6 ms·

'Burn it down' will always hurt the bottom decile the most, because they're always operating on the slimmest margins, which makes volatility hellish.

deleted 4y ago
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lotsofpulp 4y ago
I suspect the volatility of the basket of goods and services that bottom decile buys is different than the volatility of the basket of goods and services of higher income/wealth deciles. I notice people complaining about volatility of eating out, vacations, cars, houses, etc, but I wonder what the real data is for people who were working the $15 per hour jobs that are now $20 per hour jobs. They might very well be earning $10k+ more per year, but not paying that much more in their expenses.
- QuarterReptile 4y ago
  First, to make sure we're talking about the same people: Full time at $15 hourly puts one well outside the bottom decile. About 35% of Americans were paid less than that in 2020; even in a relatively wealthy state like Virginia, it's more than 30% below that line. https://datausa.io/profile/geo/waynesboro-va https://datausa.io/profile/geo/waynesboro-va For the sake of being on the same page, I'm going to frame the expenses by this article talking about spending categories by income quintile: https://www.marketwatch.com/story/why-the-poor-spend-more-on-restaurants-than-all-but-the-very-rich-2016-06-10 https://www.marketwatch.com/story/why-the-poor-spend-more-on... 51% nondurables (think grocery store) 16.6% restaurants 14% Other services 10.7% durables 7.2% fuel My most frequent places eating out are probably Chipotle, McDonalds, ChikFilA, and Costco, all in mid-to-low CoL places, so I feel pretty qualified to say that prices have gone up substantially ([0] says 8% 'from 2020' to June 2022), and service has degraded enormously over the same period. Groceries are at least 10% higher.[1] Fuel is a very high outlier, which I'll let you research if you don't have recent experience. 'Durables' and 'other services' are harder to nail down, but the three places I've lived since 2020 have all seen significant price increases (as assessed by talking to people, with me not having the time in place to judge), and service is reliably disappointing enough to take services from convenient to 'I don't have 3 hours to wait on hold for this thing that was screwed up because billing department doesn't have enough people working there' levels of crappy. Finally, and most importantly, people who switch jobs for higher pay will, indeed, tend to see improvement over time. But the people who didn't switch jobs over the same time period will likely have seen 1-3% raises, if any. And the bottom decile probably isn't very full of people job hopping for upward mobility. [0] https://www.gobankingrates.com/money/business/as-mcdonalds-prices-go-up-customers-are-taking-action/ https://www.gobankingrates.com/money/business/as-mcdonalds-p... [1] https://www.cnn.com/2022/07/13/business/grocery-inflation/index.html https://www.cnn.com/2022/07/13/business/grocery-inflation/in...
MuffinFlavored 4y ago
what can be done to make those at the bottom not be at the bottom?
- neon_electro 4y ago
  Universal basic income. (https://en.wikipedia.org/wiki/Universal_basic_income https://en.wikipedia.org/wiki/Universal_basic_income)
  - mc32 4y ago
    I think the pandemic proved this was a pipedream. Did people pursue their passions once they had government disbursements? No. They just moped around and became malaised and disinterested. Sure, we got tik-tokers, and YT personalities (all 'bourgeois-capitalist schmaltz'), but if that is what we get from that "investment" I don't want to invest any more. Previously hardworking people more or less got comfortable being freeloaders --taking but not giving back.
    - lamontcg 4y ago
      > Did people pursue their passions once they had government disbursements? No. I'd argue that the wage inflation and labor shortages we're seeing in areas like food service indicates the correct answer to that question is "Yes" and that a lot of people spent the time "leetcoding" (or whatever) and landed a significantly better job.
      - mc32 4y ago
        Could be, but I'd like to see some data behind that.
        thunky 4y ago
        I'd be interested to see the data to back up your claims as well. Regardless, I'm not sure the main point of UBI is to allow people to quit their jobs and pursue thier passions at the government's expense. It's moreso meant as a way to give people on the bottom rung a little bit of room to breath and better their circumstances, and in theory this also benefits the rest of the economy.

deleted 4y ago

[deleted]

lotsofpulp 4y ago

I suspect the volatility of the basket of goods and services that bottom decile buys is different than the volatility of the basket of goods and services of higher income/wealth deciles. I notice people complaining about volatility of eating out, vacations, cars, houses, etc, but I wonder what the real data is for people who were working the $15 per hour jobs that are now $20 per hour jobs. They might very well be earning $10k+ more per year, but not paying that much more in their expenses.

