Why the poor pay more for toilet paper and just about everything else
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There are some poor of whom it is literally true that they can't spend $24 on toilet paper. My local food bank gives out rolls of TP, and keeps nearly-empty rolls in the public bathrooms because rolls that are above half get stolen. Some of the clientele literally have every dollar for the month already spoken for, and $24 of TP is not in the budget.
But for a lot of the poor, it's more accurate to say that spending $24 on toilet paper would interfere with other things they've chosen to spend on instead. It's not impossible to come up with $24, but they'd rather spend it in other ways when they do. Now, it's not my place to say that a poor family should or shouldn't use a small surplus to become more efficient and generate bigger surplus later, when they could spend it on something with a more immediate psychological benefit (like a nicer-than-their-average meal). This isn't a judgment, it's just an observation. But I think it's an important observation to make, because the hidden implication is that an extra $20 a month would allow for a new efficiency (like buying TP in bulk/on sale) which would then snowball. But the reality is that an extra $20 a month rarely has anything close to its full potential effect on efficiency, for psychological reasons. Attempts to ease the inefficiencies of poverty need to account for this.
One friend was living on disability (about $570/month) and food stamps (about $140/month), in a group home. His one "luxury" was he'd buy GI-Joe figurines every month, for about $20. At one point he asked me to take him to the store because he wasn't going to be able to walk the 10+ blocks that day. As he was shopping, I realized he had something like 30 pounds of meat in his cart and almost nothing else. I told him to put half of it back and add a bag of potatoes, and that whenever he wanted to cook meat, cook half as much as he normally would and replace the rest with potatoes. It was life-changing for him -- he was able to eat every day, and had enough money left over to start buying things like toilet paper in bulk. I've since lost track of him, and I'm sure he's still poor, but he's a more secure grade of poor than he had been.
Another friend was a divorced mom, recently remarried to a disabled man. She's unable to handle a full-time job, but works a few days a week as a substitute teacher. Between disability, child support, and work she makes maybe $1500 a month. She's always bought in bulk, usually splitting orders with her parents and siblings who live in the same complex. The only real escape from poverty she has is to recover from psychological trauma to the point that she can work full time.
Third is a young couple, both just turned 20, and their son is 3 years old. He's had adequate work for a while, but hides financial information from her, they both have expensive phones they use for things my old prepaid Moto X can do for a lot lower price, and they both have a tendency to eat fast food even though he works at a grocery store that has a good selection and good prices. The two things that have kept them from disaster for the past year: I let them live in my basement for a token amount of rent that I stopped collecting after a few months, and his grandparents have helped them pay off a couple of surprise expenses. She recently found work, and with two incomes they're able to afford their own place fairly comfortably, but for a while there it looked like they were going to get into a bad cycle like the one detailed in the article.
How about real killers, like payday loans, bank fees, and paying more for milk, eggs, and everything else at the corner store because you don't have transportation to get to Costco?
And if you want next level hosedom, how about the opportunity cost of having limited or no transportation?
Many of the poor have felony criminal records, as I do, so how about the political cost of being denied the right to vote?
The list goes on and on. [edit] The title does say "..and almost everything else" so I guess I missed that.
People who can manage their money up have a sudden need aren't good either. They'll take the loan, pay it back, and that's it. You made $60 and nothing else.
The customers they want are on the edge. They have enough money to be able to 'rollover' the loan (extend another 2 weeks for a fee) but not actually pay it off. Over time the fees add up and they're paying you more, but you don't want them to totally default. At $60 + fees every two weeks it doesn't take long to make back the original $300 and then you're printing money.
Yes these can be people right on the edge of total poverty. It can be people who have enough money but are irresponsible and use payday loans to fill gaps but aren't in serious trouble. Sometimes it's people who make a ton of money but are up to their eyeballs in debt and can't fill the credit cards up kore.
Credit, which was literally created to hose the poor.
How about goddamn product marketing which merely has the effect 1) robbing poor people of their time and 2) jacking up costs of goods at the expense of 1?
It's all wrong.
moreover, having wage increases lag price increases is a part of the policy reason for having state-driven inflation, in the name of employment.
http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig...
"Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
Do a simple math experiment: Imagine being poor and spending 90% of your income on day to day, inflation-sensitive expenses, versus being rich and spending 20% of income on these expenses. A 10% inflation for you means that now you are spending 99% of your income, resulting in a 90% loss in living margin. For the rich person there is only a 2.5% loss in living margin. (I picked 10% because that is an easy calculation, the effect is true at any inflation level).
