I haven't yet made any effort to read critically into this. Wanted the thoughts of the various smart people here.
Posts: 4136 | Registered: Aug 2008
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posted
I just skimmed it, but my initial thought is that they are incorrectly weighing healthcare costs. They mention that healthcare costs about $12,000 a year for a family making $60,000 but everyone I know that makes over $60,000 has employer-provided healthcare. The employee portion of the premiums add up to a few thousand a year at most. I know that's not universal, but it's common enough that it seems misleading to just claim that it costs $12,000.
Posts: 3275 | Registered: May 2007
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posted
Since they're counting Medicaid as adding to the poor family's "income," the advantage is only there if the $60K job carries no health benefits.
My verdict would be that there should be more of a safety net for "lower-middle-class," aka upper-poor, families. $60K these days is not a living wage for a family of four.
Posts: 4600 | Registered: Mar 2000
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posted
Raymond, if his point was that people can and do scam the system -- he is sadly correct. If he was trying to come up with some fictitious family who (among other things) somehow get SSI for three family members with no medical proof, then you'll have to excuse me while I roll my eyes for a while.
Posts: 32919 | Registered: Mar 2003
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posted
Sure, there are people who scam the system. I've known several, and it's sick. However, there are several things wrong with the article.
For one, who has a job that says only come in one week a month??? You might have a part time job that lets you work, say, 10 hours a week all month, but rarely one that will let you really work only 1 day a month.
Two - SSI generally counts as income when applying for services (as does child support, among other things). Whatever you get in SSI will lower your food stamp or TANF amounts. (Though, in most cases, getting SSI automatically qualifies you for medicaid).
Three - as others have mentioned, $12,000 is alot for a family of 3(or 4 - the article uses different numbers in different places) for medical premiums actually paid out of wages. My company doesn't supplement any of my "dependent" health care costs, and I only pay about $3600 a year in premiums. I have the high deductible plan, but even if you add our total deductible on top of that, it's only $7200. I've had a pretty sick kid in the past, but we've still never come close to $16,000 out of pocket.
Then you also have to consider some "quality" aspects. Section 8 housing is often not very nice. Sure there are some good neighborhoods and some people can get vouchers for better places, but in general, it's not that great. The same thing can go for medicaid. I actually had to use medicaid for my son for about 6 months when he was a baby because I wasn't able to get a job with health benefits. The "no copay" thing was nice, but finding doctors for him was a real pain. Few of the doctors I liked (and no pediatric dentists) would accept his medicaid. It also meant that we ended up on the ER every other week because we had "managed medicaid" that basically meant we had to see one particular doctor (who was always over booked) or the ER, no other options. This article seemed to think that welfare benefits were exactly the same as what can be privately purchased, and that's just not so.
Posts: 1321 | Registered: Jun 2006
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quote:Originally posted by scholarette: When I was a grad student and on medicaid, it would have cost us $12k through my college.
But grad students rarely make $60k/year...
That's strange though. When I was a grad student at Texas Tech, my HMO was totally free! I thought that was probably the biggest perk since our paychecks were tiny, and we still had to pay tuition! I also didn't have a family though, so maybe the dependent coverage wasn't as good a deal.
Posts: 1321 | Registered: Jun 2006
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posted
If being poor is so great, why aren't more people rushing to the poor house?
Well, maybe some are, but not on purpose.
This is the standard reactionary article that some of those who have money like to read because it allows them to excuse their excesses by saying, "See--the poor like being poor. Why should I try to help them."
Actually it goes further. It says, "See, the poor are all scrounging, lazy, vampires. They choose to be happily relaxingly poor and feed off the system. I'll show them. I'll cut off their food so they have to work."
Its a shame there is no work for them to do.
Posts: 1941 | Registered: Feb 2003
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quote:Originally posted by Darth_Mauve: ... Its a shame there is no work for them to do.
Unless they're willing to work as cheaply as illegal immigrants, probably bypassing some laws in the process.
I do sometimes wonder if Arizona got its way and truly built a foolproof way of keeping illegal immigrants out whether the result would be: a) Major deployment of robots ala Japan to pick up the slack b) Reduction in social programs to force the poor/lower-middle-class to do the jobs that Americans currently don't want to do c) Something totally different
Posts: 7593 | Registered: Sep 2006
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posted
Probably just paying more for alot of services, like sewers. Americans WILL do the jobs if you pay enough for it. Maybe we really ought to be paying more for them already...
Posts: 1321 | Registered: Jun 2006
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In the 1960's they said, "America is the world's greatest manufacturer. Nothing can steal our jobs because we have the best labor market in the world."
