Living on a Reduced Income in 1868
blogs.bl.uk
blogs.bl.uk
She was a widow of one William Christie Laing, a surgeon. Her late husband had subscribed to the Bengal Military Orphan Society for 23 years. So, presumably, he was part of the military, and as a surgeon, held a rank that would have yielded a sizable stipend.
According to the article, she received a £225 widow pension from the Bengal Military Fund. So, is this a sizable pension, or mere charity pushing her into "extreme penury" per her own assertion? One could assume that rank and years served by her late husband would have propped up her pension beyond what a widow of a common soldier would have received. Or even a common laborer who didn't came from wealth at all.
In that regard, rent wasn't her particular issue. Relinquishing her former lifestyle in order to maintain her 7 children was. Sure, the reduction of her income had a serious impact. But how does it compare to actual poverty levels at the time?
Just 3 years later, she had moved out to a different place and was living with 4 of her children. So, clearly, her financial situation did improve during that period of time. A dynamic that generally wasn't - and still isn't - all that self evident for someone who already belonged to the lower social classes.
[1] https://www.officialdata.org/1860-GBP-in-2017?amount=225
Two things to keep in mind though. First, despite the Federal minimum, many states and localities have much higher minimums, for the reason that the Federal minimum is insufficient to live off of in many places. For example, San Francisco, has a minimum of $16.99/hr. or about £29,265 p.a., very close to Mrs. Laing's pension.
Second, whether it's the Federal or San Francisco minimum, it's at best barely sufficient even for a single person. Mrs. Laing had a family of eight people. The US national poverty threshold for a family of 8 is $40K (£33,249) [0], so her by those standards her family would indeed be very poor.
[0] https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...
(Foreigner here, I don't have the minimum wage in the US super clear)
While she rented in a poor area, would 17 pounds have been on the high end or low end for the kind of living quarters it got her? What were the price levels in general for food, clothes and so on? You'd have to look at rent levels in that area at the time to make an accurate assertion.
> Even with all this misfortune, all of them seem to have done well later.
They clearly did. One unanswered question is what the intentions were behind her petition to take her children on the Bengal Military Orphan Society. Was there a real hard pressure to take such a drastic measure? Or was this a desperate plea in hopes of drawing attention and financial help from elsewhere e.g. erstwhile social circles she frequented?
Ultimately, the article does mention that the petition was denied, yet doesn't answer how she made ends meet in the following three years before the family moved again.
Wouldn't it be better to use expenditure instead of income? As an example, my rent is 40% of my expenditure. Couple of years back, my income was just enough to cover my bills. Now I've more than doubled that income. But 40% of expenditure for rent is roughly the same even now.
Is that 1/3 of the total gross pay or is that 1/3 of total net pay?
I presume 1/3 of the total gross pay goes in deductions. So 1/3 of total gross pay is 66% of total gross pay. But 1/3 of total net pay is more like 22% of the total gross pay. And that's a big difference. I'd appreciate clarification about which one of these are the NYC rental prices more like.
You've fallen victim to presentism, the cognitive bias of assuming the past was like the present.
Before the 20th century, households spent a far higher proportion on their income on food and on fuel (for space heating, cooking, lighting) than we do today. Clothing and footwear also loomed large in the budget. Housing used to be a relatively smaller cost than these.
7.5% is possibly on the low side for the time, but not astonishingly so.
Is pointing out something in the past as not like my experience "assuming the past was like the present"?
I was curious about this bank failure and looked it up. Some backstory here
https://www.qdl.qa/en/bombay-banking-crisis https://www.cnbctv18.com/finance/backstory-the-collapse-of-p...
Interesting how connected the global economy was back then too:
In the early 1860s, the American Civil War caused cotton supplies, which had traditionally supported the western cotton trade, to be cut off. In England, this resulted in a depression known as the Lancashire Cotton Famine, however, in India it led to a period of great prosperity and wealth as cotton supplies in the East and Orient were suddenly in great demand. The situation in India was exacerbated by a famine in 1866, which led to many cotton farmers turning to growing foodgrains. Overnight, many companies that had sprung up in Bombay faced extreme financial distress and their shares tanked. Many of them went into liquidation leaving their lenders including banks, holding dud paper. Speculation on Indian cotton, followed by failed harvests left Bombay’s banks in crisis and customers struggling to access funds.
Agatha Christie wrote in her autobiography about in post Great War Britain a servant being a necessity but that she wasn’t likely ever going to be rich enough to afford a car.
https://fullstackeconomics.com/why-agatha-christie-could-aff...
The space afforded seem pretty substantial. Even if it was fourth floor. That is still 6+ rooms.
Anyone who has hired a professional to do something for them can tell you the bill was quite tall, certainly not something someone living paycheck-to-paycheck could afford.
https://www.forbes.com/sites/leezamangaldas/2017/07/28/a-con...
I'm sure others on HN have more firsthand knowledge.
Humans are pretty good at seeing in the world whatever is on their mind or that they have fears or insecurities about. Sometimes that's the face of Jesus on a piece of toast, sometimes that's a scary figure that turns out to be a shadow, sometimes it's interpreting an innocuous word as reminiscent of injustices centuries in the past.
In fact, even in the Soviet Union, engineers and even highly qualified workers (!) had full-time domestic servants in 1930s. Not after the war though.
Interesting. You feel that the 1960s were too egalitarian?
it's worth noting that even though the top marginal rate today is only 37%, tax as % of GDP stayed mostly the same since the 1960s. The difference can be explained by the fact that the 91% tax rate was accompanied by a plethora of deductions, which reduced the effective tax rate.
I think there's a lot more to this one than meets the eye. The £225 pension she was apparently entitled to was a lower middle class salary at the time, and if her rent was £17 a year then some of that money is going on something other than feeding kids and a servant girl animal food on alternate days...
Here are some family budgets from the 1880's, just to get a general idea of the type of expenses she might've incurred:
"Vice" is one reason why somebody receiving well above average family incomes for the time could have a well below average ability to feed her family, indebtedness a more likely one, not actually receiving her pension [consistently] is a third. But the most logical reason for her reporting conditions of extreme poverty (in between gripes at loss of middle-class privilege) despite being entitled to a pension worth 4-5x the average wage of the time is that she is exaggerating the hardships in a letter which is essentially begging for help.
Of course, the poor had to deal with all this and scratch out a living, which is a major reason why their children were enlisted to help around the house as soon as practical.
Do you buy food daily?
My labor was extremely cheap until I turned 18 and had to be given minimum wage.
14 year old me could be had for €500/month. Come to think of it, I’m not quite sure why that’s fine in a supermarket. Maybe you can actually have a servant?