Now the common retort is that wages will catch up with inflation. But is that true? If that were, why would periodically increase the mininum wage? In fact, not having wages catch up with inflation is part of liberal economic policy (it's good for employment![1]):
http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig...
[1] I guess one good way of keeping employment metrics high is keeping your population enchained to a moving economic treadmill that brutally nudges them toward finding employment.
Now, am I better off with 9% inflation or 1% inflation? Clearly the former, despite it being lower than the interest rate.
Similarly, I deposit funds in a CD with 3% interest; am I better off with 4% inflation or 9% inflation? Clearly the former despite it being higher than the interest rate.
Even Keynes warned: "By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat."
He recognized that the bourgeoisie was getting screwed by inflation but the proletariat not less, I.e. worse.
(1) the poor are most likely to be on either fixed incomes, or incomes where cost-of-living adjustments are substantially time-delayed relative to the increased cost of living, and
(2) they're least likely to have any sort of hedge against inflation or sudden shocks to the system, such as having a paid-off house, a fixed-rate mortgage, adequate savings to handle an emergency, or investments in assets other than plain ol' US Dollars That Only Come In On The First And Fifteenth.
The middle class weather inflation just fine -- they're likely to get yearly raises that outpace inflation, to have savings to be able to handle unexpected price increases, and to have at least some assets that keep up with inflation even if their liquid accounts don't. And the wealthy benefit from inflation, because their factories keep producing widgets but their labor costs go down relative to the price of widgets.
Not to mention, if you don't "play the game" and you abstain from using credit, you're still subject to the cost of credit, as merchants have to charge more for their products to cover the cost of credit processing (which is exorbitantly high).
In other times of my life, I have quit my job and spent half a year writing free software, or training karate -- without any income. I also spent 5 years living in a run down shack spending less than $10K a year, when I was teaching English in Japan.
By many measures, I was living in poverty because I had almost no income, or I was spending almost no money. But at no time in my life have I ever thought of myself as poor. I have always had money in the bank and I have never really been in debt. When I went hungry it was because I stupidly spent my food budget on beer (or something similar). I didn't have money for food, but I did have money.
Money is an option to buy things and for me the feeling of being rich is the feeling of always having that option. You can be happy with less things, I think. Nobody actually needs a yacht to be happy, or a big house, or a collection of vintage wine. But I think it is really hard to be happy when you have no options. It is even harder to be happy when you spend your options in the future and have to suffer with crushing debt -- possibly enslaved forever.
I could choose to be hungry. I could choose to give up my job and do something that paid no money. I could choose to move half way around the world and live in a shack teaching English. That's incredible wealth for me. That kind of wealth is available to many people, but I think that most people can't see it, unfortunately.
Anyone can learn to code or do Linux ops work, a skill that you have that keeps true poverty at bay. Most can go to school on grants if they are truly poor but there's a learning curve to being able to fill the paperwork out, a time and transportation cost to getting the paperwork done and to the right place.
In these situations, you have chosen to live as poor, but the opportunity to not be poor is always there because you had an education, you had a skill, and those things gave you an opportunity to save up enough to work for free for a while.
There are a lot of places in the world where people don't even know you could work on computers for a very high wage. And even when they do, they lack the know-how to find a geographically diverse community that can mentor them.
And generally, opportunity cost tends not to be super high when you don't have skills or an education.
I'm going to stop making excuses and go back to school, I think.
There is also the "working 2 jobs to feed 3 kids" sort of poor.
These are completely different kinds of "poor".
I should point out many poor people on EBT (new name for food stamps) do buy toilet paper in bulk once a month. I do wonder how many merchants raise some prices on the 1st of the month.
Every month this causes huge boom-bust cycles in neighborhoods and local businesses, which adds to the perpetual trauma state benefits have wreaked upon the disenfranchised poor that live in the US's major cities. But Coca-Cola, Nestle, Walmart and Kroger all get their predictable windfalls as a result. And people wonder why these companies are the primary supporters of EBT! It's because EBT is not a people subsidy, but rather a massive corporate subsidy that is also trapping our most vulnerable citizens into food desert wastelands.
As "well intended" as these programs are, they are worse than doing nothing at all, as far as I can tell. I don't see how such massive and ruthless commodification of the poor could ever be achieved in private industry without government support and regulation to bolster it.