In the 1980's they said, "Don't worry about those manufacturing jobs going to cheap labor over seas. Sure the sweatshops and pollution mills make things cheaper. We still have our tech jobs, the white collar jobs of the future. We have the best hi-tech labor market int eh world. Nothing can steal our jobs."
By the year 2000 they said, "Don't worry about all those tech jobs going to India and China, or about these new Tech experts we are importing. Sure they make 1/4 the salary of an overpriced computer programmer in the US. This is now a Service Economy. No one can outsource service jobs."
By 2020 they will say, "Um, so we imported some cheap labor for those minimum wage or less service jobs. Hey, illegal immigrants are only doing the jobs you won't for the pennies we want to pay them."
Posts: 1941 | Registered: Feb 2003
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posted
One thing that they don't point out, most of the "money" is restricted. For example, the free school lunch program they list, that is not actual money. That is a free hot meal. If you want say clothing, that gets you no where. Food stamps are also pretty much just food (though that is a bit easier to cheat and get cash for). What this really says is that 60k for a family of 4 is jut enough for a family to eat and pay rent and health care- not much left for extras.
Posts: 2223 | Registered: Mar 2008
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quote:Originally posted by scholarette: One thing that they don't point out, most of the "money" is restricted ... What this really says is that 60k for a family of 4 is jut enough for a family to eat and pay rent and health care- not much left for extras.
Indeed. The chart really does not calculate the various disposable incomes as the title of the article suggests.
Even if you assume that the amount of the benefits for the lower income columns are fixed costs for a typical family, subtracting the benefits from the $60,000 family still leaves more disposable income than the $3,625 family, and that's including the seemingly inflated $16,500 medical care costs.
Posts: 161 | Registered: Aug 2010
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Even in Quebec (hence the French) when you consider the "all-in" effective marginal tax rate only really makes it profitable to not work at around $15,000 or so. I think $60,000 is pretty unrealistic.
Posts: 7593 | Registered: Sep 2006
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posted
I noticed they counted $1800 dollar value of free school lunches. Given 180 school days a year, that's $10/day for school lunch. The average cost of school lunch for paying participants is $1.90/day. Even if we bump that up to $2.50/day that presumes that all four family members are attending public schools.
How many families of four are there where all 4 are between the ages of 5 and 18. I suppose if the mother had triplets when she was twelve, it's possible.
Posts: 12591 | Registered: Jan 2000
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posted
Correct, Rabbit, even if you add in breakfast that doesn't work. They may have been considering two students, breakfast and lunch and assuming $2.50 per student per meal - that would equal $10.00 a day. But, as you point out, it is not that high and breakfast is even cheaper. I think our school lunches are $1.75 and breakfast is $1.00 for students.
Posts: 14428 | Registered: Aug 2001
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posted
I tried to find the original article by Wyatt Emmerich at the cleveland current. It doesn't exist.
Posts: 12591 | Registered: Jan 2000
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posted
That's funny Rabbit. I'm not too surprised though, this kind of stuff floats around.
The numbers ARE somewhat interesting though. I don't believe the $60k per year compared to welfare, but when you look at working full time at minimum compared to working only part time at minimum, the numbers do work out a little more "accurately". I think it really does highlight the flaw in our system about how difficult it can be for people to work themselves off public assistance. As soon as you start getting close to support yourself, the benefits tend to drop dramatically, so that someone may actually be better off working, say 32 hours a week at $8.50/hr than if they took a job working 40 hours a week at $9/hr.
Posts: 1321 | Registered: Jun 2006
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posted
ABC (I think) did an article about 6-7 years ago about living on one wage, and why most couples COULD do it, but don't.
Back in the day, most families that lived on one income had one car, one insurance payment for that car. No one had cable at $100+ a month, or cell phones for $55-120 a month. No one had/payed for internet. The average family home had 2-3 bedrooms, 1 bathroom, and was between 860-950 sq ft....where now the average home is 1400 sq ft, and most have 2 bedrooms. All of which also costs more to heat and cool....
Most couples only profit about $1500-2500 by having a second income once child care, car payments and insurance payments are taken out, on average.
