For Many Americans, Nowhere to Go but Down
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"It's 28 hours, eight bucks an hour," she says. No benefits, she adds. "You say, 'Thank you, but -- '?" "Yup," she says. "I make more on unemployment."
So she turns down a job that pays $224 per week so she can continue to collect $268 per week unemployment compensation after 9 months.
Am I the only one who sees something wrong with this picture? Has she even considered:
- that 28 hours could turn into more
- that $8 could turn into more
- that no benefits could turn into benefits
- that she may meet someone at work who could refer her to a better job (lots of people pass through a chiropractor's office each day, a lot more than she meets at home)
- that she may meet someone at work who could refer Scott to a job
At what point should we expect people dealing with difficulties to try a little harder to help themselves?
I really felt bad for this family until she turned the job down. In my mind, that changed everything.
You're right it's probably doable on a strict budget, but kids are expensive, I've heard. Then again, so is beer and lotto tickets, but he might not be exaggerating when he says that's the last thing keeping him sane.
Indeed. There have been times when I spent my last $10 on chips, dip, and soda, just for the temporary mood boost.
That's understandable to me; she'd essentially be paying to work. That would both worsen their immediate cash situation and make it harder for her to search for a decent job. The real problem is the ridiculous incentives caused by unemployment payments that immediately go to zero once you have any source of income.
The point where I lost sympathy was when the guy was making a good salary and was determined to spend every cent of it. If you're living paycheck to paycheck in the best of times, you are going to get screwed, it's just a question of when.
Unskilled labor needs to be cheaper than mechanization or it'll become mechanized labor.
(Which is why I don't see automation as a bad thing, even only taking into account the effect on the job pool.)
For instance, what is a living wage for a college student can be very low. My college job started at $7 and it paid my living expenses. Similarly, if one person in the household is earning enough to cover the bills the partner might be content earning enough for luxuries.
When you're close to the poverty line you've been taught by experience that saved money will be just eaten up by future crises anyway, so why not enjoy a little treat while you can? If future pain seems unavoidable, why not take some pleasure today?
A year ago, the man alone was making $53K! Let's presume the woman contributed at least another $25K. That's a well above-average household income in America.
The time when you can borrow the money is a limited window, usually, around 17-23. If you don't understand that this is important and possible, the window vanishes.
Living far below your means while saving up money is not only very difficult to do, culturally, for Americans, but takes a long time at minimum wage or some small multiple of it, and you have to resist the urge to do things like buying business casual clothes in the hopes of getting a better job, or buying a newer car in the hopes that the maintenance will be lower enough that it pays for itself, etc. Those things can work, but they fall under "get lucky". :)
You are right that there is a limited window, but it is not so tied to age. My wife was a "nontraditional student" and they were more than happy to give her student loans.
A better threshold is kids and mortgage. If you have real dependents that need money now for things like food/diapers/clothes then it becomes much more challenging, perhaps insurmountable.
However, while past studies cover a wide range of choice situations, there is a remarkable consensus in the literature that future outcomes are discounted (or undervalued) relative to immediate outcomes. Put differently, an identical (positive) outcome will become increasingly attractive the closer it is located in time to the time of decision-making.
See: http://www.mit.edu/people/shanefre/Marketing%20Letters.pdf
Also: http://www.nytimes.com/2009/04/19/magazine/19Science-t.html
One also shouldn't think of the discount factor just in terms of dollars spent. We can compare the pleasure today of drinking Pepsi, smoking, etc. with the probable pain later associated with losing one's home, etc. How many units of future pain is that Pepsi worth?
Easy to say. Except they know too many people who had $400K in their 'future' and now have $150K; or who've worked all their lives and are now destitute for medical bills.
The 'system' has been screwing those folks for 30 years. And then a couple years ago it started working its way up the food chain. And now the middle-class is starting to take their jobs.
And you talk about future cash.