The exact solution is complicated. It would, on the one hand, involve grandfathering in all current entrenched users of state subsidies. On the other, we'd have to allow young people to opt out of any of these payroll taxes, and therefore not be eligible to receive these benefits. They would see a massive uptick in their take-home income, which they can spend as they wish instead of having to buy the cheap bullshit that EBT affords its users.
With those extra dollars young consumers would have many more votes as to where their dollars go, and will have a greater ability to influence corporate behavior. Companies that peddle sugar-filled crap will have less of that predictable monthly revenue to depend upon, and therefore the prices for their food products will rise. This will begin making real food more attractive to EBT consumers, and will introduce actual competition into the market.
The only reason that these multi-national food product corporations can make money on uninformed, unhealthy consumers is because the government props up these business models. This can be witnessed throughout the debate among many stakeholders - farming subsidies, environmental regulations, tariffs, and even our government's own horrible diet recommendations - there are so many bad actors here that no solution will be comprehensive. What I believe to be the most important of all the fixes that we need to derive, however, is the education factor. Because EBT exists, consumers are not driven to be educated. Until we give people a choice, they will never bother to lift a finger and educate themselves.
All the well-meaning charities, after-school programs, and education facilities on the planet will not stop Coca-Cola from lobbying Congress. Even Michelle Obama's ridiculous nutrition program facilities the wrong message. (Look at how little abstinence from sugar is promoted by her, and how much exercise is promoted, as if kids have the ability to run 10 miles per day to work off the abhorrent amount of sugar in their breakfast cereals, let alone the rest of the sugary junk they consume on a daily basis.) The only way to get Congress to listen is to have the electorate realize just how fucked over they have been by their representatives who peddled the food product multi-nationals' prerogatives, and get MAD AS HELL about it.
I understand that there are people who are already in a situation where they are in trouble. That's pretty much my point. It doesn't matter if you have 3 kids and can't afford to feed them or if you have $20K in debt and can't make your payments. That's real poverty. Even without an income, I was never poor because I never had those responsibilities.
I feel sad for people in those predicaments. Sometimes it comes through poor choices. Sometimes it comes from unfortunate circumstances that are outside of their control. It doesn't really matter, because you are where you are and there is nothing that will magically transport you to a better place. But you do have choices left in the future and I think it is worth considering the impact that money in the bank can have on your life.
I don't much like beer. Something about the taste, maybe the hops, I dunno. Every time I tell someone I don't like beer, they say "Oh, you just haven't had _good_ beer! You should try this one!" And I try it, and I don't like it. Some folks can acquire a taste for beer, given enough exposure. I've given it plenty of exposure, and it just doesn't work for me.
I suspect that the ability to "see" the kind of wealth you're talking about, to be happy and fulfilled on a razor-edge budget, is like a taste for beer. Some people have it built-in, some people can acquire it, some people will never have it; they just aren't wired that way. It's really cool that you were able to be happy under those circumstances. But it's dangerous to assume (with just about anything) that everyone else could learn to be like you, if they only wanted it enough.
FTFY
If you have the skills/connections/etc to be able to trivially leave poverty when you need to then you are never truly living in poverty. You lack the vulnerability.
Your story is nice, but it has nothing to do with poverty.
They patiently explained to idiot me that the reason they ate so poorly was because finding $100 was effectively impossible.
Unrelated, but I seriously doubt you could eat for three months for $100 at Costco unless you subsist on bulk oatmeal and other dry food.
That's supposedly what they're doing now. You could just buy the rice/beans in much larger bulk than normal grocery stores so the money lasts longer.
'Normal' meals with fresh veggies and some meat/etc? You're right.
With community support you can pool your money, then split the goods and the savings.
But you have to be able to implicitly trust your community.
Do your friends have other friends in similar situations? Do they trust them enough to make pooled purchases?
(Also, you start with pooled purchases simply to help your community. Eventually that transitions into making a bit extra, and before you know it you opened a store. If you are a good person, then you continue to quietly help people in your community with discounts or credit.)
Maybe not everyone can buy bulk but you can buy expired goods, grade b veg, etc.
It may not be logical, but I accept it as one of the quirks of human behavior. Similar to how pointing out the economic nature of some relationships and interactions is often considered creepy and anti-social (for example, pointing out how certain commonly assumed altruistic behaviors are not altruistic).
But that just proves the broader point: it's not the mere $100 that's holding them up; it rarely is. Rather, it's the practice of not thinking long term, and not accumulating savings even when you have clear opportunities.
