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Poverty in America: Greater Than Statistics Indicate

• post_break 8y ago
  People cannot buy a phone outright. It's that bad. We're literally financing a $500-1000 device because they can't take the hit up front. Now I'm sure most people here could swing a phone tomorrow if they needed to say theirs was stolen, but you gotta think about how many people just can't. How about tires, there are places to rent tires. Financing a car? Common. 8 payments to put two front tires on your car? Seems insane, but for a lot of people in America it's either that or you keep the donut on for a few more months.
  • meddlepal 8y ago
    The problem is largely people buying things they cannot afford. Everyone wants a smart phone, a large television, a game console and a bunch of other junk. But what you want is not necessarily what you can afford. Now I am not necessarily disagreeing with your point. There are legitimate life needs that people cannot afford (e.g. the tires and car you cited), but nobody needs a $500-$1000 smart phone. Nobody needs a top of the line television, computer, internet connection or subscriptions to all the fancy on-demand media services... and yet by and large American's want these things.
  • coryrc 8y ago
    A car isn't a necessity. A $500-$1000 phone is not a necessity. These are bad choices people make. Why they make those choices is subject to many theories, but their situation is entirely within their power (but maybe not knowledge) to fix.
    • yammajr 8y ago
      > A car isn't a necessity If you happen to live in a city. If you live outside a big metro area, at least in the US, a car absolutely is a necessity. Where I live, there are no buses, no cabs, no uber, nothing. I don't have children or need to haul large loads frequently, so I might be able to make it work, but it would be a HUGE quality of life hit, necessitating taking a different job nearer me which almost certainly wouldn't pay as well as what I make now, moving closer to work - if I can find anything that's nearby and reasonably priced - and/or spending large amounts of time walking/biking. If I did have children or other dependents, there's just no real way I could expect to not have a car.
      • PenguinCoder 8y ago
        I agree and my situation in regards to Uber/public transportation is the same. People who say a car isn't a necessity in America, have likely never lived out of a big city. I live in a rural area (not quite USDA definition), where the closest store is 12mi one way. It's a convenience store/gas station. The grocery store is 3mi more up the road. I have kids, animals, and somewhat of a small hobby farm (chickens, garden, etc). It is an absolute necessity for me to have a car and all the costs that entails. I'd rather give up my cell phone than the car.
  • savanaly 8y ago
    A phone of that cost is a luxury item. Now I'm in the category of people who can afford that and I want to make sure I'm not just living in a bubble when I dismiss what you said, so I opened up a tab and typed in "cheap phone" to google. The first result is a $20 phone from best buy. It appears to do calls, take pictures and video, do web browsing and have some library of available apps. So I don't think "People cannot buy a phone outright" is a very helpful way to frame it. Rather say that "people cannot buy a top of the line luxury brand-name phone outright". Which doesn't sound as bad, right?
    • flukus 8y ago
      You're not wrong, people that can't pay cash for a phone shouldn't be buying one. But there are a lot of expenses in that range that are more of a necessity, car tyres that OP mentioned, other car expenses, removalists fees and bond payments, a fridge breaking down. There's some even bigger ones you can't put off like funeral expenses or missing work for medical reasons. A $500 phone gets used as an example because it's something people here will buy somewhat often and without much thought but it's missing the point to argue that there are cheaper phones.
      • sjg007 8y ago
        You can finanace an iPhone for basically 0%.. and it could last you 5+ years. Example are the iPhone 5s that are still quite usable.
        • beatgammit 8y ago
          And how much does that cost compared to less expensive options? At $1k for an iPhone, you're paying $200/year if it lasts you 5 years, more if you stay on the upgrade wagon. My phone cost me $250 (Moto x4) and it's an improvement on my previous $400+ phone (Nexus 6). I could buy a new one nearly every year for the price of making payments on an iPhone. But people see a top-of-the-line product at a monthly cost they can afford and jump on it, not realizing that they could buy a cheaper option and get much more financial stability, and thus much less stress. And yes, it's not just phones, but to me it's a symbol of the other decisions you make it life. Nearly everyone I know who complains when payroll is a day or two later than expected has a way nicer phone than me, drives a nicer car, and eats out a ton. I, on the other hand, have a house I can afford, am well above average on retirement, and have enough cash in the bank to survive without a job for several months without touching my investments. If people realized that they could be out of debt in just a couple years of living more frugally, I'm sure they'd do it. But people just assume they'll be stuck, so they don't even try and spend everything in luxuries now.
