Hacker News Reader

Yes. It is true that some people just need to live within their means. But for people who are poor in the traditional sense, the cash flow is just too low. There’s no way to live well on that income. Finding ways to save cash isn’t really an endgame, other than perhaps tactically preventing going bankrupt from an extra medical expense, etc. What you need is more income. The most reliable vehicle to this is to go to college and make plans to go into a healthcare/engineering/accounting etc career, but that’s a really hard plan to pivot to at a certain point in life.

> but that’s a really hard plan to pivot to at a certain point in life.

or while the cash flow is just too low at any point in life

There's something seriously wrong with a society where nobody can live comfortably without a white-collar job while at the same time there's no way we would survive if we were all accountants.

I agree. How do you see us fixing this? Maybe universal basic income? Over the last century we've eliminated many of the positions in agriculture and manufacturing that were traditionally considered good blue collar jobs. Automation on that front is only going to increase. Obviously the gig jobs - Uber, Lyft, DoorDash - are a really poor substitute...

Here are some solutions I can think of. No telling if any would work, these are just conversation starters.

1. Socialism. I don't need to describe this because you've already heard of it. :)

2. Extremely general insurance. You don't know how successful you're going to be before you're born, so you have insurance policies for lifetime income. If we can insure against the treatment costs of cystic fibrosis (parent's insurance covers dependents, then they get their own insurance when they grow up) then we can insure against the costs incurred by being born with an IQ less than 160 in an economy that's out to get you if you so much as blink. Is having 159 IQ a pathological deficiency? Well, pathology is relative to your environment. ;)

3. By fixing our existing system. Maybe all of these pointless wars, intelligence agency black budgets and the dead weight overhead incurred by structuring government projects to allocate funding according to the influence of representative districts, adds up and costs us in a way that puts the lower income 50% underwater first. Maybe there's enough to go around, but we're wasting it.

#1

Plenty of blue collar jobs pay enough to live comfortably

A society consisting exclusively of highly specialized welders and accountants can't operate either. We do actually need someone to deliver packages for example.

The jobs that don't pay a living wage are oftentimes more essential than some that do.

Do we need someone to deliver packages? If last mile package delivery was a skilled profession that earned workers $200k a year, more people would choose to walk/drive/bus to the depot. There's no point streamlining a process at a cost of e.g. $35k/year if you can pay someone $30k/year to do it.

If people are walking to the depot, the delivery work is still being done, but for $0/hour.

>Do we need someone to deliver packages? If last mile package delivery was a skilled profession that earned workers $200k a year, more people would choose to walk/drive/bus to the depot.

Do we need someone to farm food for us? If farming was a skilled profession that earned workers $200k a year, more people would choose to grow their own vegetable garden.

And then you might decide to pay some one to help you in your vegetable garden part time, and before you know it...

The point here is that jobs are elastic and can be automated or shuffled around, we just choose not to do so because we don't value the time of the worker enough. When you get a package delivered for $2 instead of $3 you're implicitly putting a lower value on the time of someone else.

We will always need someone to deliver packages. However, maybe we do not need someone to deliver a package of rice from Amazon for an unlivably low wage to a recipient who could have just gone to the supermarket.

The same thing applies to the agricultural industry, which abuses immigrant labourers doing backbreaking work for low pay to provide you cheaper luxury goods. Maybe if strawberries reflected a livable wage you'd choose to eat more easily harvestable crops, like apples.

>we just choose not to do so because we don't value the time of the worker enough. When you get a package delivered for $2 instead of $3 you're implicitly putting a lower value on the time of someone else.

Is that bad? Like it or not, different types of work provide different value to the economy.

>maybe we do not need someone to deliver a package of rice from Amazon for an unlivably low wage to a recipient who could have just gone to the supermarket.

Sure, that MANGA programmer could have gone to the supermarket himself, but why should we stop him from spreading the wealth around by paying someone else to do it for them? Would the delivery guy be better off if he had 20 minutes of his time back but was $5 poorer?

It's a reply to the claim that "a society consisting exclusively of highly specialized welders and accountants can't operate." I don't think it's bad that labour has a market value, but I do think it's bad that we can't imagine a future where most or all of the jobs are higher paid.

Again, this isn't an attempt to dunk on anyone who gets a package delivered. It's a defence of the market's ability to stretch to accommodate rising wages in a sector, and an attack on the idea that a low-paid underclass is necessary.

>It's a defence of the market's ability to stretch to accommodate rising wages in a sector

I don't see how this can be solved by the market. At the marginal level, raising wages can do a little to push the income of the lowest earners slightly higher, but it's not really a solution to the general problem of "people who can't earn enough money to afford some minimum standard of living". For one, it actually doesn't increase overall earnings, because businesses end up cutting hours[1]. Second, it only affects people who are employed, so the policy does nothing for the unemployed/disabled. If society wants to guarantee a minimum standard of living to their members, they should just do it (ie. redistributive policies), rather than trying to coerce the labor market into doing so.