QuarterReptile 4y ago
First, to make sure we're talking about the same people: Full time at $15 hourly puts one well outside the bottom decile. About 35% of Americans were paid less than that in 2020; even in a relatively wealthy state like Virginia, it's more than 30% below that line. https://datausa.io/profile/geo/waynesboro-va https://datausa.io/profile/geo/waynesboro-va For the sake of being on the same page, I'm going to frame the expenses by this article talking about spending categories by income quintile: https://www.marketwatch.com/story/why-the-poor-spend-more-on-restaurants-than-all-but-the-very-rich-2016-06-10 https://www.marketwatch.com/story/why-the-poor-spend-more-on... 51% nondurables (think grocery store) 16.6% restaurants 14% Other services 10.7% durables 7.2% fuel My most frequent places eating out are probably Chipotle, McDonalds, ChikFilA, and Costco, all in mid-to-low CoL places, so I feel pretty qualified to say that prices have gone up substantially ([0] says 8% 'from 2020' to June 2022), and service has degraded enormously over the same period. Groceries are at least 10% higher.[1] Fuel is a very high outlier, which I'll let you research if you don't have recent experience. 'Durables' and 'other services' are harder to nail down, but the three places I've lived since 2020 have all seen significant price increases (as assessed by talking to people, with me not having the time in place to judge), and service is reliably disappointing enough to take services from convenient to 'I don't have 3 hours to wait on hold for this thing that was screwed up because billing department doesn't have enough people working there' levels of crappy. Finally, and most importantly, people who switch jobs for higher pay will, indeed, tend to see improvement over time. But the people who didn't switch jobs over the same time period will likely have seen 1-3% raises, if any. And the bottom decile probably isn't very full of people job hopping for upward mobility. [0] https://www.gobankingrates.com/money/business/as-mcdonalds-prices-go-up-customers-are-taking-action/ https://www.gobankingrates.com/money/business/as-mcdonalds-p... [1] https://www.cnn.com/2022/07/13/business/grocery-inflation/index.html https://www.cnn.com/2022/07/13/business/grocery-inflation/in...

MuffinFlavored 4y ago

what can be done to make those at the bottom not be at the bottom?

neon_electro 4y ago
Universal basic income. (https://en.wikipedia.org/wiki/Universal_basic_income https://en.wikipedia.org/wiki/Universal_basic_income)
- mc32 4y ago
  I think the pandemic proved this was a pipedream. Did people pursue their passions once they had government disbursements? No. They just moped around and became malaised and disinterested. Sure, we got tik-tokers, and YT personalities (all 'bourgeois-capitalist schmaltz'), but if that is what we get from that "investment" I don't want to invest any more. Previously hardworking people more or less got comfortable being freeloaders --taking but not giving back.
  - lamontcg 4y ago
    > Did people pursue their passions once they had government disbursements? No. I'd argue that the wage inflation and labor shortages we're seeing in areas like food service indicates the correct answer to that question is "Yes" and that a lot of people spent the time "leetcoding" (or whatever) and landed a significantly better job.
    - mc32 4y ago
      Could be, but I'd like to see some data behind that.
      - thunky 4y ago
        I'd be interested to see the data to back up your claims as well. Regardless, I'm not sure the main point of UBI is to allow people to quit their jobs and pursue thier passions at the government's expense. It's moreso meant as a way to give people on the bottom rung a little bit of room to breath and better their circumstances, and in theory this also benefits the rest of the economy.