  • zaroth 8y ago
    I think there’s nothing inherently wrong with spreading out payments for durable goods over the lifespan of the device, only if it can be done at a reason APY. The problem with pay-as-you-go is the interest rates, penalties, fees, etc. When AT&T or Apple sells me a phone with a monthly payment, I take it because it’s literally the price divided by 24 payments. Zero percent interest. No brainer. Better debt servicing and better risk assessment and higher trust in buyers would bring down default rates and decrease APY making these programs reasonable and proper. At the extortionate rates necessary due to the extreme default rates and difficulty in collecting payments, they are terrible.
  • umvi 8y ago
    I'm a well off software developer. I've been using a $50 Nokia Lumia 520 for the past 3 years or so. When this one dies I'll likely "splurge" and buy a Nokia 2 ($100). That our I'll buy a Blu phone ($50). I would consider my neighbors poor. They have state-subsidized rent, for example. They use food stamps. They also smoke a pack a day each. All they need to do to buy a new phone is not smoke for 5 days. Not that it matters, they all have iPhones inexplicably. It's just a viscous self-feeding cycle and I don't know how to help them break out of it.
    • gammateam 8y ago
      Being able to send the same emojis to communicate effectively and having blue bubbles is a lot more valuable than you might think If you are part of any professional membership or subscription to get you through life, then there are some similarities The point being that maybe they overspend on conspicuous consumption, using an iphone alone isnt an indicator in isolation. Who knows where the price limit is, but low interest low velocity on phone payments with easy upgrades makes this practical
      • loco5niner 8y ago
        >Being able to send the same emojis to communicate effectively and having blue bubbles is a lot more valuable than you might think That's pretty hard to believe.
        • reidjs 8y ago
          I thought so too for a long time, but I have met a woman who confused in me that she will not date men if they have an Android phone. I doubt she’s the only one.
          • ams6110 8y ago
            Hope you didn't ask her for a second date.
          • loco5niner 8y ago
  • chrissam 8y ago
    It seems like a bad decision to pay $500-1000 for a smartphone if you can't pay upfront. My sense is that people push their financial situation to the limit in order to get more stuff faster. You might say "if they had more money it wouldn't be an issue" but my feeling is that, for most of these people, if they had 20% more money, they'd just find the new limit. I don't necessarily fault this behavior, if the things you're buying make you happy then maybe it's perfectly rational. But if that's true, it seems nonsensical to define poverty as "precariousness of one's finacial situation". The only definition of poverty that makes sense to me is the material one.
  • AnimalMuppet 8y ago
    If they charged you $500 up front for a phone, it would be obvious how much it's not a necessity, and they would sell many fewer phones. They would therefore sell service to many fewer phones. They don't want that. So they follow the make-your-compliment-cheap strategy (if you're selling razor blades, make the handle really inexpensive). Edit: Thanks for the downvote, stranger. Care to explain?
  • esotericn 8y ago
    Well, sure, but that's a "people cannot buy a phone outright because people cannot buy a phone outright" problem. If you can't afford a 1000 dollar phone, then taking a loan out to buy one is completely illogical. It's a depreciating asset with diminishing returns - a 200 dollar phone does basically all the same things. The issue is that loans have a psychological effect on some individuals which makes them more like to spend more than they would otherwise. They end up in a sort of situation where wealth doesn't exist at all and all future income is accounted for already.
  • zjaffee 8y ago
    Except the thing about all of the items you've mentioned is that you can get stupidly low rates, and in some cases no interest loans, my savings account interest rate is higher than that of my car loan. You're better off taking out the loan to build credit at this point than just paying for something outright.
    • toasterlovin 8y ago
      > my savings account interest rate is higher than that of my car loan Then you overpaid for your car.
