10 ms·

The cost of hand-to-mouth living

139 points by cs702 14y ago

gruseom 14y ago
Walmart's CEO talked about this a few years ago—how crowded their stores get around midnight on the last day of the month, because that's when people's payments clear: about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs, and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher. And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason. That stuck in my mind. It's a poignant image. http://blogs.wsj.com/economics/2010/09/20/watching-walmart-at-midnight/ http://blogs.wsj.com/economics/2010/09/20/watching-walmart-a...
- dopamean 14y ago
  I worked at WalMart for 3 years. I worked overnight doing inventory management and I saw exactly what the CEO described. One thing I noticed that he didn't mention is that a large number of the people I worked with were part of that group of people waiting at midnight to buy their baby formula. I always felt like the wages at our store were subsidized by the government. All of the people I talking about worked full time. They all had ungodly sums come out of their paycheque every two weeks to pay for health insurance (from what I understand it was not a great plan either). I don't really know what kind of point I'm trying to make here. On one hand it's nice that there are a lot of cheap options at WalMart for people on small budgets. On the other hand, it's sad that so many WalMart employees (in my own experience) are the ones who so badly needing to take advantage of those prices.
  - dantheman 14y ago
    I don't think it's just walmart employees that need those prices, it's anyone working that type of job. Most employees at small businesses doing the same work earn the same or less than a walmart employee.
    - dopamean 14y ago
      I didn't mean to imply that I think it's only WalMart employees that need cheap goods. I was simply trying to comment on the irony of that.
  - gruseom 14y ago
    That is why I like Costco better: the people who work there don't seem as downtrodden. Either I've been fooled by corporate propaganda or they really have figured out a way to make money, lower prices, and treat people relatively well. Walmarts feel like places of despair to me and Costcos like places of hope. I know how ludicrous that sounds, but the feeling is real. I often chat with workers at checkout counters to gut-test my theory, and it seems to hold up, though it could all just be confirmation bias. Edit: there's one big difference, though. To shop at Costco you have to buy twice as much (plus typically pay membership fees). That step could be too steep for the people most living hand-to-mouth, even though it would save them money within weeks. So there could be sample bias here too.
    - protomyth 14y ago
      The membership is the too steep part for Costco.
      - malandrew 14y ago
        It would be nice if CostCo allowed people of low income to apply for a financial aid in the form of free membership if their income was low enough. It's unfortunate that only the people with greater purchasing power get access to the lowest cost per item unit.
- incision 14y ago
  That was me growing up. I'd go out since my mother had to get up at 5:00. That card allowed us to scrape by during some very rough times. I hate to think where we'd have ended up without it. I'm glad to see a little sympathetic light being shown on this. It always irritates me a bit to hear these programs and the people they help derided politically. Today, I pay far more in taxes each month than my entire family consumed in such benefits each year growing up.
  - Camillo 14y ago
    Are you taking inflation into account?
    - incision 14y ago
      Yes, if this calculator [1] is any reasonable approximation. 1: http://www.bls.gov/data/inflation_calculator.htm http://www.bls.gov/data/inflation_calculator.htm
ck2 14y ago
My personal saying is "It's very expensive to be poor".
- alxp 14y ago
  Obligatory Vimes quote: The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.” Source: http://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned http://www.goodreads.com/quotes/72745-the-reason-that-the-ri...
  - 1123581321 14y ago
    Similarly it's expensive to be disorganized. I have hesitated in the past to buy a quality fall/winter jacket because the risk was too high that I would lose it. I cleaned out some boxes recently and found three low-quality sets of Allen wrenches. If I had bought a nice set, I probably would just have been out more money when I lost them anyway.
    - hso9791 14y ago
      Not to mention the cost in time.
  - daeken 14y ago
    That's a great quote, but this all really just boils down to short- versus long-term thinking. When you're poor, your long-term thinking goes out the window in exchange for making it to next week. Getting out of that is hard -- harder than you can imagine until you're in it -- because it's like your long-term thought center just atrophies in survival mode.
danso 14y ago
I was hoping to see some data on how limited funds forced people to buy inefficiently...that is, buying cheaper quantities that are per-item more expensive than bulk buying because they can't afford the up front cost of buying bulk. My roommate will do this when buying dish soap for the household, always getting the smallest bottle than just paying for the large one at a 30% discount per ounce. Also, some cheap items are disproportionately bad for one's health...if I were poor, it'd be hard to justify buying two apples over a Big Mac, given the calorie per dollar ratios.
- daeken 14y ago
  When you don't have enough to cover all your bills and keep appliances up, your spending patterns change dramatically as well. If you don't have a functioning fridge, you're only buying a tiny (extremely overpriced) package of meat. If you don't have gas for your oven, you're only going to be making things in the microwave. This is discussed in numerous really interesting ways in "Makers" by Cory Doctorow: http://craphound.com/makers/download/ http://craphound.com/makers/download/
  - nostrademons 14y ago
    There're also some perverse incentives around happiness calculations too. When I was in college, I had a netfriend who lived in a poor rust-belt town, and her family never had enough to eat. One time she was talking about her brand new DVD player and home entertainment system, a couple days after talking about how there was no food in the house. I asked her why she'd just bought a brand new DVD player (something that, to my middle-class college existence, was an incredible luxury) when she was going hungry. She replied that if she'd spent that money on food, she'd eat well this month but would just go hungry again next month. This way, she'd go hungry all the time, but at least she could lose herself in a movie and forget about it. There's a peculiar kind of logic to that which I can't really argue with, despite the common Internet refrain about how poor people are poor because of their own stupidity.
