7 ms·

"They work in big cities and rural towns. They’ve tried to save — but rent, child care, student loans and medical bills get in the way." Yikes. I'm not exactly

by tjr225 8y ago

"They work in big cities and rural towns. They’ve tried to save — but rent, child care, student loans and medical bills get in the way." Yikes. I'm not exactly living paycheck to paycheck, but I can relate to this. It's really funny - my wife and I make quite a bit of money - whatever twisted form of capitalism we currently live in has been designed in such a way to extract most of it away from us. One begins to wonder what the point of going to work and earning money is other than to line the pockets of corporations that have effectively taken ownership of our government.

0xcde4c3db 8y ago
> It's really funny - my wife and I make quite a bit of money - whatever twisted form of capitalism we currently live in has been designed in such a way to extract most of it away from us. I think it's evolved, not designed. A (arguably the) key element of capitalism is that a dollar extracted from an individual transaction is a dollar that can buy capital to scale up the extraction. That means exponential (actually logistic, I suppose) growth scaling with how much an entity can extract.
sct202 8y ago
It's pretty understandable, imo. My income would not scale upwards very much if I moved from Chicago to somewhere higher cost like NYC, DC, or SF, and if I were to go to those places a lot of my current extra income would be wiped out.
derekp7 8y ago
You bring up a good point, that even people who make decent money still can't get ahead much more than those making close to minimum wage. Why is this? My theory, is that life is full of stress, and throwing money at problems can make some causes of stress diminish. Whereas a minimum wage worker will shovel his own driveway, a higher paid office worker may typically have a snow plow contractor on retainer (for them it is worth the trade off, especially with long office hours). Same story with vehicle or home repairs. Which is why you don't really feel stress free until your income exceeds the threshold to handle most stress items with money instead of your own labor.
- supertrope 8y ago
  There's nothing inherently better about any specific trade-off between time and money. Not buying a car and riding the bus saves hundreds of dollars per month but costs hours a day. Eating out saves the effort of cooking and washing dishes. Hiring a maid might be used out of laziness or to eek out more family time. I have to remind myself to try to focus on what really makes my life better. Usually that involves estimating time+money+intangible factors. And if it will still be useful in a year.
- zanny 8y ago
  This depends on your definition of "decent money". If we wanted a legitimate middle class, the textbook definition of one, the per-capita incomes in such a class would need to average around 100k for the whole US. Then you would make enough to invest enough to be making an appreciable amount of your money from investments and thus be "middle" class. The average income is still a bit more than a third that, so the average is still decidedly a member of the working poor. Money doesn't stop buying happiness until... coincidentally... you start making about enough money to be middle class. I'm not surprised at all that those below that threshold are buying happiness at the expense of future stability or prosperity.
  - refurb 8y ago
    Do tell, what is the textbook definition of middle class? I always assumed it was th middle of the income distribution.
    - zanny 8y ago
      The preamble of the wikipedia article on middle class espouses why its such a loaded term: https://en.wikipedia.org/wiki/Middle_class https://en.wikipedia.org/wiki/Middle_class I'm using the academic definition, where if the upper class earns their wealth through investments and the lower class through labor, the middle is a mix of the two. Humorously even the wikipedia article mentions how the middle class in the US is framed as a political tool of manipulation...
- 8y ago
wccrawford 8y ago
It's human psychology. Below a certain level, your mind will simply talk itself into spending your available money to make you happy. You don't need that car. A car half the price would have been plenty good enough. But you did it anyhow. You don't need fancy breakfast cereal that costs twice what the generic stuff at Aldi costs. You don't need all those electronics and toys. You don't need to eat out that much. If you made less money, you'd do less of the above right until you simply couldn't afford any of it. And you'd continue to be about as happy as with all that money, assuming you were still paying for the necessities. I'm not trying to convince you to give up those fancy drinks. I'm just explaining that you could choose to live more frugally without almost no repercussions, but you won't.
- ip26 8y ago
  The "funny" part I think would be how rent, child care, student loans and medical bills tend to scale in cost to your locale, so despite your well paid job, your cost of living has gone up to match. It might be expected & natural for that to happen, but it's still kind of... "funny" if you look at it from a certain angle.
  - supertrope 8y ago
    Child care, education, and medical are labor intensive. It's not like making widgets in a factory that can double in per worker productivity every two years. Industries that don't mechanize like a string quartet playing Mozart still command higher wages over time because they need to afford their bills too. Real estate is limited by the supply of desirable land. Location, location, location. I'm fairly sure that student loans do not scale with locale. That payment is the same no matter where you move to after graduation but it's easier to earn it in a high cost of living (unless housing costs are so high that your free cash flow is less).
- wutbrodo 8y ago
  I decided in college that a 40 hr workweek wasn't the optimal amount for me. I've since learned that for white-collar jobs, employers really really want full-time employees[1]. My way around this was: consume as if I made ~half as much and take extended sabbaticals. The final piece in the puzzle was ACA exchanges, as I can now get stable (though expensive and high-deductible) health insurance while unemployed. This obviously isn't a binary, but I've been consistently fascinated with the inability of the people I know (generally middle- to upper-middle class) to shift their consumption downwards to meet a goal. Not everyone wants as much leisure time as I do, but I know tons of people with all sorts of reasons they'd like to save more, and every one of them consumes more while making less than me (when I'm working). I used to think the issue was that I grew up without a lot of disposable income, but now I know people with similar backgrounds whose floor on consumption rises in lockstep with their income. That is to say, I don't disagree with your analysis here, but for God's sake _why_ do people do it? [1] Contracting is obviously possible, but it often constrains the type of work you can do.
throwaway4926 8y ago
This rhetoric has been known for longer than either of us has been alive, yet the more things change, the more they stay the same.
deleted 8y ago
[deleted]
AnimalMuppet 8y ago
The problem is not a "twisted form of capitalism". The problem is us. In the 1950s, a family could live on one blue-collar salary. You could probably live on a single blue-collar salary today, too - but you'd live like people did in the 1950s. You would eat out very rarely. You wouldn't have college debt because you wouldn't have a college degree. You'd only have one car. You'd have only one TV for the whole house. The kids would not have huge numbers of toys, and nobody would have huge amounts of clothes. The problem is, nobody wants to live like that today. As soon as we have more income, we "need" more - more clothes, more toys, a better car, a nicer house in a better neighborhood. As we get more income, our "needs" change, driving our expenses to almost exactly match out income. This is especially true when you have kids. If you can afford it, you're tempted to give your kids those ski lessons... that summer camp... that vacation to Disneyland... a car when they turn 16. It feels heartless to say no when you could say yes. But if you say yes to all of it, you'll spend as much as you can afford (and maybe a bit more besides), because there's always something more you could give your kids. Note well: This is not a criticism of those with low incomes who are struggling to make it. It's a criticism of those of us with fairly high incomes who still struggle to make it.
- uuwp 8y ago
  I actually think capitalism is the problem. It's the best form we know to organize a society, but it has the serious problem when money tend to stick or gravitate towards bigger chunks of money. I'm making well over 300k and can afford a decent house that I'd have to pay off my entire life. What if I had 30M and was too lazy to start a business? I would just buy 30-40 nice houses in my area and would rent them. 10 years later I would have 60M in assets plus whatever rent I've been paid. Where did those 30M come from? Did I do anything useful to the society? No. I have done nothing useful. It's just the dynamics of capitalism where another 30M sticked to my original 30M by the mere fact of their existence. If I was seriously rich, I could lobby zoning laws to benefit from monopoly and drive my wealth even higher, while giving nothing back to the society.
  - Aeolun 8y ago
    If you make 300k you need to either be fairly old, or buy a ridiculously expensive place to pay it off for the rest of your life.

