (although, granted, in this case, the chits don't literally disappear once they're taken, but if they're effectively taken out of circulation for the long term, what's the difference?).

That's why you'll always hear so much grousing about fiat currency: Printing money that isn't backed by money borrowed from somewhere else (treasury bonds) devalues the currency. There can literally only be so much money to go around. Sure, the Fed prints more money, to replace old currency coming out of circulation, and sometimes to pay off its treasury bond creditors, but when it does, it devalues the cash currently in circulation (and that money goes to treasury bond holders, who are usually either wealthier or represent foreign interests). So at any given time, the amount of actual money in circulation can only increase roughly at the same pace it declines in value. But when it's taken out of circulation and horded (or used for rent seeking), there's less real money (as opposed to credit) to go around.

You can't just increase how much money is floating around in an economy. You can only redistribute and circulate that money in different ways. How is it not basically a zero-sum game when some players horde a disproportionate share of a finite resource? There's no mechanism for just introducing more money into an economy without negatively impacting the value of the money that's already there. Sure, money generally keeps circulating at the lower levels, but at the upper end of the economic scale, much of it doesn't; that's how wealth gets built. It gets parked in savings accounts or other low risk investments--investments that transform real, unencumbered money into other people's debt (e.g., if I'm a bank and I lend you $100,000 from this other guy's savings to buy a house, now you and the other guy both seem to have $100,000, but in reality, there's still only that original $100,000 in circulation--only now, you have to find some way to pay me back the principle plus whatever you can scrounge together to pay the interest).
posted by saulgoodman at 1:16 PM on May 19, 2009 [2 favorites]


Is there an unspoken distrust of banks among the working poor? If so, why?

Part of the problem with the bank question, according to a recent documentary I watched and can not find a reference to at the moment, is that there are very few bank branches in some of the more poverty stricken neighbourhoods.. They showed a few maps and there was basically no bank coverage in an area that had over 300 payday lending storefronts - this may have been DC, but I can't recall, sorry.
posted by mbatch at 1:19 PM on May 19, 2009


saulgoodman: Money isn't a zero sum game. if it was, investments would make no sense.

When you lend someone money, you expect a return (interest/equity), yet both the lender and the borrowser is better off. It is because of this dynamic that fiat currencies exists, to allocate the supply and demand of money itself.

Money is more than chits you throw around to account for who's winning a game. It's an allocation system of the world's resources. Those who are better at managing the allocation of resources gets more responsibility for allocation. It's massively decentralized decision-making, which is most definitely not zero-sum.
posted by amuseDetachment at 1:31 PM on May 19, 2009 [3 favorites]


Thanks for the link, Oktober. It's an interesting read.
posted by ShadowCrash at 1:33 PM on May 19, 2009


Here's a simple example. If I had $100,000 eating a hole in my pocket, and I went downtown and bought the best hot dog ever made for $1.00, and in a moment of generosity, tipped the guy at the hot dog stand $99,999.00, that guy would suddenly have real wealth. He could buy a house outright. He could send his son to Harvard (well okay, maybe Brown). He could take a year or two off work and live the high life.

If instead, I put that money into a savings account, the only way that hot dog vendor or anyone else can get his hands on it is to pay to use it under the terms of an interest-bearing loan. If he successfully manages the loan for its entire term, the bank gets richer off the interest. The guy gets a house that's worth significantly less than he paid for it (both due to depreciation of the home and due to the interest paid). But if the guy defaults on the loan--even if it's in year 29 of a 30 year term--the poor guy's out everything he's already put into the loan, plus the interest, and he's got nothing to show for his last 29 years of effort. But the good news is I don't lose a dime. In fact, my money's worth more now, due to interest earned. I'm still golden because already sold the loan on the after market at a tidy profit.

Isn't it kind of obvious how the second scenario I just described eventually creates systematic imbalances? The very best the guy in the second scenario can do is to come out just a little behind.
posted by saulgoodman at 1:36 PM on May 19, 2009 [1 favorite]


Those who are better at managing the allocation of resources gets more responsibility for allocation. It's massively decentralized decision-making, which is most definitely not zero-sum.

Because the invisible hand of providence just naturally directs money into the stewardship of those who are best suited to allocating resources? Riiiiiggghhht....
posted by saulgoodman at 1:40 PM on May 19, 2009 [1 favorite]


The invisible hand is giving me the finger.
posted by mazola at 1:43 PM on May 19, 2009 [5 favorites]


The invisible hand is picking my pocket.
posted by shetterly at 1:47 PM on May 19, 2009 [1 favorite]


While social programs and equitable allocation of resources are the key to alleviating poverty, the other 50% of the equation is wealth creation. And some are better at creating wealth than others.

BTW, where does creating and selling a successful software application or whatever (say, Craigslist) fit into a "zero-sum" model? I suppose Craigslist is taking away available profits from existing providers such as newspapers (and therefore this is actually an example of a "zero-sum" game), but when we reach the age of majority we're never guaranteed a free lunch.
posted by KokuRyu at 1:49 PM on May 19, 2009


Is there an unspoken distrust of banks among the working poor? If so, why?

I used to work with some people that refused to deal with banks. I did try and ask why, but usually I didn't get much of an answer. I think it was mostly because they didn't feel like they had control over their money, or for some reason or another it could be taken from them.

Also, I imagine some people out there did have a bank account but got caught in the whole insufficient funds, bounced cheques and late fees cycle. It's astonishing how quickly that system can crush ones finances.
posted by Talanvor at 1:53 PM on May 19, 2009


There was a really good book I read whose author did much more in-depth research. He described how poverty can create and be perpetuated by a cluster of problems: lack of education, poor health, substance abuse, and poor life management skills... I'd recommend the book to anyone who is interested in this topic if I could only remember the name and author.

Sounds like The Working Poor by David Shipler ... Does that ring a bell Orange Swan?

And to go along with what's already been commented on--the working poor's natural distrust of banks-- Shipler describes how many poor people go to H&R Block or some other income tax service, even though income taxes for most working poor are relatively simple and straightforward. It's just that the whole income tax process is confusing and intimidating and they'd rather just pay a fee to have the whole process handled by someone else. And H&R Block knows this, and they'll tack on fees for everything.

From the book:
Each form the taxpayer needed carried a fee: $41 for a 1040, $10 for an EIC (the Earned Income Credit), $1 for each W-2, and so on. Electronic filing cost another $25. So a simple return with two W-2s filed electronically would run $78. But it didn’t stop there. Block had a smorgasbord of services for people who lived on the edge. If you had no bank account, your refund could be loaded onto an ATM card that charged $2 per withdrawal. Or a temporary account could be opened into which the IRS payment could be deposited for a fee of $24.95. If you were enticed by Block’s offer of a “rapid refund” and wanted a check in a day or two, you paid H&R Block an additional $50 to $90, depending on the amount you were getting. The fee could be as much as $50 on a $200 refund, up to $90 for $2,000 or more.

This was actually a loan, and for a very short time. Filing electronically usually gets you a check in two and a half weeks, according to the IRS, and five days sooner if it’s deposited directly into a bank account. At the most, then, the “rapid refund” loan, issued a day or two after filing, would run about fifteen days, which made the $90 fee on a $2,000 payment equivalent to an annual interest rate of 108 percent. At the least, the loan could run as little as four days, propelling the annualized rate to 410 percent on $2,000, and 2,281 percent on $200.
posted by Kronoss at 1:54 PM on May 19, 2009 [2 favorites]


While social programs and equitable allocation of resources are the key to alleviating poverty, the other 50% of the equation is wealth creation. And some are better at creating wealth than others.

This may be true, but I can think of no sureer way to stultify an economy that by having aristocracies of vast inherited wealth.
posted by rodgerd at 1:55 PM on May 19, 2009 [2 favorites]


It's a game in which the players compete for a fixed number of chits. And that's essentially what our economy is (although, granted, in this case, the chits don't literally disappear once they're taken, but if they're effectively taken out of circulation for the long term, what's the difference?).

/me pounds face on table

You have a partially correct definition of a zero-sum game, but incorrectly describe the economy as a zero-sum game. The latter couldn't be farther from the truth.

It's a classic misunderstanding. The economy is not a giant pie where if I take two slices, you go hungry. The "pie" can always be made larger by growing the economy, and yes, Virginia, there can be slices for everyone.

Anyone that doesn't understand this doesn't understand the reality of economics, or is being willfully obtuse in order to score hipster cred.
posted by Cool Papa Bell at 1:59 PM on May 19, 2009 [11 favorites]


The guy gets a house that's worth significantly less than he paid for it (both due to depreciation of the home and due to the interest paid).

That's not how real estate works.
posted by mr_roboto at 2:01 PM on May 19, 2009 [1 favorite]


saulgoodman: Money isn't a zero sum game. if it was, investments would make no sense.

Yes it would, as long as it's possible for the proportional distribution of money to change over time (meaning, someone somewhere is getting poorer so that someone somewhere else can get richer). Okay, I realize that's not strictly speaking a zero-sum game, at the individual level. But when you analyze it in terms of economic roles, instead of focusing on the individuals, it kind of is.

That is, Joe Dirt-Poor may not always be dirt poor, but as long as 10% of the population are super wealthy, a proportionate share of the population have to be super poor, and that's an immutable consequence of the form of economic system we have, not merely a result of any particular failings of the economically disadvantaged viewed as a whole (sure, on an individual-level, certain personal failing might account for why Joe Poor got selected to be the goat on this particular go-around--but either way, somebody's got to be the goat). If the rich get richer, someone's got to get poorer.

The "pie" can always be made larger by growing the economy, and yes, Virginia, there can be slices for everyone.

If this is true, then please point me to any mechanism that exists (beyond the treasury's borrowing money that already exists from other countries) whereby actual new money can be created without devaluing what's already in circulation (also excluding than the Federal Reserve's discount window, which as I understand it, in theory at least only creates new money in the short term precisely to short-circuit monetary deflation).
posted by saulgoodman at 2:05 PM on May 19, 2009


Yeah, except from asthma, diabetes, heart disease....and violence.

I don't know what Southeast Washington is like,
That's very clear.

Well, yes, that's why I am talking about my experiences in NYC.

Can we stop assuming that poor people are incapable of any intelligence at all? Rich or not, people should live with the consequences of their own actions. Even growing up poor, it was pretty well known that smoking is bad for your lungs, fast food is unhealthy, loan sharks will gauge you if you let them, etc. These aren't breaking news reports, and we aren't dealing with mountain dwellers here; these are inner city populations, and many of them know exactly what risks they face.

Is there an unspoken distrust of banks among the working poor? If so, why?

This isn't some kind of conspiracy: there are computer models in play which calculate your risk depending on your credit history, projected income, and tens of other variables. These are purely mathematical to optimize the bank's profit while minimizing its risk. And if I were a stock holder in a retail bank, I'd be extremely angry if it started giving better rates than the expected risks involved just so someone could feel better about himself. Banks aren't charitable institutions.
posted by gushn at 2:05 PM on May 19, 2009


That's not how real estate works.

After 29 years, an unimproved home no matter how nice the neighborhood, isn't going to be worth as much, on an inflation-adjusted basis, as it was when it was purchased without substantial sums being poured into it for maintenance. I own a home, and I know--if I let it go even a couple of years without spending money on its upkeep, it'd be a crumbling mess.
posted by saulgoodman at 2:08 PM on May 19, 2009


This may be true, but I can think of no sureer way to stultify an economy that by having aristocracies of vast inherited wealth.

By wealth creation I mean solidly middle-class jobs and a functioning real estate market, small and medium sized businesses, etc.

Too often "progressive" folks tend to discount or demonize entrepreneurs and businesspeople.
posted by KokuRyu at 2:12 PM on May 19, 2009


A lot of these transactional fees that nickel-and-dime you to death can be avoided by having a checking (or even savings) account with a bank, and the barrier to entry on a checking account is almost nonexistent.

If you have to cross town every time you want to use your bank, it's probably not worth it.

Most bank closures in poor areas (UK)
Banks slow to locate in poor areas (NYC)
Bank Failure: The marginalization of the poor: "In poor areas across the country, banks have been replaced with check-cashers and pawn shops..."
posted by desjardins at 2:15 PM on May 19, 2009 [2 favorites]


The size of the pie can change because of something called "investments", see my original point about the nature of money itself. As fashionable as it is to crap on the efficiency of markets and failure of the invisible handjob or whatever, it's still a damn good method towards resource allocation on a high-level.

The reason money cannot be viewed as zero-sum is because you can actively change the amount of investments worldwide (which will in turn change the amount of production).

I suppose the reason you dragged in some anti-fiat-money crap into this, is a lack of understanding as to the nature of money. Think of current global GDP, you see it as money being a claim to a slice to the pie. However, due to investments & monetary policy you can actively change the GDP higher or lower. This can be achieved by investing in technology, etc. This increase in production creates more "stuff" and more potential for more investments. This potential creates the intractable dilemma in monetary policy itself: at what level do you set the money supply (times velocity)?

The greater the level the more investments will be made. If the investments pay off, you create a net good in the economy and potential for more investments. If they go wrong, you have less potential. The probability of any random investments going wrong is correlated to the amount of money seeking investments. If there are too many people looking for investments, more will go wrong and be mispriced, if there are too few (e.g. created by a situation with a hard currency, for example) then we would be not reaching our potential production/technology. This balancing act is managed by the increase and decrease of money supply.

As you can see, this is not some simple "money is a zero sum game". Sorry for the Macroecon 101 lesson, but hating on fiat money is a severe misunderstanding of economics that is comparable to the denial of evolution.
posted by amuseDetachment at 2:17 PM on May 19, 2009 [1 favorite]


This potential creates the intractable dilemma in monetary policy itself: at what level do you set the money supply (times velocity)?

amuseDetachment: Okay, so how is money supply set? That's what I asked, isn't it?
posted by saulgoodman at 2:20 PM on May 19, 2009


Obviously sitting on garbage is cheaper then getting a good deal on furniture, but I guarantee you washing your clothes in a laundromat would have cost more in the long run then owning a washer. If that wasn't the case, the laundromat would have gone out of business.

