Rich people do have trouble understanding what it's like to be poor • Hacker News Board

Re: Rich people do have trouble understanding what it's like to be poor

#231

Post by notacoward » Sat, May 22, 2021, 4:16 PM UTC

fnord77 wrote: post #19

I grew up poor. We were on food stamps. Most of my adult life I have been making an upper-middle class salary. I have forgotten what it is like to be poor other than some unpleasant memories.

Even though I just wrote in another comment about how growing up poor has shaped me, I feel this too. I try to remember, and to pass on what I remember because I think those lessons are important, but I'm also keenly aware that it was a long time ago in a different place. In a way, the most important thing I know and that many around me don't is that there's something to be learned about what it's like to be poor in this time and place. Knowing that a particular piece of knowledge exists at all is the first step to learning it.

Re: Rich people do have trouble understanding what it's like to be poor

#232

Post by duped » Sat, May 22, 2021, 4:18 PM UTC

zpeti wrote: post #75

hn_throwaway_99 wrote: post #65

Earlier quoted context omitted.

I think this is an excellent comment. What makes me very sad is that during the past 14 months the divide between those who own assets and those who don't has reached gargantuan proportions. I mean, in my raging inferno of a housing market, over the past couple of years home prices have easily doubled. So a 400k house from 2018 now sells for 800k. Yes, if I want to move to another house in my area I'll pay similarly…

I would love to see a parallel universe where in 2008 no one is bailed out and bankers are either on the hook for the risks they took or actually are sent to prison. Taking it further back, what if the tech bubble of the 90s is allowed to collapse, interests aren't set at almost 0, and a housing bubble isn't blown by exploiting minorities. And last year airlines, and other corporations who didn't account for black sw…

I understand the sentiment, but even with the bailouts 2.5 million people lost their jobs and we continue to see second order effects of the crisis, like deferred home purchases, declining birth rates, low or nonexistent retirement savings, and political instability.

Imagine how bad it would be if there was a total collapse of the financial system. That's what the situation was before the bail outs.

Re: Rich people do have trouble understanding what it's like to be poor

#233

Post by chasebank » Sat, May 22, 2021, 4:18 PM UTC

adolph wrote: post #135

chasebank wrote: post #101

Earlier quoted context omitted.

Not in California. Prop 13 keeps property taxes at the value when you purchased your home. IMO this is a massive contributor to inflated property values, now leaking into other state economies.

What is your theorized mechanism for the freezing of property tax rates at the purchase price causing inflated property values? I could see it making an upward or downward trend worse. In an upward trend buying before increase would be tax advantaged. In a downward trend buying after anticipated decreases would have the advantage. All in all, more people would be advantaged by just staying in place. Maybe that reduce…

It's really simple. California has a housing supply problem. If taxes are never raised, housing supply is even more suppressed. Owners have zero incentive to sell.

Here's an example. My mother inherited a beach house in Carpinteria. My grandparents purchased it for $14k in 1924. It's worth north of $10M. Annual taxes are under $5k. She can rent this out during summer months for over $50k/mo. Why on earth would she ever sell? She has an asset that appreciates at or above index funds and pays amazing dividends. This is an extreme example but it works the same at every level.

Prop 13 encourages people to accumulate housing / property and removes basic market economics. Artificially low housing supply leads to artificially inflated housing prices.

Re: Rich people do have trouble understanding what it's like to be poor

#234

Post by an_opabinia » Sat, May 22, 2021, 4:19 PM UTC

bradleyjg wrote: post #107

hn_throwaway_99 wrote: post #65

Earlier quoted context omitted.

I think this is an excellent comment. What makes me very sad is that during the past 14 months the divide between those who own assets and those who don't has reached gargantuan proportions. I mean, in my raging inferno of a housing market, over the past couple of years home prices have easily doubled. So a 400k house from 2018 now sells for 800k. Yes, if I want to move to another house in my area I'll pay similarly…

People made vastly more money just sitting around in their houses in the past couple years than I made in my job as an "essential" worker over the past decade. This is not an accident. It’s a result of deliberate policy choices. The incumbent homeowners voted themselves massive returns. And they felt self righteous while they were doing it to boot.