Regardless of the terms of repayment (even if there are no terms), it adds stress to future encounters, and they may outright refuse it out of principle anyway.
“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.”
The older I get the more I see this. Paying upfront to get a lower rate on your mortgage. Having money to begin with to manage well to get a good rate on a mortgage to start with. Having the flexibility in general to try something that may lead to less money overall if it pans out, but is a waste if it doesn't.
Or is my mistake not buying the 50K BMW or 100K Tesla? :-p
To be sure, there's a certain cost in time and inconvenience in decreasing reliability. And it's always a bit of a crapshoot (which I've typically let go on a beat or two too long) at the point where it's time to get rid of the thing. But I've been mostly happy with buying new and driving it until I start to run into ongoing issues.
(Currently I have a '97 Honda with about 170K on it but I admittedly don't drive it on salted roads any longer or take it on long road trips.)
You know, people say that, but I found it really hard in practice to buy a nearly-new car. When they are available, the discount from new isn't that much.
Note that I'm speaking only about Toyota and Honda minivans, because that is what I was buying, but I was surprised just how little "driven off the lot" discount I could find. We ended up buying new instead.
In practice, most opportunities are not a pure savings like this where you will end up ahead in every way if only you could borrow the money; usually, you'll end up with more painful feet but more money to spend, as the cheaper shoes aren't completely useless and in need of replacement.
If the quote were as true as claimed, then someone could make a program where helpers pair up with a poor person, loan them 50 dollars, and then let the savings spiral up virtuously -- that loan enabled $100 of savings, which can be reinvested in more savings, when frees up more savings, etc.
But obviously no one's figured out how to make that happen, and the poor can often already get loans of such size and not trigger the upward spiral. So something's missing.
With that said, being poor does tend to be a double whammy where e.g. you live in a places that makes bulk purchases harder ... but it looks nothing like the dynamic in the Vimes copypasta.
A year ago, with about the same salary but less savings, I wouldn't have been able to meet the 20% downpayment mark, so loan insurance would have make it not profitable. Before that, with even less savings to put as downpayment, just the monthly mortgage payment would have been higher than my rent.
I disagree with your premise that the poor can often get loans big enough to make an impact in their lives. And when they do, they tend to be predatory loans.
You're supporting that by illustrating a situation where being able to come up with a lot of money over a year enables a savings later, which gives a different impression than "look how poor you become from not having $50 one time". I think your example supports my point: being poor has costs, but it doesn't look at all like the dynamic given.
>I disagree with your premise that the poor can often get loans big enough to make an impact in their lives. And when they do, they tend to be predatory loans.
But if the savings is so sharp, then even a predatory loan could reverse the cycle. In practice, it doesn't. So the theory is incomplete.
[1] though inflation since the writing makes the amount larger than it sounds now
Because poor people are high-risk loans, you'd need to put a significant risk factor on that boots loan if you ever hoped to break even (there's a reason credit cards charge 20+% interest). So now the $100 boots are $130 or more.
Additionally, nobody not already in heaps of debt would ever take the loan, because people hawking predatory loans and money-for-nothing schemes are a dime a dozen in poor parts of cities (cash4gold! payday loans!) and those who don't lean quickly to ignore them all get screwed.
Finally, you're ignoring the psychological aversion to taking on debt, even if it's for the best. Even among fairly well-to-do university students the concept of business leverage seems to come as a bit of a shock, and takes a fair bit of explaining - "But why would you deliberately go into debt?". Imagine trying to explain to somebody below the poverty line that the boots are worth going into debt for!
Well, yeah, but that's the point: it's not that they're $50 away from a perpetually self-reinforcing cycle of rising out of poverty. It's that even if you loaned them the money, and showed them the savings, they still won't take the rudimentary steps (pay back some of the easy savings). (Hence why my disproof involved the example of a charity program.)
But at that you'd you'd be using a very different theory of poverty than the Vimes one; it's not that the person couldn't find an extra $50 one time, it's that they are unwilling to plan ahead even when the seed money is given to them. That has a very different moral than the one in the excerpt.
>"But why would you deliberately go into debt?". Imagine trying to explain to somebody below the poverty line that the boots are worth going into debt for!
So wait, now you're saying the problem is that the poor are too unwilling to borrow?
> poor can often already get loans of such size and not trigger the upward spiral
I don't know about that. Almost all loan-based businesses that target the destitute are predatory. I've seen exactly two that were not. Kiva and my college that gave loans of up to $200 to students for short terms.