- Filligree 14y ago
  Well, I imagine so. The calorie-per-dollar ratio for apples is negative.
k3n 14y ago
There really isn't much to this article. From the title, I thought it was going to discuss the problems that people face when they live paycheck-to-paycheck and/or near the poverty line, which is a story that's been told but bears repeating and further exploration. Instead, it merely remarks that some US corporations have noticed an upward trend in the number of their customers who are a part of this very predictable cycle (pay/benefits days, usually at the end of the month), and mentions that more "middle-class" are now a part of the cycle. However, it doesn't delve much deeper than linking it to the recession, and doesn't offer any insights into how these businesses are adapting other than vague references to "big data" (with a hat-trick of references to the term).
- ctdonath 14y ago
  Yeah, I was hoping for practical quantification of the minimum viable cost of living. Fascinated with $1 meals, I get a lot of flack over "cost of living" which usually includes a lot which I consider relative luxuries. Take those waiting for the midnight EBT recharge and see what they really buy, and see whether their choices are more a matter of need, desire, education, awareness, and/or availability. Methinks the real issues are buried under the heated rhetoric.
  - deleted 14y ago
    [deleted]
venomsnake 14y ago
My grandfather's saying - I am not rich enough to be able to afford buying cheap stuff ...
laurentoget 14y ago
Every year, those post apocalyptic novels feel more and more like they are a documentary.
- thoughtcriminal 14y ago
  We are experiencing slow motion Armageddon. I'm serious.
encoderer 14y ago
"The rich get richer. The poor get -- Children"
- forinti 14y ago
  Life goes on. If people stopped having families because they are poor, we wouldn't be here.
  - e12e 14y ago
    Indeed. We might have been in a better place (overall).
protomyth 14y ago
You'll also find the cops setting up "safety checkpoints" on the day welfare payments go out / checks clear. It happened a lot on the road from the reservation to town. Its not like its easy to keep a car running and maintained in a place where it gets above 90F in the summer and -40F in the winter[1]. 1) there is no bus or other public transportation
lifeguard 14y ago
http://www.youtube.com/watch?v=mwAQwItEjUo http://www.youtube.com/watch?v=mwAQwItEjUo If minimum wage was $22 an hour the price of dinner for two at Applebee's would increase around 80 cents. $22 an hour is what the wage should be in keeping pace with workers increased productivity. If the minimum wage was in fact a livable wage young adults could support themselves with an entry level job. I believe unemployment is the highest among males 18 - 22 years old. Where does the missing 80 cents go?
- AlexeiSadeski 14y ago
  If it takes $22/hour to "live," what are the people in Mexico, earning $5/DAY, doing? Are they not living?
ilaksh 14y ago
I consider myself to have some pretty useful development skills. I keep up to date with things like HTML5, CoffeeScript, AngularJS, AWS, Node.JS etc. However, I don't know what my problem is, if its lack of social or business skills or no degree or what, but I have been living hand-to-mouth doing freelance software development for years. A lot of my projects have been from outsourcing sites. But some of them have been from small companies that weren't trying to outsource, just didn't have the biggest budgets. There seem to be quite a lot of software projects that have fairly restricted budgets, and unfortunately those are the ones I know how to get. Sometimes things are good for a few months and I don't have to worry, but oftentimes I need to complete some aspect of a project and get a PayPal from the client right away or I won't be able to pay bills. Maybe I am the exception, but I doubt I am really alone in this, and thought I should admit it in case anyone else is struggling.
- dools 14y ago
  You probably aren't charging enough. I have been through this so feel free to email me iain@workingsoftware.com.au if you'd like to discuss it.
  - TY 14y ago
    Agree with dools - try charging more. I increased my revenues by 25% simply by asking. Once this contract is over, I'll increase my rates again. One important note - I have a proven record of someone who delivers. I suggest you invest in making sure your next customer understands it. It doesn't take much - do a nice write up about yourself on LinkedIn and ask previous customers to write endorsements.
    - gexla 14y ago
      For many people, increasing rates also increases that ability to deliver. A hand to mouth developer has to prioritize by which project will pay an invoice the fastest rather than the highest paying project (I need to get paid today, I can't afford to wait for big corp to pay me net 30.) That means plans may change on a day to day basis and low priority projects get delayed. The hand to mouth developer may unexpectedly fall off the radar because he got his internet shut off and can't pay the bill. The hand to mouth developer takes on too much work and ends up delaying everything because he doesn't have enough time to knock everything out. If he hits burnout from this, then he may fall off the radar indefinitely. You MUST set your rates at least to a point where you can save money. You MUST have at least a 3 month cushion (the more the merrier.) For those looking to hire freelance developers, a low rate should be a red flag. You don't want to risk your business on someone who is being affected by these issues.
AlexeiSadeski 14y ago
You can eat quite well on $3/day. $1.50/day of food is comfortably above subsistence in the US. A diet of strictly rice and beans will net 1500 calories for $.30 - $.50 per day. That's not an appetizing diet, but provides a base number for calibration. Cheap eating discussion: http://forum.earlyretirementextreme.com/topic.php?id=599 http://forum.earlyretirementextreme.com/topic.php?id=599
- infinite8s 14y ago
  It can be quite appetizing if you are able to purge a bit on dried whole spices, which I'll go a long way.