> The incumbent homeowners voted themselves massive returns. And they felt self righteous while they were doing it to boot.

We'll see. They're millionaires on paper. If there's one thing about unsophisticated people and investments, they always cash out when it's too late.

Re: Rich people do have trouble understanding what it's like to be poor

#235

Post by cronix » Sat, May 22, 2021, 4:20 PM UTC

throwaway1777 wrote: post #193

mechagodzilla wrote: post #155

Earlier quoted context omitted.

There are a lot of 'deliberate' policy decisions which both depress low-skilled workers' wages, and lead to higher property prices. On the wage side, good examples are that: 1) the minimum wage doesn't get increased with inflation 2) many jobs require a higher degree (which takes capital to pay for), or effectively require working for free via internships (which requires capital or someone else subsidizing you) 3) ma…

It’s not only a supply issue these days. Even areas that have basically unlimited land and building in Texas have prices going up massively. How do you explain that?

Lumbar as a whole has minimally doubled during the last year[1]. A lot of people are moving to Texas, which raises demand, which raises prices. There is also a current lumbar shortage, which makes house building unpredictable when you have to plan 1+ years out.

You don't just go from 0 to a house. There is usually about a year of designing/planning which have to be approved and meet national and local code, numerous inspections, approvals and permits before ground is broken. Most people who move buy an existing house because they want to move "now." Out of all of the places you've lived, how many did you have custom built vs moving into an existing structure?

Prices are rising pretty quick in Arizona and Idaho as well. Idaho was the quickest growing state in 2020[2]. Those are also hotbeds of people moving to them. Most are trying to escape California, Chicago and NY. CA and NY lost population and even recently had their US House seats reduced as a result[3].

[1] https://fortune.com/2021/04/27/lumber-prices-are-up-232-and-...

[2] https://www.kxly.com/idaho-leads-country-with-amount-of-peop...

[3] https://www.usatoday.com/in-depth/news/politics/elections/20...

Re: Rich people do have trouble understanding what it's like to be poor

#236

Post by spzb » Sat, May 22, 2021, 4:22 PM UTC

bachmeier wrote: post #123

There are a couple things to understand about being poor. It's not about lack of money (though obviously having lots of money means you're not poor). It's about insecurity. I grew up in farm country in the 1980s. Nobody had money, but I didn't feel poor. When I moved to other parts of the country, that's when I encountered poor people. They had to worry about crime, schools for their kids, and being homeless. When yo…

Poverty is relative but those who are not poor tend to view it as absolute. So anyone who has any apparent trappings of being well-off, such as a car, mobile phone or a big TV, obviously isn't poor and is a scammer or criminal. Never mind that, in this day and age, a car and a cellphone are pretty much essential for getting work and a TV (big, small or in between) is the cheapest form of entertainment for filling your non-work time.

Re: Rich people do have trouble understanding what it's like to be poor

#237

Post by mcguire » Sat, May 22, 2021, 4:22 PM UTC

moralestapia wrote: post #76

GuB-42 wrote: post #45

Earlier quoted context omitted.

The worst part is that your wealthy family member is right. It is well illustrated by a quote from Terry Pratchett > 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 se…

This is very naive and short-sighted, what percentage of your income go to boots? 1%? Your own example is talking about a ROI of 50USD in years, yeah sure ... that's wealth right there. People spend 90% of their wage on: rent, food and basic services. Can you be very smart and hack your way into halving your monthly rent? Can you be very smart and buy a really good potato that will last you for years? Can you be very…

No, but if you're not poor, you can not live in an expensive urban area within walking distance of your minimum wage jobs. If you are not poor, you can buy 10lbs of potatos and store the excess in a cool, dark cabinet until you eat them rather than buying today's potato at the convenience store on your way home for a 100% markup. If you are not poor, you can renovate and install insulation so that you are not paying to heat or cool the neighborhood.

