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

#311

Post by _xy8h » Sat, May 22, 2021, 6:26 PM UTC

mynameishere wrote: post #62

elliekelly wrote: post #12

Earlier quoted context omitted.

I thought this for the longest time. An embarrassingly long time. Then I volunteered with a program that helps people who qualify for EITC to prepare their taxes and budget how they’ll use their tax return to “get them out of their situation”. Person after person came in, we did their taxes, and then we went over their expenses and each case was a frustrating puzzle that was impossible to solve. There just wasn’t eno…

Okay...but on /r/personalfinance, people show up all the time with a litany of complaints and a litany of awful, awful budget mistakes they have no interest in fixing. 120/month cellphone, 400/month doordash, Dodge Charger with a 600/month note. And so on. each case was a frustrating puzzle What puzzled you? The necessities should never be a puzzle. If the rent, the food, the utilities, the insurance, and the day car…

https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...

>McDonald’s was among the top five employers of Medicaid enrollees in five of six states and SNAP recipients in eight of nine states.

>Other notable companies with a large number of employees on federal aid include Amazon, Kroger, Dollar General, and other food service and retail giants.

>About 70% of the 21 million federal aid beneficiaries worked full time, the report found.

" It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country." - FDR

TLDR: Minimum wage was never intended to be less than a living wage. If you're working full time and can't afford food, why should the company get away with forcing taxpayers to make up the difference?

Your oversimplification of the issue glosses (intentionally?) over the real issue.

https://www.cnbc.com/2020/07/14/minimum-wage-workers-cannot-...

>Full-time minimum wage workers cannot afford a two-bedroom rental anywhere in the U.S. and cannot afford a one-bedroom rental in 95% of U.S. counties, according to the National Low Income Housing Coalition’s annual “Out of Reach” report.

>In fact, the average minimum wage worker in the U.S. would need to work almost 97 hours per week to afford a fair market rate two-bedroom and 79 hours per week to afford a one-bedroom, NLIHC calculates. That’s well over two full-time jobs just to be able to afford a two-bedroom rental.

But yes, go on about how thse people need to 'dispense with luxuries' and 'work a second job.'

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

#312

Post by ac29 » Sat, May 22, 2021, 6:27 PM UTC

chasebank wrote: post #101

fortran77 wrote: post #68

Earlier quoted context omitted.

Taxes even that out a bit. The person with an 800k house pays twice as much in property taxes. In many states, the amount that the state can raise taxes on someone whose house may have "increased" in value is limited.

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.

> Prop 13 keeps property taxes at the value when you purchased your home.

That's a myth. Prop 13 limits assessed value from increasing by more than inflation rate and is limited to 2%/year overall. So yes, property taxes stay artificially low, especially over long times, but they do go up every year.

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

#313

Post by bradleyjg » Sat, May 22, 2021, 6:35 PM UTC

mindslight wrote: post #177

e40 wrote: post #112

Earlier quoted context omitted.

What are you talking about?

The Federal Reserve's overt mission is to dump new money into the economy to create inflation. But since they only pump it into the overgrown financial sector, we get asset inflation rather than general price inflation. Every time interest rates are lowered, land prices go up, because the monthly (financial) rent remains the same. Similarly with down payments (20% -> 5%). The next step will be lengthening mortgage te…

Each step is aimed at increasing the wealth of incumbent homeowners, not making housing more affordable. The economists at the Fed and GSEs are not stupid.

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

#314

Post by gruez » Sat, May 22, 2021, 6:39 PM UTC

baq wrote: post #306

gruez wrote: post #303

Earlier quoted context omitted.

>Never meant to, just pointed to a direction that you seem to be unaware of. What gave you that impression? In my initial comment I acknowledged the concept of excusing suboptimal decision making due to "psychology of decision making when poor and struggling". How is that different than what you're saying?

You call it 'excusing'.

That seems like the right characterization to me? Definition from wiktionary:

>3. (transitive) To provide an excuse for; to explain, with the aim of alleviating guilt or negative judgement.

Earlier in the thread there was definitely a tone of negative judgement. ie. "people show up all the time with a litany of complaints and a litany of awful, awful budget mistakes they have no interest in fixing"

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

#315

Post by medvezhenok » Sat, May 22, 2021, 7:00 PM UTC

gruez wrote: post #84

LocalPCGuy wrote: post #71

Earlier quoted context omitted.

Have you looked at the psychology of decision making when poor and struggling? It might open your eyes as to why people don't make the optimal choices (financially or others). And a lot of people literally do not know any better. They've never had someone teach them how to manage money and potentially had bad role models growing up. So its easy for you to say, with the knowledge it seems like you have, this is what y…

> Have you looked at the psychology of decision making when poor and struggling? It might open your eyes as to why people don't make the optimal choices (financially or others). Where does "psychology of decision making when poor and struggling" stop and personal responsibility begin? Can every suboptimal decision be excused because of "psychology of decision making when poor and struggling"?