It's pretty obvious that a laundromat can turn its fixed assets over far faster than can a family, and (for a small enough household) you're probably wrong. By your logic, I should buy a car instead of renting one six times per year.
posted by Kwantsar at 2:21 PM on May 19, 2009


It's possible to both be in support of middle-class business growth and entrepreneurship and reduction of income distribution in favor of the upper classes. In fact I feel strongly that in the rebuilding of this economy, enabling startups and small business growth - especially where we can entail and support those efforts with real worker benefits in the form of support for healthcare and a living wage through the use of government programs and stiumulus funds - would be much more productive than trying to shore up failed sectors that will never return to the income levels seen before the crash. I agree that it's a shallow progressivism that doesn't recognize the role of small entrepreneurship - in fact, if anything represents a progressive economy, that's probably it. At the same time, restraints and limits on large-scale companies and industries would be very helpful. The parameters of business and enterprise need to be redrawn.
posted by Miko at 2:26 PM on May 19, 2009 [1 favorite]


Obviously sitting on garbage is cheaper then getting a good deal on furniture, but I guarantee you washing your clothes in a laundromat would have cost more in the long run then owning a washer. If that wasn't the case, the laundromat would have gone out of business.

You also need a place to put it and the water to run it. In our NYC studio apartment way back when, the building wouldn't even allow washer units at all, I guess since water was an included utility. Everyone had to wait to use the two machine laundry service in the room downstairs (when they weren't broken), or trek to the nearest laundromat where people once stole our clothes, so we'd have to sit there all day and watch it. Owning a washer wasn't feasible or economical.
posted by gushn at 2:29 PM on May 19, 2009 [3 favorites]


saulgoodman: By the central banks. If they decide to set it too low (akin to a situation that would be in hard currency), we would see much lower economic growth (to the point where our recessions would look fantastic in comparison), if they set it too high then we get bigger recessions. Some central banks do this via informal inflation targeting.

Somewhat linking this derail, fiat money inflation targeting really does help the poor, as it prevents the rich from sitting on their money (because it is constantly being devaluted), in favor of worthwhile investments to maintain their wealth through the low level inflation. The result would hopefully be more investments in infrastructure and technology, driving down costs for the poor. While there are deep flaws in the reality and allocations from not accounting for externalities, this method would be much better for the poor than a hard currency (where all the rich people would just hoard their gold in a vault, and then it would be truly zero-sum).
posted by amuseDetachment at 2:29 PM on May 19, 2009 [1 favorite]


See, I agree with your point about fiat money, BTW. I don't think it does necessarily lead to inflation, and in fact, what I've been trying to argue is that it's at some level unavoidable. But the assumption under a lot of the more narrow interpretations of market theory (which inform a lot of decision making and wankery) is that increasing the money supply always = bad and will inevitably lead to runaway inflation. That's not my position; it just seems to be one that's so often taken for granted it's conventional wisdom in some circles. I'm sorry if I didn't make that clear.
posted by saulgoodman at 2:30 PM on May 19, 2009


saulgoodman If this is true, then please point me to any mechanism that exists [...] whereby actual new money can be created without devaluing what's already in circulation

Easy: people can do real work. Making real things. Planting corn and harvesting it. Taking wood and making chairs out of it. Adding things to the world that did not previously exist. At a more fundamental level, soaking up the rays of the sun is sufficient to make the "economy" not zero-sum. I'm absolutely serious about that. The sun itself is the bottom-line final energy input into our home planet. In the presence of the sun, more life forms can be made. "The economy" is just a small, special-case abstraction of an ecosystem, and the same rules apply. That is why the economy is, almost everywhere and almost all the time, a positive-sum game: people input work.

Zero-sum games in general only exist as abstractions and models, which is what they are for. They're a lot like those "moral dilemma" questions, like "do I kill this guy to save those five?", in that they take a small subsection of life and analyze it while ignoring all external factors, and the fact that life began before and continues after the moral dilemma. Cutting up a cake is a zero-sum game, because you only have that cake: but this ignores the fact that you existed before the cake, will exist after, and can make new cakes out of flour and milk and eggs, and indeed make new flour out of wheat, get milk by feeding grass to cows, and get eggs by feeding grain to chickens. And so on.
posted by aeschenkarnos at 2:43 PM on May 19, 2009 [10 favorites]


many of them know exactly what risks they face

Yes, they do; but the problem is, the risks they face are so much larger, overall than the risks faced by wealthier people--because they have no safety net, or a much worse one. If you are faced with the very real prospect of being on the street, risks from smoking or eating fast food just aren't on your radar.

People in true poverty are not in planning mode; they're in survival mode, which is a different mental state entirely. The long-term future vanishes when you are not sure you're going to make it through the next few days. You just don't have the energy to plan in that way.
posted by emjaybee at 2:48 PM on May 19, 2009 [5 favorites]


Saulgoodman I understand what your getting at but it's a poor choice of description to say "zero-sum."

There really are endless ways to possibly create wealth. Granted even if the wealth isn't "real" in terms of actual material wealth. The Nineties were a testament to that fact. But still the meritocratic system works when it's allowed to work. However with a power disparity as wide as we have in the US it's not working right now. What you have is a small class of people soaking up a huge swath of the opportunity bandwidth by blocking and misdirecting political power to themselves. Almost like an Oligarchy, really.

The key to wealth creating is education and opportunity. And both those things are entirely dependent on timing. When people in poor communities don't get good early educations, when their prime is spent battling day to day just to get home safe or take care of kids— those key moments in life when you get that initial investment in your own wealth creation are lost forever.

But the potential is there.

My grand parents were not college educated. I bet most Mefites grand parents or great grand parents were not college graduates. However. Most Mefites ARE. So with a a couple of generations the system has created wealth enough to move us forward. So. It can work. And when it worked was after WII when the government made a concerted effort to invest in the population.

It isn't zero-sum. It's a river. With a dam on it. Get rid of the dam.
posted by tkchrist at 2:49 PM on May 19, 2009 [1 favorite]


aeschenkarnos nailed it.
posted by tkchrist at 2:51 PM on May 19, 2009



Is there an unspoken distrust of banks among the working poor? If so, why?

This has been covered more generally above, but here's some specifics on the practice of redlining.
posted by availablelight at 2:53 PM on May 19, 2009


A system isn't zero-sum if you keep adding more stuff into it. We mine, we farm, we fish; these add things-of-value into the economy that were previously rocks, seeds, and sealife. Build a solar panel and it starts "creating money," in the sense that it produces electricity and that has a greater-than-zero economic value to somebody. Similarly, every time I sit down and write some code that my employer wants me to make, I'm creating something of value that would not exist if I had just sat on my ass and eaten chinese food.

I have five bucks and you have five bucks, except bam, you do a little dance for me. I may be willing to give you a dollar for it, and that might seem like it's zero-sum, except I have a little flush of enjoyment from watching a dance, which I clearly value at $1, and you have an extra $1, so our tiny little economy has grown by $1.

Sure that's stupidly simple, but the point is, time itself is a resource, and while the universe may limited, our economy doesn't include everything in the space-time continuum, and by adding things into the economy from elsewhere (bringing sunlight into our electric grid, bringing your dancing skills into my eyesight), we can grow the economy. And that's not zero-sum.
posted by Tomorrowful at 2:55 PM on May 19, 2009 [3 favorites]


These are purely mathematical to optimize the bank's profit while minimizing its risk.

And for decades, one of the formulas banks plugged into their system to figure out risk was race - entire neighborhoods were redlined because they were black neighborhoods. Getting a loan for a business, or a house, or a car was incredibly difficult or impossible. And of course it became a self-fulfilling prophecy that people in Those Neighborhoods would have little or no experience with finance, and that they would distrust those institutions.

I grew up poor - we were on food stamps and welfare off and on when I was a kid - but I was never the kind of poor as the folks in the WaPo article. I didn't grow up surrounded by poverty; I didn't grow up surrounded by people who hadn't gone to college, or finished high school, or who didn't know how to open a bank account. I didn't grow up in a neighborhood where you need to get what you can get today because you might be dead tomorrow or next week or by the time you're 25. Or you might be in jail. I didn't have to go to a long chain of crappy schools staffed by inexperienced teachers trying to teach us out of 15-year-old textbooks; my schools all had doors on the bathroom stalls and mostly fresh paint on the walls and up-to-date books.

We didn't have much money when I was a kid, but I was surrounded by people - friends, family, teachers - who made it quite clear in a huge number of ways that they gave a shit what happened to me and what I did with my time. I wasn't ordered to finish high school and go to college, but it was expected in the way that going from kindergarten to first grade is expected, and everything was laid out so that I had as few barriers as possible. I'm so privileged it's leaking out of my ears, and most of it is stuff I got not because we were "rich" when I was a kid but because we weren't in this specific kind of poverty, which is generational and creates huge cultural, physical, psychic, and emotional barriers.

It also might make you less smart: Chronic stress from growing up poor appears to have a direct impact on the brain, leaving children with impairment in at least one key area -- working memory.
posted by rtha at 2:58 PM on May 19, 2009 [3 favorites]


If you have to cross town every time you want to use your bank, it's probably not worth it.

The last time I went in person to a bank, it was to deposit cash. And even that's not necessary if the bank has cash-counting ATMs.
posted by oaf at 3:00 PM on May 19, 2009


More articulate people than me have covered this already, but:

One reason that a lot of poor people don't like banks is that, when you're a poor person, a lot of the people that work at the bank treat you like crap.

When you're a poor person, institutions are baffling at best and nakedly exploitative at worst. When you're a poor person, you might begin to feel that the whole world is stacked against you, that there's no realistic way out of your situation, and that, every day of your life, you're going to get screwed. And you'd pretty much be right.
posted by box at 3:10 PM on May 19, 2009 [4 favorites]


gushn If you are not willing to pay a premium to have food stocked at your inconvenient location, of course you will need to walk to the supermarket.
You as an individual cannot afford to pay that premium. Only through collective financing in some way can it be raised. Taxation and subsidy is the obvious method there: tax sources of wealth, in order to provide basic services to all. (At break-even, if need be.)

If you have no purchase history but want to buy property, the bank should be able to charge you higher interest, because you carry more credit/default risk.
All very well except for the fact that charging you higher interest increases your inherent risk, and by "higher" we're talking RUINOUS (3,685%). Many, if not most, payday lenders game the system in that they expect their clients/victims to default, set the terms of the loan up to cause the default, and engage in the closest thing our economic system has to enslavement. Which in turn increases the risk of default, because people are just plain less likely to care about and preserve the interests of those who try to enslave them.

If I were a stock holder in a retail bank, I'd be extremely angry if it started giving better rates than the expected risks involved just so someone could feel better about himself. Banks aren't charitable institutions.
This is why the response has to be legislative. You cannot expect morality to arise from out of the market; morality has to be jammed down onto the market, screwed on, and constantly monitored to make sure the shifty bastards' constant attempts to unscrew it fail. It is well-established that the duty-to-stockholder economic model is highly caustic to the moral behavior of corporations.

Unfortunately it has been allowed to continue for so long that one of those immoral behaviors, corrupting politicians, has become so widespread that it is doubtful that we can do anything about it at this point without a total paradigm shift - the kind of thing that the politicians and corporations are at this point in time desperately trying to prevent.

And as for "being extremely angry", that's a great example of misplaced priorities. You would have your profits somewhat reduced in order to greatly reduce costs to others. Since those others would be able to put more resources to work, the economy as a whole, which includes you, will benefit.

That last bit is the key to it, in my view: there are profitable activities that cause others to also gain profit, and it is highly desirable that these be done; and there are profitable activities that cause others to incur losses (which is what I believe saulgoodman is referring to when he mentions "zero-sum"), and it is highly desirable that these be made to cease. Loaning is in both categories, depending on the terms of the loan.
posted by aeschenkarnos at 3:13 PM on May 19, 2009 [7 favorites]


The last time I went in person to a bank, it was to deposit cash. And even that's not necessary if the bank has cash-counting ATMs.

Are you being obtuse? There really aren't many ATMS in poor neighborhoods either. Besides, do you really think that most places that employ poor people - if they are employed at all - use direct deposit? What do you do with the physical check if there's no ATM or bank around you? Do you wait for the bus to take you across town so you can deposit it? Most banks aren't open at night, so you'd have to take time off of work to do this, which is self-defeating for a poor person.

I'm betting a lot of places in poor neighborhoods don't take checks anyway, so I'm not sure what good your checking account will do you. I can totally see the appeal of paycheck cashing places (which are oddly called "currency exchanges" in Illinois - anyone know the etiology of that?). Sometimes they're the best option out of an array of shitty options.
posted by desjardins at 3:22 PM on May 19, 2009 [2 favorites]


Please keep in mind that 28.3% of single mothers live in poverty (vs. 12.5% of the general population - source). Not only do they have to endure bus rides across town to go to the supermarket or bank, but they have to do it with toddlers in tow. I don't have kids, but that sure doesn't sound like any fun to me.
posted by desjardins at 3:30 PM on May 19, 2009 [1 favorite]


“Should America's underclass suddenly be educated to the BA level, what would they do?”
Riot.

“All the life management skills, education and crime prevention in the world, won't change the fact that some significant proportion of the population has to be disproportionately poor if some proportion of the population gets to be disproportionately rich. Education and crime prevention don't change the basic arithmetic.”

I disagree.
Or rather - I take your meaning. But I’d argue (in counterpoint to Miko as well) that the situation is reciprocal. I don’t eat at McDonalds in part because I’m intelligent enough to form goals, follow plans to achieve those goals and I know enough about nutrition and health to know the sacrifice in convenience isn’t worth the huge downsides – but mostly because I’m resistant to the marketing in the first place.
Where’d I get that? From learning what to value. Where’d I learn that? – A vast number of cues – social and otherwise - that are nominally invisible to the poor.

How’d I learn to, say, go on a job interview? Honestly? I don’t know. I just sort of picked it up.

Doubtlessly I was exposed to such information a number of times before I even went to college.
But many people in poverty, kids, don’t enjoy that kind of information osmosis.
So, yes, it’s structural. But saying “we need to change it” is not going to change anything. There won’t be the will to change it without some enlightened self-interested thought across a broad base.

Why do you think there is such a push back against public schooling? Vouchers and such? That’s not by design? All the struggles over school funding in poor areas, systemic issues, etc. etc. etc.
Those top earners got to be top earners by exploiting others’ ignorance and promoting certain worldviews as factual, viable, or appealing – through advertising mostly, but other methods as well.
(In part, I'd argue as a pet peeve, because it's socially acceptable to compete - or exploit - someone with less information, or who isn't as smart, while it's completely unacceptable to likewise bully someone physically weaker than you are. There are countless examples of this.)

Certain mechanisms for remedying disparity in wealth go without saying. Or rather – it goes without saying we’re in agreement (some details and certain matters of execution aside).