by tjr225 8y ago

0xcde4c3db 8y ago

> It's really funny - my wife and I make quite a bit of money - whatever twisted form of capitalism we currently live in has been designed in such a way to extract most of it away from us. I think it's evolved, not designed. A (arguably the) key element of capitalism is that a dollar extracted from an individual transaction is a dollar that can buy capital to scale up the extraction. That means exponential (actually logistic, I suppose) growth scaling with how much an entity can extract.

sct202 8y ago

It's pretty understandable, imo. My income would not scale upwards very much if I moved from Chicago to somewhere higher cost like NYC, DC, or SF, and if I were to go to those places a lot of my current extra income would be wiped out.

derekp7 8y ago

You bring up a good point, that even people who make decent money still can't get ahead much more than those making close to minimum wage. Why is this? My theory, is that life is full of stress, and throwing money at problems can make some causes of stress diminish. Whereas a minimum wage worker will shovel his own driveway, a higher paid office worker may typically have a snow plow contractor on retainer (for them it is worth the trade off, especially with long office hours). Same story with vehicle or home repairs. Which is why you don't really feel stress free until your income exceeds the threshold to handle most stress items with money instead of your own labor.

supertrope 8y ago
There's nothing inherently better about any specific trade-off between time and money. Not buying a car and riding the bus saves hundreds of dollars per month but costs hours a day. Eating out saves the effort of cooking and washing dishes. Hiring a maid might be used out of laziness or to eek out more family time. I have to remind myself to try to focus on what really makes my life better. Usually that involves estimating time+money+intangible factors. And if it will still be useful in a year.
zanny 8y ago
This depends on your definition of "decent money". If we wanted a legitimate middle class, the textbook definition of one, the per-capita incomes in such a class would need to average around 100k for the whole US. Then you would make enough to invest enough to be making an appreciable amount of your money from investments and thus be "middle" class. The average income is still a bit more than a third that, so the average is still decidedly a member of the working poor. Money doesn't stop buying happiness until... coincidentally... you start making about enough money to be middle class. I'm not surprised at all that those below that threshold are buying happiness at the expense of future stability or prosperity.
- refurb 8y ago
  Do tell, what is the textbook definition of middle class? I always assumed it was th middle of the income distribution.
  - zanny 8y ago
    The preamble of the wikipedia article on middle class espouses why its such a loaded term: https://en.wikipedia.org/wiki/Middle_class https://en.wikipedia.org/wiki/Middle_class I'm using the academic definition, where if the upper class earns their wealth through investments and the lower class through labor, the middle is a mix of the two. Humorously even the wikipedia article mentions how the middle class in the US is framed as a political tool of manipulation...
8y ago

