The cost of being poor: Why it costs so much to be poor in America | Hacker News Reader

The cost of being poor: Why it costs so much to be poor in America

finmasters.com

227 pointsshepherdjerred562 comments

Lets all say it together:

Car dependency and bad city planning.

This is literally the majority of the problem.

If you have a walkable town, you don't need a car for your basic you need to live. You just walk to the store. Also, because going to a store is not a car trip, you can do it every day, or every other day. You don't need a insanely large fridge and freezers that Americans seem to have. You can also take advantage of temporary price reductions.

Towns built around walkability, bikes and public transport are just superior in every way that we can measure, from health to water use and so on.

The US needs to fundamentally change its approach to cities and towns. You can't have poor people working in cities to provide services and then force them to live in some Cul-de-Sac cheap house 1-2h drive outside of the city.

I highly suggest people listen to Peter Calthorpe, who coined the turn Transit Oriented Development. Here some great videos that are worth checking out, one general, one about California:

- General/China: https://www.youtube.com/watch?v=KqldZhxl86I

- Cali: https://www.youtube.com/watch?v=fUtdFbK4YG4

This article is missing the forest while talking about trees.

It's disheartening to read some of the replies to your comment. A large number of Americans seem so traumatized/conditioned to the suburban/car-centric setup, that they can't even envision a future with Transit.

It is doubly sad, because the political and economic dominance of the boomer era was so pronounced, that many Americans now dream of a future (suburban white picket fence house) that is derived from exactly this unsustainable past that made the 'dream' unachievable in the first place. American suburbia works if you live in a unipolar era of unprecedented wealth that's unmatched almost anywhere else in the world or in history. Well, duh. It's no different to considering Dubai's abandoned Palm Islands or World Islands a sensible infrastructure because they haven't yet bankrupted a country with practically infinite per-capita wealth. The first sign of economic troubles will decisively doom your nation. It's started for America, and other unsustainable cities will follow suit.

it is staring Americans in their face too. Every private money-conscious closed-system mini-govt ensure that transit and density are in order. People rave about the convenience of buses in college towns and Disneyland's metro system, as if either of those are unrealistic outside of those contexts.

I have said it before and will say it again. American urban infrastructure (or lack there of) is the closest thing we have to a monocausal root of all of America's problems. Obesity, loneliness, cost of living, low trust, Govt. debt etc etc.

Mostly agree.

The problem with monocausal issue is that it also touches everything.

To really address it, there is no monocausal solution.

- Taxation policy (Land Value Tax)

- Transportation policy local and federal level

- Services policy (police, social services)

- Land use policy (mixed-use, multi-fam homes and so on)

Problem is many of these institutional systems were developed or revolutionized in the exact wrong moment, in the 50/60. So that many standards and standard way of doing things have encoded the exact wrong solution.

Traffic engineering is a particular victim of this. Everything is done by a book of standards, and the standards are just totally wrong.

> Problem is many of these institutional systems were developed or revolutionized in the exact wrong moment, in the 50/60.

In addition, because of the way the policies were made and allowed select people to get rich from these policies, those people now use their money and power to further entrench these policies to keep their own power and money. The auto industry wants continued government subsidies for roads, vacant land owners want to continue property tax instead of land value tax, etc.

It's like we've dug a massive hole and some of us see a way out, but many people with the tools are still digging.

I'm as much of a transportation alternatives fan as anyone, but when I got to the "Cars vs Public Transit" I just rolled my eyes a bit. Modern ebikes cost a few thousand dollars, and are so absurdly cheaper than cars, they pay for themselves within a single year.

Average Annual Cost of Car Ownership:

$9,282: https://www.aaa.com/autorepair/articles/average-annual-cost-...

$5,264: https://www.move.org/average-cost-owning-a-car/#data

$11,756 the first year, $7517 the fifth year, $5914 the tenth year: https://www.caranddriver.com/research/a31267529/cost-of-car-...

Cost of a top-of-the line cargo bike:

$6,499.00 (Dual battery, 1,000Wh), Bosch dual-battery system (500/1000 Wh) for a range of up to 206 km (128 mi): https://www.ternbicycles.com/us/bikes/472/gsd-s10-lx

If you live within 20m of where you work, and cargo-centric ebike will suffice (or farther if you can charge it at work). You can take kids to school on one, you can go grocery shopping on one, you effectively do every single trip in a modern city.

For the few things you can't do, the occasional cost of short term car rentals are drops in a bucket.

The point I'm trying to make is this. Yes, public transit is important, yes we need to make our cities interconnected with trains. However, if we want to create a functional system for transit alternatives... we can do it literally today, by creating network of low-car/car-free streets for ebike traffic.

This doesn't work so well as to warrant an 'eye-roll' for a large portion of the world, where it would be ridiculous to expect people to be riding ebikes long distances, for half the year or more. In my city, people would think you were insane if you tried riding more than than a few Kms with any regularity during the winter, since it often hits -45 C (-49 f), generally with significant snow and slush on the ground. It's also not exactly trivial to make such a huge change to layouts of cities' traffic flows.

Edit: As a point of illustration that I'm not overstating the issue, my city actually has a thriving e/bike rental market for 5-6 months/year and for the other part of the year, the rentals literally disappear and you can't find a single one until part way through spring season.

Aside from the triviality that the cities with highest rates of cycle commuting all have snowy winters (Denmark, Sweden, Norway), a city where people regularly commute in -45C will really not matter if people are walk+transit or cycling. -45C is not normal.

If you're riding at any decent speed, say 20 mph (32kph), think about the additional windchill that adds: -30C becomes ~-46C, if you're blessed enough to not have existing cross or head winds.

Base -30C temp is pretty normal here during the winter (3+ weeks worth before winter even started this year). Granted, in my city at least, we would have to do a much better job clearing/sanding your proposed bike roads than we do our regular roads to maintain that speed on a bike with any sort of safety. In any case, it's a helluva lot easier/more comfortable and less risky to bundle up and trundle to the train/bus station, than to risk additional frostbite from that windchill or wipeouts due to reduced stability of bikes on ice for any significant time. Again, assuming you could convince everyone else who has money for a car to abandon their cars and convert enough roads to dedicated bikeways, and build the infrastructure to safely store a bunch of $3,000-$7,000 ebikes.

Beyond all that, ebikes don't solve a lot of problems if you have a family of any significant size. If I have to buy, maintain, and secure 5 ebikes (and get my kids good with and prepped for riding in the cold and snow), public transit or even a car start looking much, much better.

I realize that most people don't live as far north as I do, but there are many millions who do and my whole point was that it's not eye rollingly obvious that ebikes are the immediate solution for everyone.

I do find it curious that the only neighbourhoods in my own city where use of bikes for that sort of thing (grocery shopping, taking kids to school etc.) is common are typically fairly well-off ones. I'm wondering if part of the reason is that those in poorer neighbourhoods are too worried about having a bike stolen? (it would certainly worry me!). Obviously part of it is also lack of investment in decent bike-friendly infrastructure. But I suspect it may be partly cultural - esp. in areas where there's a significant number of recent immigrants who might think of bicycles as something people would only use to get around on in the poorer countries they came from.

It's always hard to gauge why large groups of people don't do things. I think one of the main issues is just getting it into peoples minds that $6,000 is a reasonable amount to spend on a bicycle:

"But you could buy a used car for that much"

is the common refrain I hear. Yes, you could buy a cheap car for that much, and then immediately have to dump in at least $80 a tank for fuel.

The concept of using a bicycle instead of a car is just so foreign, that I think most American without active inter-cultural experience, say, living in a foreign country or at least multiple areas of the US, are not going to really understand how that would even work without having it spelled out for them line by line. Unfortunately, I fear that the people most likely to fall into a cultural homogeneity are low income, for exactly the reason that uprooting oneself is expensive.

When I go line-by-line explaining how car-free or low-car life is wildly less expensive than normal commuting, the main reply is... "Yea, that's stupid. Nobody is going to do that." I hear this in San Francisco, where anyone can trivially walk down to the wiggle and watch literally thousands of people every day commuting by bicycle.

At this point, it seems most people won't actually approach the subject rationally. People don't do it because it seems mentally ridiculous to them, and honestly, once I can get people out on a bike, they suddenly think that it's actually a really nice way to commute.

> I think one of the main issues is just getting it into peoples minds that $6,000 is a reasonable amount to spend on a bicycle

Not sure I agree, given that you can buy a perfectly serviceable 2nd hand e-bike for a good deal less, though if you want something capable of carrying kids/groceries etc., you're still looking at a considerable outlay if you have very limited savings (3k seems to be a pretty standard ask for good condition ones). Still, you can get new e-trikes with reasonable carrying capacity for well under 2k, and a lot cheaper still if you're fit enough to power it yourself :)

FWIW, I don't personally go largely car-free for any sort of financial reason - I just much prefer getting around by bike than car, and as long as there's access to a car when needed it's basically never an issue.

The math is obvious. If it's $6K vs nothing, I agree with you, but that's not what we're discussing. It's $6K vs minimum $5K/year. Asking people to ride a bike shouldn't be treated like a "craigslist purchase." Car replacements are serious pieces of machinery.

I mean isn’t it stupid to expect bike usage given the layout/organization of most of our cities?

No, obviously. If you live within 20 miles of where you work, and ebike is a perfectly sensible way to commute.

100% agree with the bike policy thing.

And you don't even need an e-bike in most situations.

It seems like a large stretch to call car dependency "the majority of the problem" when only one of the eight areas in the article are clearly related to car dependency. For transportation, yes absolutely car dependency is a major cost. But how would reducing car dependency significantly affect the high cost of childcare, for example?

I completely agree that there would be a lot of benefits if the US focused on making urban areas more walkable and less car-dependent, but I feel it's often presented as though it would solve every problem that the US has.

> But how would reducing car dependency significantly affect the high cost of childcare, for example

1. Driving children to schools and other activities is a huge cost in time and money. If children could walk and bike, it would be much cheaper. I walked to school (even back home for launch) and then took the bicycle to soccer practice.

2. Children can spend time alone much earlier and travel alone much earlier. My parents were comfortable with me being alone at home for launch and after school, risk of car accidents was vanishingly small.

3. Mother helping each other out in a walkable neighborhood is trivial. My mother worked, I would simply walk home with a friend and would it at his house. And then later when my parents were home from work I would walk home. No big deal.

4. Having distributed housing policy with lots of option leads to cheaper apartments being available next to richer neighborhoods, means that its easier for low paid child care workers to live closer (walking distance) from the people who have children to take care off.

5. Having mixed use zoning allows for buildings that have child care facilty closer to actual housing in general.

> but I feel it's often presented as though it would solve every problem that the US has

I doesn't solve every problem, but it impacts most problems positively.

Also if you're not spending your time, money, and energy on gas, a car payment, insurance, registration, smog, or stressful traffic, you have time, money, and energy for other things. Let alone the huge costs to society incurred by the myriad ways the car-based hellscape destroys lives, limbs, and property.

On top of that, iirc even if you never have an accident or use a car, living next to a busy road has also been correlated with lower life expectancy regardless of socio-economic indicators.

I have a couple of small stores nearby and I don't use them at all for groceries because the selection is limited and the prices are high. I drive the 1.5 miles to the larger local store.

Those stores could have different variety if more people relied on them, but they simply don't have the space to compete with the larger store. One gets by selling alcohol and convenience items, the other is really a meat counter.

This is a pipe dream. US cities will never be able to accommodate public transportation as a viable alternative to car ownership. Take a drive around Europe and take a drive around the US and it becomes very obvious, very quickly, why that’s the case. You can’t go back and relayout every American town and city. Just not gonna happen. Sorry. Find something else to pour your energy into.

Not to mention that many/most Americans don’t want to live in your utopia. I’ve lived in walkable, lively parts of cities. Now I live in a stand-alone house and drive everywhere and I much prefer it.

> You can’t go back and relayout every American town and city.

You don't actually need to do this! Its a fantasy that you somehow need to re-design your city to make improvements.

In fact, by simply removing some harmful regulation you can already do 100x better. Removing the function based zoning. Allow mixed use as default. Removing lots of the other regulation such as minimum lot size, offsets and so on.

US city were not designed for cars, and mostly they are simple grids, and that's totally fine.

Changes in pricing for things like water, move to block pricing and increase price depending on how much infrastructure is required.

The tax system should move from property based to land based.

Cars need to be slowed down, lanes need to be made thinner, and add a protected bike lane. This is actually a case where US insane wide streets come in handy, space for bike-lanes is already there.

> Not to mention that many/most Americans don’t want to live in your utopia. I’ve lived in walkable, lively parts of cities. Now I live in a stand-alone house and drive everywhere and I much prefer it.

Even rural and small towns or even villages can be walkable.

And your taxes are likely not covering the infrastructure required for you live-style, you are subsidized by the poorer parts of the city you live in.

Also evidence shows, that areas such as I suggest are getting a huge amount of demand and are really expensive. So I think evidence is clear that there is a huge amount for such development.

And evidence also shows that where they happen they actually make sense for cities in terms of taxation.

This playlist compiles a lot of this: https://www.youtube.com/watch?v=y_SXXTBypIg&list=PLJp5q-R0lZ...

> Find something else to pour your energy into.

I'm not 'pouring my energy into it'. I'm simply commenting on an article. That seems to miss the forest because of the trees.

> You can’t go back and relayout every American town and city.

We did it before when we ripped out all the street cars and replaced them with stroads.

I would have agreed with you... up until the pandemic. If we didn't live in a car dependent country, way more people I know would have died. You -could- make the argument that we'd probably be healthier and thus, wouldn't be as severe of a risk but that's neither here nor there.

I barely leave the house. And when I do, I've mostly always taken as much precautions as I could. I get curbside pickup for all of my groceries. I can't drink the water locally, so I'm dependent on bottled water.

All of this would have been a disaster if I had to cram myself on public transit to go places (definitely would have caught COVID then) or lug a fucking case of water to my house 4 times a week.

> way more people I know would have died.

Ähh no idea what you are talking about. There is no evidence that less car depended places have higher death rates. You can't just throw out something like that without explanation.

How many people have been saved because they had a neighbor who was one apartment below and was able to help very quickly.

I would argue to opposite of what you suggest is true. More dense less car depended places have a far easier and cheaper time getting medical care to people.

Getting medical care to some far flung subburbs is part of the issue.

> I barely leave the house. And when I do, I've mostly always taken as much precautions as I could.

Why? What crazy situation is this? Most people in most places in the world are not afraid to leave the place where they live. And that was even true for most poor cities. Locals are usually not afraid to walk to the store down the street in their neighborhood.

> I can't drink the water locally, so I'm dependent on bottled water.

That again is a problem of infrastructure. Infrastructure problems are very hard to solve in far flung suburbs and are very expensive because the amount of piping goes up per person.