So, essentially, two points there:

One - most people aren’t wearing enough hats.

Two - reducing poverty *can* be brought about by having a marked based economy, but you also need a strong social welfare support system that aims more at the maintenance of living standards than amassing wealth (as you say) but it must also provide social services – most prominently education – in order to sustain a process of reciprocation and employment as well as a common understanding of the uses of, say, wage solidarity and other kinds of equity such as social (as opposed to economic) opportunity - like they have in, say, Sweden where you have trade unions as well as the government working in a dynamic manner to prevent inequalities in living standards based on (say) living in a rural vs. urban area. But this can’t be achieved without preventing distraction from these crucial (possibly generation spanning and most certainly stability creating) matters by powerful media and political influence directed by the wealthy elite, as well as mundane, non-directed, often self-inflicted distraction by everyday trivia and ego minutia.
posted by Smedleyman at 3:34 PM on May 19, 2009 [2 favorites]


And as for "being extremely angry", that's a great example of misplaced priorities. You would have your profits somewhat reduced in order to greatly reduce costs to others. Since those others would be able to put more resources to work, the economy as a whole, which includes you, will benefit.

Admirable, but I doubt that the expected benefit from your macro analysis would be enough to counterbalance the reduction in profit from quoting risky individuals normal rates, especially if you are operating in such a competitive environment as modern finance. Don't you think that if it was more actually more profitable to reduce the working poor's costs in this way, that it would already be done? Say what you want about bank executives but they are, by definition, profit-maximizing agents.

Taxation and subsidy is the obvious method there: tax sources of wealth, in order to provide basic services to all.

Taxation is the most obvious solution, isn't it? But while I am dismayed that people would have to ride the bus however long just to get to a supermarket, I would personally continue to be upset if my taxes were increased in order to build an unprofitable but proximate supermarket. If you want to be closer to the supermarket, fine, maybe you should move, but why should I be mandated to pay for your convenience?
posted by gushn at 3:49 PM on May 19, 2009


gushn--why should i bed mandated to pay for public education when i don't have children?

A: because by my investing in the education of the children in my neighborhood, i stand to live in a safer, nicer, neighborhood. which means it's for the greater good.

and that's why providing basic services to people, and treating people like people, is important.

or ... you could just do it out of human kindness.
posted by msconduct at 3:53 PM on May 19, 2009 [1 favorite]


My intention is not to belittle public services, as I agree that public education, libraries, etc., are all extremely valuable. However, the collective can't provide everything for everyone, and we need to draw the line somewhere. I happen to think that a supermarket within walking distance is not a basic necessity, but you may disagree. That's cool.

But why should measures of kindness be factored into taxation policy? If you have extra income, you are free to donate it to one of many fine charities. Some people want to take lavish vacations with their disposable wealth; they should be free to.
posted by gushn at 4:01 PM on May 19, 2009


"The problem isn't that people are poor or live in a poor area, it's that they don't have the skills, the knowledge, or the desire to practice sound financial judgment."

Yeah, and they have these problems because they live in a poor area. I mean just fucking wow.
posted by Gamien Boffenburg at 4:04 PM on May 19, 2009


"Because the invisible hand of providence just naturally directs money into the stewardship of those who are best suited to allocating resources? Riiiiiggghhht...."

Wealth can be generated through labor, which is why our monetary system is not zero-sum (and labor is not a fixed resource). Increased money supply can also indicate a growing population, not just inflation.
posted by krinklyfig at 4:04 PM on May 19, 2009


A system isn't zero-sum if you keep adding more stuff into it. We mine, we farm, we fish

You might want to drop that last one from your list. Fishing looks less like wealth creation and more like asset stripping.

but why should I be mandated to pay for your convenience?

I find it amusing that you segue straight from banks to this. Why should the taxpayer prop up failing banks? Especially hilarious given you list your job as being in finance - how many tax dollars has your sector consumed in the United States recently?
posted by rodgerd at 4:21 PM on May 19, 2009 [2 favorites]


"But why should measures of kindness be factored into taxation policy? If you have extra income, you are free to donate it to one of many fine charities. Some people want to take lavish vacations with their disposable wealth; they should be free to."

Creating and maintaining a functional egalitarian society doesn't happen on its own. We could always go for the most individualistic philosophy and forgo any public services at all, but there are already countries like that which probably would take you. I might recommend you find one you like and make your fortune there where you won't have to be bothered with any social responsibilities, that is if you don't want to contribute anything to our society. Relying on people's good will isn't really enough to make it work, however, and examples abound.
posted by krinklyfig at 4:23 PM on May 19, 2009 [1 favorite]


A: because by my investing in the education of the children in my neighborhood, i stand to live in a safer, nicer, neighborhood. which means it's for the greater good.

you can generalize this to equality of access to everything that is required to become and remain a productive member of society. Mainly health care, education, local transportation.
posted by toroi at 4:27 PM on May 19, 2009 [1 favorite]


"However, the collective can't provide everything for everyone, and we need to draw the line somewhere. "

Mmmmm.....beancounty!
posted by Gamien Boffenburg at 4:33 PM on May 19, 2009


Fishing looks less like wealth creation and more like asset stripping.

Not to any greater degree than mining!

Wealth is not a zero sum game on the micro scale because wealth is being created more than it is being consumed.

Plus one needs to drill down to the naked essence of what wealth really is -- wealth is that which provides services that satisfy human needs and wants. An apple is a bit of wealth that provides the service of satisfying hunger. A trained massage therapist provides the service of physical pleasure via his labor.

The subtlety of any modern economy is that it requires a healthy primary sector of resource exctraction and/or secondary sector of processing/manufacuring to support the soft service-sector economy we all enjoy. The physical component of goods that are actually consumed is where the rubber meets the road of any economy.

But the economy at the macro level IS a zero-sum game because the primary and secondary sectors are largely owned by the upper class of our society; they no longer need to labor, the interest earned on their capital can cover their consumption of goods. Actual laborers must yield some of their surplus in service to the independently wealthy who own most of everything in this world.

We could vaporize every stock, bond, and savings account and we would collectively not be bit less wealthy, since money and monetary instruments are not wealth, but claims on wealth.
posted by toroi at 4:43 PM on May 19, 2009 [2 favorites]


It's pretty obvious that a laundromat can turn its fixed assets over far faster than can a family, and (for a small enough household) you're probably wrong. By your logic, I should buy a car instead of renting one six times per year.

If you only do laundry six times a year, then yes, go the laundromat rather than buying a washer and dryer. Just bear in mind that most people do laundry more often than every two months.

Back when I used laundromats, it cost about $12 a month for me to do my once-a-week washes there (this was back in 2001, and of course prices would have gone up...). That's $144 a year to do a wash for one person. I just bought a new washer and dryer in late 2006, and paid $1300 for the set. That's roughly nine years of going to laundromats. Washers and dryers, however, generally last a family about 20 years, and are likely to last me longer if I continue to live alone, so over their life span I'll chop my laundry costs by at least half plus save myself the hassle of having to lug my laundry two blocks and have strange men leering at me while I fold my undies. Seems like good sense to me.
posted by orange swan at 4:46 PM on May 19, 2009


I might recommend you find one you like and make your fortune there where you won't have to be bothered with any social responsibilities, that is if you don't want to contribute anything to our society. Relying on people's good will isn't really enough to make it work, however, and examples abound.

Okay, way to take my points completely off base, lol. Our tax code is already sufficiently progressive, and will continue to be so under this administration. There's nothing wrong with being able to donate, waste, or invest your money as you wish, and that's what great about America.
posted by gushn at 4:50 PM on May 19, 2009


It's a classic misunderstanding. The economy is not a giant pie where if I take two slices, you go hungry. The "pie" can always be made larger by growing the economy, and yes, Virginia, there can be slices for everyone.

This is definitely true. Unfortunately, our conntinually growing economy has been largely based on increased energy from fossil fuel since the 19th century, and this is going to wreck many areas of our planet and destroy many resources that we rely on to keep our continually growing economy going.

But the other reality is that poverty is not absolute, but relative - that is, all the bad stuff we associate with poverty (social exclusion, etc) comes from disparity, not absolute lack of stuff. If you are talking about percentiles of wealth and income, these are zero-sum. If one class has 60% of the income in an economy, and everyone else has 40%, that economy can grow and everyone gets a little bit richer in terms of abosolute stuff, but the disparity doesn't change.
posted by jb at 4:51 PM on May 19, 2009 [1 favorite]


But why should measures of kindness be factored into taxation policy?

From our personal incomes we pay taxes, housing, food, transportation, personal goods, recreation, educational costs, etc.

But there is a basic element of economics that low-tax proponents either fail to understand or intentionally elide, and that's the fact that land is the dominant source -- and sink -- of everyone's wealth. Ever since the frontier was filled in, paying someone for access to land has become a central part of our economy, and given the *fixed* supply of land vs. the unbounded demand for it, this cost of access to land ratchets up in our collective competition for it. This effect is the "All-Devouring Rent" first described over 100 years ago.

Libertarians in la-la-land think a world free of government and its taxation, where everything is simply free trade and is between economic equals on a voluntary and mutually-beneficial basis, will bring a low-cost, low-overhead utopia, but their free-market ideology here fails to account for the All-Devouring Rent.

The more "kindness" we front-load into taxes the better a society that will result, provided of course these taxes are used for socially-beneficial expenses of the public commons.

A shorter version of the above would be that all taxes come out of rents and land values, not actual disposable income. We should seek to maximize taxes not minimize them, LOL.
posted by toroi at 5:01 PM on May 19, 2009 [2 favorites]


But still the meritocratic system works when it's allowed to work.

A meritocracy can still be highly unequal, and thus will still have poverty.

Michael Young's satirical Rise of the Meritocracy (which was the origin of the term "meritocracy") is still the best book I have ever read on the issue of social mobility, meritocracy and inequality.
posted by jb at 5:14 PM on May 19, 2009 [1 favorite]


If you want to be closer to the supermarket, fine, maybe you should move, but why should I be mandated to pay for your convenience?

It's no accident that if an apartment ad says "Near shopping" its rent will be higher. Land values keep people where they are. They are the invisible walls of our existence. We should strive for a society without these walls; for an example of one I recommend a week or three in Tokyo. You can walk among its hundreds of square miles and not find a slum anywhere (however, Tokyo exports its grinding poverty to the sticks to some extent).

Any micro-economy needs bona-fide wealth-creation to survive. The inner cities do not presently have this capacity to create wealth via primary-sector resource extraction or secondary-sector manufacturing, so most people survive on service-sector jobs ie. the wage slavery of providing labor for others, plus of course illicit trade and theft.

We *all* can't be a nation of upper-middle class people. Somebody needs to clean the toilets, rotate the shelves at the market, and do all the other crap jobs. The least we could do as a society is provide equal access to a commons and the basics of life that our collective productivity can afford.
posted by toroi at 5:17 PM on May 19, 2009 [1 favorite]


It isn't zero-sum. It's a river. With a dam on it. Get rid of the dam

Speaking of water metaphors, IMHO we need to liquidate the landowners, Ho Chi Minh style.
posted by toroi at 5:19 PM on May 19, 2009


"There's nothing wrong with being able to donate, waste, or invest your money as you wish, and that's what great about America."

I suspect the 38 million who officially live in poverty would not think wasting money was so great. But the richest 1% who own more than the poorer 90% would certainly agree with you.
posted by shetterly at 6:06 PM on May 19, 2009 [1 favorite]


Sudhir Alladi Venkatesh's Off the Books: The Underground Economy of the Urban Poor isn't perfect, but it opened my eyes to why things are the way they are in the ghetto.
posted by djb at 6:34 PM on May 19, 2009 [1 favorite]


Back when I used laundromats, it cost about $12 a month for me to do my once-a-week washes there (this was back in 2001, and of course prices would have gone up...). That's $144 a year to do a wash for one person. I just bought a new washer and dryer in late 2006, and paid $1300 for the set. That's roughly nine years of going to laundromats. Washers and dryers, however, generally last a family about 20 years, and are likely to last me longer if I continue to live alone, so over their life span I'll chop my laundry costs by at least half plus save myself the hassle of having to lug my laundry two blocks and have strange men leering at me while I fold my undies.

Factor in water, sewer (40 cents per load between them in some municipalities), electric, gas, and the time value of money, and adjust for the maintenance necessary to keep a washer/dryer alive for 20 years (you must read Consumer Reports religiously) and maybe you break even owning. If somehow, ex post, interest rates stay low enough and your washer and dryer are still working (without repairs) in 2026, send me a message and I'll eat crow.

Coin laundries are often good businesses but the variable costs alone can eat up almost half the margin in some places.

Your analysis was incomplete, but delmoi's logic ("washing your clothes in a laundromat would have cost more in the long run then owning a washer. If that wasn't the case, the laundromat would have gone out of business") was just wrong.
posted by Kwantsar at 7:12 PM on May 19, 2009


This wasn't much of an article, honestly.

Agreed. I came away from it thinking, "Huh, that was pretty thin." It left me wondering about its intended audience.
posted by limeonaire at 7:36 PM on May 19, 2009


I happen to think that a supermarket within walking distance is not a basic necessity, but you may disagree.

How can you live in New York City and believe this?
posted by oaf at 7:47 PM on May 19, 2009


How can you live in New York City and believe this?

Plenty of people do this in NYC. I actually take a bus to my usual supermarket because I find the nearest overpriced, and buy produce from places subway stops away (Chinatown).
posted by gushn at 8:03 PM on May 19, 2009


You know, it's entirely possible for both to be true:

The economy is NOT a zero-sum game
AND
Inequality is rising.

Someone upthread was talking about education. In the mid-20th century, very few Americans went to college, but it was entirely possible for a guy with a HS education get a job that would support a family, buy a house, buy a car every few years, and have a decent middle-class life.

Today, more than half of HS graduates go on to college. And today we see college graduates (...most of whom start their working life already deeply in debt...) who are forced to take jobs that they can't live on, let alone raise a family on. (And good luck to you if you didn't go to college.)

So yes, at some theoretical level "we're all better off": today, an ever-increasing proportion of adults are college educated, yay. And at the same time, more and more of us are being immiserated.

The economy grew through most of Bush's term. And most Americans saw their wages decline, their standards of living decline. Because all of the gains from this "increasing pie" went straight into the pockets of the predator class.
posted by AsYouKnow Bob at 8:19 PM on May 19, 2009 [5 favorites]


So yes, at some theoretical level "we're all better off": today, an ever-increasing proportion of adults are college educated, yay.