139 points by cs702 14y ago

Walmart's CEO talked about this a few years ago—how crowded their stores get around midnight on the last day of the month, because that's when people's payments clear: about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs, and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher. And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason. That stuck in my mind. It's a poignant image. http://blogs.wsj.com/economics/2010/09/20/watching-walmart-at-midnight/ http://blogs.wsj.com/economics/2010/09/20/watching-walmart-a...

dopamean 14y ago
I worked at WalMart for 3 years. I worked overnight doing inventory management and I saw exactly what the CEO described. One thing I noticed that he didn't mention is that a large number of the people I worked with were part of that group of people waiting at midnight to buy their baby formula. I always felt like the wages at our store were subsidized by the government. All of the people I talking about worked full time. They all had ungodly sums come out of their paycheque every two weeks to pay for health insurance (from what I understand it was not a great plan either). I don't really know what kind of point I'm trying to make here. On one hand it's nice that there are a lot of cheap options at WalMart for people on small budgets. On the other hand, it's sad that so many WalMart employees (in my own experience) are the ones who so badly needing to take advantage of those prices.
- dantheman 14y ago
  I don't think it's just walmart employees that need those prices, it's anyone working that type of job. Most employees at small businesses doing the same work earn the same or less than a walmart employee.
  - dopamean 14y ago
    I didn't mean to imply that I think it's only WalMart employees that need cheap goods. I was simply trying to comment on the irony of that.
- gruseom 14y ago
  That is why I like Costco better: the people who work there don't seem as downtrodden. Either I've been fooled by corporate propaganda or they really have figured out a way to make money, lower prices, and treat people relatively well. Walmarts feel like places of despair to me and Costcos like places of hope. I know how ludicrous that sounds, but the feeling is real. I often chat with workers at checkout counters to gut-test my theory, and it seems to hold up, though it could all just be confirmation bias. Edit: there's one big difference, though. To shop at Costco you have to buy twice as much (plus typically pay membership fees). That step could be too steep for the people most living hand-to-mouth, even though it would save them money within weeks. So there could be sample bias here too.
  - protomyth 14y ago
    The membership is the too steep part for Costco.
    - malandrew 14y ago
      It would be nice if CostCo allowed people of low income to apply for a financial aid in the form of free membership if their income was low enough. It's unfortunate that only the people with greater purchasing power get access to the lowest cost per item unit.
incision 14y ago
That was me growing up. I'd go out since my mother had to get up at 5:00. That card allowed us to scrape by during some very rough times. I hate to think where we'd have ended up without it. I'm glad to see a little sympathetic light being shown on this. It always irritates me a bit to hear these programs and the people they help derided politically. Today, I pay far more in taxes each month than my entire family consumed in such benefits each year growing up.
- Camillo 14y ago
  Are you taking inflation into account?
  - incision 14y ago
    Yes, if this calculator [1] is any reasonable approximation. 1: http://www.bls.gov/data/inflation_calculator.htm http://www.bls.gov/data/inflation_calculator.htm