So I agree, that's a very bad situation, but the solution to that is infrastructure, and not car dependency.

> All of this would have been a disaster if I had to cram myself on public transit to go places

First of all, there is this thing called walking. Also a think called, a bike.

Also talking about public transport in terms of 'cram' is funny, because often you have more space in public transit then in a car and you can work or watch movies.

You seem to have a US perspective of public transit being some dingy lower class thing.

> definitely would have caught COVID then

Funny I never had COVID and I live in Switzerland, the most public transport orient place in the world maybe.

> or lug a fucking case of water to my house 4 times a week.

I actually do that with Cola Light an it isn't that big a deal.

If you want to do really big one time deliveries for some bulk items every week, that's fine. Or you can can also get a small wood cart or some kind of wheeled transport device and carry a week plus worth of water.

> because going to a store is not a car trip, you can do it every day, or every other day. You don't need a insanely large fridge and freezers that Americans seem to have.

I don't want to go to the store that often. Going to the store twice takes way longer than going once and buying twice as much stuff, even if you don't count driving time.

> You can also take advantage of temporary price reductions.

I can do that now, by buying a bunch of food when it's on sale, then loading it all into my car and putting it in my fridge and freezer that have room for all of it. In your world, I couldn't do that.

> I don't want to go to the store that often.

Then don't, its not forced on anybody.

What you are missing is that you think of going to the store as a trip in off itself. If you like in a walkable community, going to store is just something you do on the side.

I might bring some of my recycling to the center, go to a friends place to hang out then on my way home I quickly go to the store and pick up a few thing that I am missing.

Or simply on my way home from work.

Or sometimes I just go because its a nice couple minutes walk in the fresh hair and I can get some fresh bread.

> I can do that now, by buying a bunch of food when it's on sale, then loading it all into my car and putting it in my fridge and freezer that have room for all of it. In your world, I couldn't do that.

You realize that you just said that you need a car and a large fridge and freezer to save money right? I have neither of those and pretty sure that saves money.

Often those lower priced things are not huge bulk products that you can buy at lower price in unlimited quantity. What I am talking about is that usually there is a box with lots of stuff that is close to expiry date that you can pick up for cheap.

> Then don't, its not forced on anybody.

If I weren't allowed to have a car anymore, then it would be forced on me, since I wouldn't be able to buy more than I can carry in one trip anymore.

So first of all, go look at the Netherlands. The idea that you can't buy in bulk without a car is nonsense.

Even when I was child we had a little cart for the bicycle (or just pulling) that you could put a gigantic amount of food into.

Second, unless you live literally right in a city center where I would advocate outright banning cars, nobody is forcing you. And even then, if you need to move, there is likely some special thing you can get to be allow for that to happen.

What I want is for drivers to pay for the actual cost of space, and infrastructure (and pollution and sound and traffic) that they are causing. So if you are rich, then yeah, have a car, do your big box score shopping run and go buy 50kg of rice and store it in your underground bunker or whatever.

However, as a society, building a society where 20% have a car, rather then 80% is clearly a good thing, from virtually angle level you look at it. And even those people that have a car, maybe go from 4 trips a day to 0.5 trips a day.

Who is proposing the forceful removal of cars? It's about having options.

> 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 a 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.

Even if the poor are smart and well behaved this will still apply.

Te actual example is pretty bad. And the general case doesn't actually hold up.

You can get really decent pair of stable boots that can last many years for pretty reasonable price. The increase in quality compared to price of some super custom boots isn't actually sensable.

99% of what rich people buy is not of some massively superior quality. Specially in terms of clothing.

Maybe some really good winter clothing is a exception, but even then layering is probably a better solution to stay warm.

So really I don't buy this explanation unless people can give me some better examples.

It's from a novel in a fantasy setting. I don't think it's meant to literally reflect what happens with boots in the real world, it's meant to be a metaphor.

It does happen quite literally in the real world with umbrellas, by the way. I live in a quite rainy area. Around 7 or 8 years ago I spent around €60 on a good Knirps umbrella, haven't needed another at the moment. When I bought cheaper umbrellas (not really due to skimping, but I didn't really know the good ones) they only lasted 1-2 years before totally breaking and becoming unusable.

Yes I understand that. But then what are the real world example, because non of the once provided are convincing.

It's certainly the case that anyone who needs an item but doesn't have cash on hand for it is going to pay more (by borrowing and paying interest), which isn't quite the same phenomenon but boils down to the same conclusion: in many cases, it costs more to be poor.

However I will agree there are likely more cases where buying the cheaper product is the most economical option even in the long run - obviously true for perishable items, but e.g. when deciding to buy 2nd hand vs new, and yes, even for things like clothes, there are clearly examples of items whose price bears little relation to their likely longevity. Though I would suggest in general that a $100 pair of shoes is likely to last more than 4 times longer than a $25 pair.

Maxing out your 401k, ibonds, HSA, mega backdoor Roth. Having extra money to buy the current market dip we are in.

> Maxing out your 401k

That's a political choice made in the US not nothing inherent.

And I don't have any idea what most of these other things are.

And determining if something is a 'dip' is just stock speculation.

They just gave you a real-world example, umbrellas...

I have lived for decades in an very rainy country and almost never use an umbrella.

Umbrellas often get left behind in bars and are available for cheap second hand, sometimes even free. I have one, that I almost never use but I had it for 5+ years and it was many years old before that and it looks like a really cheap model and its still usable.

So sorry, I don't buy a social theory based on higher quality umbrellas being not affordable. Specially for an item that isn't actually required. A cheap umbrella can still last years.

If you could built a real social theory based on this concept, then it should be easy to list lots of things that are really high impact, not umbrellas that are a vanishingly small portion of spending.

Manufacturing has gotten substantially better even in the last thirty years - things that used to be absolute crap at the low end are usually good enough to be thrown out before they wear out.

Two cases where it can still apply are toys (Lego lasts forever even if some pieces get lost/broken but damn is it spendy) and things like https://saddlebackleather.com/mens-leather-backpacks/ - I have one that has lasted 10+ years so far and none of the previous Walmart specials lasted more than three years. Could a middle ground be found? Sure.

Another example these days might be energy related - if you’re “well off” you can afford to get a well insulated house with solar and such to offset future energy costs.

Talking about backpacks, its quite funny, like 12-14 years ago the local super-market Migros ran this promotion for a backpack, it was super cheap and an incredibly amount of people had them.

I still see those quite often. Now it could be that the same model was sold later. I had mine for many years and used it daily. And to be honest I could have continued using it but we were rich enough that my mother simply bought another one.

Cheap backpacks go for 30$, so even replacing them every 3 years isn't a bad deal compared to the 600$ backpack that lasts 10$+.

> Another example these days might be energy related - if you’re “well off” you can afford to get a well insulated house with solar and such to offset future energy costs.

The most effective way to reduce energy cost is to have a smaller living space and not drive a car. Also, instead of lots of heating, you can heat to lower home temperature and wear layers.

Now for the really poor in cold climates heating is certainty an issue sometimes and state welfare should be provided for those that can't afford that.

I am assuming you never heard of "I'm not rich enough to buy cheap shoes" or some variation of that and this doesn't intuitively make sense for you. And I hope this doesn't come off like I'm mansplaining or smartsplaining or whatever :)

- Renting in San Francisco and New York. $$$ gets you way bigger and better places than $. It's not thrice the value. It's over 5x the value. This becomes very obvious as you move up the salary ladder.

- To plagiarise a Reddit post on this exact topic (which the OP article was plagirising but...) "poor people can't buy in bulk, so they never get to enjoy the savings of Costco"

- A whole cow costs less than the sum of the prices of its parts. Same applies to poultry and fish. Vegetables seem to have a linear price to amount ratio but that's largely priced in way earlier so it's kind of an illusion.

There is no evil force at work. Simple economics really.

- Economics of scale. This probably applies so widely that it's hard to overstate. e.g. Costco, better boot, whole cow. There are fixed costs to transport, customs, maintaining a store, sales people etc. Cheap stuff has to sacrifice quality so you come back more often - frequent enough to help with the fixed costs.

- Money today > money tomorrow. Not sure if there is an economic principle behind this because it doesn't always hold, but everyone except banks believe it always holds. Maybe because we believe we can invest it real good, or we enjoy the security of it (unless you're better than banks at collecting and/or selling debt). E.g. rent in SF. It takes longer to find tenants for $$$ apartments. And landlords lose more money when they let $$$ apartments sit empty. So, they can't expect to charge 2x the rent for 2x the square footage. Usually 2x the rent offers >= 2x square footage AND more amenities.

Apologies for errors. Had to write this on mobile.

Yes but you need to balance these things in the other direction. You are just listing all of the economics of scale, without any of the drawbacks.

First of all about shoes. Yes, as I wrote in another post, some % of society can not even afford a decent pair of shoes, but those people should be on welfare. The question is, how do you make a society where this applies to very few people.

> - Renting in San Francisco and New York. $$$ gets you way bigger and better places than $.

That is questionable, location is the main benefit. Maybe in terms of space. But in terms of getting access to the local job market, local transportation system and access to the local market this isn't the case.

> - A whole cow costs less than the sum of the prices of its parts.

Yes, but unfortunately I can not store a whole cow in my apartment.

Even the poorest people can usually buy a 5kg bag of rice or something like that. Going beyond that and buying a 100kg pack becomes unpractical.

The reality is most middle class people don't shop at Costco. Specially in urban places this simply doesn't make sense. Most shopping is done at the closest local store, because that safes on time and money (and for lots of people gas).

So the idea that rich people are rich because they can go to Cosco and buy 5 years worth of rice is nonsense.

When I go to the shop I'm walking there, in and out and home within 20min flat. Sure if I had a car and if I had the storage space I could drive across town, to the mega store and buy in bulk but that's not actually practical and it also doesn't safe a huge amount of money. I do that once a year for my birthday party.

> There is no evil force at work. Simple economics really.

Yes but you are ignoring the reverse incentive. The need to own a car. The need for a big fridge and lots big storage space. You need a place to put your car, and society might finance that for you with free street parking (should be abolished) or you need to have a garage. Then you need to heat that space and on and on.

And on a society level, you need to build stroads, you need to bring water and other services to those big box stores. You need to have lots and lots of policing for every Walmarket (2 police visits a day on average). Who pays for that? Local property taxes, that guess what you have to pay, and the garage that your car is in has to pay that too.

There is a reason that in most cities in the world and historically most people walk to the closest convenient store that is often not owned by the largest cooperation in the world, but rather by some immigrant family.

The Soivets built their whole society around micro-districts that had everything that you need in them. And among all the dumb shit they did, that actually did was the cost efficient way of doing things.

When you think systematically about what actually cost money and how to account for those costs, and how you can structure a society so that the most amount of people people can live without government welfare, designing a system so that poor people can go to Cosco and buy 3 month worth of grocery to get economics of scale is the exact wrong solution.

But that is exactly the pattern of development encouraged and promoted. Instead of complaining about all the individual issues, high taxes, high transportation cost, high housing cost, high cost for utilizes. These are the trees, but the forest here seems to be missed.

The real economics of scale are in the density and the accessibility of your urban environment, not in the individual buying choice of each consumer.

The idea that poor people are poor because a 50kg bag of rice cheaper per kg, then a 5kg bag of rice is wrong. They are poor because the land use pattern force them (and society) into a long term unhealthy, in-efficient and wasteful form of living.

Do you get where I am coming from?

From an example that I watched: He just got out of prison. He had very little money. He bought a cheap car that kept breaking because he couldn't afford payments on a good one, but the repair bills kept costing him. He couldn't pay the car insurance six months in advance, so he had to pay month-by-month, which is more expensive. Those are the ones I remember, but it seems that there were others. It was literally more expensive for him to do things than it was for me to do the same things.

I've had it happen to me quite literally; I've had two pairs of cheap boots not even last a month before the soles detached.

There's always a point of diminishing returns, but it doesn't really make much odds where that is if you've not got the money. If you've only got £20, it doesn't really matter that good long lasting boots can be bought for £50 not £300.

Ok but once we are admitting that you can get really good boots for £50 we are talking about a much smaller part of society.

If you can buy one pair of shoos for £50 and it will last you for years, then the vast majority of society can afford it.

Those that can't should be on social welfare and that should be a small % of the population.

So the question really is how many % of you society requires welfare to live above the poverty level and how can you reduce that number.

One can argue that this effect is real, but I don't think it works as an explanation for poverty.

Housing. Being a homeowner and paying off a mortgage builds your wealth. Renting builds someone else’s.

Buying a house also has a risk: what if your house gets flooded due to a broken pipe two months after you moved in? What if they tricked you and you learnt late that the communal garbage bins are stored under your kitchen window, and the property management doesn't let you move them? When you rent, moving is "cheap" and easy, in comparison.

Also, taking on 30 years of debt is something, that mathematically might make sense, and many people handle it easily, but it's a huge mental burden to others. You take on the risk above, on the assumption that your income is stable for 30 years, but then you break your leg and get fired during corona. I don't have data on this, but 2/3 of the parents of my sister's classmates were divorced, so how do you smartly assume a stable family income for decades while not being naive about it?

This is all for "poor" people, who can't afford the risks mentioned.

Nations with higher % of home ownership don't actually end up being wealthier or have lower rates of poverty.

And if you have a nation where you have lots of apartments buildings, you can actually buy an apartment if you want. And even as a reasonably poor person you might be able to afford mortgage on a cheapish apartment.

And even if you concede this example, housing is a special category and one the largest expanses. The whole 'boots' analogy suggest this is an everyday situation.

If by the time you finish paying your mortgage, your home has a literal value of 0, you're not building wealth. This is not a hypothetical, it's like this in Japan. There are reasons to own a home, but wealth is not necessarily one.

Not if you believe /personal finance or the like. Renting would mean you have loads of money to invest because you don’t have to repair your home.

Yeah keep believing that. You sound like a poor person. You are paying to repair the house via your monthly rent payment that has it priced in.

That's you who think like a poor person. For many people on this specific forum, house is not the main source of their wealth. It's their professional services and/or investments. The former benefits greatly from flexibility provided by renting.

Builds your wife's wealth)

Can you explain something to me?

An example is generally a way to solidify or convey an idea.

Why do some people think that attacking the example somehow invalidates the idea?

It's an excerpt from a fantasy book.

Yes, I can explain.

Usually when you hear an example, even a bad one, you can easily in your head find many other examples.

In this case however, not only is the example flawed. But also, most other things I can think of don't line up with this idea. Cars for example, a 2nd hand Prius from Toyota is more reliable then a BMW. Most clothing is costed based on style, not functionality. Public transit doesn't line up with this concept. Electronics don't really line up with this concept either.