So, really really, if you had to choose between being a median earner in 1900 or being one today you'd choose the former? Because, if yes, then... wow.
posted by blenderfish at 8:32 PM on May 19, 2009


If this is true, then please point me to any mechanism that exists ... whereby actual new money can be created without devaluing what's already in circulation

How about if I give you two?

And most Americans saw their wages decline, their standards of living decline. Because all of the gains from this "increasing pie" went straight into the pockets of the predator class.

Don't miss the forest (decreasing real wages, which I don't dispute) for the trees (standard of living). Wages can go down at the same time standards of living go up, because prices fall while curves for productivity and technology go up. Or perhaps you haven't noticed that Wal-Mart hardly carries old-school tube TVs any more, and lots and lots of people living in poverty have cell phones.

Predator class. Hah. As if your average inner city kid is some paragon of equality that doesn't ever dream of having his own big car and big house. I thought the whole "noble savage" thing went out of fashion when Kipling died.
posted by Cool Papa Bell at 8:39 PM on May 19, 2009


Predator class

10 years ago my understanding of economics did not allow anything between Marxism and Free Market Capitalism. Then I experienced the dotcom real estate bubble firsthand (as a renter) and my bat sense started tingling that something wasn't right with our current economy, but I couldn't put my finger on it. . . why should my increased productivity be enriching people who've owned in the bay area for decades? What useful work did they do to earn the right to share in this wealth?

In late 2002 I discovered Georgism and that was my "ahah!" moment. Last year I found Gaffney's The Corruption of Economics and I think I fully understand the score now: capitalism per se isn't the problem, speculation isn't the problem, but the private capture of publically-created value is the core problem, or at least something that could be fixed if we had the political will and/or about 50 more collective IQ points to spread around.
posted by toroi at 8:52 PM on May 19, 2009


Or perhaps you haven't noticed that Wal-Mart hardly carries old-school tube TVs any more, and lots and lots of people living in poverty have cell phones.

And yet a UC education has gone from $1300 to $9000/yr, medicine and medical care has gotten much more expensive, and I don't think rents have fallen any.

The temporal wealth-comparison argument is interesting but is in the end a dodge. Technology may be on a monotonically increasing value-add curve, but damn little else is, and one's standard of living isn't centered on one's access to consumer electronics.
posted by toroi at 8:58 PM on May 19, 2009 [3 favorites]


toroi gets what I mean to say. At a high level of abstraction, there's interdependency among the different income groups (not on an individual basis, but as I said, at an abstract level). You can shove as much money, education, or whatever else you want into the system, but you just end up with the same relative income distribution patterns, or else one group gains at the expense of another. If one subset of the population's spending power increases, some other subset of the population has to see a related decline in their spending power, because it's all relative.

If everyone makes $50,000,000 a year, no one's rich, no one's middle class, no one's poor. We like to make gestures and pronouncements about poverty being a problem to solve, and how the poor could all lift themselves out of poverty if only they had the life skills, didn't smoke so much dope, yada yada yada, but at the end of the day, some people have to be poor, so that others can be middle class and others can be rich. That's not some inexplicable bug of the capitalist system, but a feature. By the standard dogma, it's what motivates people to work, to innovate and to grow the real wealth that keeps the system going.

Can't we at least stop pretending that's an accident, or necessarily the fault of the people who happen to be caught at the bottom at the moment? Then maybe it would be easier to focus on ways to make sure there are opportunities for everyone to rise and fall on their own merits, regardless of their family connections or personal backgrounds.
posted by saulgoodman at 9:01 PM on May 19, 2009 [2 favorites]


Wow, that's a sad frame you people made to look out of at the world.
posted by Cool Papa Bell at 9:03 PM on May 19, 2009


The book toroi links to is pretty breathless and conspirational in tone, but I think there really is something to taxing land aggressively to stop the "private capture of publicly-created value." Sure seems like the best way to get rich without providing anywhere from some to little to no actual value to society is through real estate. I'm curious what the (non-strawman) counter-arguments are.

One nice thing about Intellectual, vs. Real Property, and the ensuing economy, is that there is an infinite supply.
posted by blenderfish at 9:18 PM on May 19, 2009


The temporal wealth-comparison argument is interesting but is in the end a dodge. Technology may be on a monotonically increasing value-add curve, but damn little else is, and one's standard of living isn't centered on one's access to consumer electronics.

Really? Because upthread, people are worried about poor people becoming too fat from eating at McDonald's.
posted by blenderfish at 9:21 PM on May 19, 2009


Because upthread, people are worried about poor people becoming too fat from eating at McDonald's.

People dying from preventable heart disease because they can't afford healthy food or healthcare is an improvement over people dying from other preventable diseases because they can't afford basic nutrition or healthcare?
posted by dirigibleman at 9:30 PM on May 19, 2009


People dying from preventable heart disease because they can't afford healthy food or healthcare is an improvement over people dying from other preventable diseases because they can't afford basic nutrition or healthcare?

LOL. What do you suppose poor people ate too much of in 19th century England? Or 10th century England? Or at any time or any place in human history up until recently? Hint: it wasn't "Cake." But it WAS low in cholesterol!
posted by blenderfish at 9:49 PM on May 19, 2009


Also, I don't have statistics handy, but I bet Big-Mac induced heart attacks have killed fewer people than, lets say, Polio. (Really, any one of a number of the diseases we've wiped off the face of the planet, and immunize even the poorest of children against, would work here.)
posted by blenderfish at 10:02 PM on May 19, 2009


"Let them eat Big Macs," then is it?
posted by saulgoodman at 10:21 PM on May 19, 2009 [1 favorite]


Wow, that's a sad frame you people made to look out of at the world

To some extent, I agree with you. Anybody in this country with talent can easily rise to the top with hard work regardless of background; just look at Obama and his wife.

But the decked is stacked against the middle-liers of the lower class and is stacked for the middlers of the upper class -- just look at the previous President's resume for how it works in the latter case.

The basic fact of the system is that opportunity comes from personal preparation and pure chance; when one moves in wealthier circles one receives perparation as a birthright and also receives many more chances at work and wealth than the case of someone moving in the poorer circles; so there are twin feedback loops, one towards poverty for those below middle class and one towards wealth for those above middle class.

I believe we collectively have an obligation to mitigate if not eliminate the feedback loop towards poverty. I don't care whether this comes from private charity or government-mandated redistribution, it just needs to happen. Of course, I don't think the profit-seeking free market can actually beat government at this redistribution.
posted by toroi at 10:27 PM on May 19, 2009 [3 favorites]


"But still the meritocratic system works when it's allowed to work."

Of course, that depends on what society deems as meritable.

"Somebody needs to clean the toilets, rotate the shelves at the market, and do all the other crap job"
A subordinate of mine in the military was told all his life he was stupid. Dirt poor background. I came in one day and saw him doing his gozintas and cypherin' and such
and he's doing transverse shear calculations (long story why). Just was curious and did a little reading, taught himself how. This is a guy who never went to college. Trig came easy to him too. But no one ever really looked at his brain. So I had a word with him and over time convinced him to take advantage of the college programs afforded veterans. He's got a doctorate in aerospace engineering now. Guy's parents couldn't afford to send him to school with shoes. Now sure, he's an exception, but in an ideal meritocracy he would have been guided along a path to MIT and his talent wouldn't have lain fallow for years.

Nobody *needs* to do crap work. People need to work at the best of their ability.
Developmentally challenged guy rang and bagged my groceries the other day - best cashier I've ever seen. And, apparently, pretty happy with his work.

As it sits we force people into crap jobs - even if they're very 'good jobs' or well paying. People die by inches every day because they're incapable of fulfilling their responsibilities (and are just leeching) or they're completely bored and unchallenged.
And hell, who wants a 'job' anyway? Most people want careers. Some investment in what they're doing beyond just doing it. (Peter talking to the two Bobs in Office Space comes to mind)

"the private capture of publically-created value is the core problem, or at least something that could be fixed if we had the political will and/or about 50 more collective IQ points to spread around."
Bada bing! (Sorry, been watching the Sopranos)

"but I bet Big-Mac induced heart attacks have killed fewer people than, lets say, Polio."

Really? The leading cause of death in the United States which is developed from eating too much fat and salt - less of a threat than polio was? Hnh.
If we're talking 'all time' stats then sure. But who's going to give you a bag of malaria infested mosquitoes at the drive thru?
Doctors didn't even know tuberculosis was preventable in the 19th century. So it's not even a fair comparison.

We're talking preventable harm within the best of our ability. Something caused by negligence or some other sort of blind spot in the system.
Number one is systemic, arterial hypertension, heart disease - with fat and salt being big contributors (can't have a burger without fries). Also - a lack of vitamin D.
Easily preventable by healthy eating, exercise and being outside.

One wonders why the poor don't take advantage of all those open parks, rec areas and health food stores amidst the tobacco and liquor billboards and McDonald's on every corner with the indoor play areas.
It must be 'cos they're stupid.

"As if your average inner city kid is some paragon of equality that doesn't ever dream of having his own big car and big house. I thought the whole "noble savage" thing went out of fashion when Kipling died."

And why do they think a big car and big house the best thing to have? Hell, why do you?
Me, I have an education and a variety of talent. Most importantly, I know how to learn. You can take my car, my house, all my stuff and strip me to zero and I'll still walk out of the jungle fat and happy. Poor folks are human beings like me, like anyone else and subject to greed, sure.
Only difference is I know what is valuable and worth effort. They don't. They should.
People are exploiting the fact they don't to the detriment of the entire system.

Because either way, we're STILL paying taxes for it in terms of hospital visits and disability if they survive the heart attack(s).
I'd rather focus on prevention. Maybe give them access to healthy food, health care, etc. etc. It seems, and in my experience is, far more efficient. And humane. But I'm just that kind of asshole. I like stability. I'll take a pay cut to not have to worry about people hungrier than me trying to take my stuff. It's precisely because I know they're just like me.
My kid is hungry and you got extra, I'm taking it from you one way or the other. I'd rather share from the outset and bank on the probability that the guy, and/or his kid, are like me, and so want peace and quiet and self-fulfillment rather than violence, sublimated or otherwise.

I always hear this dog eat dog, survival of the fittest, it's a tough world competitive crap until I ask if they want to step outside and back it up. Suddenly it's a different kind of world.
But I don't see the difference. Violence is violence. Forcing someone to live in the street is no different than knocking them down in the street. It's only a different degree of subtlety.
Though I'd argue it's at least more honest, and perhaps ultimately kinder, to belt someone.
posted by Smedleyman at 12:15 AM on May 20, 2009 [4 favorites]


I'll add - food is just one facet of this, but it's at, or at least near, the core. Brecht was right - eat first, then politics.
posted by Smedleyman at 12:19 AM on May 20, 2009


Of course things could be better, and I definitely agree that there is more we can do to allow people to achieve their potential, but the only point I'm trying to bolster regarding Big Macs is that quality of life for everybody, from the richest to the poorest, has been on an upward trend the last couple hundred years, fueled by massive technological progress, and anybody seeking to dismantle the current system to turn it into one thats 'fair' should first understand this. A suprising number of people don't.
posted by blenderfish at 12:57 AM on May 20, 2009


orange swan: And you also have to consider how you're going to get things home without a car.

Easy :)
Damn I wish I had a pic from election day. Trailer load full of ballot boxes = awesome!

Cool Papa Bell: It's a classic misunderstanding. The economy is not a giant pie where if I take two slices, you go hungry. The "pie" can always be made larger by growing the economy, and yes, Virginia, there can be slices for everyone.

Ya, not really though.. Apart from the ecological reality of living on a finite planet, there is the economic theory based issue of positional goods. At best, you can say that it is only partially a zero sum game.
posted by Chuckles at 1:35 AM on May 20, 2009


I'm definitely a proponent of better education and fairer distribution of resources. But here's the thing: no individual poor person or family is going to be able to do anything to make that happen. Here's what you do: organize. Go to your local community council meetings. Go to your city council meetings. Ask why your poor neighborhood has no commercial services, lots of vacant parcels, and no designated project area with the RDA. Take pictures beforehand and show them around. Go to an event where the mayor will be and talk to him or her about it. Canvas your neighborhood to find support. Start a community garden and make economic development a part of your mission. You can remain an unincorporated association and still receive tax-deductible charitable donations, so use any initial money to become a 501(c)(3) so you will be eligible for myriad grants, matching grants, and other corporate community giving programs. Donate to the food bank, work with other, private food sectors, and find some way to incorporate entrepreneurial activities. Hold workshops on growing organic, permaculture, and fostering urban ecology, then see if you can get an EPA grant. Check your local university. Talk with their urban planning department if they have one and see if they want to get involved. Talk to the communications department, the engineering department, the law school, the medical school, any department with family, consumer studies, preventative medicine, health, nutrition, ethnic, or environment in the name. Go to the art department and see if you can get donated graphic design work. Talk with every church in the area. Go to the university radio station and record a PSA. Go to your local weekly and take out a free ad. Check with a local internet provider to see if they will donate services. Collaborate with AmeriCorps. Check into a Community Development Block Grant. List every organization that provides support as a donor. Track your progress with data, photos, and personal stories. At the next gang-related homicide in your neighborhood, talk to a local TV station. Not you on camera, get them to do an editorial on the broader problem. Write your local newspapers. Encourage them to do a story on the struggles of your neighborhood. Keep looking for more ways to get funding, volunteers, and exposure. Canvas again for more support. And repeat.

Those comfortably in power won't do anything until you force the issue. So force it.
posted by effwerd at 6:38 AM on May 20, 2009 [5 favorites]


2. Instead of consolidating our public/affordable housing in one area or town, we distributed it throughout an area

This has been tried in a few places. The record is pretty mixed, I think. You get the benefits of being more easily able to send your kids to functioning schools, certainly. But you also get a lot of problems -- you lose the net of relationships and community that you had in your old neighborhood, so who will you ask now to watch your kid when you go to the doctor? And a lot of the social services offices that you, as a poor person, rely on are concentrated in or near poor neighborhoods, so your new apartment in a rich neighborhood might be three bus rides away from the places you need to visit every week, magnifying issues of childcare.

(That's just at the personal level; the issues surrounding impacts on crime patterns and housing values can be a lot more touchy.)

There are some interesting spins on this, though; one of the major supermarket chains in New Zealand are New World supermarkets, which are basically everywhere in Wellington, where I live. It's interesting that they run a 'charge what the market can bear' policy which runs counter to that; the New Worlds in poorer areas of Wellington (Porirua, Newtown, etc) charge dramatically less for the same goods as one in more expensive areas (Chaffers, Willis Street, etc).