ck2 14y ago

My personal saying is "It's very expensive to be poor".

alxp 14y ago
Obligatory Vimes quote: The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.” Source: http://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned http://www.goodreads.com/quotes/72745-the-reason-that-the-ri...
- 1123581321 14y ago
  Similarly it's expensive to be disorganized. I have hesitated in the past to buy a quality fall/winter jacket because the risk was too high that I would lose it. I cleaned out some boxes recently and found three low-quality sets of Allen wrenches. If I had bought a nice set, I probably would just have been out more money when I lost them anyway.
  - hso9791 14y ago
    Not to mention the cost in time.
- daeken 14y ago
  That's a great quote, but this all really just boils down to short- versus long-term thinking. When you're poor, your long-term thinking goes out the window in exchange for making it to next week. Getting out of that is hard -- harder than you can imagine until you're in it -- because it's like your long-term thought center just atrophies in survival mode.

danso 14y ago

I was hoping to see some data on how limited funds forced people to buy inefficiently...that is, buying cheaper quantities that are per-item more expensive than bulk buying because they can't afford the up front cost of buying bulk. My roommate will do this when buying dish soap for the household, always getting the smallest bottle than just paying for the large one at a 30% discount per ounce. Also, some cheap items are disproportionately bad for one's health...if I were poor, it'd be hard to justify buying two apples over a Big Mac, given the calorie per dollar ratios.

daeken 14y ago
When you don't have enough to cover all your bills and keep appliances up, your spending patterns change dramatically as well. If you don't have a functioning fridge, you're only buying a tiny (extremely overpriced) package of meat. If you don't have gas for your oven, you're only going to be making things in the microwave. This is discussed in numerous really interesting ways in "Makers" by Cory Doctorow: http://craphound.com/makers/download/ http://craphound.com/makers/download/
- nostrademons 14y ago
  There're also some perverse incentives around happiness calculations too. When I was in college, I had a netfriend who lived in a poor rust-belt town, and her family never had enough to eat. One time she was talking about her brand new DVD player and home entertainment system, a couple days after talking about how there was no food in the house. I asked her why she'd just bought a brand new DVD player (something that, to my middle-class college existence, was an incredible luxury) when she was going hungry. She replied that if she'd spent that money on food, she'd eat well this month but would just go hungry again next month. This way, she'd go hungry all the time, but at least she could lose herself in a movie and forget about it. There's a peculiar kind of logic to that which I can't really argue with, despite the common Internet refrain about how poor people are poor because of their own stupidity.
Filligree 14y ago
Well, I imagine so. The calorie-per-dollar ratio for apples is negative.

k3n 14y ago

There really isn't much to this article. From the title, I thought it was going to discuss the problems that people face when they live paycheck-to-paycheck and/or near the poverty line, which is a story that's been told but bears repeating and further exploration. Instead, it merely remarks that some US corporations have noticed an upward trend in the number of their customers who are a part of this very predictable cycle (pay/benefits days, usually at the end of the month), and mentions that more "middle-class" are now a part of the cycle. However, it doesn't delve much deeper than linking it to the recession, and doesn't offer any insights into how these businesses are adapting other than vague references to "big data" (with a hat-trick of references to the term).