For food concept also doesn't really seem to work, more expensive food doesn't have better nutritional value. Beef and fancy wild rice isn't better for you then chicken and pasta.

So when you use an example, making it a really good example is generally preferable. And boots I don't think are that great of an example. Specially because most richer people don't buy some fancy shoes and then wear them for years and years.

So if your gone have a whole theory of wealth inequality, then I would hope some better examples exist, but so far I have been unable to think of any.

Housing is the only one that might come close, but housing is always somewhat special and doesn't work that well.

Food is a perfect example, you've just pigeonholed your thought process to "expensive" meaning "higher perceived quality" but what about quantity?

Let's imagine you're a poorer person with no access to a car. You can still buy the same beans and the same rice but you're paying corner store prices rather than supermarket and you can't buy in bulk because you can't transport the goods home. This is an example of poor people paying more despite having less and it's common.

Ok but to buy in levels bulk you need a car right?

So what's cheaper, buying food in bulk while owning a car. Or buying food at the corner store while not owning a car?

Not to mention that with a cheap second hand bicycle you should be able to reach the same super-market chain that most people drive to and pay the same prices.

And you are also ignoring the storage issue. If you buy in bulk you just pay for the storage cost. The same goes for waste, the US has absurd levels of food waste. The reason, people buy in bulk don't consume it and throw it away. That what you get when you have a culture where people make big trips to big box stores.

Also, what about infrastructure cost. How much infrastructure cost is between your house and that big box store, who pays for that?

Also where do you park the car? Free street parking is clearly society subsidizing the rich, and should be abolished. How much does a garage cost?

In your world the ideal society is one where everybody can drive to Cosco once a month and load a car full with ever possible thing?

So you are complaining on the wrong level. People aren't poor because a corner store is slightly more expensive, they are poor because land use patterns for them and society into ineffective way off live.

Rather than explain you keep trying to argue, and what you've done is shown the sheer level of your ignorance.

I know a man who dated a woman in college whose family was so rich she didn't know how to operate a washing machine, the help did that. Her solution to the conundrum was to just buy new clothes. One can imagine that when talking about the "middle class" she probably thinks they're like her except with less money. But you and I can recognize this as existing in an entirely different world than the middle class.

And in that vein, poor is not "middle class but with less money".

We're not talking about buying a corolla off the lot because you can't afford a BMW. We're not talking about buying a 2 year old corolla because you can't afford a BMW either.

We're talking about buying a $300 car that just happens to be a corolla and can't be driven on the highway because it flat doesn't go fast enough to legally do so. We're talking about owning 2 $300 cars to mitigate the risk when one of them inevitably breaks down and the constant repairs as a result causing the TCO of that vehicle to be far greater than the newer model corolla you're comparing it to. We're talking about not being able to afford insurance on one, or both, of those so that you're always in fear of police.

We're talking about the constant need for money for the laundromat because you can't afford to purchase a washer and dryer, or you live in a place where such things aren't even possible.

And if your thought goes anywhere near "well just buy another $300 car when that one breaks down", it means you have zero understanding of what it means to be poor.

Yes and my point is, if you actually had a society where you didn't need to own a car at all, that is what would actually help poor people. Far more then congrats now you can buy 50kg of rice at once and save 0.05c per kg.

If you actually lived in a society where there are cheap apartments in walking or biking distance from reasonable urban infrastructure and all the job that are there. So that you don't have to pay for your commute, or have some very local public transport.

That is what actually safes real money. That is how people in really poor places, like the Eastern block could reasonably approach a decent standard of living with far lower GDP. They lived in apartments, and had most things they needed close to them.

That is how you systematically can even approach to solving these issues.

If your analysis is restricted to, poor people can't utilize economics of scale on an individual bases, then you have a flawed view of poverty.

Consistently housing cost and transportation cost approach almost 50% of total living cost even for the middle class. And more then that for the poor, add food and you are going 90%+.

So if you can systematically so something to reduce housing cost and transportation cost, then you are actually changing lives on a real scale. Far more then buying food in slightly larger quantities, far more then buying slightly higher quality shoes.

I know this probably isn't worth much, but after reading through most of this thread, I must say I appreciate your efforts to explain the existence of the working poor here. I am probably biased, because you have essentially been representing the way my family was forced to exist for my entire early life (you have no idea how crazy spot on that "$300 car that just happens to be a corolla" example was --core memory unlocked, as they say), but either way, I just thought you should know that your efforts and apparently immense patience in the face of bad faith arguments and willfull ignorance is truly appreciated.

It's not necessarily the case that paying more gives you a longer lasting product. You can pay more for a car and actually end up with the exact opposite, for example. Expensive often means more capacity for things to go wrong. The one thing that guarantees poor purchasing is thinking rules like 'it costs more, and is thus less likely to break' always, or even mostly, apply.

The automotive equivalent to the cheap pair of boots is a beater off craigslist, not a cheaper new car from the dealer. It’s not a choice between a Toyota and an entry level BMW but between a 20 year old gas guzzler that can break down at any time and an eight year old entry level sedan from a used car dealer (or whatever the age cutoff is for used car loans).

If you have a good credit score you can put down a few thousand on a down payment and get a Toyota Corolla with 50k miles for $10-15k that is likely to last for another 200k miles without major repair. If you don’t have a good credit score, the most that downpayment will buy you without a loan is a total crapshoot that can break down and total itself at any time.

I'm not really sure why you appear to have been downvoted because your point is fine. I don't entirely disagree with this. If you're in the market for nothing but lemons, and those lemons are essential, you are fairly screwed unless you can get someone else to help you (e.g. family, government).

The ability to pay more gives you more choice and thus, in general, the option of buying better products. Of course, you can also use the extra choice to choose wrong.

Reminds me how my mother used to say that we’re not rich enough to buy cheap things. I think it must be some proverb somewhere, but I only ever heard it from her.

Makes me feel pretty privileged to follow the "Buy the cheap one, if it breaks buy the expensive one" mantra.

And what makes things hard is that sometimes the cheap one is good enough for use you will ever get. Think of something like home renovation tools. Doing thing one time, even if badly might be enough. Not that nicer tools wouldn't do it faster, easier and better. Though price difference can be huge.

It’s quite common.

I heard exact same anecdote about boots from my grandfather loooong time ago. It’s possible that author hadn’t had chance to hear in “in the wild”.

I believe it’s one of those wisdoms passed from generation to generation.

I believe this was a marketing strategy of some boots maker that went viral

I was curious and decided to check - there’s Wikipedia page about it. Looks like it Pratchett wasn’t first and took from general wisdom but that specific anecdote was popularized by the book.

https://en.m.wikipedia.org/wiki/Boots_theory

If you don't have the money to buy it once, you definitely don't have it to buy twice.

My (Polish) grandfather used to say that too. I’d guess it’s either a Polish or a Yiddish proverb.

That's uniquely masculine perspective. No woman I know of would agree to wear the same boots for ten years straight.

This is a very niche text book example. If you want to make this point you need a real world example. And prove that poor people are diligently spending those $10.

Nope. It does not. I've read this many times, and it isn't true. Not in reality, as opposed to the theory it states. It is completely wrong. Not always, but mostly.

I went to the dollar store today looking for stocking stuffer items. It's now the "dollar twenty-five store" due to inflation, with some items four and five dollars.

Here are my observations.

* The food will likely make you sick if you eat it regularly, the food options are highly processed and made of cheap, poor quality ingredients.

* Kids, lots of kids. Lots of lower income families have multiple kids and the dollar store is one way to stretch the budget.

* Dollar stores do a decent job at keeping things at $1.25. There were definitely some products that I would see 2x or 3x the price at other stores.

* It was busy, very busy.

Nutritious food can be very cheap. Others have mentioned beans and rice. Beans are an amazing source of nutrition. Dried beans are dirt cheap and require little work to prepare. Organic bananas from Whole Foods are about $0.50 each. I'm pretty sure you can find a cheaper banana elsewhere. Broccoli costs less than a $1 per head, typically. Organic rainbow carrots are $1.50 a pound. I could go on.

The point is, good food can be cheap. And yes, food deserts exist. And yes, people buy poor quality food from stores like Dollar General. But perhaps there is a correlation here? Maybe (some) food deserts exists because there is little demand for fresh food in those regions.

As mentioned in the article, some low income housing units literally don’t have kitchens or don’t allow cooking.

This blew my mind and is a facet of poverty I hadn’t even considered.

Also, are you actually making the point that food deserts exist because all the people in the area just decided not to buy groceries? I haven’t read such a blatant “blame the poors for their situation” take in a while.

If you've really fallen out of society and gone through an eviction or foreclosure then your credit is shot so badly you can only afford to live at a weekly rate motel (you'll never pass a real apartment's credit check). Those places don't have or allow any kind of cooking. A mini fridge and a microwave that's hopefully still working is all you have.

You can make anything in a microwave. There is no way that they don't allow microwaves. And I personally just bought a microwave from craigslist for $15, and it was almost brand new. The buttons that you press the time in still had the plastic covering on it.

Same with fridges - can buy a used one for super inexpensive - a small one, to be sure, but at least you have something. Or could buy two of them over time.

There are always solutions.

There are no such thing as food deserts. I've seen the maps, and yes, there are areas that don't have large grocery stores. BUT, there are good grocery stores 5 or 8 miles away. If you have a car, you drive there. If you don't, you find someone who has a car to drive you there and carry inexpensive groceries back. Could be a neighbor, a church, yeah, it will take a little extra work, but so what? My family member lived way in the rural area and had to take a 1 hour trip each way to Costco once a month to stock up on staples. They took the time, why can't everyone else. Except they had to drive 60 miles, not 5 or 8 miles.

There are always easy solutions.

Unfortunately, I think I'm the only person in the known universe that knows the solutions.

Food deserts occur because we tolerate petty crime in the name of wokeness. I'm seeing this play out in my own inner city neighborhood where grocery stores are talking about closing after the city destaffed police.

My argument is that nutritious, affordable food exists. We live in a capitalist society. Where there exists demand for a good, supply materializes.

I'm open to other interpretations. But I would need a compelling, non-demand reason why affordable food, which exists in surplus elsewhere, can't be sold in certain neighborhoods.

Pretty much all the food you mention are extremely expensive when your basic caloric needs arent met. $1 for broccoli that will give me basically zero energy is a really awful deal. If you have enough calories, then yeah, buy the broccoli.

Beans are great, but require time to cook that not everyone has, especially when very poor. They also cost money to cook, require a kitchen, time to clean dishes, a place to store em if cooked in bulk, etc.

Bananas though, are wonderful, sent from heaven.

To some of your other posts, it’s not really sufficient that this food merely exists. otherwise, yeah, problemo solved, trivial.

The bridge that has to be gapped is: - foods gotta be accessible - people gotta have enough time to cook the food, this is a biggy - people gotta have time to clean up from the food - people gotta have enough of the healthy food and with enough macronutrient diversity to not get sick. $1 worth of bananas ain’t gonna hold you like that $1 cheeseburger.

Somewhere in all of this is that eating healthy is way more cognitive overload when you’re poor than when you’re stable. Now that I’m stable I have enough time on a Sunday to cook a weeks worth of meals. I don’t really have to scrunch to do it, I’m not cutting into sleep time to do it. Lotta folks don’t have that luxury.

> Beans are great, but require time to cook that not everyone has, especially when very poor.

When I was very poor a friend of mine gave me a crockpot that got dented in shipping and Amazon sent a replacement. Throw some pinto beans in it in the morning and fire up the rice cooker (bought with an Amazon gift card from my sister for Christmas) when I got home and have the perfect cheap meal[0].

Once I figured out I could make cornbread in the rice cooker it was all over, $1.49 Jiffy cornbread box (think it needed an egg and maybe milk too so not all the time) with some beans thrown on top and I was in heaven.

Or sometimes I’d just make a giant pancake in the rice cooker which was also pretty awesome.

[0] https://m.youtube.com/watch?v=XcWhHJXgxgc

It might be a case of the US and Australia being different, but here here $1 will get you 3 or 4 bananas at an independent fruit shop whereas even the shittiest cheeseburger on the Hungry Jack's Penny Pinchers menu costs $2.

>Broccoli costs less than a $1 per head

A head of broccoli is going for ~$5 at Loblaws in Canada. It's not much cheaper at shops in NYC.

https://www.loblaws.ca/broccoli/p/20145621001_EA

I bring up this example because if you try hard enough, $5 will buy you an entire (unhealthy) meal. It's really hard to tell someone to spend their entire meal budget on a single head of broccoli!

> Organic rainbow carrots are $1.50 a pound

https://www.loblaws.ca/organic-carrots-bunched/p/20056027001...

Sold by the bunch, but really more like ~$10/lb.

I don't disagree that it's possible to eat healthily on a thin budget, but we're sadly past the point where this can be accomplished by buying fresh vegetables at the supermarket.

Dry beans and fresh food like you described cost a large amount of time to prepare compared to processed food, and time is a luxury poor people do not have.

If you take a bus to work, you probably don’t have time cook.

> Time is a luxury poor people do not have

I know a lot of poor people and I assure you that many of them have plenty of time. There are certainly many hard-working poor who desperately need time back in their day and would cook if they had the time, but time alone would certainly not solve the phenomena of poor people not cooking. What many other poor people do not have is executive functioning skills, the ability to plan ahead, or impulse control, and some of them also have addictions or expensive recreational drug habits, or live in unsafe scenarios where cooking would be an absurd afterthought.

Furthermore, many of the poorest people are recent immigrants (Mexican, Indian, Middle Eastern, African) and those households often rely on home cooking even more than many affluent households do.

What do you consider a large time? There are plenty of healthy meals one could cook in around 30 minutes. Personally I meal prep on Sundays and make it a personal challenge to have everything complete including prep, cooking, washing etc in less than a hour. It's pretty rare I fail.

"Take the bus"? That seems like a massive exaggeration.

It's not hard to do simple, health, quick meal prep. Hell, buy some veggies, wash them and eat them is health as hell. Make rice or beans in 20 min.

If you have enough time to walk or drive to get fast food, you have enough time to make a healthy meal.

It's also a matter of skills. Cooking doesn't have to be that time consuming if you know how to do it efficiently. And you don't have to cook everyday. Some people cook more in the weekend and then save it for later. Unfortunately, this is something that isn't taught at school.

It doesn't need to. Buy dried beans, prepare them all at once, freeze. Then you can make quick meals in like 10 minutes.

As I wrote in my other post, its about city planning.

> And yes, food deserts exist.

Yes because car dependency and long distances involved. If you have a mixed use walkable area there is almost always access to freshish foods at least basic vegis.

Being depended on big box stores in some commercial district with a gigantic parking lot that you can't walk to that you only go to once every week or two is the problem.

might also be hard to find the time to cook when you got two kids and three jobs.

