7 ms·

You know, I think there's another part of this--income inequality (stop groaning, it's relevant!) that means that everyone has to try and shill and monetize the

• komali2 10y ago
  I'm about to take us from off the rails to into the forest, but since we're on the subject - poor people are poor, yes, but I think the biggest problem is lack of financial education. I know people that are making enough money to live comfortably, but are crippled by debt caused by poor decisions when they are younger, or poor decisions now. I say better financial education, and then the next step.
  • gjm11 10y ago
    Does better financial education actually help? I mean, I know it sounds like it should, but does it? I ask because I have a super-hazy memory of seeing some report that it turns out not to make much difference to later wealth, happiness, etc.
    • stephengillie 10y ago
      Compound interest isn't much help to those spending their whole paycheck meeting their basic needs. Knowing how to properly invest doesn't help those who can't generate enough income to effectively invest, and didn't receive any help from family or angels. https://xkcd.com/947/ https://xkcd.com/947/
      • imtringued 10y ago
        That raises an interesting question. If you were poor, would you want to sacrifice your happyness a bit to ensure that your children will be better off than you? Sure this is quite a slow solution but it would actually work if done consistently.
        • digi_owl 10y ago
          Happens all the time. I keep running into stories from people that grew up in a poor household, or is a parent in the same situation. And always the parent will sacrifice a meal or similar to make sure that the kids get to eat. In nature, getting between a mother and her baby is perhaps one of the most dangerous situations you can be in. very few predators, unless they are out of options, consider humans a viable meal. But even ruminants will potentially attack you to defend their young. Trying to treat humans as cold calculators of utility is perhaps the worst idea economists have clung to over the years.
    • gjm11 10y ago
      This got downvoted and I'm curious why. (Perhaps because talking about my "super-hazy memory" sounds lazy? I dunno -- if I'd omitted the last part, would my comment have been better received? It doesn't seem like that would actually have been an improvement.) If you downvoted the parent of this comment and would like to help me do better in future, I'm all ears...
  • jshelly 10y ago
    Why personal finance isn't taught in school is beyond me
    • wldcordeiro 10y ago
      In my experience, it is taught in school, only as an afterthought and a single semester-long high school course with usually one of their least competent teacher, much like the computer literacy courses.
      • hueving 10y ago
        It wasn't even taught in my school unless you didn't sign up for any other elective classes (e.g. shop, computer classes, etc). So on top of it being only taught once, it wasn't even taught to the majority of people that signed up for something else.
        • wldcordeiro 10y ago
          That's a great way to make sure that everyone mentally checks out of class and doesn't learn anything (even if it wasn't much.) My high school had a financial literacy requirement, but it was a half year class taught by one of the worst teachers I've had (very nice lady but like the computer teacher they were just riding out to retirement and relegated to these classes that were undersupplied and they weren't knowledgeable in), the content was out of date, and sparse. They cover things like writing checks, bank account creation, but I remember nothing covering how loans work or anything of that nature because the math required would make the class too tough for general education. The class was really something the school just paid lip service to as the state required it. It's a damn shame school's don't have better experiences because people enter the world totally unequipped for the financial predators that loom.
          • mjevans 10y ago
            I think you've raised an excellent point here. Loans (interest, and also contracts in general) are not required to be presented at a level that /most/ of the population can understand. There is a giant, thick, legal language contract that even if you are a lawyer you probably don't really understand (it hasn't been adjudicated, so you don't know what a judge feels it says). Disclosure: I do use credit cards, but only as a convenient and insurance providing mechanism for accessing my bank account and recouping some of the fees built in to prices by the predatory banking industry.
  • Frondo 10y ago
    You know, better financial education would be great. I don't think it's enough, though, when you're trying to stretch a $230 paycheck to $300 in expenses. I don't think it's enough, either, when you look at how poor people get dinged with so many more fees than the less-poor whenever they go out to do anything in the world. And I don't think most of the "save what you can" advice is particularly meaningful when you're telling people to put aside $10 a month. One big family gathering could wipe out a year's savings on food costs alone! I think the first solution has to be getting people--especially the poorest--paid more for the incredibly taxing work poor people tend to do, like cleaning, cooking, all those jobs where you're on your feet 8, 10, 12 hours a day and your body's worn out by the time you're 40.
  • josho 10y ago
    I agree, but feel the root cause is actually easy access to credit. Credit has been driving the economy for the last few decades. If we didn't have easy access to credit that may have forced wages to stay tied to productivity increases. Oh and the decline of unions meant that workers lost their ability to successfully lobby their government, business meanwhile increased their lobby efforts. So, I see the root causes as a rigged game against workers. (Rigged as the odds slightly against our favour, so we get just enough wins and benefits as to not realize that we are loosing overall).
