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Living paycheck to paycheck is disturbingly common

washingtonpost.com

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Re: Living paycheck to paycheck is disturbingly common

#291

Post by sethammons »

Jerry2 wrote: post #95

Check out this graph "The erosion of the minimum wage" from The Washington Post as well: https://pbs.twimg.com/media/DvbrUVCVsAM25XX.jpg You need to do 47 hours of minimum wage work today to get the same amount of purchasing power as 40 hours of work in 2009.

That's interesting. Related to the erosion of minimum wage, my brother's mom, when she was around late teens or early twenties (so, around 40 years ago), was able to rent a beach view place in Newport CA with her friend. They both worked part time at Burger King. There is no way that could happen today

Re: Living paycheck to paycheck is disturbingly common

#292

Post by wutbrodo »

Aeolun wrote: post #266
wutbrodo wrote: post #113

Earlier quoted context omitted.

I decided in college that a 40 hr workweek wasn't the optimal amount for me. I've since learned that for white-collar jobs, employers really really want full-time employees[1]. My way around this was: consume as if I made ~half as much and take extended sabbaticals. The final piece in the puzzle was ACA exchanges, as I can now get stable (though expensive and high-deductible) health insurance while unemployed. This o…

Because there is a lot of things I would like to buy now that I have no money for? My ideal doesn’t change when my income rises, I’m just finally able to pay for the things I’ve wanted all along. At least, that was true before. I guess I’m finally at a level where something remains for saving.

Well, obviously. If what you want to spend your marginal income on is more consumption, that's completely reasonable. There's no accounting for preferences. That's not what I, the article, or anyone else in this thread is talking about though.

Note that I'm also talking about a _floor_, not about discretionary income. What you consider "must-have basics" is different from what I would consider to be so, which is different from what a billionaire or a villager below the global poverty line would. To some degree this is normal, but the degree to which it gets in the way of the other goals of the people I'm talking about, I don't understand it.

I'm specifically talking about the many, _many_ friends of mine who have goals other than immediate consumption, and for whom immediate consumption is preventing those goals even when those other goals are higher-priority. Yes, I know revealed preferences are a thing, but in extremis the concept relies on a completely unrealistic Homo Economicus model of people. Hyperbolic discounting, innumeracy, an innate desire to keep up with the Joneses even when you disavow any such desire: these are all surely contributors, but I guess I'm surprised at the degree to which their sum skews consumption behavior.

Re: Living paycheck to paycheck is disturbingly common

#293

Post by graeme »

Johnny555 wrote: post #279
NightlyDev wrote: post #278

Earlier quoted context omitted.

Debit cards are quite secure, at least here, but we're many years ahead of the US when it comes to credit/debit cards. The magnetic strip is never used(haven't been used the last 10 years, at least), a PIN is always required at PoS and for many issuers an electronic multistep authentication process is required to order anything online with the card. And if something still where to go wrong then you'll get your money…

And if something still where to go wrong then you'll get your money back. Well... most of the time, unless the bank claims it was your fault because chip-and-pin is infallible... then you have to fight the bank for your money. https://www.thisismoney.co.uk/money/saving/article-2215223/V...

Interesting. Had atm fraud in brazil from my canadian chip and pin card. No issue getting the money back.

Re: Living paycheck to paycheck is disturbingly common

#294

Post by mikeash »

matis140 wrote: post #107
SmirkingRevenge wrote: post #28

As someone who didn't learn the very basics of personal finance at the optimal point in life, I feel like it should be part of our standardized education. I'd like to think that would make things at least marginally better. Another thing I'd love to see, would be for banks to fundamentally reorient themselves to be their customer's advocates/financial guardians, instead of being yet another party encouraging people t…

Another change, but one much harder to manage is that many of the products people buy today have no value left after 2-4 years and some both have no value after 2-4 years and do things degrading their performance forcing you to again purchase an expensive item that does nothing to build wealth. Vehicles, electronics, home appliances all sit at something like a max of 8-11 years of use and loose 30-50% of their value…

The average age of American cars on the road today is over 11 years. That means they’re generally lasting twice that long.

A few decades ago, it was a remarkable achievement to get a car to 100,000 miles. Now, if a car falls apart that quickly, you probably swear off the entire brand for making unacceptably shoddy products.

I’m sure there are examples of the phenomenon, but cars aren’t it.

Re: Living paycheck to paycheck is disturbingly common

#295

Post by refurb »

greedo wrote: post #247
astura wrote: post #111

Earlier quoted context omitted.

Ideally this case would be insured; you'd also be eligible for Social Security survivors benefits.

Survivor benefits cap out at 75% of the worker's benefits. That itself caps out to $2675. So a spouse with kids would get at most $2006/month. Not horrible, but a parent with two kids would just be over the poverty level. And realistically, most people at that age would have small accrued benefits.

