Yes, I think you’re right and I was wrong about that.
Also, the number of study participants was apparently 405. I don’t know why the study you originally cited represented it as “more than 1500”.
Given that only around half of all new business start-ups survive for five years, (similar numbers broken down by industry), it appears that the data was cherry-picked to review only successful start-ups. From that perspective, the numbers indicate that even among the small number of successful start-ups, barely half actually provide the means to escape poverty.
Again, more power to them and I do not want to see anything done to interfere with such entrepreneurs, but the notion that being an entrepreneur is a ticket out of poverty needs to be accompanied by a number of caveats.
REPORT that I cited 
Yeah, I didn’t see the difference in that number either. I don’t know enough about statistics to tell if that makes a great difference or not.
This doesn’t seem to be the case
Are those caveats along the lines of “It’s not easy” and “It takes a lot of work”? Seems like you can use those caveats for almost any venture that lets someone get ahead.
Anyway, I’m not staking my life on this study. It’s something I found after 5 minutes of searching. It indicates there are numbers out there, and that it’s POSSIBLE for SOME poor people to use entrepreneurship to elevate themselves out of poverty.
However, there’s something weird about the combination of the study data, as follows:
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If 49% of the microbusinesses went under in the five-year period, but 72% of the microbusiness owners experienced gains in household income over that five years, then for about one-third of those who experienced gains, the gain was not due to the success of the microbusiness.
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In fact, another bullet point says that microbusiness income accounted “for 37% of the increase in household income for those whose businesses stayed open”.
A few other salient points:
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“The average change in household income was $8,484 — rising from $13,889 to $22,374 over five years.”
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“Average household assets of the poor grew by $15,909 over five years. The primary source of growth in the value of assets was in the category of housing assets.” [Remember, this was during the relative boom period 1991–1997].
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“Poor microentrepreneurs reduced their reliance on government assistance by 61% on average, with the greatest reduction in the amount of Aid to Families with Dependent Children and cash benefits received. Average benefits declined by $1,679 a year.”
I think they might if they have no idea how much these jobs can actually pay. I know it came as quite a surprise to me when I found out years ago how much money lawn guys make. Or curb painters. I related in the thread that sparked the OP how a guy hit up my neighbor to paint his address on the sides of his drive, including the logo of his favorite sports team, and for this he got paid a quick $20. I don’t know how many takers he gets out of the number he offers his service to, but even if he only gets one taker from every two hours spent offering his service he still makes almost $10 an hour. Based on the number of curb signs he apparently painted in my friend’s neighborhood business was fairly brisk. I’d guess he probably paints at least two an hour on a good day.
Of course I have no data to prove my apparent contention that curb painting is the solution to eliminating the country’s poverty level, or that every poor person, crippled, diseased or burdened with 8 children all under school age will be able to do it, but still…
The point is that there are a ton of ways people can earn very good money if they know about it and can do the work. With regard to these kinds of enterprise, I suppose I somehow had in the back of my feeble mind originally that people precluded from these kinds of work through infirmity, total pennilessness, ghetto life, etc., naturally would not be pursuing them. But for the 90% or so who are capable of minimum wage work but find themselves either out of a job or wanting to supplement an existing job, there are plenty of relatively simple ways to make a lot more money than they might think.
While there are definitely a ton of ways to make casual income, your claims of “earning very good money” at it are still not very convincing. Thanks to manson1972’s and my links, we actually found some data on self-employment success for poor people, and in general the results of even solid success appear fairly modest.
The five-year failure rate of low-income microbusinesses is apparently about 1 in 2, the chance of not managing to increase your income at all over a five-year period is a little greater than 1 in 4, and even among those who do increase their income, on average the increase is less than $10K annually.
That doesn’t mean that microentrepreneurship isn’t still a good thing (and of course, there hasn’t been anybody in this thread ever trying to deny that microentrepreneurship is a good thing). But a look at some actual data suggests that for most low-income people who start their own businesses, expecting to “earn very good money”, along the lines of your blithe projections of grossing $3600 to $4800 per month after a few months building up the business, is highly unrealistic.
Right! Sorry!
[QUOTE=Slash1972]
Yeah, I didn’t see the difference in that number either. I don’t know enough about statistics to tell if that makes a great difference or not.
[/QUOTE]
I doubt it, at least not to the actual stated results, because the summary of the actual Aspen study that I linked to used the same basic numbers (e.g., the 53% and 72% figures, etc.). I suspect that the author of the report just mis-copied the number of participants in the study.
Okay, Kimstu, a new day has dawned and having opened the thread anew, I believe I now see the reason for the disconnect between us and why you’ve been so insistent that I show percentage levels for the impact of these kinds of work on poverty as a whole.