I grew up in the American middle class, and probably felt the same way many of you do. I became more sensitive to this sort of thing by:
a) Talking to my wife, who is an immigrant from a lower class, who came here so she could be something. She's a professor now, so we've seen the whole spectrum of society.
b) Experiencing first hand what the system does to people, even those who try really hard to help themselves. It sucks. It's not fair. It's unjust. It provides perverse incentives. You want to believe that's not true, but it's true.
You see him buying a few beers out of context, and you feel justified in thinking he'd better just man up, but you have no /idea/ what that situation is like, and probably (hopefully?) never will.
I suggest reading Pedagogy of the Oppressed to start to get an inkling of what goes on: http://www.amazon.com/Pedagogy-Oppressed-Paulo-Freire/dp/082...
Most people I know (and probably most people here) want to be sympathetic, they want to root for the underdog. For those in need, we routinely open up our wallets, both voluntarily with a smile (charity) and involuntarily without a smile (taxes).
The analogy I prefer to use is teaching your child to walk. We never give up, but we can't walk for them. Sooner or later they have to do it for themselves. And some have an easier time than others learning.
Adults dealing with difficulties are much the same. These people are obviously having a tougher time than most people here would with their problems. But based on OP's slim descriptions, they still have to try harder.
What you call "middle class condemnations", many posters here would just call "calling them out". Forget about the lottery tickets, beer, soda, and donuts, and get a little more proactive. And for heaven's sake, if someone offers you a job, grab it! Choosing to stay on unemployment instead of working earns little sympathy here.
Cuz when their unemployment ran out, they'd not be able to make it on her $1000/month...no way, no how. So it didn't make sense to change their plans.
In Eastern European culture, people really do "live for today" far, far more.
It is my impression that is true of many other non-Angloamerican societies as well.
and here we have the primary problem. those unjust situations are usually the indirect effect of other people acting on their perverse incentives.
To say we are the middle class condemning the middle class is false. He was the middle class himself.
I think you mean "middle class condeming working/lower class..." but excellent point.
Sorry, but no That story could have been written about my dad almost 30 years ago when gas prices climbed and manufacturing in IN collapsed. Only my dad didn't sit on his butt, drink beer, and waste money on lotto tickets and gambling. We moved to Texas so he could get a refinery job which didn't pan out and he took up with day laborers until he got a job managing a fast food joint. Then He put himself through college by working nights. You do what you have to do, quitting is for losers like this guy.
But remember by the article, until recently they were middle class. They had a household income of over 75K and they were not living in a major city so did not (likely) have extraordinary cost of living.
I am not condemning them (but for the grace of God go I...), and I for one still sympathize, but I sympathized a lot less when I read about the name brand soda, Xbox, dirtbike, guns, beers,.. than I would have without them. Turning down the job didn't help. I do understand that in one sense it is rational since she would be making less take home, but it still didn't help.
Um you have to be kidding me.
Ride his dirt bike? Sure, a fairly inexpensive (and fun!) pasttime. Fishing? Same deal. Golf? Holy Batman, golf is an expensive sport to get into.
I'm making double what he did at his peak, and I don't feel like a golf club membership.
A lesson I learned from my student days, when money was highly variable month-to-month.
I don't do so right now, but I can take my food budget down to about $200 a month in a pinch, and shed a lot of other expenses (Netflix, VPS, etc) with little to no penalty. Keep your head in reality and know what in your life is a luxury and what is a need.
Add to that the pervasive psychological and physiological pathologies unavoidably common among poor people - whatever you think of how that reflects on their "responsibility" - and the external costs of those, and, well, you get the idea.
The way this article is written, it sounds like a work of satire.
The moment that stops being the case, that economic sector stops being.
You just have to either 1) get the skill set and make a career in something that seems to be durable and sustainable and for which there is always a certain level of demand, or 2) take the appropriate risk-mitigation measures if you want to go work in something more ephemeral.
No, nothing lasts forever, and in capitalism, everything changes. But some things clearly change more than others, and the change is of a higher magnitude. Basing your family's fate around a pure-recreational industry is really no better than playing games as a businessperson with pointless non-value-added risk-free regulatory arbitrage opportunities (of which there is MUCH in telecom) or spreads that arise in various loopholes. That's just not a good way to ensure that there will be a tomorrow.
