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Are we sure that half the median is a good definition of “poor”? At least hypothetically, in a very wealthy country, that may still be an adequate amount to get

Are we sure that half the median is a good definition of “poor”? At least hypothetically, in a very wealthy country, that may still be an adequate amount to get by.

michaelmrose 7y ago
The median individual monthly income in WA state is slightly above 4K monthly. Half of this is 2K monthly or more accurately given how most people actually get paid 923 every 2 weeks. After taxes this is more like 784. After paying for insurance as you are too rich to get free health care you are looking at more like 684. This qualifies you to live virtually nowhere because most places want you to make 3x the rent and start at 700-800 per month. In King County where the lions share of the jobs are you probably will have to move to a street corner. Elsewhere you can perhaps afford to beg someone to rent a bed for 2 weeks wages and afford to eat as long as you have no hobbies and shop exclusively at thrift stores for clothes. It's probably a mostly acceptable definition of poor that only breaks down in a tiny minority of cases where someone adjacent to a very wealthy area makes enough to barely get buy in the wealthy area but enough to survive slightly more comfortably in the poor area wherein jobs are as scarce as the cost of living is low.
- AdrianB1 7y ago
  Housing as an investment is the problem here. The cost of the houses and the cost of the rent are adjusting to the income, if you double the income in the region you will have triple the rent (because the disposable income will increase much more than the actual income increase). See Silicon Valley for a good demonstration of this.
- hcurtiss 7y ago
  I’m not sure I’d do the math the same way. First, it seems to me that the median household income is a better number, as most people share expenses and many households have two incomes. That seems to me to better inform ability to get by. In Washington, that’s $70k.[1] Half that is $35k, or just shy of $3k/month. With ACA subsidies, a person in that situation won’t likely be paying $400/month in health insurance. The max for a family of four at $35k is actually $1300 per year, or a little over $100/month, and an individual at $35k is closer to $200.[2] $2800/month is not a great deal of money, but it’s not living in squalor. And, as you say, it depends on location. A high proportion of of those people will not be living in Seattle, but rather rural areas where the cost of living is cheaper. The median household income in Seattle is closer to $85k. Also note that federal after taxes income after accounting for transfers actually goes up for the second quintile.[3] [1] https://www.deptofnumbers.com/income/washington/ https://www.deptofnumbers.com/income/washington/ [2] https://www.financialsamurai.com/subsidy-amounts-by-income-limits-for-the-affordable-care-act-obamacare/ https://www.financialsamurai.com/subsidy-amounts-by-income-l... [3] https://taxfoundation.org/average-federal-tax-rates-income-group/ https://taxfoundation.org/average-federal-tax-rates-income-g...
  - michaelmrose 7y ago
    I will in fact make nearly the figure you started with for half of the median household for in my case for a household of 2. Despite your links I'm not sure how you figured the rest of your numbers despite citations. The ACA subsidies turned out to be a joke for me. A) Cheap options like high deductible plans or plans with very high co-pays for drugs make no sense if you know your medical expenses will be quite high. B) They misjudged how much they should pay towards the VERY expensive options they offer on the market and decided at the end of the year that they had paid too much and I ended up with a huge bill. C) Non of the options were affordable this year I'm paying $361 every 2 weeks for employer provided medical and this is still cheaper than the market options were. If you add the cost of drugs I'm paying closer to 10k out of 36k for medical costs + 3k in taxes leaving me with 23k leaving me with 1900 per month. In regards to the disposition of people in the state people actually tend to cluster around where the jobs are not where the cows are. 75% of the population of WA state lives in the western 40%. Nearly 1/3 in king county alone heavily clustered around Seattle and outlying cities. I had some difficulty digging up exact recent sources. In 2000 around 69% of citizens lived in places with populations 50K or more. https://www.ers.usda.gov/webdocs/DataFiles/53180/25602_WA.pdf?v=0 https://www.ers.usda.gov/webdocs/DataFiles/53180/25602_WA.pd...
    - hcurtiss 7y ago
      Your household makes $36k and you pay $10k for drugs on a private plan and that’s somehow a better deal than an ACA plan? Yeah, that’s not making any sense to me at all. Putting that aside, I’m not saying that’s a good life. But in the context of the article, where it’s comparing the absolute number of poor to crime rates, I’m skeptical that it’s an apples to apples comparison when defining poor in the way they do. Half the median in Japan is a very different thing than half the median in the US nationwide.
      - michaelmrose 7y ago
        I pay 10K in total between drugs, premiums, and all other medical expenses of which about 8600 is premiums. A plan as good in on the market in my state would have cost 1300. To be clear 1 take an inhaler which retails for $400 for asthma and my wife has an expensive chronic illness which would cost 10s of thousands to treat out of pocket. Buying a cheap plan would be disadvantageous as I can figure on trivially paying the deductible out of pocket in the first couple of months. High deductible or high copay plans just mean paying less in payroll deductions and more out of pocket. For 2018 it was a lot less AFTER I argued for 4 months about the tax credit that initially wasn't included in the price and nobody could figure out how to fix. This is basically a tax credit paid in installments to your medical insurance provider and is supposed to be calculated based on your expected income for the year. If in fact you make too much they can turn around and reevaluate how much they helped you and demand some of that money back. For instance they total help I received in 2018 to buy a silver plan was I think on the order of 11 or 12k this turned out to be too much by about 1k. If as a poor person you don't actually HAVE that money to pay back they can just not offer this and then your choice is to pay $1300 for the same plan you were paying $300 for last year or pay for your employers plan. Did you assume I was just too stupid to sign up for the ACA plan? Health care in America is a joke for the poor.