The OP (Budget Player Cadet) titled the thread “Entrepreneurship as a way out of poverty” and then posted a comment I’d made in another thread to question whether the kinds of jobs I mentioned were as feasible as I claimed. Basically he thought I was full of it that anyone would pay $30 to have their lawns mowed because that’s what his dad [under]charged for landscaping work in a very “wealthy” neighborhood. In fact he was so skeptical that he phrased his response to $30 mows in an hour as “30 bucks an hour for mowing, edging, and weedeating? Yeah fucking right.”
Basically he wanted to know whether poor people could really make the kind of money I said they could in jobs like the ones I mentioned in the other thread and came here to find out if anybody knew it was true. Unfortunately he phrased the thread title in such a way that someone so inclined (I won’t mention any names) might read it as my having said these jobs would significantly reduce poverty.
This was not what I was trying to say and such an idea never occurred to me. My point was that someone presumably previously employed but out of work and claiming there were no jobs to be found could use one of these lines of work to create their own jobs, and very likely make more (or a lot more in the case of mowing) than they would were more traditional jobs available.
So you can blame either the OP for his phrasing or the conclusions you drew from it for the mixup, but at least I’m no longer confused about why you kept insisting on my answering a claim I never made.
(bolding mine)
I think there’s some disconnect here between the quote and the response.
These are much better rates of success than for standard businesses, which have a failure rate of 8 in 10. And then you have to ask what’s the reason for the failure. Is it a shortcoming in the work itself, or a shortcoming on the part of the person engaging in it? My bet is on the person engaging in it. Some people can find it very hard to actually get out and go to work when they’re self-employed. It’s easy to find other things to do when you don’t have a boss to answer to. And there are pressures from family and friends who need help of some kind or transportation, and since you don’t have to answer to anyone and won’t get in trouble for taking off work, they turn to you and that can turn into a big time suck. Other people have trouble budgeting when they’re bringing in cash every day. It becomes easy to spend what you made today because you can always make more tomorrow. Unfortunately this turns into spending all you made every day and when the end of the month rolls around you have no money for rent. Etc., etc. The fact is that if a micro business of the type we’ve been discussing pays off for a while there’s no good reason why it won’t continue to do so (people don’t suddenly stop needing their windows cleaned, their lawns mowed, their houses kept, etc.), save a problem of some sort on the part of the entrepreneur in question.
That income pertains only to lawn mowing, and it’s legit. If you still don’t believe that after I’ve not only explained how it works but provided details as to how you can check it yourself, then your disbelief is nothing but willful ignorance and loses whatever credibility it had to begin with.
Look, Starving Artist, nobody at the start of this thread particularly cared who had said what in a different thread. We were happily discussing the question of how viable micro-entrepreneurship would be as a large-scale solution to the problem of poverty in general.
Then you popped up in this thread and started spouting stuff like the following:
The thing is, SA, you’ve been talking out of both sides of your mouth throughout this thread. You keep on protesting that you’re not saying every poor person can do this work, you didn’t intend to imply it was a universal solution to poverty, etc. etc.—and then you bounce back with some blithely unrealistic assertion about how simple it is to make a high income this way and how small the likelihood of failure is as long as somebody really wants to work.
You can’t have it both ways. If all you’re trying to say is that most people can earn a little money and some people can earn a lot of money via self-employment, fine. Nobody disagrees with you about any of that.
But in that case, you need to stop periodically regurgitating all this factually unsupported guff about how “there isn’t much chance of failure” and “success is practically guaranteed” at earning “pretty damn good money” on the order of “$30 an hour”. None of that is anything close to realistic.
Of course you were discussing it happily, because the thread at the point consisted mostly of you and Voyager disparaging the concept of entrepreneurship by the poor, while simultaneous making negative comments that would be discouraging to anyone who might become interested in learning more about earning money in these “micro businesses” as you call them. You were also discussing questions about how useful these enterprises would be to the poor en masse and questioning in a disparaging way how much impact they’d have on poverty as a whole, which had nothing at all to do with the question posed by the OP or with any claim I’d made. Then you began insisting (and continued to do so over and over again) that I provide statistics showing the impact of these small businesses on the overall poverty level, which again had nothing to do with anything I’d said or that the OP was asking.