[1] https://www.nber.org/papers/w23532

Rising wages for the lowest earners are the consequence of more policy changes than just minimum wage increases: subsidised training programs, public infrastructure projects, lowering full employment rate targets for reserve banks, etc. Anything that increases competition for the pool of available workers.

I'm not even advocating for any of these things here, or in my earlier comments. I'm saying that if by some unspecified means the wages for last-mile delivery drivers doubled or quadrupled or more, society would absorb the difference instead of collapsing. It wouldn't fail to operate. Even agriculture would be survivable if it happened slowly enough to mitigate the sudden shock.

"The jobs that don't pay a living wage are oftentimes more essential than some that do"

Which was said before quite often, but still many people were surprised what qualified as a critical job - and what not, during the covid lockdowns.

And the shame is - the pay is still low for most of lowly regarded but critical work.

Criticality is not the only factor when it comes to pay. Supply of capable people also plays a part.

IE city garbage collection is critical, but finding staff to do it isn't too hard.

For me, when the salary/wage falls below living standards is the issue. Hence minimum wage should be a thing.

> Which was said before quite often, but still many people were surprised what qualified as a critical job - and what not, during the covid lockdowns.

And also what was considered to be a "non-critical" job, often by the workers themselves.

Pre-covid I don't think anyone would've predicted teachers standing up as a collective and saying "We are not essential!". But this was pretty much the case globally and I think it will have long-term impacts on the field.

Problem with teachers is that they are critical but there is about a 18 year gap in seeing the failure

Thats the funny thing about critical work. It pretty much has to become commoditized in order to be common enough to be critical Therefore it ends up in a cycle of depressed wages with no way back up.

"It's the [housing] economy stupid"

If we actually built an abundance of housing, where it would cease to be a vehicle to park stores of wealth, where there is no musical chairs competition to outcompete each other for the basic security of shelter, the deflationary cost savings that would percolate through the economy would be absolutely immense. I'm talking about even chipping away at the cost of education and healthcare immensely, because of how much of the cost goes into indirectly paying the housing of the huge amount of workers in those industry. In the world of mass housing at the cost of construction, everything is cheap, and we live with much more abundance.

At some point you're just hitting the raw material cost of roof+walls+insulation+labor built to code which--for a pretty basic structure--can easily be $120k no matter the location. Even if land was free this would still be unattainable for many under-homed people.

That's why I pointed to "mass housing at the cost of construction." $120k is the realm of minimums for SFH. For a bare necessities 432 Park Avenue[0], we should be able to do 3,000 residences within 85 stories of 800 sqft. apartments, at 50k per, amortized over 30 years and even cheaper after they're used. The Soviet Union couldn't give their people a lot but they could at least make some housing. 432 Park Ave's current prices are due to luxury amenities, Manhattan land, and inadequate housing supply.

[0]https://en.wikipedia.org/wiki/432_Park_Avenue

We can mass-produce mobile homes for $70k, but as personal property they depreciate and are harder to finance, and some people have been screwed on renting the land.

Its immigration policy too-- the 50 million or so foreign born living in the US today have overwhelmed our housing production.

Yes, that's true. But we also need them to build the housing.

Why??? Why not just pay a living wage to American citizens?

I was helping a hard working kid with some financial education and told him essentially the same thing. He simply needed to make more money. He was making $13 / hour at the time and I helped him line up an interview with a guy who was ready to hire him doing the same thing for $25 / hour + professional training.

He ghosted me and the interviewer. I’d been working with him for MONTHS to help get his life straightened out.

I still have no idea why he did it.

Is it possible it was a cultural thing? This is reading a ton into small details and generalizing a lot but... You mentioned you were helping him "get his life straightened out"; maybe he felt like it was going to pull him away from the friends that he'd grown up with? Kind of a difference of subcultures: one subculture that's poor and that values loyalty to friends over most other things (money comes and goes) vs a subculture that values career and money over most other things. (Not that these values are necessarily always mutually exclusive... but sometimes it can be uncomfortable to straddle the gap.)

The other thing that makes me wonder if it's a cultural gap is that you mentioned he was going to be able to make twice as much as he was making before for doing the same thing. If it's the same work as before, what's the difference if not cultural? Learning to talk a certain way about the things you do, use more professional language, present yourself a certain way, and ditch the people you work with if you can earn more money doing the same thing. Then he's eroding his value for loyalty by learning to bullshit the people he work with on a regular basis, because he's acting in a way that's not how he normally acts, and he's established a precedent that he's willing to ditch his new coworkers for an entirely different batch if he can make more money by doing so. He might look at that and look at the friends and/or community he already has and decide he doesn't like where that path might lead him.