Are we sure that half the median is a good definition of “poor”? At least hypothetically, in a very wealthy country, that may still be an adequate amount to get by.

michaelmrose 7y ago

The median individual monthly income in WA state is slightly above 4K monthly. Half of this is 2K monthly or more accurately given how most people actually get paid 923 every 2 weeks. After taxes this is more like 784. After paying for insurance as you are too rich to get free health care you are looking at more like 684. This qualifies you to live virtually nowhere because most places want you to make 3x the rent and start at 700-800 per month. In King County where the lions share of the jobs are you probably will have to move to a street corner. Elsewhere you can perhaps afford to beg someone to rent a bed for 2 weeks wages and afford to eat as long as you have no hobbies and shop exclusively at thrift stores for clothes. It's probably a mostly acceptable definition of poor that only breaks down in a tiny minority of cases where someone adjacent to a very wealthy area makes enough to barely get buy in the wealthy area but enough to survive slightly more comfortably in the poor area wherein jobs are as scarce as the cost of living is low.

AdrianB1 7y ago
Housing as an investment is the problem here. The cost of the houses and the cost of the rent are adjusting to the income, if you double the income in the region you will have triple the rent (because the disposable income will increase much more than the actual income increase). See Silicon Valley for a good demonstration of this.
hcurtiss 7y ago
I’m not sure I’d do the math the same way. First, it seems to me that the median household income is a better number, as most people share expenses and many households have two incomes. That seems to me to better inform ability to get by. In Washington, that’s $70k.[1] Half that is $35k, or just shy of $3k/month. With ACA subsidies, a person in that situation won’t likely be paying $400/month in health insurance. The max for a family of four at $35k is actually $1300 per year, or a little over $100/month, and an individual at $35k is closer to $200.[2] $2800/month is not a great deal of money, but it’s not living in squalor. And, as you say, it depends on location. A high proportion of of those people will not be living in Seattle, but rather rural areas where the cost of living is cheaper. The median household income in Seattle is closer to $85k. Also note that federal after taxes income after accounting for transfers actually goes up for the second quintile.[3] [1] https://www.deptofnumbers.com/income/washington/ https://www.deptofnumbers.com/income/washington/ [2] https://www.financialsamurai.com/subsidy-amounts-by-income-limits-for-the-affordable-care-act-obamacare/ https://www.financialsamurai.com/subsidy-amounts-by-income-l... [3] https://taxfoundation.org/average-federal-tax-rates-income-group/ https://taxfoundation.org/average-federal-tax-rates-income-g...
- michaelmrose 7y ago
  I will in fact make nearly the figure you started with for half of the median household for in my case for a household of 2. Despite your links I'm not sure how you figured the rest of your numbers despite citations. The ACA subsidies turned out to be a joke for me. A) Cheap options like high deductible plans or plans with very high co-pays for drugs make no sense if you know your medical expenses will be quite high. B) They misjudged how much they should pay towards the VERY expensive options they offer on the market and decided at the end of the year that they had paid too much and I ended up with a huge bill. C) Non of the options were affordable this year I'm paying $361 every 2 weeks for employer provided medical and this is still cheaper than the market options were. If you add the cost of drugs I'm paying closer to 10k out of 36k for medical costs + 3k in taxes leaving me with 23k leaving me with 1900 per month. In regards to the disposition of people in the state people actually tend to cluster around where the jobs are not where the cows are. 75% of the population of WA state lives in the western 40%. Nearly 1/3 in king county alone heavily clustered around Seattle and outlying cities. I had some difficulty digging up exact recent sources. In 2000 around 69% of citizens lived in places with populations 50K or more. https://www.ers.usda.gov/webdocs/DataFiles/53180/25602_WA.pdf?v=0 https://www.ers.usda.gov/webdocs/DataFiles/53180/25602_WA.pd...
  - hcurtiss 7y ago
    Your household makes $36k and you pay $10k for drugs on a private plan and that’s somehow a better deal than an ACA plan? Yeah, that’s not making any sense to me at all. Putting that aside, I’m not saying that’s a good life. But in the context of the article, where it’s comparing the absolute number of poor to crime rates, I’m skeptical that it’s an apples to apples comparison when defining poor in the way they do. Half the median in Japan is a very different thing than half the median in the US nationwide.
    - michaelmrose 7y ago
      I pay 10K in total between drugs, premiums, and all other medical expenses of which about 8600 is premiums. A plan as good in on the market in my state would have cost 1300. To be clear 1 take an inhaler which retails for $400 for asthma and my wife has an expensive chronic illness which would cost 10s of thousands to treat out of pocket. Buying a cheap plan would be disadvantageous as I can figure on trivially paying the deductible out of pocket in the first couple of months. High deductible or high copay plans just mean paying less in payroll deductions and more out of pocket. For 2018 it was a lot less AFTER I argued for 4 months about the tax credit that initially wasn't included in the price and nobody could figure out how to fix. This is basically a tax credit paid in installments to your medical insurance provider and is supposed to be calculated based on your expected income for the year. If in fact you make too much they can turn around and reevaluate how much they helped you and demand some of that money back. For instance they total help I received in 2018 to buy a silver plan was I think on the order of 11 or 12k this turned out to be too much by about 1k. If as a poor person you don't actually HAVE that money to pay back they can just not offer this and then your choice is to pay $1300 for the same plan you were paying $300 for last year or pay for your employers plan. Did you assume I was just too stupid to sign up for the ACA plan? Health care in America is a joke for the poor.