Then you tossed in this little tidbit: Like almost everything else recommended as a road to prosperity for the poor as a group, entrepreneurship has the power to be very successful for the most healthy, capable, motivated, intelligent minority of the group. But I’m very skeptical of claims that these are workable large-scale solutions for poor people in general, if only they would just apply a little gumption and start raking in the cash. [bolding yours]
There are two errors in that little bon mot which I think give away your true thinking on the issue. First is the declaration that only the “most healthy, capable, motivated, intelligent minority” can make it as entrepreneurs, which isn’t true at all, as all one really needs is sufficient health and intelligence to clean houses, wash windows, mow lawns, etc. And then you state that you’re skeptical of claims that these are workable large-scale solutions for poor people in general, when no such claims had been made by anyone, including myself. So who were you accusing of having made those claims that you were so skeptical of, if not me?
Ahem, the problem here is that one of these things is not like the other. My assertions as to the profitability of these types of work has absolutely nothing to do with whether every poor person can perform it or whether it’s a solution to poverty in the main. Further, my assertions have been anything but blithe and unrealistic, as the really high income work I highlighted was lawn mowing, and I’ve pointed out time and again how skeptics can determine the truth of what I said. All one has to do is a little research, which has ranged from asking people who pay to have their lawns mowed how much they pay and how long it takes, to browsing the many lawn care forums that exist online and reading what those guys say as they talk among themselves about what they charge, how they work, how they get business, and how long it typically takes to mow their lawns.
Actually what I’m saying is that anyone truly desiring work (and this assumes they have a place to live and a car to drive and are of sufficient health and intelligence to hold down minimum wage work of some sort) can begin making money on their own by providing either one of the services I’ve mentioned or any of a number of others which they may think of themselves, and that as a bonus they may very well find they’re not only making more than a minimum wage level income, but one that is considerably higher. The reason I say ‘anyone’ can do it is because demand outstrips supply due to the fact that so few people have the drive and confidence and will power to get out there and do it. Obviously, if every poor person had these qualities, then of course those who are alleging there isn’t enough work to go around would be right. But one of the things in life that makes it relatively easy to get ahead is that so few people are willing to exert themselves enough to make it happen. So those few who are willing to do so are the ones who reap the benefits, which in this case is capitalizing on the money to be made mowing lawns, power washing drives and houses, painting houses and/or interior rooms, operating a small advertising service by distributing flyers for businesses, cleaning houses, etc., etc., etc.
Wanna bet? (Fair warning: I happen to have considerable personal knowledge in this area as I once considered writing and publishing a guide on mowing for money and I researched the subject thoroughly, including talking to guys in the business and successfully working up a part-time operation of my own that topped out at 28 clients per week by the end of that summer. Some of my customers from that time want me back to this day. But I digress.) Anyway, I’ll bet you $10,000 I can prove conclusively, from real-life lawn guys and their customers, that they are routinely mowing lawns that take an hour or less to mow, edge, weedeat and blow clean, using basic residential walk behind mowers and supplemental equipment of a type that can be found at any Walmart, and that they’re being paid $30 or more per lawn. (I’ll even go a step further and demonstrate that most are weekly mowings and don’t require bagging.) If you’re so sure my claims are “nowhere close to realistic”, then you’ll be jumping on this bet like a duck on a June Bug. If not, then I’ll expect you to knock it off with your ignorant proclamations that I don’t know what I’m talking about.
So how far is the jump from this to “Anyone can do this, the reason it isn’t a widespread solution is because they’re lazy or stupid”? I guarantee for many on the right wing (including several on this forum), it’s not exactly a far hop. This is what really gets to me about this. Never mind that this cannot possibly work as a solution for poverty for more than a handful of people, never mind the diminishing returns, never mind the obscene amount of risk involved… those few people who pull it off are evidence that those who don’t try, or try and fail, are responsible for their own poverty.
Again, it’s the difference between “Anyone can do this” and “everyone can do this”. It may very well be a personal solution for poverty for some people. But we can’t therefore hold it against other people that they don’t go this route, or claim that it’s their fault that they’re still in poverty.
sigh So much wrong in such a short post.
I haven’t said any of those things, why are you asking me? I also never said any of this was a solution to poverty, that’s your construction. There are no diminishing returns. And the risk, particularly in jobs such as commercial window cleaning, house cleaning, house painting, flyer distribution, etc. is virtually nil. And the risk involved should someone decide to take on something like lawn mowing or power washing is hardly obscene (melodrama much?), especially if they’re smarter than you seem to think they are and can recognize it wouldn’t work if they’re penniless and don’t have transportation.
Having said that, these kinds of jobs do work for many more than a handful of people (and could work for a great many more), although as a percentage of the poor and/or unemployed overall the number is admittedly small. But then again I never said otherwise. You and Kimstu are the ones trying to hammer that particular square peg into the round hole of service work opportunity.