Yeah poor people know about Bananas for the most part.

You’re gonna need to eat well over ten pounds of broccoli and carrots to get a full days calories. This is going to be something most are going to see more as supplemental, or as means to dip.

Beans and rice are well and good but they’re not actually very nutrient dense. I know people who QUIT rice due to concerns that a bowl of rice raises blood sugar. In fact a lot of the foods you suggested are fairly high in sugar. I’ve known others who quit beans because they’re notoriously harsh on digestion.

When poor it’s hard to get sufficient nutrients or avoid excessive carbs and sugars, and you don’t have the luxury of playing around with things like speciality diets because you just can’t afford to.

Who said you have to eat only broccoli and only bananas? The person mentioned those because you need a varied diet. If you eat potatoes, lentils/beans, broccoli, banana, and some more things, that's a nutritious, cheap and health meal.

Nobody is suggesting that you get your calories from broccoli and carrots or bananas. That's what grains and fats are for.

Food is really cheap. In my experience, American born people assume that immigrants and poor people are buying packaged foods. In my experience as a child of immigrants, my parents bought actual bulk food items and produce at stores. It's exceptionally cheap unless you're shopping at a DINK store like whole foods.

Dollar stores are amazing for kids things. For example, balloons are a dollar at the dollar store and ten dollars for the same balloon at Safeway.

I cannot imagine buying food at the dollar store even if you are poor.

Eggs, beans, rice, bread, potatoes, apples, bananas, are among the cheapest foods at any grocery store or supermarket.

I kind of hate that your being downvoted b/c your perspective here is a very common one.

It’s not just a matter of unit price, but also time, convenience, and cal/$. Fruit / veg in general is pretty expensive when looked at from a cal/$ perspective — you pay for a lot of water there. Potatoes, beans, rice are pretty slow cooking, and require dealing with dishes after.

So for my single mom, it was pretty hard to provide anything but

1) fast food (decent cal/$, extremely convenient)

2) microwaveable tv dinners (Meh cal per dollar, but long shelf life, extremely convenient)

3) PB / lunch meat sandwiches (basically god tier for poor chow)

For reference, my mom worked many jobs and got maybe 4-5 hrs sleep a night. Adding 30 minutes for a days worth of meals was a lot.

I know fast-food and microwaveable tv dinners are cheap and "worry free" but you pay the price with your health. Consider it like achool abuse. You get away with it several times but eventually your health will deteriorate.

You have to want to eat healthy and set the appropriate mindset. For example instead to order that fastfood crap just eat some simple raw, "spartan" food(bananas, boiled meat or even fried meat etc). I have some good experience with that working long hours on my own startup(s) without distractions.

I doubt you don't have 30 minutes to "prepare" your dinner. After all you don't really prepare much. Just boil or fry whatever raw food you have.

Of course convincing kids to eat not very tasty food may be a different story but it's doable because I've seen that too.

At some point you may start to appreciate the simple food and hate when the chefs put you sugar and all kinds of "flavours" in your food.

Do Americans in that situation serve much pasta? Pasta is generally cheap, stores well and cooks quickly. You can serve it with pesto out of a jar, butter/oil/pepper, or various other tomato-based jar sauces if short of time.

I have children so can empathise with anyone short of time and trying to accommodate juvenile palates, but pasta with some sauce options is one of our fallbacks - the two youngest like pesto. Rice is another (trivial in a rice cooker).

> Fruit / veg in general is pretty expensive when looked at from a cal/$ perspective — you pay for a lot of water there.

I agree with your post overall but would quibble with this point. Maximizing calories isn't a very good goal. Eating fewer calories but more fruits and vegetables would be an improvement for most people in the US, regardless of socioeconomic status.

I was also raised by a single Mom and can attest to a similar experience. Although I don’t remember a great deal of fast food. It was a kind of luxury thing we had a few times a month. I remember my Mom trying to avoid it. We were also on assistance and ate out of food pantries a lot. We had lots and lots of canned food e.g. soup and various kinds of vegetables, and they gave us ridiculous amounts of cheese. You basically take what you can get. My Mom used to trade excess cheese blocks with my grandmother for laundry detergent.

I’d have to ask her about time and sleep but I remember it being more hectic than it was strained. This may not have been as true without the assistance we were able to take advantage of. I remember being woken up very early (around 4-5 AM) to be taken to a baby sitter. I must’ve been 4 or 5 at the time. I would sleep in the car along the way.

As another child of an overworked single mom, allow me to cheer for your comment.

The amount of paternalistic "just make better choices!" nonsense in this thread is giving me a headache.

My experience was the opposite. We were dirt poor and had home cooked meals all the time, it was way cheaper than fast food or microwaveable meals.

Buy 10 kg of rice, a bag of beans and some frozen veggies for under $20, cook it all at once in a big pot. You've got 10 meals for under $20 and maybe an hours time.

Put it in the fridge/freezer and you've got healthy meals for a week that cost $0.50 each.

Not sure how a single $10 meal at fast food could be considered "a cheaper alternative".

You clearly haven't bought eggs, beans, rice, etc. at the grocery store and been on a budget. In the last two years the price of eggs have easily doubled--a dozen large store brand eggs are over 3 bucks now vs maybe 99 cents pre-pandemic. Every single staple you mention has gone up in price significantly. Food inflation is astronomical and if you don't feel it then it's quite a privilege. If you were struggling to make ends meet two years ago, you are in deep deep trouble or probably completely forgotten by society and/or dead now.

In the last two years the price of eggs have easily doubled--a dozen large store brand eggs are over 3 bucks now vs maybe 99 cents pre-pandemic.

Food in the US is insanely cheap. Wow.

$4.78 USD at the cheapest store here, and this is on special.

$0.25 per egg is still a great value in terms of health and satiety.

> You clearly haven't bought eggs, beans, rice, etc. at the grocery store and been on a budget.

Food inflation is real but not experienced the same way by many Americans who consume mostly processed foods, which are less vulnerable to commodities shocks. So I can't be too surprised the HN crowd hasn't noticed. But eggs are apparently specially fucked[1] due to an avian flu outbreak, so you're kinda cherry picking. Cherries btw, have seemingly doubled in price, but pre-pandemic was the cheapest they'd ever been in the past 30 years.[2]

More importantly, I think you're missing the point the article and OP were making: dollar store supply chains for these goods suck compared to grocery stores that are optimized for this. Whatever inflation has done to raw goods is amplified at these small dollar stores.

[1]: https://www.cnbc.com/2022/11/11/why-egg-prices-are-surging-b... [2]: https://fred.stlouisfed.org/series/WPU01110203

There are unfortunately a bunch of factors that added up to this.. e.g. for Eggs, there's just normal food inflation, but then there's a massive avian flu outbreak that resulted in ~50 million birds culled in the US alone. It doesn't help but either way, prices are indeed up ~100% since pre-pandemic (https://fred.stlouisfed.org/series/APU0000708111).

https://www.vox.com/future-perfect/2022/11/22/23472207/bird-...

eggs are pretty much immune from shrinkflation as well.

> I cannot imagine buying food at the dollar store even if you are poor.

If DOLLAR GENERAL qualifies, for many poor communities it's the only option in town.

Dollar General is not a dollar store. Traditionally a dollar store is a store where everything costs one dollar. Dollar General is a general store that has dollar in the name.

https://en.wikipedia.org/wiki/Food_desert

But you see people with SNAP pushing around carts full of things that aren't eggs and beans and potatoes... and why would they? The maximum monthly benefit for a family of 4 is $939/month, you can buy whatever you want with that.

The most corrosive idea in our society is the notion that someone somewhere is getting slightly more than they deserve, just slightly more than you think they earned through their god-given talents, and that it’s therefore worth trying to correct at huge expense, because we certainly can’t have that tiny bit of unfairness in the universe.

And the correction, when applied, is always to the detriment of a huge number of other people who actually needed the help.

This is how we get means-testing, SALT caps, and bad immigration law. We have got to be more humane than this.

I mean —- have you been poor? I can say when my mom and I were dirt poor, we literally didn’t have the time. My mom didn’t take benefits mainly due to pride, but all the foods you mention were way out of her time / price bucket

Just saying - when you work 60 hours/week you really don't have time to cook. Cooking is not an option. Not cooking is not out of choice.

Lots of times you're better off getting stuff from the thrift store. Lots of lightly used household items, cheap as dirt.

Thrift stores in rich neighborhoods have significantly higher quality of items than ones in poor neighborhoods. I would not recommend shopping at poor thrift stores.

I've been in thrift stores in both neighborhoods. Found lots of nice stuff in the poor one.

In my experience, this is true for just about every type of store. Especially grocery stores. I live on Federal in Denver, and the selection relative to some of the wealthier suburbs is atrocious. The past few years have made me wonder who gets the job of ensuring poor neighborhoods get screwed in the face of nationwide shortages of items.

Much of the food at dollar stores is the same stuff you'll find in regular grocery stores, just in smaller packages.

I always got the impression that it was largely things with a long shelf life, to minimise waste. Which doesn't discount what you've said, but just worth asserting that it's a subset (not always healthy) of regular grocery stuff AND in smaller packages.

I would say 90% of the food in dollar stores is high in oil, salt, or sugar and most of the time all three. Most of it is cookies, crackers, potato chips, sauces, soda, etc. I have seen a few with decent staples such as wheat bread, eggs, meat but that is small pct of all foods. Rarely vegetables (or ever). Would be hard to eat healthy if got most of your food there.

Regular supermarkets have plenty of bad food but still wide selection of nutritious food.

Dollar stores are awesome. If you buy crap at the dollar stores, then you are buying crap, but if you buy Cheetos at the dollar store or at the regular grocery shop, they are the same crap. Crap is crap no matter where you buy it.

Any food will make you sick. You can find crap food at any store. Dollar stores don't have the monopoly on that. I think that 90% of "food" at ANY store is crap.

Food is extremely inexpensive if you learn how to make stuff yourself and don't buy anything that is prepackaged. Don't buy Thousand Island dressing for example, make it from base ingredients. Instead of paying $3 at a regular grocery store, you can make it for 25 cents, if that. Croutons? Costs $2.50 at the store, or make them at home in your oven for 10 cents or whatever. All you need is bread and spices, and as I said, this is not a $2.40 savings, oh no. it is a 2,500% return on your money.

Don't forget to include the value of the time spent making food yourself.

Yes, but that is often calculated incorrectly. Like it might take 4 hours to make beans, and people say that. But really, it takes 15 minutes. This is the amount of time to sort and was the dried beans, put the beans in the water. That's it. Then you let the beans simmer for 3 1/2 hours. But people will count the entire 4 hours as time they spent making food. Not saying you do that, but many do. Also, the more one cooks, the faster it gets. First time it might take 45 minutes to make something, but after you make it 15 times, it gets down to 10 minutes. Also, it is about making staple foods, like pasta. Of course if you make some complex dish for the first and only time, every night, that will take a lot of time. But if one has many easy dishes to make, then it is fast. I like oil and balsamic vinegar dressing - to make it from scratch takes me less than a minute to make a big jar of it that will last me 2 or 3 months.

It really does not take too long to make one's own food, if one does it correctly.

Yes but almost everything is going to break quick and you will be back buying more soon.

> Yes but almost everything is going to break quick and you will be back buying more soon.

Hence, the entire point of the article. Beginning with the boots paradox.

Simple things that have little effect for an upper middle class family can completely devastate a poor one.

If you own a 20 y.o. car that you bought for 3k to commute to work it will for sure break down. You go to the mechanic and they quote you 4k, while you live paycheck by paycheck.

Now you cannot drive to work. In non coastal America, that typically has 0 public transportation, you are now convicted to bankruptcy.

An upper middle class family just buys a new car every 5-6 years and they avoid most of the maintenance.

You aren't convicted to bankruptcy, that would be too nice if it were just that. In reality no work = no income = evicted or foreclosed and kicked out on the street with no belongings = no permanent address = no way to pass a job interview or get a job = no way to survive and get back to where you were.

There are certain cliffs in American society where if you fall off you will almost certainly never get back on top without someone stepping in and giving you direct support.

Note that this problem also ties into American (really post WW2) cultural expectations, which are completely out of sync with the rest of the world. In the rest of the world, you either have a social-safety net from your community of your govt.

Somehow, America has neither.

In the rest of the world, if you lose your job -> you move back in with your parents.

In completely individualistic societies -> your govt. provides welfare by taxing the generation with wealth (your parents generation, ie. Age. 50+ people)

___

On the contrary, America allows the age 50+ homeowners to place unprecedented restrictions on housing stock, further increasing their wealth while paying a minority of taxes (prop 13). At the same time, it's the generation that 'kicks their child out at 18', in an era when gas, infrastructure maintenance, university & housing are no longer 'practically free'.

I spent half my twenties driving beater 20 year old cars in non-costal America. Both of which I carried fire extinguishers in - because one of them had a habit of springing exciting fuel leaks in the engine compartment.

The answer to making it work, was of course community. That and $99 per year triple A's free towing. People to get you places when the car is down, friends who look under your car, see that the stick is disconnected from the transmission, and bolt it back on with some bolts they find by the side of the road. Friends with the same model of car who know where the good garage mechanics are.

And here I am driving a 17 year old car which is worth less than I make in a week. It doesn’t really break ever either, just some small stuff over the years.

You’ve obviously never lived somewhere that salts during the winter. Where road salt is used you don’t see many vehicles that old.

The trick is to buy used cars from regions that don't have salts during the winter. If I look at cars imported from US, I look at ones from Texas and etc.

I brought a pickup truck from CA to the northeast and promptly sold it for $2000 more than I bought it for 4 years prior. Inventory issues were part of it but indeed the rust free frame was highly desirable.

That’s not at all obvious to me, who drives a 18 year old Honda that’s lived its entire life in upstate NY, NH, and MA.

It’s true that rust will likely be the eventual reason to retire it, but probably not for another 5-10 years.

Go outside and count the cars that are older than 15 years. Then go to California and do it. It’s different.

No one claimed that salt usage made no difference. That's a far lesser claim than concluding that someone driving a 17 year old car has obviously never lived where the roads are salted.

Despite being a lower percentage than CA, there are plenty of perfectly usable 17+ year old cars on the roads in New England.

We do, we have a couple Toyotas older than that. Paint tech has come a long way since cars were rusting out left and right.

17yo was actually right in the era of the Toyota rust fiasco.

I vaguely remember that, was that on the trucks, specifically?

Eastern Europe represent. We use lots of road salt and plenty 17 year old cars.

It's not really comparable. Northern US and Canada use way more salt on roads and it's not the regular salt (it's forbidden) but a pretty aggressive mix of various salts.

I've never seen so many not so old but already rusty cars as in Quebec, Canada.