Usually it works the opposite way, because the rich have options (such as driving to a different supermarket), so stores in those areas feel intense competitive pressure. A store in a poor neighborhood, with a more captive set of consumers (what, they are going to take three buses to go grocery shopping?), may not need to push prices as low.

The most extreme version of differential pricing for the poor that I've seen is in markets (the kind with small stalls, rather than a synonym for "corner store) in poor countries. The poorest consumers buy rice, spices, salt, and other ingredients in tiny "single-serving" plastic bags -- just enough of that ingredient for one meal. The immediate cost is very low (a few pennies, maybe), but the per-pound (or per-kilo, if you rather) cost can be extraordinarily high.

But if you get paid irregularly for casual day labor, and if you live in a situation where food left in the house will be stolen by neighbors or eaten by your hungry children before you get home, that's the only possible way to shop. Doing so makes you a smart person, not a dunce, even if it means that you pay twenty times more for rice by weight than does someone in an expensive supermarket.

And that's the key. People going to check cashing services and corner stores are doing so because those are the best alternatives available to them, as far as they know. Changing this doesn't mean lecturing them on how financially stupid they are -- it means providing better options (eg community-based credit unions, tax incentives for grocery stores, etc) and changing the parameters that make those terrible options seem ok. For example, the corner store can be attractive, despite the prices and limited selection, if high crime rates mean that going to the grocery store is dangerous (if you walk) or expensive (if you take a cab). In that case, improving shopping options will require improving public safety, before you even get to the question of tax incentives.
posted by Forktine at 6:55 AM on May 20, 2009 [1 favorite]


So, really really, if you had to choose between being a median earner in 1900 or being one today you'd choose the former? Because, if yes, then... wow.
posted by blenderfish at 11:32 PM on May 19 [+] [!]


Inequality in 1900 was very high. That doesn't mean it's not higher now than it has been in the more recent past.

And yes, if I had to choose between being a median (male) earner in 1965, and now, I would choose 1965. (On economic, not race, gender or sexual orientation grounds, obviously.)
posted by jb at 6:58 AM on May 20, 2009


Don't miss the forest (decreasing real wages, which I don't dispute) for the trees (standard of living). Wages can go down at the same time standards of living go up, because prices fall while curves for productivity and technology go up. Or perhaps you haven't noticed that Wal-Mart hardly carries old-school tube TVs any more, and lots and lots of people living in poverty have cell phones.

But are manufactured goods - which really are cheaper and more common than ever before in the past - a good indication of quality of life or living standards?

Between 1500 and 1900, the middle and lower classes in Britain experienced a "consumer revolution" - they began to own many more things. The differences were as significant as what occurred over the 20th century. Food crises disapeered. But despite the industrial revolution and the fact that Britain was one of the richest places in the world, their housing conditions and everyday diet did not improve substantially. Though I believe that their height was somewhat higher, their overall health was still so bad c1900 that the government began freaking out that there were not enough healthy men to fight a war should it happen. How much had their standard of living improved?

Between c1000 and c1700, there had also been a great increase in manufactured goods and the prices on many things like plates and shirts fell. But heights in Britain decreased substantially. Was there a betterment in the standards of living?

The price of manufactured goods does affect standards of living. But even now in the 21st century the real prices that matter are the prices that mattered in 1900, 1500 or 1000. Housing and food as related to wages. Food is WAY down from its historic highs for the poor in the developed world, though it remains a very significant cost for those in the developing world. But housing is not, and we have added transportation to get to our places of work as a required cost of living.

Now, I would never dispute that standards of living have gone up for the average person over the last century. There are some North Americans who live in conditions similar to or worse than that of the British working poor c1900, but they are a small minority of even the the poor (not that that makes it forgiveable, but just to put it in perspective). But there are serious questions about what the increase in inequality and the flatlining (or decrease) of real wages next to the real costs of living (food, housing, transportation) since 1970 have meant for overall quality of life, or economic stability (since demand and consumption by the lower and middle classes keeps our real economy going)

Elizabeth Warren's work on middle class household expenditure is very relevant here (hour-long lecture here). She wasn't even looking at the poor, but at two-parent families with middle-class income (was it median or average? don't remember), and she found that even as their expenditure on optional consumer goods - clothes, electronics, etc - and on food went down, their expenditure on housing, mortgages, health care and childcare went up. None of these are optional costs, and none are flexible. And these families were much more economically insecure than families of a similar income in c1970. (Having both parents working was also a factor).

-----------------------

To sum up: historians have been debating about standards of living for much longer than I've been alive (and I'm not a spring chicken anymore). Generally, it seems that the price of consumer goods is part of it, but it seems that there are many other significant factors - the cost of food, housing being big ones, but also issues like stability and stress and inequality (because they may have good living conditions, but in comparison they are worse) which are much less easy to quantify.

Adam Smith once define poverty as lacking that which was required by your society to be decent. Once upon a time, respectable people would wear clothes for several days running; but would it be respectable in North America today? Respectable people in some places lived with the whole family in one room; now that could mean your children are taken away. How does this affect your stress, your security, your self-esteem, how your children relate to other children in their society?
posted by jb at 7:26 AM on May 20, 2009 [2 favorites]


LOL. What do you suppose poor people ate too much of in 19th century England? Or 10th century England? Or at any time or any place in human history up until recently? Hint: it wasn't "Cake." But it WAS low in cholesterol!
posted by blenderfish at 12:49 AM on May 20 [+] [!]


Average heights in 10th century England were the highest that that would be until the modern period, that is, until unionism and left-wing/centrist gov't policy reduced inequality. Height is a good indicator of overall health, including nutritional. (Also affected by stress? I don't know - dammit, Jim, I'm a socio-economic historian, not an epidemiologist.)

Also, English people of the 10th or 19th century ate a lot of dairy products, so they would eat a lot of cholesterol. But I didn't know until recently that a lot of margerine, which was very popular among the English working classes in the early 20th century, was made from whale blubber, and so it would have had cholesterol as well.
posted by jb at 7:36 AM on May 20, 2009


quality of life for everybody, from the richest to the poorest, has been on an upward trend the last couple hundred years, fueled by massive technological progress,

For the last hundred years, yes, but that has been largely fueled by social/political changes (again unionism, left-wing political policy regarding wages, etc). There is still a big debate on the effects of the industrial revolution on the quality of life for the lower classes before the 20th century; from the last research I heard, people in poor houses in c1700 were eating eating better than working class housewives in c1900 London.

Also, you have to ask yourself: who are the real lower classes in a global economy? Britain's economy has been tied to that of its colonial possessions and not-so-equal trade partners for some 400 years - especially since the 19th century. Clothing got cheaper in the 18th century, but that was because the poor started wearing cotton imported from slave plantations; food was cheaper in the late 19th century, but some of that wheat was imported from India. Really, the lowest classes in the whole system were the overseas producers.
posted by jb at 7:48 AM on May 20, 2009 [1 favorite]


anybody seeking to dismantle the current system to turn it into one thats 'fair' should first understand this. A suprising number of people don't.

I don't think the increase in whatever you're defining as "quality of life" is necessarily linked to income inequality. We distribute wealth already, we just distribute it in favor of capital returning to capital to a disproportionate degree. Changes which produced growth in real income and security for the middle and lower classes do not even need to begin to threaten growth in entrepreneurship. We could unlock a great deal of wealth that right now is just sitting, and put it into motion in astoundingly productive and socially beneficial ways, without even making a tiny dent in people's feeling of quality of life or opportunity at even the highest bracket. Consider the L curve, really consider this situation we have managed for ourselves, and consider how much could come off the very top of that without impacting anyone's quality of life or potential to develop their own opportunities and realize a gain. Consider the combined economic power of many more middle- and lower-income Americans being in a position to start new businesses, further their education, invest in their communities, and create more good jobs.

Under many views, this is what government is for. The end goal isn't growth or the creation of an impossibly aristocratic class that rests on the continued generation of wealth via interest accrual on investment, but the well-being of the citizenry. Having a more realistic, fairer economic system than we do now would actually increase growth, not curtail it.

Also, jb is right on when we begin to question what "quality of life" means. Cheap consumer goods are a palliative, but don't necessarily produce true quality of life. I am certainly glad to see improvements in medical knowledge and treatment, but of what good is that if it is not accessible to an increasing majority of the population? Many of the gains that have improved my personal quality of life as opposed to what I'd have experienced in 1900 are the result of social action toward increased fairness under the law - I can vote, own property, compete for jobs, take advantage of educational opportunities - most of which I couldn't do in 1900. That has impacted my personal quality of life probably more than any other factor. Finally, as opposed to those cheap consumer goods, I posit that true quality of life consists in: the security of income opportunity, knowing that one can bring in a living wage for work performed; the security of knowing that if you become unable to work, you will not starve or become homeless; health care which includes preventative maintenance for good medical, dental, and mental health; the opportunity to receive a good-quality, free public education; and the ability to choose for oneself among available professions, or develop your own. Anything else is luxury, not quality of life. Personally, my belief is that accepting an array of cheap consumer goods instead of real value in the form of enhanced public health and opportunity is a tragically missed opportunity - as a value offered to the US population, it really works best for those who own the companies and transport systems that make the cheap consumer goods - not for the general public.
posted by Miko at 8:15 AM on May 20, 2009 [4 favorites]


Height is a good indicator of overall health, including nutritional.

But overall health is not an indicator of "poverty." There was also a huge growth in urbanism in the time periods cited. People moved from the shire to the big city where they were exposed to far more germs. Public health and sanitation reduced the spread of disease in human concentrations begining in the late 19th century.
posted by Pollomacho at 8:20 AM on May 20, 2009


But overall health is not an indicator of "poverty." There was also a huge growth in urbanism in the time periods cited. People moved from the shire to the big city where they were exposed to far more germs. Public health and sanitation reduced the spread of disease in human concentrations begining in the late 19th century.
posted by Pollomacho at 11:20 AM on May 20 [+] [!]


That's a good point that urbanism itself has serious health effects - but I also know from research that the urban working poor in London c1900 continued to have a very bad diet (lots of bread, margerine, tea - and a fair bit of hunger for women if things got tough) in addition to the other health problems of pre-modern cities. I just wanted to raise the point that looking at consumer goods is only one part of standards of living, and that even as consumer goods can become much more available, this may not change what we tend to think of as the most essential aspects of a good standard of living: quality of food, housing, nature of work.

I think that the decrease in average heights from c1000 to c1600 was related to increased inequality (as well as other things that affect health, like food choices - meat is seen as a rich thing, but too much is not healthy). It was not linear (the Black Death had a big effect, obviously), but there was a very serious problem with landlessness and poverty c1600, even as the middling sorts and upper classes were improving their own standards of living (houses getting bigger, etc).

But my overall point was that when looking at standards of living, we don't want to simply look at the price of consumer goods and assume that more objects = better standard of living. I don't know think that we have a very good definition of "standard of living", but I do know that eating poptarts for breakfast in front of flat screen tv in a cockroach infested studio does not equate to a higher standard of living than eating porridge and apples in your clean, sunlit farmhouse kitchen while your dad tunes the vacuum tube radio, even if the former kid has more consumer goods than the latter. (Extreme and stereotyped examples, of course.) Obviously, there are issues about quality as well as quantity of food, size and condition of housing, and then all sorts of things we tend not to think about like access to greenspaces or social spaces, pleasantness of the environment around housing (field next door, or parking lot?), conditions of work, stability of life, satisfaction with life (which is, of course, very personal, but also affected by social expectations), relationships with others in your society (whether neighbours or authorities).
posted by jb at 9:09 AM on May 20, 2009 [1 favorite]


That's not to say that having more consumer goods does not contribute to a higher standard of living. I'm really happy with my fridge and freezer, my clean and simple stove, my microwave and my electric kettle - all of which make the preparation of tasty and healthy food much easier. But I'm just saying that these couldn't make up for a lack of affordable tasty and healthy food in a grocery store (collard greens should NOT be yellow), or the ongoing stress of paying 50% of one's income for inadequate housing.
posted by jb at 9:13 AM on May 20, 2009


jb. Miko. C'mon.

It's no accident world populations exploded over the last century. Living IS easier. It's just that moving forward we are valuing the wrong things. Net happiness (have no idea how to measure that - it's a guess) is probably about the same as it was 100 years ago. Which was NOT all that good.

But in terms of Standards? Poverty pre-1950 war a horrible horrible thing even in the west. There is simply no disputing that "standards" of living are higher over all now. I don't care how you want to measure it. And that's no just measuring by consumer goods. People are safer, live longer—healthier (minus projections due to American obesity), than ever before.

The only value I would say was better was that there was a significant value placed on time. Since life WAS shorter. People in the middle classes who had clawed a little wealth out for themselves tended to own the own time more than middle class people do now. But the lower classes were virtual slaves until the labor movements of the twenties and thirties. And well. We had a big war that took care of those noisy commies didn't we.

In terms of cities? In fact comparing cities now to cities of only forty years ago, cities now are much cleaner and much more safe than they have ever been. Cities prior to 1900 were horrible horrible places unless you were very rich.

And don't be tempted to over idealize the "farm house" bullshit. My family are farmers and ranchers and have been for four hundred years. That shit was a brutal way to make a living. My mother had to eat newspaper soup (no shit!) during the depression. My father lost three siblings to simple treatable infectious diseases. My wife's father lost six siblings in childhood to accidents and diseases on a farm.

You guys are so side tracked.

The issue now is disparity. The average American lives like a Maharja compared to thier ancestors. That means the upper six percent live like fucking gods.

Even though more wealth has been generated it is once again getting re-concentrated in fewer and fewer hands. Meaning that real power is also concentrated in fewer in fewer hands. Which means when the shit hits the fan due to population and environmental pressures all this Standards of Living shit will reverse itself HARD. Which is what happens now when there is economic turmoil or war in all but the wealthiest countries. And the bigger the disparity, the more vulnerable the society to collapse.

And this can happen because the power classes have learned to keep peoples bellies full and minds empty. And they keep the lower classes reproducing until the no longer, due to over supply of labor, have any value in the present system.
posted by tkchrist at 10:07 AM on May 20, 2009


That's a good point that urbanism itself has serious health effects - but I also know from research that the urban working poor in London c1900 continued to have a very bad diet (lots of bread, margerine, tea - and a fair bit of hunger for women if things got tough)

Hell, don't worry about c1900 -- my grandmother, who definitely grew up as part of the 'working poor' in the north of England still has a diet that regularly consists of bread, jam, and tea -- regardless of how much money her children offer to send her.