Nothing in the real world is as simple as that quote. People like it because it so clearly captures a very real situation - nobody is going to give you a zero interest loan to stock up on toilet paper, and the poorer you are the less liquid capital you have.
[1] https://en.wikipedia.org/wiki/Microfinance [2] http://www.ihep.org/sites/default/files/uploads/docs/pubs/fa... [3] http://www.res.org.uk/details/mediabrief/4410321/Americans-F... [4] http://www.nbcnews.com/feature/in-plain-sight/shift-change-j...
IOW, to the extent that microfinance has successes, it's in situations that have the opposite dynamic of the Vimes example and do not count as an implication of the theory.
The fact that "impact per dollar" is greater when one is able to exploit purchasing power differences makes it relatively more attractive as a charitable enterprise, so many charity organizations gravitate there, but it is absolutely not a necessary component of a successful microlending structure.
But there is about the Vimes theory, which is what I'm criticizing. That theory implies that microfinance should work within a society, where dollars don't go as far for the poor. The fact that microfinance is more effective as you deviate further from that situation, is then a point against that theory (even if not completely opposite).
You're responding to a different point than the one I'm making.
My point: "Vimes is wrong to attribute poverty to the poor not having access to a loan of $50 to buy longer-lasting stuff, as that would imply intra-society microloans would fix it, which doesn't happen."
The point you're criticizing: "Vimes implies microfinance never works."
(That, by the way, is how a well-supported accusation of strawmanning would look. "Strawman" means "replied to a wrong argument", not -- as you seem to be using it -- "one fact you relied on is false".)
My point is that it does, just not as often.
I would call that a bad theory.
I've seen exactly that same dynamic play out with other items of clothing, and even with shoes. And the thing is, when you're poor it's not that you can't afford expensive jeans if you really tried, it's that of necessity if you have that much money to spend on something you have other higher priority needs (things that you've just gone without, or things that you've stretched beyond their useful lifetimes but haven't replaced because you didn't have the money), and not on clothes or shoes.
But you see exactly this dynamic play out in housing, transportation, and so many other places. A poor person with bad credit is going to end up being forced into having to take a high interest loan in order to buy even a low quality car. And they're going to have to dump a lot more into maintenance and refurbishment costs than someone who can afford a nicer car. Over several years they may end up having dumped more money into that crappy car and the financing of the loan than it would have cost to buy a much more reliable car if they had the money. I bought my car almost 10 years ago, and had it paid off in less than a year, I've put 100k miles on an incredibly reliable vehicle with almost no spending on maintenance. That saved me a ton of money on financing costs and in maintenance costs. I've seen tons of other people who couldn't do that and ended up buying less reliable vehicles for a lower initial cost but have much more maintenance and end up having to buy yet other cars more frequently. And if you take public transit, you instead spend a ton of money on that without having anything to show for it.
Housing is even more extreme. Being able to afford to live near where you work can save a ton of money on travel costs over the long term. And being able to invest in purchasing property puts you way farther ahead than being forced to constantly rent.
The point of that little quote is that the difference between rich and poor is very much non-linear, and not merely a factor of the rich having more money. Having more money means being able to spend money in ways that produce solid returns. Buying goods of high quality and high longevity which result in a net savings down the road. And buying things of lasting market value which serve as investments.
I ended up wandering around the store comparing the prices to what I pay in my neighborhood. Almost everything was more expensive. I have no idea how the lower class folks in that neighborhood eat.
I wouldn't call the sachets pricey. They are single-use and come at an extremely affordable price (mostly just one rupee = 2 cents). Sachets allow the poor to try out products that they could not afford before, or products that they don't use daily.
Sachet sales created a whole new business paradigm.[0] They form the basis of C.K. Prahalad and Allen Hammond's article Serving the World’s Poor, Profitably (HBR September 2002) [1] and C. K. Prahalad's book The Fortune at the Bottom of the Pyramid (Wharton School Publishing, 2004).
[0] http://repository.umac.mo/bitstream/10692/1300/1/7444_0_Sy-C...
[1] https://hbr.org/2002/09/serving-the-worlds-poor-profitably
[2] https://en.wikipedia.org/wiki/The_Fortune_at_the_Bottom_of_t...
This can manifest in two ways: 1) the storage space physically necessary to hold the TP and 2) the capital tied up in owning this before you need it.