  • scarface74 8y ago
    Why would you not “finance” the phone? All the carriers basically have payment plans where they just take the cost of the phone and divide payments by 24-36 months. You don’t pay interest and there is no markup.
    • toasterlovin 8y ago
      Because then you’re paying a ridiculous amount of money for your monthly plan. You should be paying for your device outright and then using it on a prepaid carrier. The reason the large carriers finance at 0% interest is because it ties you to their exhorbitant plans for 2 years.
      • scarface74 8y ago
        For $70 a month from T-mobile all fees included you get unlimited talk, text, data and 3G tethering. The price goes down to $60 a month for two adults - yes both adults need cell phones, how else are they going to be reachable for jobs and if one is at work and the other is at home? I know my older son doesn’t have cable or home internet and he uses his phone for everything including entertainment, internet connectivity to his computer, etc. I’ve known families with children who were going through things and the kids studied on a hand me down laptop and use their phone’s internet access and tethering to do homework.
        • androidgirl 8y ago
          And my prepaid plan is all unlimited at $30 a month on my phone I bought all cash for $200. It's much cheaper!
          • scarface74 8y ago
            Actually, we are paying $40 a month for each phone on a family plan but I was making an apples to apples comparison so I said $70. How long will your $200 phone get updates? How long will it be fast enough to run the latest apps? If you bought a 32GB 5s in 2015 for $499, you would still be getting updates and it is still as fast as most midrange Android phones. I bought a 64GB iPhone 6s in 2015 for $749 and just recently gave it to my son. It is still going strong, and if history is any guide, it should still get updates for at least another 2 years. It’s also faster in single core performance than any but the highest end Android phones. https://bgr.com/2015/09/10/iphone-6s-iphone-6-iphone-5s-prices/ https://bgr.com/2015/09/10/iphone-6s-iphone-6-iphone-5s-pric...
• tristor 8y ago
  I hoped for a lot more out of this article. In the end it leaves us with no conclusion and no real substance for their argument. It's likelier than not that what is proposed is true, but fundamentally all they've done is make idle speculation.
  • kryogen1c 8y ago
    Couldn't agree more, lost interest here: >Psychologist Abraham Maslow believed that safety ranked second only to food and shelter as a basic human need. Someone who has food and a roof over their head today, but doesn’t know whether they will tomorrow, should be considered poor. I find this premise extremely unsatisfying and non-obvious to say the least. Life is dangerous. There's no such thing as safety. Everyone's going to die, and most of us won't expect it's rapidity. I am in no way poor, but if I lost my job and couldn't pay my bills, I'd be in trouble very quickly. That's no one's fault but my own and doesn't deserve action from anyone but me.
    • pessimizer 8y ago
      I hope that you're not advocating that "fault" be used as a inverse measure of poverty. If so, depending on your religious and political bent, there probably isn't and has never been any poverty anywhere.
    • wolfram74 8y ago
      If you live in an 'at will employment' aka 'no fault fire' state you could very easily be fired because of no fault on your part.
      • flukus 8y ago
        If you live anywhere you can be fired through no fault of your own through downsizing company mergers and the like. My company is being bought out at the moment so I don't know if my job will exist in 3 months. The only difference in countries with strong Labor laws is that it can't happen arbitrarily and a certain amount of runway is paid out.
    • 8y ago
• sovietmudkipz 8y ago
  This comment post is going to be pure speculation. I think the numbers in this article are right. Over the past 75 years, relative poverty has grown at a dramatic pace. Sure, everyone's quality of life has improved across the board but relative poverty is the important metric. In the past 15 years more and more of a household income is tied up in basic needs; bills and rent/mortgages are consuming higher percentages of net income, outpacing inflation. More of the real purchasing power is going into the pockets of a few. Most people in the US economy are being squeezed and we seem to be approaching a point where there isn't much left to squeeze. Hypothetical: there exists a figure of relative poverty where many folk will stop playing the capitalist game and instead seek alternative ways of organizing an economy. I speculate that we're approaching that relative poverty figure and that can possibly explain why many people want to socialize wealth. For example, many people I know with $50,000+ in student debt want other people to pay for it. How many other debts would people want to have others pay for? How many recurring expenses would people want others to subsidize? I think the source of the problem seems to be lack of entrepreneurial activities compared to the past. With all the squeezing experienced there are some folks in the population that aren't taking a risk in starting a business that would otherwise. The amount of risk one has to take on is higher as well due to regulation and having to buy politicians. Increasing the amount of competition would be an ideal way of "redistributing" wealth.
