Not to be all “predicted this 5 years ago on my blog”, but those aren’t new numbers. I believe they’re from a study from 2014, and made the rounds a while ago.
https://www.hbs.edu/faculty/Pages/item.aspx?num=47954
Wow. I saw that letter on r/antiwork the other day, and I assumed that it was made up since the letter was so insane.
CraigM
4083
Make America Serfs Again - MASA
Dave47
4084
If you Google Judge McGinnis the first thing you see is how he was reprimanded for his “abusive” behavior towards minors in truancy court. He sounds like a great person.
wavey
4085
In the UK, anti-poverty campaigner Jack Monroe has persuaded the Office for National Statistics to consider the impact on the poorer sections of society when calculating inflation rates, and provide a better breakdown of prices.
Concern that rising inflation is having a disproportionate impact on people in poorer households in the UK has prompted government number-crunchers to provide a more detailed breakdown of the cost of living.
The Office for National Statistics said it accepted that every person had their own inflation rate and it would do more to capture the impact of price increases on different income groups.
Jack was proposing her own price index based on the cheaper foods that poorer people rely on, calling it the Vimes Boots Index - a Terry Pratchett reference which his daughter said he would have been proud of.
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 okay 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 a 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.
Sir Terry as always with the gift of holding up such a brilliant mirror to our world.
Being poor is so damn expensive.
That’s good, but price indexes are not inflation. It matters because cuts aren’t going to fix it, quite the opposite (assuming I can guess that it’s the same thing driving it as everywhere else - energy and housing).
That’s a nice emotional plea, but durability of goods isn’t why the rich are rich and the poor are poor. The rich are rich because money makes more money. The power of compound interest, alone, way outpaces any sort of boot effect. Sure, the rich spend less, as a percentage of income on necessities. But it’s the income side of the equation, not the expense side, that has the real impact.
CraigM
4089
It is a true thing though. For a poor person the cost and quality of goods has aa greater measurable impact than it does for a rich one. A poor person will use inferior substitute goods that, long term, cost more or have lower quality. They aren’t the ones spending extra on bulk goods at costco or buying extra food when its on sale. For me, if certain staple foods are on sale, I buy extra. If I go over my monthly food budget by $100 or $200 it is not a big deal. A poor person doesn’t have the flex to do that. They wind up buying 3 pounds of chicken now, on sale, and then 3 pounds 2 weeks from now again when its $3/lb instead of $2/lb.
So it absolutely gets at a fundamental truth of something that is literally below the notice of someone who has never lived that situation.
Alstein
4090
Throw in arbitrages of various sorts as well. The rich can take advantage of speculative bubbles a lot better on average as well.
I’m not saying it isn’t a thing. But at most, it is a symptom or hardship imposed by poverty, not a cause of poverty. Making durable boots cheaper for people or even cheaper groceries won’t substantially lift folks out of poverty. You can’t save enough on chicken to get you out of poverty, if the income side of the equation isn’t addressed.
The closest connection you can make with a boots index is that poor people don’t have free capital to invest. But frankly, that too is because their income is too low compared to cost of living or perhaps they don’t have access to affordable housing sufficient to allow for capital to invest in education, training, and/or economic self-development. They’re stuck in dead-end jobs and don’t have the means to transition to better jobs. Boots and chicken aren’t impactful enough.
CraigM
4092
No, but it is a symptom of how economic structures in our country exist that make poverty even worse. Below a certain threshold each marginal dollar gained or lost has a greater than $1 impact on a persons quality of life. Its a feedback mechanism that takes already difficult financial situations and makes them worse.
Someone making $80k doesn’t simply have twice as much money as someone making $40k, but they have ways of using that money to greater effect. per dollar. So it is probably closer to an improvement of 2.5x due to the ability to store more and buy higher quality goods. Going from $40k to $20 the multiplier is probably even more stark, maybe as much as 3x.
ShivaX
4093
So much this.
Imagine having to buy a bunch of cheap stuff, more often because it’s cheap and not made to last.
It quickly adds up.
Buying an entire cow and having the means to store and freeze it vs buying a pound at a time is one of the more extreme examples, but it shows the issue pretty well. Extrapolate that to stuff like cars, clothes and the rest of it.
I’m more with StepsonGrapes on this one: Especially when you’re talking about “cars, clothes, and the rest of it”, something that’s 10x more expensive doesn’t necessarily last 10x longer. If you go out to a restaurant, a $60 steak isn’t ten times more nutritious than a $6 steak. A $50,000 car doesn’t last more than ten times longer than a $5,000 car. The price/quality curve tends to taper off pretty quickly, where you’re going to spend 20x more for something that’s twice as good, not the other way around.
And the richest people generally don’t save money by buying an entire cow, butchering it themselves, and then storing it themselves. That’s pretty much the definition of “penny-wise, pound-foolish”.
ShivaX
4095
https://www.washingtonpost.com/news/posteverything/wp/2018/01/25/why-it-costs-so-much-to-be-poor-in-america/
And no one said it was a linear correlation.
ShivaX
4096
Also “they don’t generally do it” vs “they can easily do it”.
There is nothing foolish by buying in bulk. Well-off people can do that and then store the things they bought.
Poor people can buy X amount and no more, so even if both group use the same amount of a product, the poor people are forced to pay more for it. The well-off people can be lazier and pay more if they want, which doesn’t matter as much to them because they’re well off. The poor people don’t have an option even though it does matter to them, because they can’t afford to buy bulk much less store it.
I’m still missing how this isn’t much more than an emotional plea. Yes, being poor adds certain economic hardships and such that those who aren’t poor don’t experience. How does having an awareness of this information affect any policy decisions when addressing poverty and/or income inequality?
If there are people out there who don’t support poverty mitigation, explaining to them some of these “less expected” pains of living dollar-to-dollar isn’t going to change their minds. If someone already supports mitigation, this again, won’t really affect policy decisions.
Rent, which is a significant portion of income, can trend more expensive for poorer people. In worse areas, or for instance if you have an eviction on your record (as could happen through no fault of your own due to sudden unemployment, medical issues, etc), you may be only be able to find worse housing, and it can cost more than better housing in better areas due to you being “high risk”. Echoed in the general divide between renting and owning, where mortgage payments may be equal to or less than rents, in addition to building long term equity.
Or on the extreme, living in a motel for extended periods of time because you can’t find an apartment.
There’s also things like food deserts, where fresh or otherwise highly nutritious foods are more expensive (bodega prices instead of grocery store prices) or simply unavailable without a large investment in time to travel to purchase them.
It’s not a 1:1 correlation, and it only works up to a certain income level, but there unquestionably are things that are more expensive simply because you’re poor.