That could also explain why he ghosted you. He might feel ashamed because he feels that he owes you for genuinely trying to help him. But how can he repay you except by accepting your help? And explaining where he's coming from would only lead to an ugly conflict or you convincing him that he's irrational and should just take the job -- but he's already decided he doesn't want to go that route. If he cuts all conflict, nukes it from orbit, then he can get on with his life however he wants to.

Without too much detail, he came from a really bad home environment. Ran away from home at 16 and was 22 when I was helping him out.

The only thing that made any sense to me was some type of loyalty to the place he was working (commercial HVAC company) but it always seemed like this place treated him badly. He’d been there for almost 3 years though with the prospect of a raise dangled in front of him like a carrot and never materializing.

If his current employer was a mom and pop, he may have owed the owner money on screwball terms, from deductions from his paycheck (unless he left) to "you don't have to pay this back unless you leave".

From my reviews of his finances, nothing like that ever came up.

I knew someone like that, and I always suspected he owed his boss money. Turned down a job with better benefits with a large, much more secure company to take a counteroffer from the entrepreneur who was going broke. He also had this weird bond with the employer that mistreated him and kept dangling a raise (real soon now) in front of him.

All we can do is try hard not hurt people with our version of good will. I've done the same with the same outcome, one of those people went on and made an impact and is cited frequently here, but not because of any help from me.

You gotta give everyone a chance if you can. I don't see why anyone should feel bad for giving someone an opportunity that is later thrown away. You did the right thing by giving someone that opportunity; whether he takes it or not is up to him.

If everyone in the world thought like you, the world would be a better place. Unfortunately, this world is full of nepotism and tribalism. But people like you (and the parent commenter) help balance it out.

I've been that guy. There are any numbers of reasons for this. Shame, low confidence in meeting yours (and everyone else's) expectations, inability to imagine a better future (which leads to unimaginable cognitive load as you act in ways your brain finds torturous without any sense that it will ever improve), etc, etc.

Typical people are all, pretty much, the same. Non-typical folk are different in their own ways. There is no single path to getting someone back up on their feet. This is one reason why anti-poverty campaigns - particularly the "mutual obligation" style of welfare - fail.

That makes some sense to me.

I started my pivot from a trade background into tech by going to university when I was 30. I'm 36 now and about to graduate while I've also been working in the field now for over two years. I've done this while being a single father to two young children (they were 1 and 3 when I started night univeristy). It was certainly not easy. I nearly burnt out hard multiple times.

There's something I remember being told (or maybe read about too) related to the gift culture of extreme poverty as an adaptive behavior for survival, but that paradoxically keeps people in poverty poor.

The basic idea is that you and all your friends are poor and someone comes into some amount of money, all of that money is pretty much immediately spent on helping friends or just material purchases rather than saving or planning. Partly this is because there's some feedback loop to expecting money not to last long, but also because then everyone in the community is spending money on everyone else. When you need to rely on the help of friends to survive at that level, being generous when you come into money makes it more likely your friends will help you in the same way.

This gets taken to an extreme where there's pressure to not save. If you're found out to have money and have not immediately spent it you'll get shamed by your peers for being greedy or for acting better than them. Then if you end up needing financial help later maybe they won't want to help you (which at poverty level could be existential).

These kind of social local maxima are really hard to break out of.

That’s why saving clubs are an awesome solution. Every month you and 12 of your neighbors put in money and take turns taking it out. You can make big life changing purchases without the stigma of holding on you cash. Also it eliminates the need for banking

> There's something I remember being told (or maybe read about too)

I heard it from a youtube video

https://www.youtube.com/watch?v=AchISJUKfH4

I think people miss how expensive it is to be poor.

All the free lunches are served to those with a high ROI.

There is no free lunch.

I would add that it’s not only expensive financially but also in terms of time.

I grew up very poor and was fairly poor as an adult until about 6-7 years ago. I constantly had to make time trade offs. Do I exercise or evaluate and cut coupons to make my meager grocery budget last longer? Do I meal plan to make my money stretch further or spend that time investing in a skill? Not to mention things like not having reliable transportation, which meant taking the bus to and from work which tends to be a 2-3x longer commute. And if the bus was ever late, minimum wage retail jobs don’t really care so you get a “mark” on your record and potentially written up/fired if it happens too many times.

I consider myself very fortunate that I was lucky enough to find myself a tech job and pull myself out of my previous financial situation. But I get the sense that a lot of people here haven’t been through that so they underestimate just how much more difficult it is to be poor, at least in the US.

I’ve had to juggle that in periods of my life too, on the polar opposite side I love how fast things can be.

Buying a car with a cashier’s check after negotiating lower means no financing charges, interest, credit pulls and just having stored value for a little while. So much cheaper both financially and in time.

Right now my used car is worth more than when I bought it.

I helped a kid at my church pay off a title loan that he got when he was desperate to make rent. The interest rate was 212%.

the poverty tax is real