They're not trying to go anywhere else. They're not that bad financially. In our country a lot of people make less money working - while living expenses are higher than in USA actually - (we have round 25K $ GDP per capita) with higher food, fuel and home prices (services are more expensive in USA). It's not the lack of money that is dragging them down - it's the lack of living power and motivation.
They are 30+ year olds with mentality of an 8 year.
Reading the comments on the Freakonomics page, some of which really are harsh, makes me wonder about the family's motivations for allowing a reporter to probe into fairly personal details of their lives- and write about it in a national newspaper. The article doesn't portray them in a particularly positive light. Maybe they just figure it's a chance for a little bit of fame and attention, but it still seems like a brave thing to do.
It is tough to criticize a man whose way of life, however perverse, vaporised in a matter of a few years. It existed for so long and lulled many people into believing it was real. Now they are paying for it.
This is the primary reason for the hardship that majority of the middle americans are facing in this tough times. There has never been a culture of 'saving'. as an asian immigrant, saving has been deeply rooted into my psyche. Travel and recreation is one thing, but golf, fish, poker, lottery - when you have 2 kids and a wife to support ?
all aside, i thoroughly enjoyed reading the comments on HN more than the story itself.
That's the whole point.
If a tree falls in the forest with no one around, does it make a sound?
If you read an article on the internet without hn comments, did you really get all you could out of it?
however, the advent of capitalism and 'opening the economy' has seen some recent dwindling of the savings rates.
This guy never had anything but shit jobs until 2007. So until then, he had no chance to develop a 'culture of saving'. Should he have put away $20,000 that first year? Yeah - I would have. But most people in this country don't see it that way.
You're surrounded by people who're living way beyond their means, and until you distance yourself from that, you want to be part of the 'fun'. That was what got us into the mess we're in - the average US family was $100K in the hole. So it's a cultural thing.
Maybe he knows better now. So do about 8 million other people.
This guy never had anything but shit jobs until 2007. So until then, he had no chance to develop a 'culture of saving'. Should he have put away $20,000 that first year? Yeah - I would have. But most people in this country don't see it that way.
You're surrounded by people who're living way beyond their means, and until you distance yourself from that, you want to be part of the 'fun'. That was what got us into the mess we're in - the average US family was $100K in the hole. So it's a cultural thing.
Maybe he knows better now. So do about 8 million other people. They bought in, and they got it socked to them. Find a heart before it's your turn.
Hell, the city where I grew up had to revise the hydro scheme from flat-rate to metered just because there were so many families combining into what used to be a single-family home.
I also know many families who invested in a large house and rent out a suite to another family. The mortgage practically pays itself, and with some renovations you can preserve your privacy also.
In the words of my parents, who are both Asian immigrants to Canada, who come from poor backgrounds (well, one of them anyways): some people have had too good of a life, and can't sacrifice what they need to sacrifice when times get tough, as they invariably do.
"Scott and Kelly spend much of their time watching TV, or playing games on their cellphones since they lost their jobs. Every day has become a slow-motion version of the one before, sitting around the house, each in the same spot, Kelly in the recliner, and Scott on the couch. Scott has gained 40 pounds since his last day on the job... On Monday, Scott picks up his and Kelly's unemployment benefits. After paying some bills, he sometimes goes to the Winners Circle bar, the tan building reflected in the glass, where he recently won $100 in a NASCAR betting pool."
Something tells me that is probably not the best approach. I have written to the reporter for their address so I can send a copy of Napolean Hill's Think and Grow Rich. A single passage from the book lifted me from a deep depression while stuck penniless in Japan to creating and surpassing my most cherished goals.
You should read the book itself, it's not long, but the premise of the book is basically that most wealthy people got wealthy the same way: 1. Making a through, detailed plan on how they will get rich. 2. Doggedly and relentlessly following that plan with incredible perseverance and not giving up.
It's simple. but if you think about it, it could change your life.