  • isoskeles 8y ago
    Are student loans a basic need?
    • grecy 8y ago
      Many countries certainly consider higher education a basic right.... of course those countries don't have loans for education.
    • jhayward 8y ago
      Education is a basic need. Inequality in access to education is an accelerator and maintainer of inequality.
• NeoBasilisk 8y ago
  The fact that US life expectancy has fallen for 2 years in a row speaks volumes. edit: lmao please explain the downvotes
  • prolikewh0a 8y ago
    This is mainly due to the drug epidemics isn't it?
    • pitaj 8y ago
      Yes, opioids and suicide. I don't know why your comment was flagged.
    • FakeComments 8y ago
      You’re both right if the drug epidemic is partly fueled by economic woes, as it seems to be.
      • pkaye 8y ago
        I largely believe it is due to economic woes in the US but they also realize there are many countries in the EU that have a drug epidemic despite have a better social net.
      • chrisco255 8y ago
        Previous generations had it way worse than us and they didn't have the suicide rates we have today. There's some things missing in modern society that I feel have faded with time, including family unity, community, ethical education (via church or similar), etc. It was reported recently that loneliness is on the rise in the U.S. and with that, I would expect that these health problems continue to rise as well.
        • watwut 8y ago
          Current graduates face higher unemployment rates and lower salaries. I graduated into strong economy and nearly sure job. I had it better.
• kartan 8y ago
  > Luckily, there is just such a concept: It’s called material security. This is really important. There are people that are one paycheck away from not being able to afford rent and basic necessities. I have lost my job in the past. I was calm and just enjoyed the time while I was looking for a new job. I have money saved. For a lot of people that will have been an extremely stressful situation. That kind of stress is related to bad-decision taking and reduced life expectancy. I have seen the rise of the credit card in my country. People used to have assets, a modest life and salary increases above inflation. Nowadays they depend more and more on credits and increase the amount borrowed from their loans. Salaries do not grow, but debt does. That is not a good life at all.
  • chrisco255 8y ago
    Honestly, the availability of cheap credit has made me worry a bit less about getting slammed with some unexpected expense. That's not to say that I don't put money away for retirement and rainy days...but credit cards do make it easier to float if you suddenly find yourself unemployed.
    • lotsofpulp 8y ago
      I’ve never heard anyone refer to 20%+ interest as cheap credit until now.
      • zackify 8y ago
        He probably meant for 1-2 months, so that you can use your card today, but it wont be on the statement for a month, and due 20 days after that or something.
      • SaltyBackendGuy 8y ago
        This only really works if you have good credit and can get a 6 mo. or 1 yr. 0% interest. Also, pay that money off before you start paying the juice or get hit with a larger fee. But it's definitely still a gamble. Edit: 'Only' maybe too strong as there are other scenarios that would work.
• pessimizer 8y ago
  The reasons that poverty measures are the way they are is political. That other measures could be more useful for targeting suffering is irrelevant to how useful they are political. Also, you don't have to bring the neighbors into it, or income inequality to find it an inadequate measure. Just ask: why not housing? Simple - administrations want housing prices to rise, because housing is an investment. At least it's tied to something. World poverty measures are just arbitrary absolute amounts that have no choice but to decline every year.
  • humanrebar 8y ago
    > why not housing? There are non-cynical reasons. It's not clear that optimizing for housing will work consistently. If many instances of poverty are caused by addiction, mental illness, corruption, or exploitation, it's not clear just throwing free apartments into the mix would address what we mean by "poverty".