Tell us more

He doesn't need to. We all know it must be a Toyota.

I drive a 2004 corolla that I bought off the lot and I'll probably drive it for another 10-20 years.

But I also grew up dirt poor and understand the difference between where I'm at now and where my family was at when I was young, in terms of vehicles.

There's a world of difference between an older, well-maintained, vehicle, and buying a car for $300 off the side of the road.

Our 2005 Honda CR-V was ~$7K 11 years ago and all the maintenance (except tires) has been easily done by me with no unusual tools needed. It’s probably a $3K car now and there’s literally thousands of them around.

It’s not that hard nor time-consuming to do basic maintenance and it saves low four-figures per year.

Where are you going to do maintenance? In your garage or driveway in the home you own? That's a pretty big privilege.

The reality is a low income person is living in low income housing, typically large apartment complexes. These places have strict rules against doing car maintenance and work in their parking lots. In addition it's a huge privilege to have weekend and free time to do car work yourself, not to mention buying the tools and materials necessary for it.

Working on cars is a hobby for middle class folks nowadays, it's not a solution to the general problem that low income people need reliable transportation in most of America.

Even my not low-income ($3-$5k / mo) apartment complex forbids this.

If you want car maintenance, or to run your own business, or any number of other things, you need to first own a home, apparently. And that just furthers the article's point…

I would have to imagine a $3-5k type place would be even less likely to allow this.

Honestly, a parking garage. I’ve done a LOT of small car repairs, installed exhausts, simple mods, etc for people in a random retail parking garage after hours. As long as you aren’t disassembling the motor and you’re not an asshole the security guard making $12/hr driving a hoopty in the exact same boat as you is not going to hassle you.

It’s a lot less fun than doing it in a proper shop with a lift and power tools, but given enough effort you can do nearly anything with jackstands, a trolley jack, and basic hand tools.

The great thing about a vehicle is that it’s mobile and can take itself to a place away from the tightest/most enforced of restrictions.

I’ve done more maintenance on unpaved surfaces or even parked in front of signs saying I couldn’t do it than I care to recall.

If the choices are between a $40 pad slap and a $400+ repair shop visit, a lot people will find a way to do the former.

Parking Garages. Autozone Parking Lot. Saw two guys detailing their cars and adding trim to them in the parking lot of a trail head in seattle earlier this week.

I once replaced an alternator in an AutoZone parking lot. At the time I had a '97 Ford Ranger XLT, which I got used in '03.

It had broken down outside of Phoenix as I was driving cross-country from Ohio to LA. I got towed to the parking lot, used most of my remaining money to get the alternator, and then hung around til they closed up so that I could borrow an employees tools and a light for a pack of cigarettes. That truck is still in service today, though I sold it back in 2011.

The assumption that a 2005 CR-V in reasonable condition is a $3k car was probably a decent one 3 years ago. Less so now if my recent auto shopping is any indication.

I like driving older cars into the well-maintained 200-300k mile range myself and I heartily agree that it’s the economical choice. I’ve financed a year-long sabbatical by driving a ‘93 sedan, so the potential gains really are not only four figures per year, they can reach into five figures.

At the same time the GP’s projection of catastrophic failure rings true to me — almost every car I’ve had reached this point. Each time I’ve also either had the resources to deal with the problem or generous help to fall back on, but it’s easy to imagine what it would be like if that had not been the case and it isn’t pretty. And it’s usually time-consuming and inconvenient to find the next bargain old auto as well.

Additional point, mant people are not mentally or physically capable of doing vehicle maintenance.

Poor folks find mechanics who will install used parts. Or work for beer.

There are lots of these.

The labor shortage impacted mechanics available too, it's now a $75/hr job; which inclines one to work more paying gigs.

Even historically, you often got what you paid for. Turns out that the friend that takes beer as payment and doesn't have a shop manual is less likely to figure out the vacuum system correctly in not their car.

Heck, I don't even trust many of the $75/hr oil change place to not bugar up my drain bolt.

If you dabble with old cars, always have two. Then if one breaks down you have a spare while you fix the broken one. Do it yourself if you can.

Car dependence is such a massive drain on productivity and wealth in the US

It is worse than the bar chart implies. If you are rich and your housing is costing $5k a month, because you want to live centrally, or in a massive house, you have the choice to downsize and put up with living not so centrally, or a smaller house. The poor person might already be in the cheapest accommodation it is possible to get.

In Australia for example, if someone gets a government allowance due to unemployment, it will cover renting a room, and then maybe $10 or $20 a week for food or something like that. Basically it doesn't cover the cost of living. They can't downsize. To what? There is a base level of accommodation cost.

Similarly there are a bunch of other jettisonable features of the rich person's life. Their health insurance is better, they buy convenient and funky food that is delivered fresh, they have nicer cars and so on.

True, but many of them think they're richer than they are, and develop dependencies on things that max out all of their income and going into so much debt that they don't realize how little volatility they can actually handle.

On this post,

- the first level commenter: Empathetically describes the problems of a person/family in poverty.

  - the second level commenter: No I disagree with what you are saying. Here is how they should have approached the problem.

This reminds me of how much divided our society is, the have's vs have-nots

It's important to approach it from both POVs.

We need to reiterate that, as humans, we are all the same in that our struggles emit terrible emotions that either deprive us of our liberties or freedoms (freedom to spend time doing what you want when you want to do it). And doing this might turn people to different political parties, causes, and charities that will help achieve this.

But going straight to "everyone gets free rent" isn't exactly likely, so throwing out ideas that might only requires maybe 10 years of political shenanigans to move the needle is better than going far into the unrealistic category.

We haven’t really moved the needle on anything in regards to lowering the COL (except, maybe and in only some circumstances, healthcare, but look at how far we have to go and how bad the political backlash was) in… at least two decades? Maybe three?

Federal minimum wage hasn’t even increased from $7.25 since 2009. In 1997 it was $5.15 (or $9.55 in 2022 dollars, so even 25 years ago we paid workers more than we do today)

Maybe it’s time to start putting those crazy ideas out there, because the status quo is proving more and more unsustainable

Thank you for pointing this out. I am disappointed by how ignorant so many commenters are when it comes to socio-economic issues.

That's because many of them from the Elon Musk school of problem solving.

"You're poor? Work harder. Get a better job. First principles."

"You're unhealthy? Exercise more. Eat better food. First principles."

I've never been poor in the sense that when I was young and didn't have much or any money to my name, my parents were well into the middle class and if my back was against the wall (or even near it), they were a phone call away. That being said, at that time, fucking overdraft fees. I remember doing the math of whether I could afford something on my debit card and the times I was wrong, not realizing it for a few days (had to go to an ATM to check balance back in the day) and each transaction with a balance below 0 incurred a $35 penalty. How could that be legal? It said everything you needed to know about our laws really.

I spent far too long in a job where I was supposedly earning around the average salary for my city. But I had almost zero disposable income because the cost of rent was so high. People just one paygrade higher than me were able to afford vacations all over the place, because a tiny bit of extra pay each payday meant more disposable income.

If( (salary - requirements) == 0 ){ You are screwed. }

If( (salary - requirements) > 0 ){ It snowballs. }

Luckily I quit, and now earn more than the directors where I worked before. :)

That reminds me of the quote from David Copperfield: “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Translation for those unfamiliar with obsolete English currency: 19 pounds 19 shillings 6 pence is 6 pence short of 20 pounds. 20 pounds 0 shillings 6 pence is 6 pence over 20 pounds. The point is that the very small amount of 6 pence over or under your income makes all the difference.

People of all income groups in the US seem to have problems living within their means.

My co-worker and I were talking about how much we spend on groceries per week, and it turns out they spend about twice as much as we do (and we could cut some corners). I'm sure my mother spent half of what we spend.

She buys the big container of store brand oatmeal, we buy "better oats". My co-worker buys the cups of individually portioned servings.

My mother buys the store brand chocolate milk, we buy fairlife, my co-worker buys individual fairlifes.

$8 bottles of salad dressing, more expansive cuts of meat, $15 bags of frozen shrimp, it all adds up. And this is just groceries.

I think the article is speaking more about it being expensive to be poor due to options that are not available.

The "living within their means" examples you give sound like a person having the option of spending less money, but choosing not to (or not being aware they had an option that they did).

The article is not about folk tales of "living within your means". It is about paying more for the same thing because of various factors like whether you can afford to transport yourself to a better store, whether you have the space to transport and store bulk goods, or the working funds to afford bulk purchases, and whether your dwelling even has a kitchen or refrigerator.

> It is about paying more for the same thing because of various factors like whether you can afford to transport yourself to a better store

What's a "better store"? I've heard people say Target is better to shop at than Walmart, but Target's prices are usually higher than Walmart's.

A large chain grocery store will usually have better prices than a corner grocer / convenient / liquor store. Some people have to do some grocery shopping there because they can't commute to a Jewel, Safeway, etc.

people are not poor because they spend too much on groceries. There's already a non-trivial amount of effort spent on making groceries more affordable for those with limited budgets (e.g. food stamps, coupons, offers, etc). Were it simply a case of buying cheaper food then we would have already solved that problem. Rather; it is more complex and opportunity is a more significant factor.

Regardless the article discusses many grocery issues that poorer people suffer such as more expensive supply (along with limited access to superior supplies), less choice, inability to buy in bulk as well as restrictions on cooking or being time-poor.

I don't understand why well-heeled penny-pinching skinflints always think they have so much virtue to teach others.

I can’t find much in this article about why food deserts exist in the first place. One big reason is it costs more to deliver food into high crime areas. It costs more to secure the property and employees who work in those areas.

I find there are lots of omissions like this in addressing societal issues these days. Hard to pin down why.

A bit like how CVS closed 6 stores in San Francisco in Jan. 2022 because of unstopable crime.

It always comes down to education. An educated poor person can pull herself out of poverty within one generation. My parents were dirt poor because their country was devastated by war, but they were able to concentrate on education and were middle class, and now me and my siblings are 1%ers.

The problem is the poor areas in the US are exceedingly violent and basically succumb to victimization to explain why they can’t get out of poverty. If they can’t have safety and the culture is to just blame others and not try to better themselves, this is a perfect way to create generational poverty.

I think we need to invest hundreds of billions of dollars into the most economically devastated areas of the US and first create safe neighborhoods with jobs. Once kids can go to public schools and not worry about violence, that neighborhood will thrive. In order for that to happen we need to INVEST in those communities with more police and more jobs with middle class wages.

Instead of $100B to Ukraine we need to invest that money on Americans in South Side Chicago, where there are 50 shootings a weekend, and Baltimore that has live birth rates lower than 3rd world countries, and Missouri and Oakland, etc. Create Amazon warehouses there or whatever can create an impact immediately and then hire a ton of police officers from the community and train them (1 day of training a week). Within a generation it will change the entire city and you will have a thriving middle class where wss once generational poverty.

people won't get out of poverty working at amazon warehouses. America has always had enough money to do whatever it wants. We could spend money in Ukraine and Chicago if we cared to, but we just don't. This country will never solve the poverty problem, as there is no real interest in doing so to any significant level by those who could solve them.

Universal free health care, like the rest of the modern world. Free Education, like much of the modern world. An effective and cheap transportation system like most the modern world

Those things would make a pretty big impact. America doesn't believe in such things. It won't happen. America believes in the lottery system (not just thru tickets). You have a chance to be rich beyond your wildest imagination. But almost certainly won't be. and if you aren't, hit the road.

You elide the impact of a stable two parent home.

No doubt education, hard work and grit are also at work here, but the facility of two incomes, two people to split housework and childcare duties are an enormous boon. Statistically, two parent married families who have children after high school are almost never below the poverty line.

I offer that as descriptive and not proscriptive - I don’t know the solution. But I know two parents in a stable household make it much easier.

> The problem is the poor areas in the US are exceedingly violent and basically succumb to victimization to explain why they can’t get out of poverty. If they can’t have safety and the culture is to just blame others and not try to better themselves, this is a perfect way to create generational poverty.

I think its more that if you want a straight-forward means to earn proper money without a degree then organised crime has positions for you. That's not a case of a "bad culture", its a case of opportunity.

> Instead of $100B to Ukraine we need to...

everyone knows that one of the two political parties attacks _every_ piece of public spending, not because they wish to re-invest it elsewhere but because they would like to justify tax cuts a few years down the line. So it surprises me every time this line gets trotted out when they're in opposition. Are we not learning?

Furthermore; Funding Ukraine is a very cheap means of gaining geo-political outcomes that fit the aims of NATO. Every citizen of a democratic nation should be celebrating the success of the Ukraine armed forces as opposed to trying to defund them.

> My parents were dirt poor because their country was devastated by war, but they were able to concentrate on education and were middle class, and now me and my siblings are 1%ers.

You just described me and millions like me in India. Education continues to be the most reliable path for the poor to escape the poverty trap.

I have to disagree here. Education is often more a result of increase in wealth then the cause.

How do you invest in JOBS? That's not a thing that exists.

Also, cities are not save because of police. That's a misunderstandings of how city work and a misunderstanding how safety works.

Simply reducing violence is hard, or impossible, more police isn't the answer. What are the underlying reasons for the these issues in the first place.

> Within a generation it will change the entire city

Schools and policy are not changing a city. What changes a city for the better is public transport, good infrastructure for utilities, good tax and land use policies, effective minimum public services.

Schools and policing are part of that, but only a part.

The police in Oakland are not always a force for good. They are under federal supervision essentially for being too corrupt. it's not clear that hiring more of them will help.

Why would we want DoD budget going to chicago or Baltimore?

I'm pretty sure the people of Oakland would welcome you to keep these ideas confined to whatever place you currently inhabit. Why don't you take your weird crusade to a city that could actually use it, like Memphis, Tennessee?

Want to make South Side Chicago prosperous? Make it an attractive place for productive people to set up shop. Cutting taxes and regulation is how that works.

In the scale of $20t debt and $3t deficits, and $700b tax cuts - $100b is not an either or situation.

This is a surprisingly tone-deaf comment as someone from the same background, and its not even internally consistent.

On one hand you seem to understand that education helped our parents:

> but they were able to concentrate on education and were middle class

On the other you seem to think that menial labor will somehow fix these places, you think we just haven't tried more police (for every sound bite you hear about defunding the police, go look at the YoY expenditure that city actually has)

You also flip-flop on being able to understand that safety is a pretty big part of being able to focus on education for some reason.

I mean can tell you right now, our parents are not representative of their surroundings.

Yes there are a lot of stories like theirs, but your home country is anything like mine, the stories are almost bi-modal: either a given person from "home" is the hardest working person you've ever met and pulled themselves up by the thread of their bootstraps (tends to be our direct family or family friends so we hear about this more)... or they're borderline dysfunctional, often struggle with addiction as a form of escapism, and probably not trying to better themselves just like the people you're thumbing your nose at (tends to be something you see a lot more if you go home yourself).