To put it another way, maybe poorer people can afford to buy in bulk, but in their apartments they have no place to put a gigantic package of toilet paper. Or, maybe they choose not to tie up $25 in securing future TP when they need that liquidity to ensure they can make a car payment this month.
In either way, they get something of value by not holding inventory in their house. That's why it costs more. It's not completely clear that they'd be better off if they could lock in low TP prices, even if they did have the cash on hand.
We have what I like to call a "general store" in our basement that takes up two shelves full of several bulk products. (perhaps 10-15 different products, some small, some not) We're talking about a space that might be 2.5 ft on a side, 1 ft deep. Hardly a ton of space that will require additional capital "tied up in owning this before you need it."
In Tokyo? Sure. In the US? Not so much.
Congrats on your basement, do you think apartment dwellers have basements?
Also buy a bidet. They cost less than $40, are better for the environment, and will save on your TP costs!
You need just a bit of paper after to dry yourself and that's it. No wiping.
Wiping is barbaric! Your bottom begs for salvation
LOL
It's funny but I really do fee this way when I use regular toilet paper. You're just smearing poop all around! It's sick!
There are other similar ones for even less.
THIS! I really don't understand why a bidet isn't very popular.
It is an interesting topic though. I have spent a year living in Japan as a graduate student, and had an ultra-modern all-in-one toilet with a built-in bidet (these are quite common in Japanese homes, and even hotels tend to have them en-suite).
At first you are confronted with your cultural baggage; all your life you have been using toilet paper to sanitize your nether regions. After that curiosity sets in, and you rationalize that if a whole modern society embraces this technology, than certainly there must be something to it. Then you start using it, and soon marvel at how barbaric and uncouth the toilet paper method is.
Upon returning to my Western country I was again back to toilet paper, but getting a Japanese style toilet seat with built-in bidet is on my wish list…
Unfortunately, toilet habits are not something that can be easily changed in any society. It is not something people like to discuss. If you've never encountered a bidet (built-in or otherwise) and had the opportunity to use it for a decent while, chances are you will reject the notion of owning one.
Seriously, you have to be really fucked up to not be able to put away $25 for rice.
If you're poor and not taking advantage of every savings you can I really don't know how one expects to become not poor. If you're so poor as to not be able to afford a large pack of toilet paper, sacrifice one of your dish rags, I assure you they can be washed for long enough for you to save the extra cash to afford a large pack of toilet paper.
Want to know what my 'rich' neighbors who have a BMW in their drive way do on weekends? Collect cans from their neighbors trash. I can only assume at one point that they were exceedingly poor.
Also, almost everyone I know who was/is poor also smokes. Poor people are mostly poor because they make really bad financial decisions, yes its fucking hard and it seriously takes its toll on you but eventually you get so tired of it you stop making the decisions that keep you poor.
I have never eaten so well, or been so healthy as when I was poor. I walked everywhere, never ate out, spent time with friends, meat was like dessert, and you'd buy the cheapest cuts and marinate and cook them until they were delicious and dropping off the bone.
The only thing I really had a problem with was saving $200 for a decent pair of shoes that would last. Instead I just bought cheap shoes from the thrift store, the nice thing about being poor is you generally don't have anything else to do, so you check veevies every other day. Again if I wanted to solve this problem I know full well I could have stopped smoking and in two months I'd have cash for shoes.
> they make really bad financial decisions
A lot of the time they KNOW they are making poor financial decisions. Imagine there is barely enough money coming in each month, the kids need to eat, the cooker just broke, the mortgage/rent is due, and you don't have money to solve all of those. So, make a sensible financial decision please, one that is not going to worsen your lot. A second hand cooker is only £50
Sorry kids, no more hot food? Just instant noodles for all for a week, so we can buy the old cooker?
Sometimes the choice is between a poor decision, a bad decision and a really stupid one.
The thing about poverty, especially long term poverty, is it completely takes away your ability to survive an emergency. That could be as simple as an appliance or transport failure. It's the crisis that generally fucks people up. The first three months, whilst the budgets remain credible and intact, is something any fool can cope with.
Most parents I've known would put themselves into penury and risk malnutrition to keep half decent food in their kids' bellies daily. Oftentimes knowing full well, and with due consideration, that they are making their future a little (perhaps a lot) harder.
And just in case you are thinking, but why have kids if so poor? Maybe there was a good job when the kids arrived. Before the recession, accident, or before dad died or whatever.
Yeah, it's easy man.