• chiefalchemist 8y ago
  "Thanks in part to increased government assistance, U.S. poverty according to this measure has fallen, especially for children." Pardon me but I'm a tight-ass when it comes to words / language and how their use effects perception. In short, (gov) assistance does __not__ decrease poverty. It might sugar coat poverty. It might keep the poverty stricken alive. Etc. But poverty remains the same. It's there. Alive and well. The level of denial about poverty in the USA is very disheartening. As a side note. I found the book "Evicted" by Matt Desmond to be extremely insightful. The Poverty Industrial Complex is a powerful force. http://www.evictedbook.com/ http://www.evictedbook.com/
  • soared 8y ago
    > In short, (gov) assistance does __not__ decrease poverty Source? I feel as though the equal housing act and low-income housing decrease this definition of poverty by making housing secure.
    • ggm 8y ago
      I think it demands all government tax spend in ways to alleviate poverty be viewed as an externality which would not be needed in a higher income workforce. So it has qualities of tax hating but in a context of better social equity in pay. Like you, I think rent controls and low income rent support are supporting better lives for working poor, and do far more than paint over cracks, but the poverty trap is real: people who can't afford a small payrise because it triggers loss of rental support or food stamps.
      • petermcneeley 8y ago
        So your in support of UBI instead?
        • ggm 8y ago
          Not sure. I'm not a tax hater. I think of economics as a forcing function for better happiness not a thing in its own right.
• tracer4201 8y ago
  >A reasonable, common-sense definition of poverty should include not just an absolute measure of material deprivation and a relative gauge of a person’s situation compared to the rest of society. It should also strive to measure how secure people feel — in their homes, their health, and their jobs. I generally agree, but this has potential downsides. A good friend of mine from college comes from a very conservative family. Despite doing well for themselves (father is a MD), these people are generally pretty insecure about non-whites having the ability to vote, immigration (legal or illegal), and all the other things they hear on Fox News or talk radio. They also own a home > $1million USD. So do we consider them poor because they're insecure? I guess my point is there should be some objective measure - e.g. Person A or Family B is more likely to become homeless if they lost their jobs or if one family member became disabled.
  • chrisco255 8y ago
    I come from a very conservative family. Nobody's insecure about non-whites having the ability to vote. They might be worried about the fact that some demographics vote like 95% Democrat, but that's just a concern about blind loyalty to party and identity politics. But agree with your sentiment. Insecurity in general is a very loose term. Some people are prone to believe the sky is falling and there's little that government can do to rectify that.
    • xadhominemx 8y ago
      > Nobody's insecure about non-whites having the ability to vote Actually they are, and go so far as to pass laws specifically to suppress non-white votes https://twitter.com/haroldpollack/status/1051657219899617280 https://twitter.com/haroldpollack/status/1051657219899617280
      • njarboe 8y ago
        I imagine chrisco255 means nobody in his family.
      • someone7x 8y ago
• User23 8y ago
  Poverty is not a disease. It's not a malady that can be treated or cured. It is a consequence of many factors, but above all it is primarily a consequence, not a cause. What causes poverty? Well like any other widespread social phenomenon, the causes are varied. Crime is an obvious one. Poor decision making is another. For example, a seemingly absurd 70% of windfall recipients go broke[1]. It's evident that the majority of Americans cannot or will not manage their finances prudently. This is largely independent of income too. Plenty of people with relatively low incomes control their spending, save money, and even retire early. Meanwhile plenty of people with high incomes don't save at all and end up broke. Treating poverty as a disease to be palliated is an observable failure. The US alone has spent trillions of dollars since the won reducing poverty and all we have to show for it is a greater poverty rate than ever. I don't see how a free society can force its citizens to behave prudently, but I'd love to hear some ideas. For those who are inclined to knee-jerk disagree, please realize none of this means we shouldn't have a social safety net. Sometimes bad things happen, from involuntary unemployment, to disability, or natural disaster. Various forms of effective net cash-flow assistance can be a great help to everyone, financially prudent or not. Anyhow this problem is older than dirt, there's even an Aesop about it. Any successful approach is going to require a willingness to learn from failure. [1]https://www.cleveland.com/business/index.ssf/2016/01/why_do_70_percent_of_lottery_w.html https://www.cleveland.com/business/index.ssf/2016/01/why_do_...