You CAN live on one income, at about the standard of living your parents did, but most modern couples don't want their parents standard of living....at least not the standard of living their parents had when starting out. They want 2 cars, cell phones, internet, multiple computers, game systems....a 1600 sq foot house.
posted
The flip side of the profitability of being poor is how enormously expensive it is to be poor. Everything is more expensive - you have to pay your car insurance in installments, so it costs more. Loans cost much more, and that's the legit ones. If yous pend all your paycheck, you are likely paying a lot in bank fees for when you overdraft just a little bit (that's gottten better, thanks to the law, but it's still a cost). If you do have savings, you get a lower interest rate. You can't buy the high quality clothing, so you go through more cheap clothes and shoes. It feels cheaper because you pay less each time, but you have to buy more often. If you're a single buyer, your health insurance is more expensive than through a group employer plan. Thanks to the regressive payroll taxes, a greater portion of your tiny income goes to the government to be tossed into the communal pot. You can't afford a financial adviser or a tax consultant, and often end up leaving money on the table at tax time. If you have an emergency, you end paying loan shark interest rates at those paycheck loan places. If you rent to own furniture, which is cheaper per month than buying it flat out, you end up paying an enormous interest rate on it. If you get a ticket, you can't afford to skip work to fight it and end up paying it. You can't travel as far to shop when you don't have a car, so you are stuck with the prices at the closest grocery store. If that store is in the inner city, then the same food is twice as expensive as in the suburbs.
In a lot of ways, it is very, very expensive to be poor.
Actually poor. Not lower middle class with one car and no cable.
Posts: 26077 | Registered: Mar 2000
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posted
Yeah, I was making a point about peoples perceptions of wealth and status, not trying to compare lower middle class to poor.
You made some really good points about the hidden costs of being poor. That didn't even include living in areas that are much higher in crime rates, about never owning a home or developing equity in one, or about the educations challenges faced by very poor school districts.
I think that anyone who thinks being poor is a smart financial decision has never been poor himself, and has no clue what is is actually like.
Posts: 15082 | Registered: Jul 2001
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quote:I think that anyone who thinks being poor is a smart financial decision has never been poor himself, and has no clue what is is actually like.
Agreed.
There is also an enormous difference between being poor with few prospects and being temporarily poor. I've had very little access to money at several points in my life and I've even been on the starvation diet a few times because I couldn't afford to eat more than twice a day, but it's never a terminal condition.
Graduate students who live off of welfare when there are two B.A.s in the house are not at all in the same situation as a single parent with little educaton from a culture of poverty. There is a different feel to it entirely. Education really is the difference, and not just a course in the history of science kind of education. How to live in poverty and How to live in the middle class are entirely different skill sets, and moving from one to the other involves more than a change of income.
I've lived on a weensy budget before and was getting no help at all from family, but I always knew that if I got sick, if I got hurt, or if there was a real financial emergency that left me unable to pay my rent, I wouldn't be on the street. I'd be micromanaged and there would be a plan to get me independent again and my stepmother would gossip nastily about me, but I wouldn't be sleeping under an overpass. There is a different feel to it.
One of the biggest problems with the article is the underlying assumption that someone making 15,000 a year would be aware of and savvy enough to take advantage of the programs available to them. The real challenge facing attempts to help those in poverty is NOT fraud - it's making people even aware in the first place of resources that could be available to them.
Anyone able to research and successfully negotiate all the bureaucracy has most likely been middle class before and could be again. They aren't the true poor.
Posts: 26077 | Registered: Mar 2000
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posted
Fool heartedly, I keep trying to figure out where the numbers came from in that table. Everything I've checked so far is horribly wrong.
Look at the medicaid/Chip number which is in fact the value that dominates the whole thing.
The average per person cost for medicaid is $6120/year. But that's misleading because most of that expense comes from nursing home costs for the elderly, not costs for poor families. The average cost of a non elderly adult on medicaid $3585/year and the average cost for a child on medicaid is $2345/year which is the same as the average cost of a child on CHIP. If you assume a poor family with 2 adults on medicaid and 2 children on CHIP, you get something close to the value on the table. If you use the average cost for adults (non-elderly), you get a number just under $12000/year. Even that value is likely inflated if we are talking about healthy adults since medicaid covers disabled adults, whose medical costs are many times the average.
But here is the real problem, a family earning $60,000 year qualifies for CHIP for a cost of $600 a year for each child. The bottom line on Medicaid/CHIP, you need to subtract $4600/year from the first two columns and add $3500/year to the last column.
Posts: 12591 | Registered: Jan 2000
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posted
One more "oversight" in the table. A family of 4 earning $30,000/year would qualify for ~$250/month in food stamps and free or reduced school lunch (depending on the local Poverty level).
Posts: 12591 | Registered: Jan 2000
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posted
It really is an appallingly poorly written and researched article. And that's assuming it isn't deliberately dishonest, which I actually suspect it is. A lot of the outrage comes from "If they are dishonest, then they have more money." But the person earning $60,000 has just as many opportunities to be dishonest, and would have more resources to deal with the consequences if he or she got caught.