Metaphors can be tricky.

Re: Rich people do have trouble understanding what it's like to be poor

#238

Post by mechagodzilla » Sat, May 22, 2021, 4:23 PM UTC

throwaway1777 wrote: post #193

mechagodzilla wrote: post #155

Earlier quoted context omitted.

There are a lot of 'deliberate' policy decisions which both depress low-skilled workers' wages, and lead to higher property prices. On the wage side, good examples are that: 1) the minimum wage doesn't get increased with inflation 2) many jobs require a higher degree (which takes capital to pay for), or effectively require working for free via internships (which requires capital or someone else subsidizing you) 3) ma…

It’s not only a supply issue these days. Even areas that have basically unlimited land and building in Texas have prices going up massively. How do you explain that?

I'm actually sort-of familiar with this, as I have family that lives all around there.

1) Prices have gone up, but not nearly as much as places where supply is much more constrained (i.e. the bay area or NYC metro area).

2) Even if there is 'unlimited land', the land closest to the city centers where most of the employment is located is still limited. A cheaper house 3 hours away from your job doesn't help someone all that much.

3) Texas absolutely has lots of policies that do things like limit housing density. Many of the huge suburban tracts being developed have home owner's associations that enforce a variety of policies like the ones discussed earlier (enforce uniformity in terms of lot size, minimum house size, parking, etc), as well as limiting your ability to do things like rent or subdivide your property

4) You just need the population to be increasing faster than the housing supply to have a 'supply issue'. This last year has both seen a lot of raw material supply issues (and labor issues) due to the pandemic, and a lot of people also trying to relocate (also due to the pandemic). Sometimes temporary housing prices increases are unavoidable while supply and demand adjust, but long term policy decisions can definitely limit supply and force prices higher.

Another commenter also pointed out that low federal interest rates generally promote asset price inflation (as buyers are frequently bidding based on their ability to carry a 30-year monthly mortgage payment, so lower interest rates can almost directly increase home values when people are bidding against each other).

Re: Rich people do have trouble understanding what it's like to be poor

#239

Post by gruez » Sat, May 22, 2021, 4:25 PM UTC

mentalpiracy wrote: post #167

gruez wrote: post #80

Earlier quoted context omitted.

Isn't the thinking that these jobs are supposed to be for teenagers, which has their income supplemented by their parents?

Why should a working persons age or living arrangement cause a devaluation of the work they are doing? Yes the instinct is to pay teenagers less because we generally cannot fathom them capable or experienced enough to do “real” work. But does this set the stage for the devaluation of entire classes of work because they’re seen as “for teens?”

> Why should a working persons age or living arrangement cause a devaluation of the work they are doing?

No, but their living arrangement does affect whether it's possible to live on that wage, which is what GP was talking about.

Re: Rich people do have trouble understanding what it's like to be poor

#240

Post by godfreyantonell » Sat, May 22, 2021, 4:28 PM UTC

c22 wrote: post #145

c22 wrote: post #126

Earlier quoted context omitted.

My cell phone bill (for my family of 4) would be around $120/month, but it's discounted down to around $80 because of my employer. There's no note on our car cause we could afford to just buy it with cash. We never spend money on doordash because we have plenty of time to go shopping and make our own meals. For the most part we have rent (mortgage), food, utilities, insurance, and day care (have you looked into the c…

Here's another way to look at it, we're grossing around $100k a year and only managing to save about $25k of it. I don't understand how a family that makes $60k a year (about 3 full time minimum wage jobs) manages at all. Our lifestyle is not opulent.

In this country you are either rich or some flavor of poor. Simplistic as it sounds, I won’t be able to “exhale” until I am grossing at least $400k annually. I am far from it, and I feel it. I can hardly save at the moment. Health care is a big bite as well. Even w an employer plan. Still have to come up w a $3500 deductible before costs are shared. Not whining. Just saying that even though I have a decent monthly check, I am poor.