4 ms·

> You simply cannot spend all of your income. So people making $7.20/hour should be living on $5/hour? People are spending all their income, but inflation adju

> You simply cannot spend all of your income. So people making $7.20/hour should be living on $5/hour? People are spending all their income, but inflation adjusted income has been stagnant for the middle class and below[0]. Combine this with the costs of living (like healthcare) increasing and you've created a situation where a lot of households are struggling to have money left over (or are commonly indebted). [0] https://www.advisorperspectives.com/dshort/updates/2018/10/16/u-s-household-incomes-a-51-year-perspective https://www.advisorperspectives.com/dshort/updates/2018/10/1...

esotericn 7y ago
People making $7.20 an hour in most places I can think of in the Western world are in crisis, yes. I don't know what they "should" do. It sounds like they're really in a pickle indeed and the solution (if one even exists) is going to be very dependent on individual circumstance.
nitwit005 7y ago
People in poorer circumstances save at a higher rate elsewhere in the world, and used to in the US a few decades ago. The main issue is perhaps what you hint at the end there. Credit has gotten far more available, so people are no longer used to saving to make purchases, and are in the habit of going into debt.
- blunte 7y ago
  This is a huge oversimplification. You're completely ignoring so many factors, including rising housing costs. This article illustrates it well: https://www.businessinsider.com/how-high-income-and-low-income-americans-spend-their-money-2017-3?international=true&r=US&IR=T https://www.businessinsider.com/how-high-income-and-low-inco... The bottom 20% earners spend 40% of their income on housing. The top 20% spend 30% of their income on housing. And keep in mind, that housing that the poor people are paying for would be considered horrid compared to the housing that the rich people spend their money on. If you were to look at the housing prices in the areas that the bottom 20% are renting/owning, and apply that price to what the top 20% earn, the top 20% would be spending less than 5% of their income on housing (comparing apples to apples). Yes, credit has made it much worse for the poor people. Credit appeared to be a way to save them from a difficult short term or starting situation, but predatory lending (provably so) has essentially enslaved them. The bigger question is, how/why do the bottom 20% start off in such bad situations (in some countries)? The answer almost always involves corporate influence of government.
  - nitwit005 7y ago
    I'm happy to agree about housing costs, but my main suggestion was that poverty and the personal savings rate don't have as strong a link as you seemed to be assuming. You haven't really said anything to contradict that.

esotericn 7y ago

People making $7.20 an hour in most places I can think of in the Western world are in crisis, yes. I don't know what they "should" do. It sounds like they're really in a pickle indeed and the solution (if one even exists) is going to be very dependent on individual circumstance.

nitwit005 7y ago

People in poorer circumstances save at a higher rate elsewhere in the world, and used to in the US a few decades ago. The main issue is perhaps what you hint at the end there. Credit has gotten far more available, so people are no longer used to saving to make purchases, and are in the habit of going into debt.

blunte 7y ago
This is a huge oversimplification. You're completely ignoring so many factors, including rising housing costs. This article illustrates it well: https://www.businessinsider.com/how-high-income-and-low-income-americans-spend-their-money-2017-3?international=true&r=US&IR=T https://www.businessinsider.com/how-high-income-and-low-inco... The bottom 20% earners spend 40% of their income on housing. The top 20% spend 30% of their income on housing. And keep in mind, that housing that the poor people are paying for would be considered horrid compared to the housing that the rich people spend their money on. If you were to look at the housing prices in the areas that the bottom 20% are renting/owning, and apply that price to what the top 20% earn, the top 20% would be spending less than 5% of their income on housing (comparing apples to apples). Yes, credit has made it much worse for the poor people. Credit appeared to be a way to save them from a difficult short term or starting situation, but predatory lending (provably so) has essentially enslaved them. The bigger question is, how/why do the bottom 20% start off in such bad situations (in some countries)? The answer almost always involves corporate influence of government.
- nitwit005 7y ago
  I'm happy to agree about housing costs, but my main suggestion was that poverty and the personal savings rate don't have as strong a link as you seemed to be assuming. You haven't really said anything to contradict that.