  • bcheung 10y ago
    Speaking of finance and education... One things that makes no sense to me. Take 2 different scenarios: 1) Youth gets paid $4/hr (well below the minimum wage) to work in their chosen field as an apprenticeship. Graduates with a certification in their field with a little bit of money saved up, no debt, and real work experience. 2) Youth gets into massive student loan debt, gets a degree but has no real job experience or employment prospects. Has to work the next decade to pay off their student loans. The one that makes the most sense and that would result in people being better off is illegal.
• zanny 10y ago
  If incomes had not stagnated / declined in real earnings against cost of living patronage would be a much, much more viable field to replace all IP and advertising. Though in general, I think there is an obvious trend in markets - if the people are rich, you reinvest money into new products or into improving your existing products so you can sell more stuff. When the people are poor, you use psychologically targeted advertising to make people buy things they cannot afford and sit on vast cash reserves because fundamental to capitalism is that markets respond to the needs of capital, but when you have incredible wealth inequality the only demand of capital is making more capital, and sitting on money becomes more profitable to shareholders than taking risks trying to get the drippings out of an already empty pot of middle class wealth. Simply put, my favorite metric of whether an economy is fair is how large an advertising budget the economy as a whole has. The larger it is, the less fair the market is, and the more unequal the wealth distribution is, and every society should aspire to be one where nobody needs to advertise because all your reinvestment can go into making more, better stuff rather than trying to manipulate people in buying your stuff over someone elses stuff. The more valuable advertising is the poorer your country is.
• SpaceCadetJones 10y ago
  Income inequality is just the symptom, capitalism is at the heart of the problem. This is what happens when you get a saturated labor market and employers have all of the bargaining power as the vast majority of people are unable to obtain the means to sustain themselves without selling their labor. The way I see it is we can only solve this problem possibly through a livable UBI, or preferably doing a major overhaul of how property rights work. Rather than having individuals own productive property where they employ others and keep everything the employees make, the property should be collectively owned and managed by those working it. If anyone is interested, I recommend reading up on socialist theory. If you like markets mutualism, market socialism, or collectivism may be interesting to you. If you think planning might be a better route for the 21st century check out syndicalism or communism. There's a number of other philosophies I'm not acquainted with. Also, inb4 "communism/socialism is big government and authoritarianism", I'm tired of explaining the failings of tankies.
  • hueving 10y ago
    >Also, inb4 "communism/socialism is big government and authoritarianism", I'm tired of explaining the failings of tankies. There hasn't been any evidence yet that central planning is effective in the long run. What do you think will work this time around?
    • RodericDay 10y ago
      Actually, the questions discussed in Ronald Coase's "Theory of the Firm" are alive and well Central planning and command economies work really well inside corporations, such as Apple or Google. They don't make internal decisions by hosting mini-markets and pitting their workers against each other, they have departments who study demographics and departments that study research and logistics and so on. Tankies claiming the fall of communism is just around the corner are in the same bucket of "bad" as free market libertarians who adore corporations.
      • hueving 10y ago
        >Central planning and command economies work really well inside corporations, such as Apple or Google. That's because they can fire anyone that works for the company who doesn't agree with the goals. Do you propose to jail or disappear people that disagree and work against the direction defined by the central plan?
• johnny_lunch 10y ago
  "I dream of a world in which the typical worker's wages hadn't been suppressed and decoupled from productivity for the last four decades," less than 1% of the population make minimum wage. Most companies, even the big ones you hate, pay well above minimum wage. For instance, All of the fast food places in my area pay $10.15/hour starting. The minimum wage is a few dollars less than this. The free market has pushed the wages higher, because nobody will work for less than this. "I dream of a world in which the typical worker's wages hadn't been suppressed and decoupled from productivity for the last four decades" It hasn't been suppressed or decoupled. If you have essentially have the skills that a high school student can perform at 30 years old, you aren't going to get paid enough to have a house, 2 kids, and a car. I see nothing wrong with this. If anything, the wages in the past were artificially inflated. Especially when you factor in unions. We also are now competing globally. The beloved Internet has also created an environment where we need to compete with someone overseas making much less. It has many parallels to file sharing over the last decade: musicians and artists now have to compete with the filing sharing sites because of the Internet and this same paradigm shift has now moved to other industries and jobs. The only difference is that I don't see people here on HN crying out to give the artists money through government intervention. Quite the contrary. "and give it away instead of tryin' to get us all to punch the monkey and win" I don't really see a problem with so many people trying to make money online. Money has fueled pretty much every technology breakthrough in the last 50 years. Money also gives you power..over your own life and your own decisions. I started my own business online 5 years ago. I can schedule my own vacations and I don't need to answer to a boss. This is true freedom. I also contribute to many open source projects. When I was working for a living, I contributed nothing. Your 'dream' would mean that most things online were free, ruining the ability for the independent artist to actually make a living with what they love. The end result would actually mean less freedom because our only choices would be working for the government or a large corporation. The need for money will not go away any time soon and the person with the money makes the rules. What we need is more educated people (so they don't have to work terrible jobs for little pay) and more people starting businesses and making money doing what they truly love (creating a more independent society).
  • kilroy123 10y ago