If you assume that the really poor own a dish rag, let alone multiple spares, you may not understand the kind of poverty we're talking about here.
I wonder is she realized what she was saying/implying by writing that.
She's basically saying "the poor can't be trusted to save their money, so help them spend it well, before they waste it [later in the month]".
That's really simple. I am wondering where your karma points come from.
But I'll help you out:
Implied was that they had enough money to buy in bulk for multiple months, but had wasted it on other things by the time the end of the month came.
There was another class of people who could not do even that, and could only buy for that one month, they could not buy in bulk at any time. (Which is what you were imagining I was talking about.)
Where it mentioned buying in bulk it mentioned two classes of people: people who could not buy in bulk at all, and people who did buy in bulk at the beginning of the month, if the option was available, but could not do so at the end.
If you could point at the paragraph which led you to believe it implied the poor were unable to afford bulk purchases due to "wasting" their money, that'd be great.
There are three. There are also those who can buy in bulk for multiple months.
"And the poor often can't afford to do that — to pay $24 for a 30-pack instead of $5 for a four-pack. Then, because they can't stock up, they can't afford to wait until the next sale comes around."
30/4 = 7.5. i.e. implying a multi month purchase. Also "the next sale comes around": at least by me sales are on a multi month schedule, not a monthly schedule.
> If you could point at the paragraph which led you to believe it implied the poor were unable to afford bulk purchases due to "wasting" their money, that'd be great.
That's just it - I don't think she realized she said that. It would not be in keeping with the rest of what she wrote.
And yet, her advice to stores to have sales "at the start of the month" does in fact imply that. I assume it was inadvertent, but I called attention to it because she did write it.
I think she would have preferred to advise stores to have sales on a monthly schedule instead of a multi-month schedule. That would be more in line with the rest of her article.
(Convincing stores to do that would be tough - they would have to stock medium quantities of many items, instead of large quantities of a few. That hurts their purchasing power and increases their labor costs.)
I was talking to a recruiter today. He asked me if I could start a job immediately instead of the usual two week notice. I wondered how I was going to buy gasoline to get to work. Guess I better start saving up.
Alternate theories are that (some) poor people have weak impulse control, are bad at delayed gratification, and/or have low intelligence.
In reality the causes are very likely a mix of all these factors, but the article makes no attempt to even consider other explanations.
I think one important observation is that it's very hard to distinguish poor because they can't from poor because they make bad choices and don't have the tools to make better ones.
Some comments here point out that while toilet paper at Costco might be cheaper than at the corner store, lack of transport options means the corner store is the only option.
Other comments point out that somebody who is poor might spend what little money they have on bad and/or frivolous choices with that money.
Having been pretty darn poor a couple times in my life, I can say that both are true. I've personally been in situations where the only available options were several times more expensive than the cheapest possible one. I've also (and have known many other poor folks) made fabulously stupid decisions on what to spend our limited money on.
An anecdote, I had a poor friend who was constantly struggling to make his rent and car payments and was in a state of near constant financial emergency. He knew, down to the penny, how much money was in his bank account on a daily basis, when pay day was and all his bill paying days. "Don't cash that check until next Thursday" was a normal phrase from him. And yet when a local fair would come around, he'd take a day off work, gather his family in their beat up used car, buy expensive custom made costumes for everyone and spend the day walking around and spending yet more money.
At one point when he ended up on the wrong side of collection for non-payment of a medical bill I showed him with pretty basic arithmetic that his 2 WoW accounts would cover that bill easily if he cancelled his WoW service -- but there were all kinds of emotional reasons why he couldn't and he didn't and he ended up in very serious financial trouble.
But he also packed his lunch every day, would skip meals, knew the prices of all the local gas stations so he could save on fuel, and wore clothes that were literally falling apart. Then spend $50 one Friday night at a movie premier, or spending $500 on a tattoo or whatever.
It turns out humans are complicated, and poverty/being poor is complicated. There are probably a pretty large number of people who are currently very poor who would be in a far better situation with decent financial management -- but have never had the luxury of learning how to do that. And who would probably be better off with training on how to make better life choices.
For example, when I was putting myself through college, I remember coming to the realization that I shouldn't buy any more entertainment of any sort because
a) I didn't have enough time for it anyway
b) It turns out there's plenty of free and legal ways of killing time
Now I'm not poor (thankfully) and have carried this forward with me. I almost never go to movies or concerts, I don't buy lots of bullshit or useless electronics. I'm selective in clothes and other necessities. I don't pay for cable TV or a land-line phone (neither of which I'd use) And when I feel like blowing off some steam I simply fire up Hulu or a freeware game or youtube or I paint, read a book or watch a DVD from the library etc.
