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Comment by disruptthelaw | Hacker News Reader

In addition to the other answers here, there is a large informal economy that essentially caters for the poor. This both provides them with informal means of income but also allows the poor to access essentials cheaply. For example a typical middle class corporate worker may earn a salary and live a lifestyle that is comparable to European counterpart. This same person may employ a full time housekeeper for $350 a month and this housekeeper somehow gets by because she exists in a parallel economy of sorts.

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There's minor versions of the same thing in the wealthier urban areas in the US so this shouldn't be a foreign concept to HN.

Yeah, I think what makes SA different is most people in the middle class economy can afford domestic staff.

Almost everyone in the American middle class economy can afford domestic staff.

No they can't.

Middle class by the classical "very rich people who are still technically commoners" definition yes.

Middle class by the colloquial "everyone who makes more than a kid flipping burgers but not enough to buy an apartment in Manhattan" definition no.

They might be able to afford to have a company cut their grass, have maids come by once a month to clean, and have food delivered on occasion, but they can't afford to pay a person full time to do all of those things.

Even paying minimum wage, that would be something like $20,000 after taxes. Given that the median household income is something like $60k gross; no, they can't afford domestic staff.

My point was that the vast majority of Americans are lower class.

nope

Maybe it's because I live near DC but $350 isn't bad at all if you're not paying rent. Also this is pretty common in the US as well.

$350 per month full time (albeit with accommodation sometimes included). Surely this would be unheard of in the US?

Only people stuck in exploitative situations would make $350/mo for full time work in the United States, but I wouldn't be surprised if the number of people living on ~$350/mo (including rent) is in the six or seven figures.

The economic inequality between the poorer parts of the South, Appalachia, urban projects, etc and wealthy cities can be staggering. The latter subsidize national infrastructure so it's hard to find a town with extremely unreliable electricity like one might find in South Africa, but that's it - we've even got similar segregated parallel economies.

For example, Sudhir Venkatesh from UofC did a study (mentioned in the Freakanomics book) on drug dealers and their income: he found that the rank and file made less than half of minimum wage, working out to under $800 a month full time. Now spread that across the family members that the dealer has to support and $350/mo per adult is not unrealistic.

How could anyone live on that kind of money in the US?

You don't. Your employer is paying for all the necessities because you can benefit from economies of scale (There are tons of empty spare bedrooms in the US but building extra housing is impossible in most places for example.)

Welfare. A single person would pay no tax and indeed receive several hundred dollars a year in tax rebates. They would qualify for ~$200/month in food stamps and likely get health insurance for free. They would also qualify for low income subsidized housing. With kids the benefits (tax rebates and food stamps) increase by thousands.

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