Poor diet -- as we've heard again and again in other recent threads -- is not simply a factor of money, but also of socioeconomic 'class' (which can be remarkably sticky, regardless of money), intelligence/education, and mobility.
posted by modernnomad at 10:33 AM on May 20, 2009


I know it's a little unfair to juxtapose these essentially unrelated comments from different exchanges, but something about seeing them like this side-by-side, with the right emphasis, just seems to work a little bit of comic magic from where I sit:

On the decentralized nature of market economies as efficient mechanisms for resource allocation:
amuseDetachment: "Those who are better at managing the allocation of resources gets more responsibility for allocation. It's massively decentralized decision-making, which is most definitely not zero-sum."
On how new money supply* enters the economy so that the economy isn't effectively zero-sum:
saulgoodman: "Okay, so how is money supply set?"
....
amuseDetachment: "By the central banks."
_________
*And FWIW, I'm really not all that interested in how "wealth" is generated because all the wealth in the world can't buy you a cup of coffee, while $1.50 can.

And odds are, if you're employed, and your employers aren't idiots, they'll lay claim to most of any "real wealth" you generate and compensate you at a rate that's significantly less than par for the economic value of what you produce. If an employer pays his employees on par, where's room for profit? If I work for ABC Widget Company, they have to pay me substantially less than the fair market price for each widget I produce or they'll go broke.

So again, it comes down to basic arithmetic that employers have to pay their workers less than the real economic value of their productive output. Which is why, in part, that I'm vigorously in favor of more small-scale entrepreneurship and/or more of the workforce working as independent contractors (with public policies to foster such a workforce transformation and to provide additional social safety nets).

posted by saulgoodman at 11:40 AM on May 20, 2009


What most annoys me about the article is the choice of illustrations imply poverty is only a problem for black people. But if you check Income, Earnings, and Poverty, Data From the 2007 American Community Survey (pdf), there are slightly more Hispanics and twice as many whites living in poverty:

Black alone: 8,807,000
Hispanic (any race): 9,219,000
White alone, not Hispanic: 17,404,000

It's a human problem in the US, and it needs to be solved for everyone.
posted by shetterly at 12:18 PM on May 20, 2009


P.S. I should've said "officially living in poverty." From How We Measure Poverty:
...the current system of measurement is out-dated and seriously underestimates the count of the number of poor people in this country. If the government were to acknowledge the true extent of poverty, it would need to dedicate a greater share of its resources to pay the costs of programs to help the poor. It is unfortunately cheaper to use an outdated system of measurement so that fewer people will be in poverty by government standards.
posted by shetterly at 12:20 PM on May 20, 2009


"quality of life for everybody, from the richest to the poorest, has been on an upward trend the last couple hundred years, fueled by massive technological progress, and anybody seeking to dismantle the current system to turn it into one thats 'fair' should first understand this."

Fair enough. If your point is the technology, that's a fairly solid point. The disparity tack has been taken above and other details have been addressed.
I will say, I'm not a back to nature type hippie, but there is something to be said for the freedom of nature in that no one is hassling you or demanding your time or attention.
Quality of life is how you define it. At some points in our history we had plenty of food and loads of leisure time. Is it worth a cell phone to lose an hour of peace or play a day?
I dunno. I usually chuck mine when I take the kids to the playground. I plan time to go off in the back country. Some folks might really dig it though.
That subjective bit aside - and ceding of course the medical advances and crop harvesting, etc. etc. (although the jury is still out on that - petroleum - great? or climate changer?) -
Were the technological gains dependent on the nature of the system?
Tough call. The Soviets did pretty well in the space race for a while. So - I really don't know. But it is a contestable point.
I'd argue as the system of cooperation gets more advanced and sophisticated human energies and thought become more powerful - so it's just a matter of proper engineering.
But I stole that from Bucky Fuller.
I will say I've seen what happens when egos, greed, etc. are absent from human systems (for brief periods). And the amount of progress possible is incredible.
Something had to put us at the top of the food chain, it sure isn't our teeth.
posted by Smedleyman at 12:24 PM on May 20, 2009


You left off an important number from that data:

Black alone: 8,807,000 - Percentage 24.7%
Hispanic (any race): 9,219,000 - Percentage - 20.7%
White alone, not Hispanic: 17,404,000 - Pecentage 9%

So one in 4 black people live below the poverty line, one in five hispanics, and less than one in ten whites. While I agree that it is a human problem, it's also a larger problem if you aren't white.
posted by Pollomacho at 12:30 PM on May 20, 2009


While I agree that it is a human problem, it's also a larger problem if you aren't white.

That's an odd statement. Who's "you"? If "you" means "a random poor person in the US," then "you" are more likely to be white than any other race. If "you" means "a random black person in the US," then "you" probably aren't poor.
posted by Jaltcoh at 12:52 PM on May 20, 2009


Of course, that's a byproduct of the fact that the US is predominantly white, and it doesn't mean there isn't a problematic disparity -- of course there is. But "if you aren't white" is a problematic way to frame it.
posted by Jaltcoh at 12:53 PM on May 20, 2009


But "if you aren't white" is a problematic way to frame it.

You're right, it was awkward. But the proportions are still much greater for non-whites and that is a problem.
posted by Pollomacho at 1:09 PM on May 20, 2009


Pollomacho, the percentages tell the historical reasons for poverty in the US--blacks were given nothing when slavery ended and the native people were stripped of land and wealth--but the solutions stay the same: good work, housing, food, health care, and education for all.
posted by shetterly at 1:11 PM on May 20, 2009


"the proportions are still much greater for non-whites and that is a problem."

That's only a problem if you want poverty to be proportional. I want it ended.
posted by shetterly at 1:12 PM on May 20, 2009


P.S. That's a generic "you", Pollomarcho. Apologies if it seemed personal. The US focuses on diversity instead of equality because diversity is less threatening to the rich than equality.
posted by shetterly at 1:15 PM on May 20, 2009


To some extent, I agree with you. Anybody in this country with talent can easily rise to the top with hard work regardless of background; just look at Obama and his wife.

You're saying it wrong.

A person at the top could very possibly have risen there, given talent and hard work, from any background.

It is not true that anybody in this country with talent, regardless of background, can rise to the top with hard work. Even stripping out the 'easy' I won't give you that one. There are a lot of people in circumstances that simply cannot, with any amount of effort, rise to the top.
posted by phearlez at 1:41 PM on May 20, 2009 [1 favorite]


Sure seems like the best way to get rich without providing anywhere from some to little to no actual value to society is through real estate. I'm curious what the (non-strawman) counter-arguments are.

1) Rent is essentially a premium paid for not owning. In our society, with the amount of investment that goes into our dwellings, the only two realistic choices are renting or owning, and owning imposes a massive opportunity cost. The premium for rent is essentially the cost of not being required to own.

2) Assets have upkeep. The renter also pays for the convenience of not being responsible for it. The value of this goes up as more upkeep is required.

3) The renter also pays a premium above these costs because the fixed asset is owned by someone else, which imposes an extra, steeper opportunity cost than simply the cost of owning your own house. The premium for not being required to own is borne by someone else, who above and beyond having their money tied up in a fixed asset, has their money tied up in a fixed asset that they derive no direct benefit from.

In a fair society, rent just equals those 3 added together. Thanks to arbitrage, leverage, and a mismatch in utility (renter needs/wants to not own and be flexible, owner does not) and a bunch of other fun stuff, landlords can and do charge exorbitant prices at times for the service of keeping you free from the commitment of owning a house.

It's not in itself a bad thing, but it's when that differing utility is allowed to run amok that we get a predator class, rather than a class that just provides housing for people who don't want to own.
posted by saysthis at 2:15 PM on May 20, 2009


"Anybody in this country with talent can easily rise to the top with hard work regardless of background; just look at Obama and his wife."

Okay, let's look at them. Obama was raised by comfortably middle-class grandparents and sent to an exclusive private school. His wife's achievements are actually more impressive, I think; her parents were working class, and it appears she went to Princeton and Harvard on scholarships. Neither came from a background that could be called poor.
posted by shetterly at 2:52 PM on May 20, 2009


The guy gets a house that's worth significantly less than he paid for it (both due to depreciation of the home and due to the interest paid).

That's not how real estate works.
posted by mr_roboto at 4:01 PM on May 19


Well, at least not until recently that is.
posted by HyperBlue at 3:08 PM on May 20, 2009


The retiree has no time to mail his bill payment but does have time to make a trip to pay it?

It sounded like the reason he doesn't have time is because he doesn't have the money seven days in advance or however long it takes to be mailed and processed. I rarely have time to mail payments for that exact reason. I don't have the money until right before it's due, or sometimes the same day. So I need a way to have the payment processed quickly. And making the trip to pay it is easy. Most check cashing places are also bill payment places. And they are everywhere.

The guy who lost his driver's licence can't access his chequing account?

Many banks require two forms of I.D. If you don't have them, then the teller can't help you. That has happened to me. And like me, he may not have any branch ATMs nearby. Non-branch ATMs eat up your money with fees.

A lot of these transactional fees that nickel-and-dime you to death can be avoided by having a checking (or even savings) account with a bank, and the barrier to entry on a checking account is almost nonexistent.

If you've ever had and lost a checking account then it can be quite difficult to get another one. If you don't get enough to pay your bills, overdraft fees can put you hundreds in the hole every month (I'm a hundred in the hole right now). These fees eat up my social security check every month. I'd get more of my check if I didn't have a bank account (and now I'm wondering why I do!!). My bank gives you 30 days to carry a negative balance, and then the account is closed. If you owe a bank money, the other banks won't give you an account. Even if you pay off what you owe, other banks will be very reluctant.

If you have to cross town every time you want to use your bank, it's probably not worth it.

Yep, my bank doesn't have any branches or ATMs within walking distance of my home. Most of the time when I get cash, I just pay the fees to use an ATM near me.
posted by Danila at 4:19 PM on May 20, 2009 [2 favorites]


But in terms of Standards? Poverty pre-1950 war a horrible horrible thing even in the west. There is simply no disputing that "standards" of living are higher over all now. I don't care how you want to measure it. And that's no just measuring by consumer goods. People are safer, live longer—healthier (minus projections due to American obesity), than ever before.

I think you may be barking up the wrong tree - or perhaps skimmed my comments. I explicitly said, yes, there have been vast increases in standards of living between 1900 and now (c2000). But I was using 1700 and 1900 to illustrate how one could have more things without much increase in the standard of living. So we have more stuff since 1970, but that doesn't mean that standards of living have gone up much since 1970. I just used the older example because I am a historian, and I know more about 1900 than I do about 1970.

So yeah, no claim that 1900 is the same as now. Just that it wasn't that much better than 1700.
posted by jb at 5:49 PM on May 20, 2009 [1 favorite]


Yeah - and our urbanisation conversation was a sidetrack. Again, we were talking about historic quality of life, not contemporary at all - just talking about c1000 to c1700, and c1900.

I should point out that increase in population is no indicator of quality of life - after all, grow more grain, have more people - you might be just as hungry. Ireland's top population was immediately before the potato famine.

But this was a bit of a detour through a discussion of historic examples of poverty, and not intended to be any comparison of contemporary poverty and historic - though I would contend that your middling sort c1900 farming family did have a substantially better quality of life than contemporary very poor, dangerousness and all. I've lived with in a 19th century farmhouse with c1900 tech - we hauled our water and cut wood for the stove - still better than 4 kids and a mom in one basement apartment. But that's comparing two different classes, not poor in both times.
posted by jb at 5:58 PM on May 20, 2009


People are safer, live longer—healthier (minus projections due to American obesity), than ever before.

People, perhaps. But poor people don't enjoy these gains equally. Their lifespans are shorter and their conditions are not as safe.

Long lifespan is another one of these things that may not be the best measure of quality. So you live longer? Great - but how great is it if that extra 20 years is spent in section 8 housing eating pastina to make the food stamps stretch until the end of the month, or in the cheapest possible nursing home with high turnover and a neglect problem? And healthier? The poor may be healthier than the poor of 1900, but they are disproportionately likely to suffer from poor health.

And it still doesn't mean much. We can look back to 1900 and make a lot of statements, but none of those statements really challenge the basic premise in question: that somehow, the gains made in population support are due to increased economic growth, and that increased income equality would equal a reduction in economic growth. It is possible to produce growth while increasing income equality, if growth is what is worrying you. The idea that the two are antithetical is well worth questioning. We don't have to choose between fairness and growth.
posted by Miko at 8:10 PM on May 20, 2009


Obama was raised by comfortably middle-class grandparents and sent to an exclusive private school.

Just to defend his working middle class cred, I think I heard that he went to that exclusive school on scholarship.

But yeah, while his mother didn't have much money, she certainly had education (grad student kids do well in school, go figure), and he did have middle class grandparents. His wife's family was more classically solid working class - not poor, really (she's never claimed to have been), but definitely average or below average inome (and average is lower than a lot of people realise, though still slightly higher than the median due to the rightskew of the distribution).

I think we have to realise that while it is possible for anyone to get ahead, it's just way more likely that those who move into positions of wealth and power in our society did not come from the bottom rungs of society.

But I don't know what the social mobility in the US is like (only that it is lower than most Western European countries) - really, most of us care about generational social mobility: how does someone's class compare to how they were raised, what their parents were. But I often I only see reported income mobility over 10 years - well, then all sorts of people experience "social mobility", because their income will increase between ages 15 and 25!
posted by jb at 8:25 PM on May 20, 2009


Obama did get a scholarship. His grandmother was working in a bank, eventually rising to VP, and his grandfather had a furniture store, I think. They were not affluent, but were not poor. In other words - middle class.

I think we have to realise that while it is possible for anyone to get ahead, it's just way more likely that those who move into positions of wealth and power in our society did not come from the bottom rungs of society.