$2000/month is more than a lot of people in the US make working full time.

I would argue $2000/month is a very significant benefit to a survivor. It’s also inflation adjusted.

Re: Living paycheck to paycheck is disturbingly common

#296

Post by lsc »

GreeniFi wrote: post #262
IAmGraydon wrote: post #45

Earlier quoted context omitted.

This is exactly the problem. It all comes down to what is more rewarding to you - buying or financial security. Much of the buying in today’s world seems to be driven by the desire to portray status and success to peers. What’s particularly unfortunate about those who fall into this trap is the fact that they’re essentially giving what little real wealth they possess to people who actually have real wealth (business…

I suspect a lot of people feel that part of their conspicuous consumption is part of the effort to earn more. You have to wear the right clothes, look the right way, have the right tech - or at a higher income bracket, be part of the right clubs, in order to socialise with the people who will pay you. So the two are sort of linked I suspect.

I'm pretty sure that this is actually a thing; Like once you step outside of the technical field; most everyone else really needs to "dress for the job they want" in the form of, for example, having a class-appropriate car.

I think this is one of the biggest bonuses you get as a technical person; you can live with roommates and drive a beater car, if you want, and it's not a problem when getting quarter-million dollar a year jobs.

A long time ago, I had a roommate who was trying to make it as a realtor. He though his (actually quite nice) not exactly new honda accord was a big handicap for him. I mean, I don't know if it was or not; I know little about the selling side of real-estate, but I can tell you that most people who do sales or management feel that their symbols of wealth are really important to their job and their income.

Re: Living paycheck to paycheck is disturbingly common

#297

Post by lsc »

leoedin wrote: post #27
perfmode wrote: post #6

Don’t discount the weight of emotional trauma and the self-sabotaging habits it has the potential to engender. Most people are slaves to their limbic systems. Most people don’t have self-education or resources to seek the help they need to fix these underlying problems. Society does them no favors. Media and advertising are designed to promote consumption. And not even healthy consumption. The idea that we are black…

I think the very fact that people in wildly different circumstances are living paycheck to paycheck is a huge flag that this isn't as simple a problem as "they don't get paid enough". Income and expenses are intricately linked by psychology. It's almost irrelevant what your paycheck is, if you're prone to this problem then somehow expenses will always rise to meet it. If expenses weren't actually determined by payche…

> I think the very fact that people in wildly different circumstances are living paycheck to paycheck is a huge flag that this isn't as simple a problem as "they don't get paid enough".

so, certainly, that's not all of it. we all have the wealthy friend who lives paycheque to paycheque.

But... let me tell you, saving money is a whole lot easier when you make 10x the minimum to support yourself in the area than it is when you make 1x the minimum to support yourself in the area.

Re: Living paycheck to paycheck is disturbingly common

#298

Post by Aeolun »

AnimalMuppet wrote: post #280
Aeolun wrote: post #268

Earlier quoted context omitted.

If you make 300k you need to either be fairly old, or buy a ridiculously expensive place to pay it off for the rest of your life.

Or be buying in a ridiculously expensive place - NYC or the Bay Area.

Given what I can buy myself, that would mean buying a 3M house. Even in the bay or NYC that’s a fairly expensive place.

Re: Living paycheck to paycheck is disturbingly common

#299

Post by wutbrodo »

thelasthuman wrote: post #239
wutbrodo wrote: post #99

Earlier quoted context omitted.

I'm not sure lack of healthcare and low wages _is_ the main issue[1]. As the parent comment points out, it seems like that would lead to a pretty different pattern of this phenomenon. It seems to me that there's a couple broad categories that can lead to paycheck-to-paycheck living: 1) Poverty, at the level where spending on a reasonable floor of basics (food, shelter, education, leisure) leaves little for savings. T…

"2) Severe exogenous financial shocks " Like huge medical bills?

Yup, that's the exact example I use a sentence or two later, and I'd imagine one of the more common shocks.

Re: Living paycheck to paycheck is disturbingly common

#300

Post by Aeolun »

supertrope wrote: post #207
ianleeclark wrote: post #106

Earlier quoted context omitted.

> Most people can't afford everything they optimally need while minimising their risk, and so have to manage this by optimising as much as they are able within their paycheck. Not being able to afford basic necessities-in the most wealthy nation in the world-indicates something being broken.

We live in a country where rewarding success and freedom to fail is more important than general welfare. People who are excelling obviously endorse the status quo. But also many who are lagging also endorse it because they get to directly control their finances and think they will make it one day. To give an example, if the USA allowed individuals to opt out of Social Security, many would do so and then live out thei…

Nobody in the US seems to be able to see the value of doing things collectively.
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