Also, this line, which has been quoted and quoted all over the web:
quote:The welfare system in communist China is far stringier.
.
Stringier? Like melted mozzarella cheese? Or was he trying to combine "more stringent" with "stingier" and came up with "stringier", which, while a word, does not mean what he thinks it means.
posted
I know i'm behind, but I did want to comment on this:
quote:Originally posted by Kwea: The average family home had 2-3 bedrooms, 1 bathroom, and was between 860-950 sq ft....where now the average home is 1400 sq ft, and most have 2 bedrooms. All of which also costs more to heat and cool....
I absolutely agree with you on the rest of the list. I could take or leave my cell phone, but don't touch my cable, two computers, and internet.
But the house is different. I rent a 950 sq ft apartment, and it's perfect for the two of us. I wouldn't mind owning a house this size. Except then I'd either have to buy out in the boonies and drive farther for everything as well as the opportunity cost of more time on the road, or I'd have to buy out in south side somewhere which is the neglected part of town and, again, I'd be driving for everything.
No one makes 950 sq ft starter homes anymore. Not in Tallahassee, anyway. I could get a townhouse for that, but how would that be an improvement? Still no yard for the dog and I do my own maintenance in exchange for equity that doesn't do me any good until I sell the house? I don't see the point, myself.
Posts: 2283 | Registered: Dec 2003
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posted
I wouldn't say equity ONLY does you good if you want to sell it. Part of the point of equity is that eventually you build up enough equity that you actually own the house - so no more mortgage payment. You still have taxes and insurance, but those are usually considerably less than you'd be paying in rent otherwise.
I don't know the square footage of my home, but it's probably pretty small. I have two bedrooms, a bathroom, a kitchen, a living room, a laundry room, and an "extra room" that was a one car garage once upon a time, several owners ago. I doubt it's much more than 950 square feet though, since it was built before either of my parents were born. I rent it though, thought about buying it last year during all the great tax credits, but I really don't have enough in savings yet. If I don't manage to move, I probably will buy it once I do.
It doesn't really cost any less to heat or cool than most homes though, because it is very poorly insulated. I think that's likely the case with many homes that small, since most of them are older. I suppose some of them could be retrofitted, but that's easier said than done. So, in theory, I could probably have a somewhat larger space for about the same amount of money, once utilities are factored in.
quote:Originally posted by AvidReader: I know i'm behind, but I did want to comment on this:
quote:Originally posted by Kwea: The average family home had 2-3 bedrooms, 1 bathroom, and was between 860-950 sq ft....where now the average home is 1400 sq ft, and most have 2 bedrooms. All of which also costs more to heat and cool....
I absolutely agree with you on the rest of the list. I could take or leave my cell phone, but don't touch my cable, two computers, and internet.
But the house is different. I rent a 950 sq ft apartment, and it's perfect for the two of us. I wouldn't mind owning a house this size. Except then I'd either have to buy out in the boonies and drive farther for everything as well as the opportunity cost of more time on the road, or I'd have to buy out in south side somewhere which is the neglected part of town and, again, I'd be driving for everything.
No one makes 950 sq ft starter homes anymore. Not in Tallahassee, anyway. I could get a townhouse for that, but how would that be an improvement? Still no yard for the dog and I do my own maintenance in exchange for equity that doesn't do me any good until I sell the house? I don't see the point, myself.
posted
Where I live, 1300 is a starter home. Not much smaller around. The extravagant couples are the ones who starting out got 2000 sq. ft. and higher. Everyone I have talked to says 1300 is just oh so tiny and how can we live in such a small space. My single mother in law has like 1800. But my mortgage is lower than my rent for a 1 bedroom apt so it really was the most responsible thing. We do have 2 cars, but with urban sprawl, for us to get rid of a car, I would end up driving about 4-5 hours a day and use $100 a month more in fuel.
Posts: 2223 | Registered: Mar 2008
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posted
Our first house was 925 square feet. When we had kids, we picked up a 1200 square foot place. And it's pretty close to perfect, although I'd like to finish the basement so I have a better gaming area/den.
Posts: 37449 | Registered: May 1999
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posted
You are still at the place I knew you, right, Tom? (prairie garden, jungle gym, veggie garden way out back) I loved that place.
Posts: 831 | Registered: Jul 2005
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posted
I just want to pop back in and thank everyone for the various information/analysis. My knee-jerk reaction was that the article was a load of bunk, but I don't want to rely on my knee jerk reactions to things.
Posts: 4136 | Registered: Aug 2008
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