Absolutely. The outliers remain exceptions, which is fine until they are pointed to as evidence that those who really want it can get it. That can be just tokenism. Individual successes against expectations and barriers to access are very gratifying individually and hugely important historically, but when compared with broader systemic patterns of exclusion, they are not evidence of sufficient fairness in an economic system.
posted by Miko at 9:08 AM on May 21, 2009


I'm jumping into this thread very late, but I wanted to share this series of articles the Buffalo News did about a year ago on a similar topic. It's a lot more detailed than the washington post article (mostly since it's actually half a dozen related articles published over three days), and coming from Buffalo writers, the level of poverty they have easy access to is much more acute.
posted by Kellydamnit at 2:12 PM on May 21, 2009


Kellydamnit: Your link doesn't work (I get the msg: Sorry, there are currently no stories in this section.)
posted by ShadowCrash at 2:14 PM on May 21, 2009


Bizarre... I just got the same thing, and they were there not even half an hour ago. And the same message when I went to the listing of all their special reports. The title's there, but no articles in the section.
Google still has it, though. index
1; 2; 3; 5

(google doesn't have the fourth article cached)
posted by Kellydamnit at 2:37 PM on May 21, 2009


Thank you for those links Kelly. Also thanks to desjardins for making this fpp. A few people said they didn't get the point of the articles and didn't see anything new or profound. While I do think the articles Kelly linked have even more to offer, I have to say that it is clear that plenty of people right here actually don't already know or understand how expensive it is to be poor. Including poor folks like me. I can honestly say that until I read these articles, I thought that it was all in my mind. I thought that it was only the people in my family who constantly find themselves in the hole every month due to exorbitant fees.

I knew there was an unfairness to it all, but I think being on the internet has made even me less aware of my own situation. I've been frequenting sites and blogs like metafilter which are predominantly white, educated, and middle-class, or at worst grad student poor which is a whole other kind of poor, it's temporal poverty (I think I've only really known one person in real life who even went to grad school). I can come to places like these and escape in the intellectuality of it all. I can read about poverty and class issues and it is all quite academic. It's a nice bubble to escape to, but it doesn't capture the little details of the chronically poor life that really get to you.

Not only is college expensive, but a lot of what is said about college bears no relevance to the lives of many poor people. Having people in authority lecturing at you all day? Grad school and being in competitions over the papers you write? That's just a whole other world. I am astounded at all of the people with Phds or working toward Phds around here. I can honestly say that mental health professionals are the only people I have ever known who had Phds, and most of them didn't. I have to wonder what kind of world it is where that is common. Sounds like an interesting one, but it isn't my world and I wouldn't even know about it if not for the internet. And now with the economy so bad all I hear is how a bachelor's degree is worthless and even a graduate degree might find you working in McDonald's. It all makes college seem even more remote.

I went off on that tangent about grad school because that's just one of the ways in which the world lived by many metafilterians is not my world at all. I don't hear about things like grad school in my offline life. The same goes for trustworthy banks, Whole Foods (I don't think I have ever seen one), or places that don't have corner stores everywhere. Most of my food shopping is done at the corner store, I won't lie. I know it's more expensive, but many times I just can't afford a bus pass and even when I can, the time and energy-drain is a lot just to go to Shoprite. That's two buses, and then you have to make the trip count so you have to buy a lot, and that's a lot of bags.

I read these articles and they are so true to my experience. They make me feel both good and bad. Good because at least I'm not the only one. Bad because it seems pretty hopeless.

And one more thing. I'm not sure how many poor people really hate the super-rich as much as a lot of you seem to (which may be part of the "the matter with Kansas" problem). I think there's more tension with the middle-class, to be honest with you. When you talk about the exploitative people for whom we work and all that, many of our bosses are middle class, they're not super-rich. The people most likely to be giving us dirty looks and lectures on our weight or our purchasing choices are middle-class people, not the super-rich who we aren't around all that often. The privileged masses who dominate on the internet aren't super-rich either. The NIMBYs who are constantly voting against housing and the people who want to dismantle programs like section 8 aren't super-rich. The middle-class are the people constantly complaining about their taxes and how they resent the money going to "people who don't pay taxes" (and that is a LIE, everyone pays taxes, even me, I pay all manner of taxes on my utilities and sales taxes and they hurt me even more than they hurt you, yes, that $11 on my phone bill is something I don't have the luxury of ignoring).

Maybe the super-rich are playing us off against each other in their secret board meetings or whatever but it burns me to see some middle-class people once again dismissing us and our issues and talking about American Dream success stories like Barack Obama (whom they love in part because he is a LOT more like them than I am) as if that's how it could be if we would have some gumption (and be brilliant so we can have scholarships and be middle-class and travel the world which makes for a good college entry essay and have grandparents and parents with connections all over the world).
posted by Danila at 10:41 PM on May 21, 2009 [6 favorites]


Danila, some of the people currently in graduate school have also lived in your world. I grew up in a neighbourhood where a lot of people hadn't finished high school, let alone college, and a lot were on welfare for years, if not decades, including my family. For me, going to graduate school was a step up in living conditions.

That said, reading the articles from Buffalo, I realise that I was really lucky that my mother - who was a mother at 17, and never finished high school - knew how to make baking powder biscuits when she couldn't afford bread. Or that, not knowing how to drive, she invested in a $20 granny cart - it's a lot easier getting the groceries home by bus with a cart. Reading these articles from Buffalo, I keep thinking of how - with the same educational and financial resources as the women in the article - she didn't let us get into the traps of losing a bank account, or needing a pay day loan. Or fall into the vicious cycle of two-week-feast, two-week famine that some of our neighbours experienced - where they were so hungry by the time their monthly checks came that they would buy all sorts of treats and expenisve things for two weeks, but then run out again by the end of the month and the kids would eat soup made from ketchup. When I was a kid, I didn't understand why we couldn't have chips or candy like the other kids in the building, or why all our popsicles were homemade and not like the 50 cent bought ones the other kids had, or why I had to carry a lunch box and they got disposable paper bags, and of course I resented all these little things - but then again, I never ate ketchup soup.

Poverty is systemic - and I would never argue that there aren't further disadvantages set up, like cities with no decent public transit, and the fleeing of stores from the inner core. But how we deal with poverty - this is personal, and we can all improve our skills - and recognise the choices we make. Not to recognise these choices - as restricted as they are - is to deny agency to the poor; we owe it to ourselves and our communities to help each other work out better solutions to the challenges of poverty.
posted by jb at 12:20 AM on May 22, 2009 [1 favorite]


I think my personal way of dealing with poverty from now on is going to be making myself as visible as possible. I am not going to hide who I am and my experience. I am a part of this place, this community, this nation of people. I am here too. I think focusing on "escape from poverty" has sold a lot of people short. My mother didn't count on having a disabled child who would never be able to "do for herself". She didn't count on going insane herself. That sure threw a wrench in her escape plan, I'm sure.

I will personally not look for an escape anymore. If we must accept that the poor will always be with us, and if there is a group at the top there must be a group at the bottom, then perhaps by being visible and doing as well as I can do even if I never "better myself" and even if I never "break the cycle" maybe one day I can be human enough that I am awarded the dignity of humanity.
posted by Danila at 2:33 AM on May 22, 2009 [1 favorite]


Maybe the super-rich are playing us off against each other

To some extent I believe this is quite true. There is an investor class which benefits by keeping everyone else in place. Politically, it has been incredibly advantageous to this class to convince the middle class and the very poor that their interests are different. However, I do appreciate your point that there is an order of magnitude difference between middle-class resources and working-class ones.

I also want to agree with jb that evidence here of education doesn't mean that no one has ever experienced poverty. I can't say I ever experienced extreme need, but I grew up in a household with a decidedly working-class income level and was the first college graduate in my family, attending on a full scholarship I was quite lucky to get (otherwise it would most likely have been a very long slog through community college, combining fulltime work with study, and one class at a time in the state college - I wonder if I'd have managed my BA at all). We never went without food but were always economically anxious and there was often a general feeling of insecurity. My parents worked very hard, at two jobs for much of the time. And yet, in the working-class community in which I grew up, I was side by side with people of great talent and intellect. I never questioned the idea that talent and intellect are fairly evenly distributed throughout the income tiers - and my experience working with and teaching the products of moneyed environments and private schools indicates that there are as many dumpkofs and hapless characters among the elite as there are among the poor, and as many bright people as well. The differences are generally those attributable to either polish and acculturation, or the far greater self-building resources available to people at higher income levels.

I will personally not look for an escape anymore. If we must accept that the poor will always be with us, and if there is a group at the top there must be a group at the bottom, then perhaps by being visible and doing as well as I can do even if I never "better myself" and even if I never "break the cycle" maybe one day I can be human enough that I am awarded the dignity of humanity.


I can't foresee a system in which there isn't a group that is financially at the top and a group at the bottom. However, I can definitely see a system, and a policy structure, at which life at the bottom provides the basic level of resources needed to achieve whatever one's individual and personal qualities, luck, and choices will allow. Removing the systemic barriers that keep the poor poor generation after generation could make a more meritocratic society possible. It bothers me to think about all the talent, hard work and intellect the world never benefits from because it is tied up in the struggle for survival at low-wage work in a low-resource environment. If we could raise the bottom, be assured that even at the lowest income levels people were in good health, well fed, well educated and presented with a full array of life choices, wamrly attired and safely housed, what wouldn't be possible for them?
posted by Miko at 7:17 AM on May 22, 2009 [1 favorite]


Danila, some of the people currently in graduate school have also lived in your world. I grew up in a neighbourhood where a lot of people hadn't finished high school, let alone college, and a lot were on welfare for years, if not decades, including my family.

I never went to grad school (though I had opportunities to), partly for financial reasons, though now I'm squarely in the middle of the middle class with a job as a computer programmer. But Danila, my family background is poor and working class. I was raised by my grandparents in an unincorporated rural backwater of Florida (well, after I was 5--before that I lived with my mother's family in Germany, but my mom was a junkie and depended on welfare, so my situation wasn't any better there). My grandfather, although he eventually became fairly well off (and then later, lost everything again), never even got to high school, let alone college. His family were sharecroppers in Alabama, and when his father became too sick to work, as a teenager, he started working in the fields to put food on the table, eventually helping to put a couple of his brothers and sisters through college.

That said, most of my life, I've lived a comfortable middle class existence. But like you, I despise the constant complaining of many in the middle class about their tax burdens, etc., and was raised to carry a lot of lingering class resentment. (Even now, my family here in the states like to rib me for keeping what they derisively call "banker's hours" because I work a 9 to 5 job; in my family, decent people wake up no later than 5:00 AM).

So don't imagine the MetaFilter world is nearly as culturally or socioeconomically homogeneous as it may sometimes seem. College education has, for many of us, offered an escape route from what might otherwise have been an intractable situation. That's why education is still an important part of the solution, though by itself, it isn't the answer. Miko seems to have it about right. There will always be a bottom rung on the socioeconomic ladder, but we should aim to create the most opportunities possible for mobility and ensure those opportunities are merit-based. We should also do everything our power to provide for the basic needs and well-being of everyone.
posted by saulgoodman at 8:06 AM on May 22, 2009


With everyone chiming in with their own impoverished origins, why are we still arguing that there are so many systematic barriers to wealth? Sam Walton was born on a farm too, and look what he was able to achieve.

Every class will complain about how unfair their life is, how high their taxes are, etc. To some extent this is human nature. Life was never fair, and what's "fair" to you isn't necessarily fair to the Waltons. You can't control the circumstances of your birth, but working hard and living below your means have always been keys to success. I believe that in the America of now it is possible more than ever to change your fortunes on your own volition; once you stop believing in that, that's when you are truly worse off.
posted by gushn at 8:37 AM on May 22, 2009



With everyone chiming in with their own impoverished origins, why are we still arguing that there are so many systematic barriers to wealth?


Because individual success is not evidence against systemic poverty, which has been the thrust of this thread ever since Obama was brought up. For every person like me or Sam Walton, there's another for whom the dice didn't roll quite as nicely. I was lucky to encounter the opportunities I did - I did achieve, but it would have been very easy for one more brick to be added to my load, and be sunk by that small addition to the weight there was to carry. Had I had one more barrier to success, I might not have overcome it, It could have been the death, departure, or lengthy unemployment of one parent might well have done it. A less well structured and less affluent school district might definitely have done it, since I'd never have found my scholarship nor been eligible for it. The timing of my father's medical problems, which nearly killed him and which resulted in billings of hundreds of thousands, would certainly have done it. Fortunately he got sick when had insurance, not when he didn't.

Are these things circumstances that could have been fixed by "working hard and living below my means?" Or are they concrete results of our economic policy - which schools are well funded and well staffed, who has access to health care and health insurance, sudden loss of household income which is not replaced and requires families to seek different work and shift priority from achievement to survival?

I believe that in the America of now it is possible more than ever to change your fortunes on your own volition.

It can be possible, but for many people the challenges add up to being too great. Yes, given the right circumstances to start with, people can achieve quite a bit. But not everyone gets those circumstances. It's so easy for one's life path to be derailed by challenges to economic health, even if one is very talented.

once you stop believing in that, that's when you are truly worse off


Once you stop believing in that, it becomes possible to look at the systemic causes of needless challenges to achievement, and work to change public policy in ways that open up career and life possibilities for people of all income brackets.
posted by Miko at 9:27 AM on May 22, 2009 [3 favorites]


gushn, by 'everyone' you mean less than 5 people on a site with ... well, let's look at your user number, shall we? 90,260.

Reasoning by anecdote is bad move. Even putting aside the question of whether the stories above are as dire as some of the situation in SE Washington. jb's mother was armed with knowledge and skills that enabled her to survive and succeed in ways that their neighbors did not. Miko describes a situation where the people struggling in her life had jobs they were capable of holding.

Many of the people described in the article above that started this thread don't have that knowledge or training and no avenue to get it. Someone way up talked about the knowledge of how to prepare a CV/resume and the teaching of confidence to just walk into a shop and ask about a job.

There's an old and not-so-funny joke that goes "if you parents didn't have any kids you probably won't either." But it applies here: parents in the slums who don't have the experience of success won't be able to teach its lessons to their children. That's not permission not to work and succeed, but it's not reasonable to ask them to do it if they don't know how.

I think it's easy to not realize just how many lessons for success we get when we grow up surrounded by people doing them all the time.

I believe that in the America of now it is possible more than ever to change your fortunes on your own volition; once you stop believing in that, that's when you are truly worse off.

Let's accept that as fact. What do we do about the people who have never been given any reason to believe it and have never seen anyone do it? Equally important, what do we do when someone believes it but doesn't have any idea how to accomplish it?

You might grow up poor and with people who never work and always scrounge to survive. Maybe you see someone on television who says they grew up poor then worked hard and "got out" and now they own their own business.

How do you get from point A to point B?

I know it's possible to run a marathon but I'm in no shape to do it. Maybe I just go out and start running. Maybe that eventually works, even though I keep eating crappy, wearing bad shoes, never warm up, don't stay hydrated.