I turned not spending money on stupid stuff into a habit, but it was definitely something I had to come to a personal realization about and consciously train myself for. I still get that sweaty palm feeling when I see a Steam sale or a Humble Bundle. But paradoxically, I have the disposable income to buy that stuff because I trained myself not to have disposable income.
This is very hard to get across to many poor-but-could-be-ok folks because they have strong emotional and irrational reasons for what they do and it's those reasons that are very hard to break.
I'm almost convinced that there's a kind of poverty in otherwise high functioning people that could be "fixed" with a certain mental health and training regime, without any other changes to their financial status.
For something like toilet paper people who aren't poor probably don't even check the price. In that regard they would be paying more than someone who did comparisons to find the most economical option.
The poor have it bad. Now, what are we going to do about it?
The only way to get ahead of the leveling curve is to work really hard at first, and it's painful (or boring), and then reap the rewards after.
Or in the context of this story live extremely poorly (in the "badly" sense of the word, not the economic one), forgoing every single possible thing not absolutely necessary, and then reap the rewards later.
It's hard to forgo every single luxury, or even to forgo simple inexpensive entertainments. But it's worth it later.
I'll grant that some temporary localized poverty may exist due to circumstances beyond human control, but I'm absolutely certain that most poverty exists because humans collectively permit it, not because we are - as a whole - powerless to prevent it.
I think that poverty is within human control in the same way that cancer is. Cancer has always been around, and nobody has ever been able to solve it. While most can agree that we have more control over cancer now, sometimes we take a backwards step and introduce something that encourages it.
I'd argue that cancer, like poverty, is a circumstance we find ourselves in. Something that has been there forever, and which we are trying to get under control. And like cancer, the circumstances of poverty inordinately impact people from different backgrounds, even though with a little help from the experts, it could be better. But I'd argue that we don't actively permit cancer to exist like we don't actively permit poverty.
And then what are you saving for? Not to rent a car or buy one with a loan, because you can't afford the payments. So you save up until you have enough to buy a car outright. Maybe the cost of fuel won't outweigh the savings you can now make in getting to cheaper out-of-town stores[1]. And how long does that take? A $1k second-hand car will require 10 months without food, and something that cheap is probably expensive to run.
Maybe you're saving to move house. Of course you could move somewhere out-of-town. Now you have cheap shopping. But can you find work there? Or, if you keep your old job, how are you getting there? And, again, how long do you survive on air before you've saved enough to move house?
[1] Cheaper because out-of-town stores have to compete for middle-class shoppers who can afford to travel further to shop.
While we live in the fantasy land that they are quite smart, but happen to be poor we really can't move ahead and improve the situation, the two issues are linked.
Someone well off might also may not have the mental capacity, but it will affect them less, I get that but that's an aside until the far future when everyone is well off.
IE Using disposable diapers rather than reusable ones? It is kinda scary the article has this as a given.
I get as a single parent time is hard to find, but it also means less shopping. True you have to have a washing machine, but surely responsible use of a credit card allows would make this cheaper and easier then going to a laundromat.
Responsible use of a credit card is hard and this is more the issue, not a strict lack of money problem.
In one case, I owned my residence and still wasn't allowed to put in a washing machine; it was a condominium, and the common drain lines were insufficient for every unit to have a washing machine, so no unit was allowed to install one.
There are some non-permanent washers available, but the reviews on them appear to be very mixed, so I never took the risk to buy one, and that's as someone with significant disposable income.
Pretty sure Trump can work out a nice formula to export the poor into the developing world, in return for an expansion of H1B visas or something. Given the clamor I still see in China and India for people coming in, shouldn't be too hard to work out. Also they don't use toilet paper there.
And yes I am that cynical of the crowd around here and the effect the tech industry has had on increasing poverty.
It seems some people think that there is no such thing as too much income inequality.
How does that work?
On a recent trip I saw the after effects of a Nokia factory closing. Now one would think given the boom in phones it wouldn't be an issue for the employees to get new jobs. Two years after loosing their jobs the majority were involved in evangelical churches or multilevel marketing schemes.
Disruption does many useful things, but I feel the benefits are accruing to fewer and fewer people at the expense of many.
That's a big benefit to billions of people. The few people working in phone factories are a drop in the ocean.