Maybe instead of taking the good fortune that we've had with what our parents sacrifices and struggles started us off with and stomping on it with self-aggrandizing diatribes where you proclaim the simple fixes that would right everything for these "poor self-pitying victims"... maybe just take away the lesson that things can improve for them.

Focus on the more positive aspects of that exposure, rather than confusing exposure with experience. Because if you're anything like me, we sure as hell don't have any experience near what these people struggle with, both in the US and in our home countries.

One thing the post didn’t touch on with regards to health care - it’s tied to employment.

On one hand, we have tech companies covering all out of pocket expenses, and on the other, we have service industry people who can’t even get health care from their employer.

The same can be said for childcare, free meals at work, etc.

What is better, one banana today or 2 bananas tomorrow?

If you do the math for these intertemporal choices with different combinations of time and rewards, the answer is hyperbolic discounting.

https://en.wikipedia.org/wiki/Hyperbolic_discounting

Behavioral economics is part of the knowledge that predatory people use to exploit the poor.

Ideally you'd want want one banana today and one tomorrow, especially if all you can afford is one banana per day.

Coming out of a spell of intermittent contract work, I found a job a 30-45 minute commute away. I rented a car from a shop that offered older cars for decent rates for the first few months before taking a loan for a new car.

Because I was enrolled in a car sharing service for a few years before, I had an insurance record and got a good rate.

If you don't have a daily commute, car sharing services can be a very good deal.

> If you can qualify for a mortgage, you have a big leg up on people who rent.

This is not always true. Often, the price of real estate outpaces rent. I.e. renting is cheaper than buying.

As a renter, you're not paying property tax, insurance, repairs, maintenance, and maybe utilities.

As a renter, you have no risk. Remember 2008 when housing prices tanked?

Making money off your house often depends on how good a negotiator you are.

Most people neglect to consider transaction costs. For example, you have to pay your real estate agent 6% of the sale price of the house. The house also may sit vacant for many months waiting for a deal, this is all dead weight cost.

The first few years of your mortgage, you aren't gaining much of any equity. It's nearly all interest payments.

A renter can walk away any time. This is why renting is better if you're going to stay less than 5 years.

> As a renter, you have no risk. Remember 2008 when housing prices tanked?

As a renter, you have the risk of your rent shooting up year after year as has happened these past few years basically globally.

Housing prices tanking are mostly an issue if you’re planning to sell your house, or you’re one of those people who buy with the intention of reselling. If you bought something in your affordable range and prices drop in half afterwards, well, that sucks, but you’re paying what you expected to pay and missing out on a discount you didn’t anticipate.

> This is not always true. Often, the price of real estate outpaces rent. I.e. renting is cheaper than buying. > As a renter, you're not paying property tax, insurance, repairs, maintenance, and maybe utilities.

You are though, are you not? Ie the only thing that changes between renting and owning is who is maybe economies of scale. For sake of discussion, lets say you rent from someone who owns a spare house. You are paying everything you just mentioned, on average, as the renter. If you don't, then the owner is losing money - and that's not likely.

Now with a larger business owning your home/apartment/etc, i imagine there is room for economies of scale. They don't have to pay to have a plumber come out, they might already have one on staff or retainer. etc. Perhaps they get better deals on land taxes and whatnot too?

But lets not forget - you're paying for everything your landlord is, plus profit. Always. The only way it works out cheaper for you is if they are more efficient at it.

> But let's not forget - you're paying for everything your landlord is, plus profit. Always.

Definitely not always. Loss is common in business.

Doubly so here when asset values are appreciating. If the landlord thinks they're making bank simply holding property, any rental income on top that helps minimize costs is just gravy. There isn't tremendous pressure for costs to be fully recouped.

In reality, you're paying the least amount you can that still beats the alternatives. That doesn't guarantee profitability for the landlord. The landlord recognizing lack of profits and selling the property is an alternative, but may not even be a tenable one in some circumstances (e.g. a market downturn that leaves potential buyers weary) without taking even greater losses.

> Doubly so here when asset values are appreciating. If the landlord thinks they're making bank simply holding property, any rental income on top that helps minimize costs is just gravy. There isn't tremendous pressure for costs to be fully recouped.

Maybe with certain small owner groups, but I can guarantee you that any community with a dedicated management company (separate from the ownership group) has a goal of making profit on top of however much their property value is appreciating. Not every owner plans to sell the property within a few years of buying it. This applies to all of your apartment communities regardless of age (well, minus lease-ups in their first year).

Also, most properties run on a bog-standard business checking account for their income and expenses; the owner isn't just dumping money in it every month to support operating losses because "the property is appreciating anyways!". If the manager and management group isn't making money to sustain operations, you'll have both an angry owner and angry corporate management that can't pay themselves for their management fees.

I have observed that many small landlords are speculating on a longer term payoff of the property greatly increasing in value, are not present but planning on moving back in at some point, or own outright and have out of date ideas about market rent. All of these lead to situations where they may take losses of varying sizes in the near to medium term. Combine one of these landlords with someone who is not planning on sticking around long term and you've got a match made in heaven.

> Definitely not always. Loss is common in business.

Maybe randomly here and there, but you will be homeless if your landlord continually loses money. I said it earlier in my comment, "on average".

If your landlord on average is losing money, you will be homeless soon enough, or someone else will buy it and increase your rent or find a way to be more efficient than the previous landlord.

There is a small seeming exception in regions where housing prices are rising rapidly: if the owner is willing to forgo increasing rent at the rate of housing price increases (which is pretty common among smalltime landlords), then renting can appear to be cheaper than the present-day mortgage for an equivalent property. Of course, in that market as a renter you lose out on appreciation of the house, so renting is only better if you can get bottom-market rates near the top of the market.

Or if you're not sticking around long term.

> The only way it works out cheaper for you is if they are more efficient at it.

One easy way would be the difference in credit scores leading to lower payments for the landlord.

There is a widening gap between "perfect credit score" and "able to afford a down payment on a mortgage".

> Always.

Not always. Around here, there were several years where house prices rose faster than rents. The owners were renting them out for less than the mortgage.

That was pretty standard leading up to the Great Recession. It was the new economy, you see, and fundamentals like valuing property based on rental market values was the old economy because property values never go down.

My sister was renting out her house for less than the mortgage for a few years waiting for the price to rise enough to not lose money selling it and she bought well before the real estate boom.

There are further aspects that speaks against home ownership:

a) The money one puts into a house is an investment whose future value depends on the increase or decrease in the value of the property. If a person puts most of her or his money into this investment, this means per se a high risk, because the person's investments are not well-diversified.

b) People run the risk of overspending early in their life, because many of them want to build or buy a house for life, which means building something larger than they would rent at that age, thus generally spending more money on housing (via interest rates).

c) When people have no heirs or their heirs are already well provided for, it makes little sense to own a more or less mortgage-free house when they die. The money could have been spent during their lifetime.

These aspects speak, of course, not absolutely against home ownership. Point (a) cannot easily be avoided, when the property's value is high compared to one's savings and income. But it also means a commitment to saving, which can be a good thing. Point (b) can be mitigated by starting with a small property, selling it later and then buying or building a larger property. Point (c) can be mitigated by a mortgage on the house, if this is possible, or by another financial instrument where the house is (partially) sold but one retains a right to live there until death. -- All in all, however, the danger of overspending is real.

>Point (c) can be mitigated by a mortgage on the house, if this is possible, or by another financial instrument where the house is (partially) sold but one retains a right to live there until death.

In Italy (but probably in many EU countries) there is a way to sell what is called "bare property" (in Italian "nuda proprietà"), while keeping use of the house (in Italian "usufrutto").

The cost of a "nuda proprietà" is of course much lower than the full one, and basically the buyer is betting on the time the seller will still live, whilst the seller is using the sale income to live those remaining years.

It is not particularly common, sometimes the buyer (of course not really poor people) use this form to buy a house for their sons as a form of investment for when they grow up.

> This is why renting is better if you're going to stay less than 5 years.

Sometimes the opposite if you have rent control.

Mine can only pass on property tax increases and capital improvements. As monthly strata fees, interest and repairs go up, they can’t pass any on to me.

At this rate, I’ll never move out!

I'm in the same boat as you. I live in Southern Ontario (Canada) in a small town (10-14 thousand people). I have a 1000sq/ft apartment, 2 bedrooms, central air/heating . Moved in 15 years ago, rent was $726/month (Canadian dollars obviously). It's rent controlled. 15 years later, I'm now paying $868/month. Just 15 units/apartments here, VERY quiet building. On top of rent, I pay my own hydro, which is about $100/month, water supply is included in rent.

I write software for a living, and over the last 15 years I've saved (invested) enough money to buy any house in town for cash. But I don't see the need, I'm single, no kids, and I work from home (second bedroom is my office). I'm 56 now, and am on track to retire in 7-8 years, with low 7 figures saved. The more I save, the more cheap/stingy I become with my money. While I could easily buy a new vehicle for cash, I prefer to keep my (rusted in places) 2010 F-150, I keep it maintained mechanically, and it is still purring along.... except for the rusted rocker panels that is. :)

There is VERY rarely any units in my building for rent, all 15 units/apartments are rented by long-term tenants. The only way the landlord/owner can raise the rent is when a tenant moves out. About 5 years ago, the couple across the hall moved out, landlord renovated their apartment, and rented it for $1,800/month (same apartment as mine, just a mirror image).

I don't know anything about the US of A, if there is rent control there or not, but it's almost universal in Canada for "purpose built" commercial rental buildings. Private rental units, like privately owned condos and houses, they can raise the rent as much as they want AFAIK.

And this is why rent control is bad for society - very beneficial for those who have it, prevents anyone else from finding cheap land nearby (because the remaining non-controlled housing is in higher demand :/)

It’s all over the place in US, and even Canada.

Private condos/houses are mostly still rent controlled in Ontario too.

That's why you'll end up in a slum where repairs are minimal. (at least if you're in a large metropolitan)

A poor renter often can not walk away any time as easily as a home owner.

First and Last months rent is often a deposit, and when you don't have credit is a minimum, 30, 60, even 90 days notice (and the naive or people who can't take a phone call, research laws, or just don't have time) will sometimes pay more.

In effect, poor, don't have credit, then lost deposits + new deposits could be worth more than a down payment.

Oh, and those with credit might have gotten down payment assistance (with forgiving), or a low% downpayment - and their worst loss is that downpayment and 7 years of bad credit; plus it takes a lot longer to evict a delinquent mortgage than a delinquent renter.

> A poor renter often can not walk away any time as easily as a home owner.

Consider how much it costs to have your house sit empty for a year looking for a buyer. There's nothing "easy" about it.

I'm not sure of any time I've heard of a house sitting empty for a year. Even in 2009. Until a few months ago, you had houses selling in hours/days, and even now it seems like they still move quickly.

> The first few years of your mortgage, you aren't gaining much of any equity. It's nearly all interest payments.

It might not have to be that way.

Where I live we have the linear mortgage. Every month I pay a constant amount back on the principal, and a variable amount of interest on the remaining principal. At the end of the mortgage (30 years here) it is all paid off. With this type of mortgage we pay the lowest overall amount of interest.

Because the monthly payment goes down each month, the first payment is the highest. As a result some people choose to get a different type of mortgage instead, even though the linear type costs the least in the end.

> Making money off your house often depends on how good a negotiator you are.

Good luck negotiating with the bank's appraiser. During the 2021 housing craze you might've been able to get 5-digits over closing, but from what I've heard, it was still rare to have a buyer with another $20k to throw your way. Nowadays, you're completely at the mercy of the market and how much the homes around yours are being sold for, relative to your home's square footage and whatnot.

You're not negotiating with the appraiser. You're negotiating with the buyer or seller.

> you're completely at the mercy of the market

I hear all the time people saying they cannot negotiate. They can. You can. I can. There are many books on it if you need an introduction to it.

Have you ever bought or sold a home? Unless the buyer is buying in cash, or at least has large cash reserves to give to you at closing, they can only afford up to whatever the bank approves them for, and lenders don't hand out $400k loans for properties valued at $350k just because "the seller made a hard bargain and the buyer agreed". If they did, they'd be upside down the second after closing because a foreclosure means the lender/bank can only sell the house for $350k less than what the buyer owes (and they don't tend to stake their foreclosure sales on whether or not they find another oblivious buyer willing to pay way over market for a house that they could go across the street and get for much cheaper).

Also, nobody bragging about their mortgage mentions their down payment. I’d never be able to afford 20% down anywhere on the west coast.

Most of the US is not the west coast, and an FHA mortgage only requires 3-5% down and a credit score of someone with a pulse.

That mortgage principal and interest is fixed for the life of the loan. Rent always goes up. Real estate builds wealth because it’s one of the most accessible ways to acquire an asset that historically beats inflation with easily accessible leverage. You can even rent it out after only a year of occupancy (although one can only have one FHA mortgage outstanding at a time).

There is always risk with any asset, but you have to live somewhere; might as well borrow to capture the upside if you’re going to stick around for a bit. If you’re renting, hopefully you’re still allocating cashflow to investments to offset the real estate exposure you’re not getting through ownership.

> an FHA mortgage only requires 3-5% down and a credit score of someone with a pulse

Those kinds of loans are a huge government subsisdy, contributing quite a bit to the unaffordability of housing. So many mortgages today are backed by the government. These came about in the 1930s with the New Deal.

Without government guarantees it would not make sense for banks to take on the risk of underwriting fixed rate low interest 30 year loans. Many other countries, like Canada and the UK for example, have mortgages that must be rolled over to new interest rates every 5 years. Would you wanted to underwrite a 30 year loan for 500k a couple years ago at 3%, knowing that rate could only go higher?

It's not fair. These government loan guarantees skew the price of housing, negatively impacting people who need a roof over their head and don't have the money to compete with investors who can bid up the aritificially limited supply of housing to make passive income collecting rents.

3% of 350k is still over $10,000, which is a big chunk of change for the vast majority of Americans.

Because if you’re rich enough, you don’t need any.

> This is not always true.

Its usually true in urban areas especially given the somewhat global housing shortage that seems to plague most of the big cities around the world right now. Definitely true in mine, renting is way more expensive here and now rates have risen and landlords have sold up its spiking even more due to lack of supply.

Renters pay for mortgage, property tax, insurance, repairs, maintenance, and utilities. Along with a bonus middle man fee to the landlord.

As a renter, you're paying at least 1/N of things like utilities and maintenance, where N is the number of renters for that property, right?

In the case of N=1, where someone is renting a single family home, you must be paying at least as much as if you owned the home, since presumably the landlord wants to make some profit on top of all the expenses being passed to you.