If you were put in that position and stripped of all of your privileges, you would also be likely to make similar decisions (not exactly, but we can observe given medians).

That's why we need a UBI - to give the poor people leverage. We saw it a bit with the unemployment bonuses - companies are having to raise their wages finally and are complaining about it, and we might finally see inflation. Every keeps treating it like a bad thing, but in reality, the late 70s with high inflation were the most "equal" times historically, since inflation with wage indexation is actually more akin to a wealth tax on the rich, which I totally support.

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

#316

Post by zepto » Sat, May 22, 2021, 7:00 PM UTC

calibas wrote: post #198

zepto wrote: post #158

Earlier quoted context omitted.

> If that's not true, then it implies that live in a class-based system. It really doesn’t. It does absolutely imply that the system is broken, but it most certainly doesn’t imply that it is ‘class based’ in some essential way.

It's odd, because when I suggest that money and power stays within a handful of wealthy families, nobody seems to disagree. When I call that a "class-based system" or use words like aristocracy, then people disagree... There's a ruling class that people are born into, same as how the old Indian caste system works, at best it's a "democratic aristocracy" because you get your choice of elite. Of course, that's just sem…

It’s not just semantics. Yes, wealth tends to remain with the wealthy. That is a consequence of economic processes, and to the extent that it limits what is possible, it would be good to alter those processes.

Analyzing society into ‘classes’ of people has nothing to do with it. They aren’t real things. That analysis is a political tool whose value is to divide society and leverage ignorance for political gain.

The animals you can see in cloud formations are not responsible for the drought.

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

#317

Post by medvezhenok » Sat, May 22, 2021, 7:04 PM UTC

GuB-42 wrote: post #105

moralestapia wrote: post #76

Earlier quoted context omitted.

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…

Of course it is a joke, it is Terry Pratchett after all. But there is a serious problem behind it. For example, with food, if you have enough money you can afford to buy large quantities and take advantage of discounts. For rent, it you have money, deposits won't be a problem, and landlord may be more willing to give you interesting offers. Poor people are at risk of not being able to pay the rent, and landlords have…

I mentioned higher up in the thread, but this is exactly why we need UBI. UBI gives the poor some leverage to avoid being exploited due to circumstance(s). Yes, we will get some inflation - but I don't see that as bad. A lot of the reason we have very low inflation right now is because the balance is skewed too far in favor of capital over labor (and that is due to being able to offshore - which should be penalized appropriately, imho).

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

#318

Post by baq » Sat, May 22, 2021, 7:09 PM UTC

gruez wrote: post #314

baq wrote: post #306

Earlier quoted context omitted.

You call it 'excusing'.

That seems like the right characterization to me? Definition from wiktionary: >3. (transitive) To provide an excuse for; to explain, with the aim of alleviating guilt or negative judgement . Earlier in the thread there was definitely a tone of negative judgement. ie. "people show up all the time with a litany of complaints and a litany of awful, awful budget mistakes they have no interest in fixing"

Negative judgment is exactly what is off mark. Real humans make mistakes. No whys or buts or excepts. They just do and they shouldn't be blamed for what is essentially being human. IOW people can't be reasonably expected to make rational, self-interested choices.

(It's actually amazing this is almost a Nobel-prize worthy observation in economics. This is psychology 101.)

If you ask why or what kinds of mistakes they make, now that is where the books go deep. Suffice to say those mistakes are not unpredictable and people can be nudged to make a better (dare I say correct) choice.

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

#319

Post by portemonnaie » Sat, May 22, 2021, 7:17 PM UTC

Miner49er wrote: post #207

portemonnaie wrote: post #114

I miss the part where they show that the rich people's "choice mindset" is wrong? Are we just going to accept at face value that poor people have no choices whatsoever and are simply victims of society (and of course capitalism, I guess)? To me, that sounds a lot like religion. Of course you can not assume that everybody could be equally rich, and only their choices are to blame if they are not. But the other extreme…

The article doesn't say they have no choices it says they have less/limited choices. And this is simply a common sense fact. The more resources/power you have the more options you have. I can buy so many more things and combinations of things with $100 vs $1, for example.

Sure, but I don't think most rich people think poor people have just the same choices. That's not implied when they think choices make people poor.

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

#320

Post by imtringued » Sat, May 22, 2021, 7:31 PM UTC

mechagodzilla wrote: post #155

e40 wrote: post #112

Earlier quoted context omitted.

What are you talking about?

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…

> which usually has a subtext of [by keeping poor people out of our town]

It took me a long time to grasp this because I simply refused to believe that people think this way. Just think about what "character of the neighborhood" really means.

It may sound like it is about architecture and preserving history but the character of a neighborhood isn't made up by that alone, the biggest factor in the character of the neighborhood are the people living in it and therefore preserving it requires keeping certain people out. It really is a code word for classism.