Personally, I don't feel bad for these people at all. It's not the economy, it's mindset. Some people have an entrepreneur mentality, and some people have a victim mentality. If I sat around all day drinking beer and buying lottery tickets, I would probably be in the same place he is. Instead, I'm going to spend the next 12 hours setting up advertising campaigns with the expectation that 90% of them will fail. I will continue working until I hit that 10% that will succeed, which enables me to live comfortably and earn more than I could at a day job running my own business.
My point is that the bad economy often makes an all to convenient scapegoat for some people. Living paycheck to paycheck is not a good financial strategy regardless of economy.
Just want to make a point on your last paragraph. I agree but at the same time I don't see any reason why we need to demonize the people who don't know what to do. Whether what they are doing is right or wrong, we're better off not placing blame on them either.
Maybe if someone had demonized them a little earlier, they wouldn't be so worthless right now.
Let them be responsible for themselves. It doesn't help you to criticize others.
If they were responsible for themselves, they would be working or starving right now. However, they are on unemployment. As a taxpayer, I'm partly subsidizing their donut and lotto habits. That gives me ample reason to criticize their behavior: if someone is spending your money, you're perfectly entitled to at least complain about how they spend it.
Please, if you don't like the system, argue for a different system. You aren't going to change the behavior of these people by putting them down.
Well-said.
Thankfully, the book itself can be had for free online from a number of sources, including this one found via a quick Google search: http://www.onestopinternetbusiness.com/tgr.pdf
Here are a few relevant passages from the introduction:
"The secret to which I refer has been mentioned no fewer than a hundred times, throughout this book. It has not been directly named, for it seems to work more successfully when it is merely uncovered and left in sight, where THOSE WHO ARE READY, and SEARCHING FOR IT, may pick it up. That is why Mr. Carnegie tossed it to me so quietly, without giving me its specific name. If you are READY to put it to use, you will recognize this secret at least once in every chapter. I wish I might feel privileged to tell you how you will know if you are ready, but that would deprive you of much of the benefit you will receive when you make the discovery in your own way."
"The secret to which I refer cannot be had without a price, although the price is far less than its value. It cannot be had at any price by those who are not intentionally searching for it. It cannot be given away, it cannot be purchased for money, for the reason that it comes in two parts. One part is already in possession of those who are ready for it."
"Somewhere, as you read, the secret to which I refer will jump from the page and stand boldly before you, IF YOU ARE READY FOR IT! When it appears, you will recognize it. Whether you receive the sign in the first or the last chapter, stop for a moment when it presents itself, and turn down a glass, for that occasion will mark the most important turning-point of your life."
If, however, other people can make a statement for the usefulness of the book or the author or something to backup these remarks, then maybe it is an alright source of inspiration. But otherwise, why would any sensible person read that pdf you link to? I am not attempting to put down your opinion of the book, merely I need much more proof when such language is used.
The bottom line of the book is that the "secret", at least as I understand it, is perseverance and hard work, which is exactly the opposite of MLM get rich quick schemes.
It's not a how to book, it's more of a motivational book.
One major difference, Leon: the book is free and it is not selling anything other than your own success and happiness.
"and the fact that you link to 'onestopinternetbusiness.com' makes me very wary of anything you are saying."
Here is the Google search I used to find it: http://www.google.com/search?hl=en&q=%22think+and+grow+r...
I have no interest or affiliation with the site.
"If, however, other people can make a statement for the usefulness of the book or the author or something to backup these remarks, then maybe it is an alright source of inspiration. But otherwise, why would any sensible person read that pdf you link to?"
A sensible person might check my other comments, profile, etc. to get a sense of who I am and what I believe in.
My remarks were for more discussion about the book and its contents, and how you portrayed the book poorly in your comment with respect to appearing legitimate by a) the whole 'secret' thing when you could have said 'hard work and perseverance'; and b) the source link of the book.
Using your own reputation as a proof of usefulness is not what I am here for, or many others. You must provide proof, in some form.
[edit] The commentator 'il' had exactly the reply I was looking for, with all the information that could help convince me.
I know of a local church that now has a career helping program. One night a week they'll get people together with others that can help with resumes, networking, and financial planning.