Your simplified model leads you to the wrong conclusion. You need a better model to understand the nuisances

It really depends.

On your jurisdiction. On your market.

In my country, renting carries a strong risk of instability. As our rental laws were written in the 60s, when it was something you only did while at university.

After the Christchurch earthquake, I ended up moving house 3 times in 2 years. Why? Because the landlord wanted or needed the house back.

The first one, the farm the cottage was on was sold, and the new owner wanted it for worker accommodation.

The second one, the owner's house was red-zoned[0], and he needed somewhere to live.

The third one, the owners had bought it for their retirement, and were renting it out until then. Not that I knew that up front.

But, 10 months in, they decided to retire.

So how much cheaper was it to rent, considering the costs involved with moving, the cost of cleaning rentals you're leaving, the time you spend finding a new rental, and the letting fee that every property manager used to charge until recent legislation?

And I haven't even mentioned the cost that such instability imposes on you and your family. My oldest son has lived in about 11 different houses. Renting!

> A renter can walk away any time

In my country, that wasn't true on a fixed term tenancy, you were liable for rent for the entire term.

TL;DR - it depends.

Oh, and fun fact, my mortgage repayments + taxes + insurance + maintenance are significantly cheaper than the rents I'd been paying for significantly worse houses.

Which makes sense, when the "Mum and Dad" investors are using your rent + tax breaks to cover the ongoing costs until they can sell for sweet tax-free capital gains, of course you're paying more.

[0]: https://en.wikipedia.org/wiki/Residential_red_zone

"One analysis of tax burdens relative to income suggests that in ten US states the percentage of income spent on taxes by low-income people is six times greater than that paid by the wealthy"

The footnote is to a study at https://itep.org/whopays/ - is this a reputable study? If so the findings seem like something people should be objecting to in the strongest terms possible - I'd be horrified if it were true in Australia. But at the highest level it seems to contradict the usual numbers you see floated around where the wealthiest X% pay Y% of all taxes (where X is considerably less than Y).

The cost of renting furniture surprised me.

My wife and I were looking for a dining room table to rent for Thanksgiving. Our house has a dining room that goes largely unused, as its just the two of us and we eat in the kitchen. However, we were having a large party for Thanksgiving and wanted to make sure that everyone had a place to sit, but just for that day, hence the need for a table rental.

She found a great listing on Rent a Center: a perfect table for $24/week. Perfect!

Then we saw the fine print: You couldn't rent anything for less than three months, and late fees were SUPER high.

We would have needed to spend at least $360 to rent this table, which makes no sense!

The kicker? This table was a $500 table.

I feel bad for people that have no choice but to rent furniture.

I was shocked to learn what "Credit Card" means in the US.

Here (Israel) a Credit Card is always connected to a bank account and at the end of each month the accumulated debt is just recovered from the balance. It's done automatically and you would get a very stern phone call (from your bank) if you balance is not enough.

Of course, the CC companies and banks would be happy to give you a loan with outrageous interest rates, but that takes a phone call, or a form on their website.

From a human fallibility point of view, American CCs are evil.

> Of course, the CC companies and banks would be happy to give you a loan with outrageous interest rates, but that takes a phone call

I mean it’s exactly the same here, except the loan doesn’t require a phone call. There’s no interest if you pay off your card every month.

Inflation really hurts the poor.

When you can't afford groceries at $70 a week you surely can't afford groceries at $120.

Back in the 90s in L.A., I remember that that some grocery store chains were routinely more expensive than others (e.g., Vons always cost more than Lucky’s). I found it interesting while exploring some neighborhoods that in lower-income parts of the city, I was more likely to see the more expensive grocery chain than the less expensive one. And that’s putting aside the whole food desert issue with South Central where there weren’t any grocery stores at all. I’m not sure how the grocery situation looks now.

Yeah if I wasn't poor I'd buy a farm to create food for myself. Why pay someone else to make the boots! But a farm costs lots of money, and though I have leather boots, I'm still paying to be poor in other ways. In many many ways.

This doesn't just affect Americans. The article describes an obvious concept to anyone not privileged.

In the UK we make it much cheaper to be poor than <whatever you call the 20% of people above the poor>. That's nice, but it also means we have a lot more poor people, and that people trying to stop being poor get fucked. I am not justifying either choice. I am just saying you pick your problem and live with it...

It's really shocking to see the disconnect between middle-ish class and everyone below them. The same way I find it shocking to see how the same group almost worships millionaires/billionaires thinking they can easily enter those classes if they just work hard, I find it shocking to see how little critical thinking is applied to seeing the problem from someone else's perspective.

My family was poor, but luckily due to a number of circumstances, we had a place to live and we had access to a gas cooker and grandparents that could provide the raw ingredients for food - the beans, flour, meat that people keep quoting. Without those, we couldn't have made it through many months of me growing up. I was also fortunate enough to have access to those as I know the importance of a healthy diet for a child growing up. None of the vegetables we got from them or the meat was processed, filled with pesticides or other chemicals or any growth hormones or antibiotics.

Remove this safety net which was obtainable through hard work (it's a lot and I really mean it, a lot of work to grow plants and vegetables when almost all farming is done using manual tools) and I might've suffered from the same problems some of my classmates at the time - overweight, underweight, etc...

While most raw ingredients can be cheap, even cheap is relative. Through an even darker period in life, I had the chance to see first hand what it meant to not have enough money to even get to the next month. When all outgoings are 120-125% of your monthly income, there is nowhere else to go. I used to smoke (a lot) smuggled cigarettes (couldn't afford buying them at the shop) because it was cheaper than eating and they are appetite suppressants. So instead of spending money on buying food (let's say 5 dollars per family in my part of the world per day) we'd smoke (1 dollar per day) and live of whatever we could get for free. It generally meant one meal per day (not nutritious at all because surprisingly most foodbanks aren't filled with organic avocados).

This then brings me to the last point which is - you might not know how to cook it, you might not have time to cook it (I had worked a job at a point where I would start at 6 AM to 10 PM to make enough to get some food) and you might just not have money to buy those things. A recent scheme to place immigrants in the UK places them in modified hotels. Your average hotel room doesn't have a kitchen so that means you can at most cook something in a microwave. Pot noodles (one pack per day in a good scenario) is what most people eat in that scenario. Your 50 cent organic bananas each can be a pack of instant noodles (36 cents at walmart for beef noodles) which can hide your hunger and maybe leave you enough for your children or to pay those pesky electricity/heating/gas bills.

Never forget the fact that having a shelter, food and safety are privileges. We like to think that they are rights, but if that's the case, we failed more than half the planet. Be happy for being able to sleep with a full belly, in a warm room and a locked door, a lot of people can't afford those things.

I just do not understand the concept of renting a property. If you can't live there, let other people do! How good is that system for society? You're rich enough to buy extra property, then you make money of poorer people. That's sick.

nonsense headline and thesis.

I hate articles like this, and especially the "boots" example. Like most things, it sounds great in theory. Reality is usually much different.

>“Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars."

So he makes $38 per month...where is that other money going? As a cowboy, he is spending that on whiskey and prostitutes. We've all seen the movies. These days, it is the exact same thing where people spend their excess money on crap - big screen tv's, and that kind of stuff, even if they are very poor.

People do not do comparison shopping to get the right price. People wait to the bitter end before they fill up their car with gasoline, and do it at the gas station that costs $.50 cents more per gallon, but they travel past a station that is less expensive all the time, they are just not near it when they absolutely need gas at that second - they could fill up their tank when it is 1/4 tank left at the cheap gas station - people don't plan ahead.

It's pretty easy to lift oneself out of poverty in many (not all) cases, but people are ruled by emotions and what they want at this second. People don't plan. They don't comparison shop. When they get a little extra cash to buy in bulk quantities on some kind of thing like a great toilet paper sale - they spent the money on a dinner at a restaurant instead, because "they deserve it".

I'm not saying this is the same with all poor people - if you are a single mother with 2 young children, well, that's tough if you have nobody to help you out.

Furthermore, that cowboy in the example could go out and try to get a side hustle. Make enough extra to get more basics.

And the "food deserts" are complete bullshit, in reality. Yes, there are places that don't have large grocery stores, for sure. BUT, when I looked at a map in Chicago, for instance, there are Costcos and all kinds of stores that are 5 miles away. There's no desert, unless you mean that there's no grocery stores within a block. But one of my relatives lived in a remote area and traveled 1 hour to get to Costco to make big purchases of living staples. So if a poor person doesn't have a car, well, they need to work - find someone who has a car that can drive you there and split expenses. Find a church that has a van to travel there. Yes, you have to work at it a little bit, I personally am not going to life someone up and carry them piggyback for 5 miles because they don't want to work at finding someone to help them.

I'm looking at ALL this stuff in the article and it's almost all bullshit...but one does have to try to figure it out. It is not super easy, but it isn't super hard either.

The main problem, though, is that people just don't want to what is necessary.

Doing what is necessary demands a lot of energy. Every way to save a few dollars demands more of your time and it adds up.

We the lucky ones get to hire help when it suits us. We can budget our energy, and replace it with money as needed. When it runs out we can catch a break in a nice restaurant or on a beach. We also make dumb mistakes with our money, but they don’t hurt. We can say “today I’m too tired to cook” without being judged harshly. We can pay more for gas and still eat that week.

If you’re in such a comfortable situation, you might forget how tired poor people are, and how little slack they actually get. The demands of their situation are much greater and their energy is not unlimited.

The demands of your situation are far gentler. I consider exercising empathy to be part of them.

I've been poor and tired a long time ago. I know what it is like. But it is what it is, and you have to deal with it, right? You can't just do nothing. So, at least what I did, is work on the extra work that would give me the highest payback and greatest time savings, because that shit build on itself. The first thing I did was to buy what staples that I could in bulk. Not only did it save me money, but it prevented me from having to go out and make special trips to purchase those items - so I got a LOT of time back.

I started making food in bulk, and froze it, and food prepped on Sunday so I didn't have to make food every day, just grab and go. Saves a LOT of time.

To this day, I do the same thing, and have not changed anything, because that stuff got ingrained in me. I don't really have dumb mistakes with my money, too much, as I am super careful and have priorities.

But, if you are poor, what can you do? You still have to work and try to get out of poverty, even if you are tired. So one should try to think what they can do to get the best payback for everything they do, and do that first.

Like if you're poor but still own a car, and driving to work takes $50/week in gas, then maybe buying a bicycle and bicycling to work might save $2,500 per year in gas. If one is healthy enough. I'm not saying to do this - it is just an example. But still, if one could, that's an easy $2,500 per year. Then you take that money and use it to buy toilet paper, beans, rice, and other staples in bulk. This means you get a discount for bulk, PLUS you don't have to go buy them every week and take time and effort to do that.

I hope you get what I'm talking about.

> I've been poor and tired a long time ago. I know what it is like.

How many times have they turned off your water?

"When someone is telling me they are or have been poor and I’m trying to determine how poor exactly they were, there’s one evergreen question I ask that has never failed to give me a good idea of what kind of situation I’m dealing with. That question is: “How many times have they turned off your water?”."

That's from here: https://www.residentcontrarian.com/p/on-the-experience-of-be...

Please forgive me my curiosity. The linked article was somewhat eye-opening for me on who is poor and who isn't, and I now keep asking this question too. So, how many?

This is really out of touch. First off, poor people can’t afford Costco memberships. Second, 5 miles is a very long distance in Chicago. How can someone justify spending an hour in traffic each way, and with what car?

That was just an example saying Costco. But, one can try to find someone who has a Costco membership and make a trip together. Or maybe going in on a membership with someone else. If a Costco is near enough, it would make sense to find the money to buy one, because the savings would give enough money back to make financial sense.

5 miles is not a long way. I live in a metro area, one of the highest traffic-wise, and I go that far, no problem.

The car - you have to do this thing called "work" and work at finding someone who has a car and share. Maybe a church has a van that does this kind of thing. I'm not saying it is the easiest thing in the world, but seriously, it is not that difficult to find out if someone has a car that can go to a grocery store, even a normal one, and carpool.

There's a lot of other things one can do to lift themselves out of poverty, that are not difficult.

No one making $9/hr with a kid or two is going to be dishing out for a Costco membership and getting a volunteer to drive them around everywhere they need to go. There is no long-term savings and “financial sense”, it’s hand-to-mouth, sometimes shoplifting to survive. Have you executed this plan yourself? If not, I’d suggest appreciating the fact that it isn’t this easy or many people in poverty would have done it.

As a landlord of single family homes, I have to look at the detailed credit history of potential tenants. Before I even get to that stage I let them know the income requirements, etc. so usually we are looking at the top 3 applicants out of the 30 that applied.

With almost no exception, the renters make horrible financial decisions that set them up to work until they die. The average credit report I see is about a 500 and it's filled with missed payments, loans sent to collections, etc. Then, right at the top, in the last two or three months will be new loans for expensive cars and jewelery. It's mindboggling and sad. Most of my tenants have a nicer car than me (I own a pretty vanilla $30k sedan).

The renters usually come just above the 3x income to rent ratio and they never fail to pay their rent. But I don't really ever forsee them owning a home if they continue to make luxury purchases that prevent them from saving. The loan industry really enables a life of debt.

> The loan industry really enables a life of debt.

It really does, and I've seen so many people fall into it, especially at the beginning of their career. Financial responsibility should be something taught early on at schools. With cryptos today, maybe even with the risks behind investing.

That said, I'm glad I live in the majority of countries where someone more privileged than me cannot judge my financial decisions to give me access to housing. I consider myself financially responsible, and credit scores aren't a thing here anyway, but I find it very disturbing.

What happens in your country if you move into a house and then just stop paying?

>Financial responsibility should be something taught early on at schools.

100% guarantee that this does not matter one iota.

I've tried and tried to help so many people with their financial picture. You would have more luck talking to a brick wall.

People don't care. They just simply do not care.

This is because most people - maybe 95% - are ruled by their emotions rather than rationality. Or to put it more precisely, people make decisions based on emotions and then use their rational mind after they make their decision to rationalize their purchase.

Also, becoming financially responsible is just about the simplest thing to do, at least at the beginning stages. All it requires is addition and subtraction, mostly, which we learn in second grade or whenever it is. Second grade.

I remember opening my first savings and checking account when I was 15 years old (when you could do it yourself without parent's permission). The person who helped my took about 10 minutes to help me understand, that's all you need.

The internet is inundated with videos and classes on basic financial knowledge. I'm sure that I could go to Udemy and find 500 courses on basic financial training and pay $15 for it....hmmm, let me go check right now...ok, typed "personal finance" in the search and it came back with "6,496 results for “personal finance”"

People don't take those classes because they don't want to take them. Probably personal finance is one of the topics that is #1 for total courses available.