Kids in poverty may never see someone do the hundred little things that are necessary to thrive because they aren't exposed to people doing them, have never seen how people conduct themseves at work, in manner or dress.

I don't disagree that people who want a better place in life should work for it. Maybe we just disagree on how hard they should have to work for it. The fact that a few people beat their head on the wall and eventually manage to get through is great.

I'd rather make sure that everyone knows what's on the other side of the wall and illuminate some easier - but maybe not easy - ways to get there. Not just because I think it's the morally right thing, but because I think it makes us a better nation to have opportunities for people to succeed without unnecessary hardships.
posted by phearlez at 9:44 AM on May 22, 2009 [2 favorites]


We're very much in agreement here. My point is not that it's easy for people to rise out of poverty with a few terse sayings and a few anecdotal examples, as it is clearly very difficult, and easily compounded by circumstances out of one's control. Of course.

I did, however, want to emphasize the role of individual action. The people in the articles who are buying houses they can't afford or participating in disadvantageous rent-to-own schemes for a 36in TV don't strike me as being extremely responsible and faultless in the first place.

There is certainly plenty that the collective can do, but I don't think the long-term solution is wealth redistribution but rather in capitalist investments in manufacturing, technology, etc. In my opinion, humanity's best solution to poverty in recent history has been the industrial revolution. As commented upon upthread, instead of concentrating on different ways to divide our tasty economic pie of today, I am focused on growing the pie of the future.
posted by gushn at 11:41 AM on May 22, 2009


parents in the slums who don't have the experience of success won't be able to teach its lessons to their children


Very well put.

I did, however, want to emphasize the role of individual action

I don't think anyone de-emphasizes that role.

The people in the articles who are buying houses they can't afford or participating in disadvantageous rent-to-own schemes for a 36in TV don't strike me as being extremely responsible and faultless in the first plac

The middle classes' addiction to credit is also very much at fault. Most middle-class and apparently affluent people are floating on a pool of debt. As long as they can tread water fast enough, they stay above it. The difference between them and the working and nonworking poor is often not net worth, which can very well be negative, but in access to resources and information.


I don't think the long-term solution is wealth redistribution


But we are already redistributing wealth. We're just redistributing it from the working and middle class to the upper classes.

humanity's best solution to poverty in recent history has been the industrial revolution

But that's over. Now that we are in a post-industrial economy, where will the pie grow? I believe in the power of growing many small, local owner communities, small businesses, and community enterprises rather than creating a single, tiny wealthy investor class which will supposedly produce wealth. Evidence is showing that that class has not produced wealth for us in recent decades - in fact, it's jeopardized us drastically, and now we are leveraged out to the third world, because their interest is not in community well-being and the opportunity for Americans to succeed, but in maximizing shareholder profit, pure and simple. That kind of policy simply doesn't work to create the kind of growth and opportunity you and I both want.
posted by Miko at 11:48 AM on May 22, 2009 [2 favorites]


Danila: "If we must accept that the poor will always be with us..."

We only have to accept that in a conditional sense, that sometimes natural disasters will impoverish people who will need to be helped. We do not have to accept capitalism any more than we had to accept feudalism.

gushn: "Sam Walton was born on a farm too, and look what he was able to achieve."

Genghis Khan was the third son of a minor tribal chief, and look what he was able to achieve.

Which is to say, the exceptions never justify the system.
posted by shetterly at 12:28 PM on May 22, 2009


I believe that in the America of now it is possible more than ever to change your fortunes on your own volition.

Too bad reality disagrees with you. Social mobility in the United States is DOWN from its historic highs (in the immediate post-WW2 period - you have to wonder how much of that was the effect of the GI Bill, most of whose benefits were denied to black veterans through discrimination in housing and universities). Social mobility in the US is lower than in most of Western Europe - I think it might be on a similar level with that in the UK.

I wasn't arguing that because I got to grad school, anyone could. Anyone who has experienced eductational generational mobility (I won't call it social until I actually, you know, get an actual job) can probably point to the lucky breaks they had. (Basically, I had a series of lucky breaks into undergraduate - breaks my equally intelligent but troubled brother did not have - then I worked my butt off).

But I've changed my mind about social mobility in the past few years. I no longer care about social mobility - I don't care if a poor child has just as much chance in getting into the top 1% of income as a child raised in that top 1%, if this comes with a society with high inequality. Oppression by the smart and/or able is just as much oppression as that by hereditary nobility; at least the nobles are honest about the inequality of society.

Why should someone be paid less than me, just because they aren't as talented as doing what teachers want as I am? How is being good at reading and writing any more of a "merit" as having good people sense, or just working plain hard? But our society has decided that learning quickly* is a merit, but working hard at something physcial is not - or at least, that's what I see from the fact that a great day labourer who really tries is paid the same as a terrible day labourer.

I've been convinced with Michael Young - down with the "meritocracy", because it's just another excuse to create a new heirarchy no more moral than heirarchies based on birth. An unequal society with high social mobility is still just as unfair as an unequal society with no social mobility - because we all deserve the change for a decent livelihood and a fufilling life, no matter what our innate talents might be.

*I don't think of it as being smart, because most good students aren't smarter. They just pick up the concepts faster. If they were smarter, they wouldn't go to grad school. : )
posted by jb at 4:51 PM on May 22, 2009


jb's mother was armed with knowledge and skills that enabled her to survive and succeed in ways that their neighbors did not.

That is very true - my point was that those poor with these skills need to share them with those who do not. This is one of the basic premises of the Harlem Children's Zone (awesome project), which helps children by teaching parenting skills to their mothers and fathers. I'm not talking about top-down, let's teach "those people" how to live like the middle class (because, as pointed out, most middle class people barely know how to live within middle class means, and would be on the streets within a month of trying to live poor), but that there are financial and personal planning skills that all of us need to work on, and that improving these skills could be a really good way to help poor families improve their own lives.

That, of course, doesn't solve the systemic problems, like chronically low wages for low status work (I refuse to call it unskilled, because it is usually skilled, just not in the skills that are considered to be high status), or inequalities like how there aren't supermarkets or banks for those who can't afford to drive, or that the poor are charged way more fees for banking than the middle class or rich. We need to all vote for better public transit - which doesn't only benefit the poor, but also the young and the elderly, as well as both our physical and social environments. Also, a decent minimum wage, and health insurance for all, because the American system is just plain broken.

And we all need to get out and support institutions like credit unions who do serve underserved areas; if there isn't one, maybe one can be started. If a check can be signed over to another person, then maybe someone with a bank account can set up a non-profit - or at least, a non-usurious - check cashing service to serve their friends and neighbours. I know that when I've only had a little bit of money, I've banked with my mother - I give her the money, and she pays me a bit of interest, and she throws it in with her money to invest at a higher rate than I could get alone.

(Actually, there was a time when she "sold" cigarrettes as well. It's always cheaper to get cigarettes by the carton, but if my aunt bought a carton, she would smoke them too quickly. So my mom (who didn't smoke), would get a carton with the money my aunt gave her, and kept it in her freezer and then my aunt would come down the hall and "buy" each pack just as often as she would have gone to the corner store (I think she paid as much too). My mom would buy the next carton with the money paid for each pack, and the excess went into my aunt's savings.)
posted by jb at 5:13 PM on May 22, 2009


But we are already redistributing wealth. We're just redistributing it from the working and middle class to the upper classes.

I see what you did there, with your claim that the upper classes skim off the profit from the labour and productivity of everyone else.

And you're completely right.
posted by jb at 5:18 PM on May 22, 2009


But our society has decided that learning quickly* is a merit, but working hard at something physcial is not

because we all deserve the change for a decent livelihood and a fufilling life, no matter what our innate talents might be.

Wage is determined by supply and demand of labor: when there are more people able to do a skill (such as, say, babysitting), wages are pushed down. When you want to hire the best and brightest MBAs, you will need to pay a premium for that selectivity. Lawyers and bankers being paid multiples of traditional blue collar work is not accidental or unwarranted, but just economics in play.

Genghis Khan was the third son of a minor tribal chief, and look what he was able to achieve.

I actually think Genghis Khan is a pretty awesome historical figure. Napoleon too. And a whole host of modern industrialists and technology entrepreneurs. Great stories. They may be exceptions, but inspirational stories like theirs get me up every morning.
posted by gushn at 8:59 AM on May 23, 2009


Lawyers and bankers being paid multiples of traditional blue collar work is not accidental or unwarranted, but just economics in play.

There is an oversupply of lawyers in Canada, but lawyer salaries have not gone down. There is an undersupply of qualified bricklayers in Canada, but they are still paid less than lawyers. Doctors in over supplied areas like Toronto are still paid the same amount as doctors in undersupplied areas.

Economics plays a part in wage levels - but what range these wages move in is socially determined. This is true in prices as well - what price the market will bear is affected by economic issues such as supply and demand, but also socio-cultural factors. How high status is the profession? What do people expect to pay? Lawyers have less training and expertise than a contract university lecturer (most of whom have PhDs), but no lawyer would undercut the profession by being willing to work for a middle class wage. They may not have an official union, but they have a strong professional ethos which keeps rates up.

I'm not saying that it is accidental - far from it. But it isn't economically warrented.
posted by jb at 1:16 PM on May 23, 2009


What jb said. In Bad Money, the very astute (and not very ideological) Kevin Phillips shows that in the financial sector, the high salaries are not at all justified by a need to attract the "best and brightest," but by a need to absorb and distribute amounts of profit that the sector was accruing to itself out of all proportion the real value it generated, skimming most of that profit away from the manufacturing sector by redirecting investment capital to risky investments in derivatives promising high return rather than to a real infrastructure producing jobs, growth, and goods. That money had to go somewhere, since it didn't need to pay any concrete bills, and it went into the pockets of executives and became a self-justification for the industry to continue to command and redistribute the investment money it was drawing in. There's no reasonable argument that salaries in the tens of millions bear any relation to the ability to generate income or create jobs. In this sector, at least, it's a byproduct of the outsized (and temporary) cash gains made by redirecting wealth into financialization.

The lawyers example is good; also, have a look at doctors. The wages don't drop because the reimbursement models are set. No matter how many doctors we produce, the amounts charged for their services will not drop below a floor that insurance companies manage (at least under our present system). It's not individual talent, skill, the rarity of a specialty, or education that determines the remuneration available in a field - it's the profit points (where and from whom money for a service can be collected), and the structures that maintain the wages at those levels, that do it. Wages may rise and fall in response to gluts or shortages - nursing and plumbing come to mind as two examples - but it's still only one among many factors, and in the professions it becomes somewhat arbitrary and wage defenses become an active focus of lobbying efforts and professional association activities, to continue to justify the level of those wages.
posted by Miko at 6:05 PM on May 23, 2009


oops, Bad Money
posted by Miko at 6:06 PM on May 23, 2009


There is an oversupply of lawyers in Canada, but lawyer salaries have not gone down. There is an undersupply of qualified bricklayers in Canada, but they are still paid less than lawyers.

This isn't compatible with my personal experience. It may be less true now, but getting a well-paying job as a lawyer was very hard in Quebec in the 1990s. And my parent's bricklayer neighbor makes fairly good money -- he's probably better off than most lawyers in my small home town.

But it's true that lawyers can make stupendous amounts of money, while my neighbor is probably among the best-paid bricklayers in the country.
posted by Monday, stony Monday at 7:37 PM on May 23, 2009


This isn't compatible with my personal experience

Again, though, we're not looking at the exceptions, a few of which can always be found, but at the broad general patterns. In the US you can look up the average rates of pay for different occupations through the Bureau of Labor Statistics. There must be a similar database in Canada.
posted by Miko at 9:11 PM on May 23, 2009


I'm just saying the bricklayer-lawyer example is not a great one, at least not in my part of Canada. Consider: A unionized journeyman bricklayer working in Quebec makes around $30 an hour, which works out to around $60k a year [around 50% of construction workers in the province are unionized]. The mean revenue for a lawyer is $110,000, which works out to around $50 an hour. That's all before tax. Above around $75,000, the tax rate in Quebec (federal + provincial) is 50%.

So, a large difference, yes, and of course I'm comparing a well-positioned bricklayer to the average lawyer, but I think it's very likely that a good proportion of lawyers aren't that well-off compared to your average bricklayer.
posted by Monday, stony Monday at 11:40 PM on May 23, 2009


I think it's very likely that a good proportion of lawyers aren't that well-off compared to your average bricklayer.

There is still a huge difference between $60,000 a year, and $110,000 a year. It's almost twice as much money! And, as you pointed out, that's for a well-paid bricklayer and an average lawyer. I don't care about the relative tax burdens and take home - of course the higher paid individual pays a higher percentage in tax, that's how we set the system up. The point is that an average person in one job which is not suffering a lack of supply still continues to make some 180% of what a person does in a very skilled job for which there was a need (if I gathered right from what I saw in the immigration stuff) - though that may change with the slow down in construction.

To put it in perspective, median household income in Canada is about 53,634, while an income over about 90,000 puts you in the top 5% of individual earners. (Yeah, I know household > individual, but I couldn't find the percentile on households or the median for individuals - anyone with better google skills or more coffee in them is free to correct this).

So yeah, while bricklayers might be firmly into the middle class, even for a single income household, it doesn't go against my point that supply and demand do not determine what range income comes in. No matter how desparate we are for nurses, we will never pay them as mucch as we do doctors in the most oversupplied area. Why? Because doctors have more education? Tell that to the adjunct lecturers. No, it's because "physician" is an ancient honourable and genteel profession, just like lawyering.

And for further proof - just look at what happens to jobs that go from being seen as traditionally male to being dominated by women, like teaching in formal schools. (Women have long taught youong children in informal schools). Or the pay disparity between primary and secondary education.

But like I said, this is all where the mythos of meritocracy comes in. People who are paid a lot like to lie to themselves that they are paid a lot because somehow they are better or do more for society. They aren't, and they don't. Society needs people in all jobs to function; professors can't research if there is no one there to do the grant paperwork, and teachers can't teach if there aren't janitors there to clean the bathroom. As a society, we need to start recognising this, and stop lying to ourselves and claiming that the "meritocracy" - where what is defined as merit is whatever the powerful have or did - is somehow fair.
posted by jb at 8:21 AM on May 24, 2009 [1 favorite]


« Older Sunscreen's a pain, but sunburn is worse. UV-prote...  |  Tweet your movements.... Newer »


This thread has been archived and is closed to new comments