wccrawford 8y ago

It's human psychology. Below a certain level, your mind will simply talk itself into spending your available money to make you happy. You don't need that car. A car half the price would have been plenty good enough. But you did it anyhow. You don't need fancy breakfast cereal that costs twice what the generic stuff at Aldi costs. You don't need all those electronics and toys. You don't need to eat out that much. If you made less money, you'd do less of the above right until you simply couldn't afford any of it. And you'd continue to be about as happy as with all that money, assuming you were still paying for the necessities. I'm not trying to convince you to give up those fancy drinks. I'm just explaining that you could choose to live more frugally without almost no repercussions, but you won't.

ip26 8y ago
The "funny" part I think would be how rent, child care, student loans and medical bills tend to scale in cost to your locale, so despite your well paid job, your cost of living has gone up to match. It might be expected & natural for that to happen, but it's still kind of... "funny" if you look at it from a certain angle.
- supertrope 8y ago
  Child care, education, and medical are labor intensive. It's not like making widgets in a factory that can double in per worker productivity every two years. Industries that don't mechanize like a string quartet playing Mozart still command higher wages over time because they need to afford their bills too. Real estate is limited by the supply of desirable land. Location, location, location. I'm fairly sure that student loans do not scale with locale. That payment is the same no matter where you move to after graduation but it's easier to earn it in a high cost of living (unless housing costs are so high that your free cash flow is less).
wutbrodo 8y ago
I decided in college that a 40 hr workweek wasn't the optimal amount for me. I've since learned that for white-collar jobs, employers really really want full-time employees[1]. My way around this was: consume as if I made ~half as much and take extended sabbaticals. The final piece in the puzzle was ACA exchanges, as I can now get stable (though expensive and high-deductible) health insurance while unemployed. This obviously isn't a binary, but I've been consistently fascinated with the inability of the people I know (generally middle- to upper-middle class) to shift their consumption downwards to meet a goal. Not everyone wants as much leisure time as I do, but I know tons of people with all sorts of reasons they'd like to save more, and every one of them consumes more while making less than me (when I'm working). I used to think the issue was that I grew up without a lot of disposable income, but now I know people with similar backgrounds whose floor on consumption rises in lockstep with their income. That is to say, I don't disagree with your analysis here, but for God's sake _why_ do people do it? [1] Contracting is obviously possible, but it often constrains the type of work you can do.

throwaway4926 8y ago

This rhetoric has been known for longer than either of us has been alive, yet the more things change, the more they stay the same.

deleted 8y ago

[deleted]

AnimalMuppet 8y ago

The problem is not a "twisted form of capitalism". The problem is us. In the 1950s, a family could live on one blue-collar salary. You could probably live on a single blue-collar salary today, too - but you'd live like people did in the 1950s. You would eat out very rarely. You wouldn't have college debt because you wouldn't have a college degree. You'd only have one car. You'd have only one TV for the whole house. The kids would not have huge numbers of toys, and nobody would have huge amounts of clothes. The problem is, nobody wants to live like that today. As soon as we have more income, we "need" more - more clothes, more toys, a better car, a nicer house in a better neighborhood. As we get more income, our "needs" change, driving our expenses to almost exactly match out income. This is especially true when you have kids. If you can afford it, you're tempted to give your kids those ski lessons... that summer camp... that vacation to Disneyland... a car when they turn 16. It feels heartless to say no when you could say yes. But if you say yes to all of it, you'll spend as much as you can afford (and maybe a bit more besides), because there's always something more you could give your kids. Note well: This is not a criticism of those with low incomes who are struggling to make it. It's a criticism of those of us with fairly high incomes who still struggle to make it.

uuwp 8y ago
I actually think capitalism is the problem. It's the best form we know to organize a society, but it has the serious problem when money tend to stick or gravitate towards bigger chunks of money. I'm making well over 300k and can afford a decent house that I'd have to pay off my entire life. What if I had 30M and was too lazy to start a business? I would just buy 30-40 nice houses in my area and would rent them. 10 years later I would have 60M in assets plus whatever rent I've been paid. Where did those 30M come from? Did I do anything useful to the society? No. I have done nothing useful. It's just the dynamics of capitalism where another 30M sticked to my original 30M by the mere fact of their existence. If I was seriously rich, I could lobby zoning laws to benefit from monopoly and drive my wealth even higher, while giving nothing back to the society.
- Aeolun 8y ago
  If you make 300k you need to either be fairly old, or buy a ridiculously expensive place to pay it off for the rest of your life.