Honestly, personal finance is so easy. It is just about the easiest thing to do. Sure if you get into complicated stuff, if you have $200 million in the bank/assets/whatever, maybe it is hard. But for the general person, no, it is simple. And the part that someone doesn't get, there are a ton of videos and articles on that, too.

I have gotten exceptionally angry at some people because they were so broke and asked me for help. There I was, spending countless hours with them, doing what you said and educating them, and they go out and blow a HUGE chunk of their feeble savings on the stupidest shit. I got angry because I knew these people and got emotionally invested in helping them (I don't regret getting emotionally invested).

I don't help people anymore. It's an exercise in frustration and futility. People simply do notwant to be financially responsible...well, maybe in the 20/80 law, 20% are financially responsible. The other 80%...don't waste time on them.

Kind of a rant, but it still burns deep in my soul, because the people I tried to help are good people.

You can lead a horse to water, but you can't make it drink. Pearls before swine.

> the renters make horrible financial decisions that set them up to work until they die.

Did you read the article? Genuine question. Because you seem to be completely missing the main point it's making, it's not exactly lacking in examples.

Not GP but these comments and the article are not unrelated.

TFA says amortized cost of things is lower when you have access to cash, or cheap credit. Buying in bulk in large shops is cheaper than buying small amounts at local shops. Proper renting is cheaper than weekly-billed accomodation.

But then GP is saying, the poor often have better access to credit than it might seem, it just goes to things that don't improve their financial situation. Nice cars and jewelry for instance.

I don't really know and suspect both are true to an extent, but chipping in since poverty is fascinating to me and I don't fully understand it (I come from and remain in a modest background btw). Sometimes it's just a lack of cash but often it seems not as simple as that.

Other factors in fairness are kids and medical stuff. I spent 3k fixing up a wonderful 3.5k used car - have had it for years - runs great even though 16 years old. I do want / need to buy a new car but prices seem crazy to me! Kia soul maybe as a cheap car? Everything else has puffed up to high 20s and 30s (and far far higher) - this old car costs nothing to insure - and Kia seems to have waiting lists around the block for warranty work. My old car I can have anyone work in it without warranty issues.

It made me wonder if all the required features and electronics are puffing up costs a bit?

I grew up around a lot of poor people and I saw much of the same.

I wish this article broke down the "food" and "clothing" categories into the specific products they are purchasing.

A little anecdata:

These families would buy brand-name sneakers and jeans for their kids, whichever brand was popular that year, whereas I was on year two of home-sewn or no-brand cheap jeans. I'd go visit friends and see boxes of brand-name Lucky Charms, Apple Jacks, etc, and be envious versus the bulk oatmeal I choked down every morning. Their mothers were getting their "nails did" regularly whilst mine had perpetual dishwater hands.

My parents didn't make much money, but they knew how to spend it wisely. Other poor families, not so much.

Another anecdata:

My father-in-law grew up absolutely dirt poor (far far worse than my parents), but did reasonably well for himself over time. He still has significant debt and inability to manage his money because he has to buy luxury goods regularly as some sort of compensatory mechanism to ensure that other people would never see him to be poor.

At the end of the day, when I look at poor people's spending habits, I see the same thing you do: they are hooked on unnecessary spending. I suspect there is something in the human psyche that makes poor people try to compensate for it by spending to not appear poor, thus exacerbating the cycle.

It's a largely self-inflicted problem.

Consider that some of those appearances aren't just for social circles but for job status. As someone in startup software (now remote!) my wardrobe choices are far broader than someone working in service who may be expected to wear and use the products they're selling.

Why do you have to look at their credit history before allowing someone to rent from you? Shouldn't their income be all you need? Whether you realize it or not, you are a part of the system that enables a life of debt. Owning a home allows people to build equity and sets a foundation for a stable life. By being a land lord, you are preventing people from buying and building equity. Instead their hard earned money goes right into your pocket.

Believe it or not, people exist who don't want to own a home and would rather rent. There are also plenty of times where it is a better idea to rent than buy a home- plenty of people who bought right before a housing market crash then needed to move for a job can attest to that. Generally, if you aren't sure that you're going to stay in a home for several years, you're not getting any equity back out if you need to sell... Especially if you had to do any big repairs or maintenance.

Landlords are a necessary part of a functioning society.

> Shouldn’t their income be all you need?

Sometimes people can pay but choose not to. Ability to pay is necessary but not sufficient. Demonstrating a proven track record of financial responsibility makes a landlord much more willing to lease on favorable terms.

> By being a land lord, you are preventing people from buying and building equity.

Landlords increase the supply of housing by improving and renovating older structures or converting them into residential use.

A landlord has the exact same costs as a homeowner. He has a mortgage, property taxes, insurance, repairs, etc. Because he wants to operate at a profit he needs to keep those costs low, and a lot of landlords do that by purchasing distressed properties at lower prices, improving them, and leasing them profitably.

Alternatively a landlord can lease to tenants who have poor credit and can’t obtain a mortgage to buy a house. Those tenants would probably be homeless if it weren’t for landlords willing to risk leasing to them. No bank will lend $300k to those tenants so they can purchase the houses they would otherwise be renting. Those landlords are charging higher rents commensurate with the higher nonpayment risk inherent in tenants with low credit scores.

Generally the only thing preventing tenants with poor credit from building home equity is their poor financial decisions.

> By being a land lord, you are preventing people from buying and building equity. Instead their hard earned money goes right into your pocket.

What? This is like arguing that someone who owns a car and is a taxi driver is “preventing people from buying” and “instead their hard earned money goes right into your pocket”.

One person being a landlord does nothing to prevent others from owning property. Housing is no more a scarce resource than cars are. Or, at least, that would be true if the US weren’t covered in laws preventing new housing. There’s your actual bogeyman.

> Why do you have to look at their credit history before allowing someone to rent from you? Shouldn't their income be all you need?

Am I missing something obvious? Isn't it just because not everyone who misses payments is low-income?

The rest of the comment makes it pretty clear why income is not the whole story. Overextending finances can happen in any income bracket.

Renting is a service that is available to everyone, not just those who can’t afford houses. Most people who buy houses previously rented. Gotta live somewhere when you save up.

For better or worse, real estate is one of the earliest investment opportunities available for the most Americans. The ROI is easy to understand and capital is much easier to access compared to VC, bespoke business loans, etc. The industry is large and competitive, not investing or participating in the market isn't going to actually change housing affordability. Almost everyone except the poor/working class is invested in real estate directly or indirectly.

Most importantly, only residents vote in local elections and it's local policy that has the largest impact on housing supply and renter protections. Market's are quick to react to policy changes but policy has to actually change - advocating for individual actors to behave against the market is, on average, not going to actually help the people you aim to help... instead other actors (and perhaps actors biased to even more amoral decision making) will take advantage.

The landlord is effectively a lender, or at least a rusk-taking intermediary. They buy the house with outright cash or a mortgage backed by good credit. Their risk is that they don't find tenants, can't receive rent, or the house price goes down.

It's effectively shielding the tenant from the financial risks of house ownership, for a price.

I also agree it's unfair to the poor that renting is more expensive long-term when they can't afford to buy, but I don't think it's the landlords fault.

Your judgement seems misguided towards someone that may have been incentivized to take risk on an investment property, or someone that bought a home and had to move due to any number of circumstances, but was not able to sell.

I agree that homeownership is becoming less and less viable for the middle class and below due to a lot of speculation that has entered the market in the past few years, and this should be nipped in the bud with regulation. But without knowing much about OP, it feels like an over reach to make assumptions that they are the problem.

On the credit history, I don't know if you have rented out a place before(sounds like maybe not), if you get a bad apple as a renter...everything gets massively more complicated and remedying the situation is not a clean maneuver. You wouldn't buy a vehicle off one picture, so why would someone rent out something that is 10-20x more valuable without proper due diligence?

Income is evidence of a person's ability to pay. Credit history is evidence of a person's willingness to pay. I would expect a positive correlation between the two but relying on that correlation seems risky.

Your comment is confusing.

Are you concerned that the parent is using a credit history to make a decision who to rent to?

Or are you concerned that by being a landlord the parent is somehow preventing people from buying a house?

I can see each being a concern. However, phrased as it is, it sounds like an incoherent emotional rant that is hard to respond to.

>>By being a land lord, you are preventing people from buying and building equity.

Yeah me going to the gym, reading, and eating healthy is the reason why so many others are obese and unread.

>>Instead their hard earned money goes right into your pocket.

What is the connection between X being a landlord and Y not being allowed to be a landlord?

If you look at housing as equity why do you have problems with renting it out?

it's hard to evict people. missed payments means loss of $

you make your living off them, so you have a psychlogical incentive to see them in a certain way.

> the renters make horrible financial decisions that set them up to work until they die

The point of this article is that those "horrible financial decisions" aren't mistakes, they are costs of living that are imposed upon those that are already struggling. Sometimes it may be irresponsibility, other times it is an inevitability, a distinction that you truly cant discern from the outside. It's possible that splurging on a car might be a long term benefit, maybe fuel efficiency or maintainence costs are money savers after the initial buy in. You don't know the personal calculus of each decision so maybe don't assign motive to what renters are doing under the heel of capitalism.

And it turns out, these people need a roof over their heads, which you could provide at a cheaper cost if you chose to but instead you take a chunk of their paycheck each month as your personal profit. Like you could help people. You could treat housing as a necessary resource and not a commodity. Overnight you can alleviate people's debt if you wanted to.

very fair, but from my handful of observations I've seen people chase brand name over the quality benefits a brand carries (e.g. maintenance, efficiency) to consider

You're not renting to poor people ... and you're rationalizing.

poor people don't have 3x income to rent ratio, middle class people do. poor people don't drive $30k+ vehicles, middle class people do.

The only thing you got right is that poor people make bad financial decisions. Often times they're forced into it, although not nearly always. Poor people trade time for money.

People are often predatory towards the poor because there's a combination of money being there but not having enough to protect yourself from the bullshit.

Personally, the one group of people I have absolutely no sympathy for are landlords, and I say this as someone with a 6-figure income who rents. I grew up dirt poor, to the point of being homeless.

And the number of times I've had a landlord try to pull some shit only to be shocked when my lawyer got in touch is entirely too damned high. Only for the problem to magically go away.

And why? Because you would never imagine my resources by looking at me and how I live. landlords do this shit as a matter of course and only back off when they realize not only CAN you defend yourself, but you WILL defend yourself.

Think about it like this.

There are laws on the books that very explicitly state if a landlord makes a persons property inaccessible before they're legally required to move, that person can sue them for the value of everything lost.

1. How do you think I know that (they gave away 2 of my pets, reptiles)?

2. Why did that law need to be passed?

---

I'm sure there are landlords that act in good faith as decent human beings, but it seems as if there's something unique about landlords that makes it difficult. In all the time I've been renting I've met a single decent property manager, and no decent land lords.

This is true, it's a vicious cycle but it's not only about poverty. It's about human life in general. When something goes wrong other things follow it.

Having health problems directly implies that your career will suffer that your dating life will suffer that your finances will suffer. It's all connected.

The good news is that it's not as bleak as improving one area improves the others as well and people just don't need as much money as is advertised to lead happy lives. When I had very little money I was much happier. I've been utterly depressed in a 4 star hotels and happy as a clam in a single room crap-hole with very poor heat isolation. What I've learned is that if you aren't happy living modestly you are compensating for some deeper issue by throwing money at cars and things.

Whenever I see a Westerner concerned about money I realise they have much bigger problems that aren't being addressed. Yes, US is a place where it's really bad to be poor but all you need to get out of the cycle is for a single time to get lucky. And that's it suddenly you are on an upward trajectory with compounding success. I think everyone should experience at least once in their lives how it is to be poor. If they don't get traumatised by the experience and become misers constantly scared of losing their wealth then they win if not then it's really sad. Rich people who are petrified of losing their wealth look utterly miserable.

An interesting thing is that the rich will keep the poor down in a strange way: they'll encourage crime in poor communities, demanding less policing, asking for shoplifters to be let free, etc. resulting in food deserts.

The poor want safety and peace and our society wants them to tolerate violence and crime.

Can you give some examples of this?

I know there exist some humans who may behave in terrible ways like this if given the chance but to think that this is a generalizable behavior among the rich just seems like a stretch.

I think what they mean is that people who live in nice neighborhoods and never have to deal with the practical effects of high crime, are often the ones calling for defunding the police, building low barrier homeless shelters in less well-off neighborhoods, etc. Their Teslas parked in their garages in their gated communities will never get broken into or have their catalytic converters sawed off. They earn social virtue points by espousing these views.

But the middle class households living in a blue collar neighborhood are constantly getting their packages stolen, mailboxes and cars broken into, even occasional gunfire once in a while. Unfortunately, they don't have the disposable income to handle these mishaps easily.

I don't think most rich have an explicit goal of encouraging crime in poor neighborhoods or harming the poor, though it may be a side effect of them pursuing their own interests.

This is true. It's the classic thing: it's not that they hate you, they just don't care about you.

Are you talking about San Francisco? Sounds like San Francisco.

I'm really tired of such analyses.

Money, money, money. Quality of life is not measured by money per se.

We've made money into an excessively big issue in the US. Money is just supposed to reduce friction in trade so you don't have to make ten trades to get the thing you really want.

Poverty is not about money. It's about all the myriad ways we say "Fuck you" to "the wrong kind of people."

Wrong skin color.

Wrong gender.

Wrong sexual orientation.

Etc.

I don't even know where to begin. You can't solve a problem from the same mindset that created it and actively keeps it alive.

I don't see how you prove your point. It's basic economics that, in the job market, supply and demand are the forces that set the amount of money any job will pay, so a job that anyone can do might pay $10 an hour, while a highly-specialized job might require paying $100 an hour to attract that smaller group of people to consider dedicating their skills to that job. None of that involves any of the attributes you've mentioned. And it's tough to believe you when you say that "money is not the mindset" then go on to say "money is just how we exchange our value for goods and services without making 10 trades to get what we want".

One of the biggest risk factors for homelessness is being LGBTQ.

Now explain that one by saying who gets hired or whatever has nothing to do with anything I said.

In a town of 1000 people, if 100 are homeless, and 25 are LGBTQ, that certainly does spell out that the town has a discrimination problem. However, that doesn't mean that homelessness is guaranteed if you're openly LGBTQ, nor does it mean that everyone who is homeless is LGBTQ. It just means that it's a big risk factor.

So while discrimination of protected classes is still likely the biggest factor in homelessness in the US, it's not the only thing, and thus it's demonstrably false that "Poverty is not about money. It's about all the myriad ways we say 'Fuck you' to 'the wrong kind of people.'". If you solved discrimination overnight, we'd still have homelessness.

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