  • umvi 8y ago
    I generally agree with you, but I'm somewhat convinced windfalls are hard to manage for both rich and poor. This is because it has less to do with poor decision making and more to do with the new target on your back. You are now a wounded sheep with hungry predators all around you (in the form of family, friends, thieves, lawyers, etc). I first ran across this idea when I read a reddit thread mentioning Jack Whittaker [1]. Jack Whittaker was a rich dude who won the lottery (net worth $15M before winning). His life has been a trainwreck since. I don't know if he's lost it all yet - my main point is to suggest that the public nature of lottery sets you up for failure and has less to do with competence than you might guess. [1] https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the_happiest_5word_sentence_you_could_hear/chb38xf/ https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the...
• forrealfreedom 8y ago
  "It should also strive to measure how secure people feel". So now were basing poverty on feelings. I can't even say how ridiculous this sounds.
  • forrealfreedom 8y ago
    Seeing as I'm being down-voted, I figured I should respond. We cannot measure anything without quantifiable measurements. Feelings cannot be quantified. This was my point.
    • deleted 8y ago
      [deleted]
    • topspin 8y ago
      Pollsters routinely measure how people feel about one thing or another. The results have substantial impact on policy and positions of leaders. Your point simply isn't very good.
• DoreenMichele 8y ago
  The risk of eviction, meanwhile, can be roughly measured by the percentage of people’s incomes that they spend on shelter each month. As of 2015, 17 percent of Americans spent half or more of their incomes on rent. This is why we (here in the US) need to address housing. And I don't know what term to use. "Affordable housing" is the term I want to default to, but that gets misinterpreted by people and ends up being a pointless argument where we talk at cross purposes. Historically, we had more housing appropriate for single people with not much income and childless couples with not much income, etc. We largely eliminated those options as we defaulted to a standardized expectation of a family home designed for a nuclear family and the footprint of such homes has more than doubled since the 1950s. Meanwhile, the average size of the actual nuclear family in the US has shrunk as we are having fewer kids and, simultaneously, our population has diversified away from the nuclear family towards more single people, childless couples, single parents, etc. It also used to be more feasible to live without a car in the US. Now, we default to assuming you drive and own a car. That is in the process of changing, but it is still a pretty standard assumption baked into residential construction. Some US cities are starting to loosen parking requirements for rentals near transit stations, among other things. But we still mostly assume that you drive, you own your own car and you don't object overly much to driving fairly long distances for daily essentials like getting to work and doing the grocery shopping. I don't have a term for the kind of housing that doesn't default to assuming you are part of a nuclear family with at least two cars. I don't know of anyone inventing terms for an alternate concept here. But this is part of why we have terrible housing insecurity in the US. From what I gather, other countries tend to be better about having housing available that isn't a terrible burden to some large subsection of it's population -- ie everyone who isn't part of a nuclear family with either a very well paid head of household or a two career couple situation (and I say career, not job, to try to evoke something that probably pays better than minimum wage, has benefits, etc.).
  • bluGill 8y ago
    Adam Smith observed years ago that cost of housing tends to eat up most people's pay raises. Which is to say if you can afford more you get more. Of course there are limits. Everybody has a point where their house is big enough for them and there are no better areas to move to (or the better areas are out of reach). Then they improve it for lack of anything else to to with their money.
• mback00 8y ago
  It is not useful to define a demographic of the destitute at a standard relative to the median. (Note: Advancement of inequality of outcome beyond poverty is a _virtue_ of free society.) It is more virtuous to define an absolute poverty value and seek to ensure that the societal wealth distribution minimum never reaches the minimum - then allow maximal opportunity for all individuals to achieve any outcome they desire. If this model is achieved, all are then maximally provided for and maximally contributing to the civil society.
  • toasterlovin 8y ago
    Humans aren’t logical. We’re apes who evolved in the context of groups of 100 or so individuals. We pay attention to how others are doing. If there is too much of an imbalance, mob justice and violence are the means by which the scales are re-balanced. All sides of the political spectrum (and especially the rich) should acknowledge and accept this. And I say this as somebody on the right.