ctdonath 14y ago
Yeah, I was hoping for practical quantification of the minimum viable cost of living. Fascinated with $1 meals, I get a lot of flack over "cost of living" which usually includes a lot which I consider relative luxuries. Take those waiting for the midnight EBT recharge and see what they really buy, and see whether their choices are more a matter of need, desire, education, awareness, and/or availability. Methinks the real issues are buried under the heated rhetoric.
- deleted 14y ago
  [deleted]

venomsnake 14y ago

My grandfather's saying - I am not rich enough to be able to afford buying cheap stuff ...

laurentoget 14y ago

Every year, those post apocalyptic novels feel more and more like they are a documentary.

thoughtcriminal 14y ago
We are experiencing slow motion Armageddon. I'm serious.

encoderer 14y ago

"The rich get richer. The poor get -- Children"

forinti 14y ago
Life goes on. If people stopped having families because they are poor, we wouldn't be here.
- e12e 14y ago
  Indeed. We might have been in a better place (overall).

protomyth 14y ago

You'll also find the cops setting up "safety checkpoints" on the day welfare payments go out / checks clear. It happened a lot on the road from the reservation to town. Its not like its easy to keep a car running and maintained in a place where it gets above 90F in the summer and -40F in the winter[1]. 1) there is no bus or other public transportation

lifeguard 14y ago

http://www.youtube.com/watch?v=mwAQwItEjUo http://www.youtube.com/watch?v=mwAQwItEjUo If minimum wage was $22 an hour the price of dinner for two at Applebee's would increase around 80 cents. $22 an hour is what the wage should be in keeping pace with workers increased productivity. If the minimum wage was in fact a livable wage young adults could support themselves with an entry level job. I believe unemployment is the highest among males 18 - 22 years old. Where does the missing 80 cents go?

AlexeiSadeski 14y ago
If it takes $22/hour to "live," what are the people in Mexico, earning $5/DAY, doing? Are they not living?

ilaksh 14y ago

I consider myself to have some pretty useful development skills. I keep up to date with things like HTML5, CoffeeScript, AngularJS, AWS, Node.JS etc. However, I don't know what my problem is, if its lack of social or business skills or no degree or what, but I have been living hand-to-mouth doing freelance software development for years. A lot of my projects have been from outsourcing sites. But some of them have been from small companies that weren't trying to outsource, just didn't have the biggest budgets. There seem to be quite a lot of software projects that have fairly restricted budgets, and unfortunately those are the ones I know how to get. Sometimes things are good for a few months and I don't have to worry, but oftentimes I need to complete some aspect of a project and get a PayPal from the client right away or I won't be able to pay bills. Maybe I am the exception, but I doubt I am really alone in this, and thought I should admit it in case anyone else is struggling.

dools 14y ago
You probably aren't charging enough. I have been through this so feel free to email me iain@workingsoftware.com.au if you'd like to discuss it.
- TY 14y ago
  Agree with dools - try charging more. I increased my revenues by 25% simply by asking. Once this contract is over, I'll increase my rates again. One important note - I have a proven record of someone who delivers. I suggest you invest in making sure your next customer understands it. It doesn't take much - do a nice write up about yourself on LinkedIn and ask previous customers to write endorsements.
  - gexla 14y ago
    For many people, increasing rates also increases that ability to deliver. A hand to mouth developer has to prioritize by which project will pay an invoice the fastest rather than the highest paying project (I need to get paid today, I can't afford to wait for big corp to pay me net 30.) That means plans may change on a day to day basis and low priority projects get delayed. The hand to mouth developer may unexpectedly fall off the radar because he got his internet shut off and can't pay the bill. The hand to mouth developer takes on too much work and ends up delaying everything because he doesn't have enough time to knock everything out. If he hits burnout from this, then he may fall off the radar indefinitely. You MUST set your rates at least to a point where you can save money. You MUST have at least a 3 month cushion (the more the merrier.) For those looking to hire freelance developers, a low rate should be a red flag. You don't want to risk your business on someone who is being affected by these issues.

AlexeiSadeski 14y ago

You can eat quite well on $3/day. $1.50/day of food is comfortably above subsistence in the US. A diet of strictly rice and beans will net 1500 calories for $.30 - $.50 per day. That's not an appetizing diet, but provides a base number for calibration. Cheap eating discussion: http://forum.earlyretirementextreme.com/topic.php?id=599 http://forum.earlyretirementextreme.com/topic.php?id=599

infinite8s 14y ago
It can be quite appetizing if you are able to purge a bit on dried whole spices, which I'll go a long way.