But I thank you for speaking up and confirming what many of us already know about PC culture and SJWs: the truth must be denied no matter what if it works against your goals. This is the real elephant in the room and it has been since the thread began. The primary aim behind all the attacks on the income opportunities I’ve talked about has been to try to thwart the idea the poor can make it on their own, even if the number is relatively small, because you think any success at all undercuts your message that the poor are helpless and need government to make things right.
It’s a constant implication hanging in the background, and I could’ve sworn I saw something along those lines back on page 2. For example:
“So what’s wrong with encouraging the relative few who want to work to achieve a better income to do so?”
Even if you don’t explicitly notice it, it’s a constant undercurrent to this discussion, and indeed the basis for discussions of this nature: the apparent idea that most of the poor are juts moochers with no interest in work or doing anything decently.
Then what did your post have to do with the topic at hand, which was, if I recall correctly, welfare? Here’s the post again, everyone can feel free to examine it in the context of the thread. If we’re talking about handouts and welfare, it’s at best a misstep to start talking about ways individuals can make their way out of poverty. Even if, being really generous here, 5-10% of the population can drag themselves out of poverty like this, what does that have to do with welfare and social insurance?
…Yeah, I’m not going to bother to explain why this is almost certainly really wrong. It’s been done quite often throughout the thread, and if you’re just going to assert with no evidence that a massive spike in entrepreneurship in menial labor jobs isn’t going to lead to the price of such jobs dropping somewhat, then I see no reason to reiterate them.
We’re talking about the working poor here. Often, these are people who have neither money nor time to spare. They are just barely scraping by, to the point where any substantial loss is a huge disaster for them.
This is entirely projection on your part. Me, Kimtsu, and essentially everyone else who has told you that you’re wrong throughout this thread has been saying the same damn thing: “Individuals can use entrepreneurship as a way to drag themselves out of poverty, but it’s risky and doesn’t work for everyone.”
Get better reading glasses.
Why does everyone who takes undergrad econ think they are Milton Freeman?
Except that it might also cause a massive drain on the economy. I’m not sure why basic income is considered a superior solution to targeted welfare programs that give money to the people who need it most.
In all fairness, the flip side of the discussion is that the poor are hopelessly trapped being poor, completely helpless and therefore absolved of any responsibility for taking action on their own behalf. As this is the internet, I’m sure that any nuanced position somewhere between the two extreme views is completely out of the question.
Yes, entrepreneurship is a way out of poverty. But being an entrepreneur is not for everyone. And lets face it. A lot of poor people are poor because they don’t have the drive, talent or creativity to be successful businesspeople. However, some do and for them, entrepreneurship should be encouraged and supported.
I tend to favor free markets, but honestly, a lot of conservatives sound like insensitive jerks. Because, as you said, there is ultimately an undercurrent of entitlement. That they, through their own conservative hard work and personal effort rightly deserve their high standing in society and poor people, by their inability to “compete” in free and open markets must deserve to be poor.
I fear it is you who do not.
And so what? Is that supposed to be a point? Either the person spends the time sitting on their duff bemoaning their fate (been there, done that) or spends the time trying to better their lot (been there, done that too). Guess which option has a better chance of working? Guess which option has the better chance of working the second (or third…) time? Sure the business may fail - or (as in my case) not even get off the ground - but you meet people, you make contacts, you learn things, and use that for the next try.
I see a lot of objections in this thread, and it is the objectors - those who look for reasons why it won’t work - who fail, while those who spot and seize the opportunity are the ones who have a chance of success.
Yes, sometimes there are no jobs and no opportunities (BTDT too) and that’s when we need to help those in need.
Regards,
Shodan
It depends on how you define success.
Assuming that you are reasonably diligent, the chances of making more than you make on welfare, etc. are reasonably high. The cahnces that you end up making more money than someone who invests a million dollars into a mcdonalds franchise is pretty low.
It really depends on what they end up doing. Obviously they can’t all go around mowing lawns. You can drive cabs, you can be a street vendor, you can clean homes, you can make and deliver prepackaged meals.
If I was poor I would sell and deliver smoked barbecue. It takes a long time and some effort but the cost of production is cheap and can be done in your back yard. You can get turn ribs ~2/pound plus ~/ pound of rub, glaze, sauce, etc and turn that into $10/pound after 5 or 6 hours of tending a low burning fire. Similar margins with brisket and chicken. Deliver with home made sides and I am pretty sure I can get more orders than I can handle. Its relatively easy to do but its takes so much time that anyone with a reasonably busy schedule just can’t do it as often as they like. The start-up cost of a smoking and barbecue are really low if you dig your own pit rather than buy a weber.
Find a need, fill a need.
A lot of it is negativism and defeatism. You can ALWAYS come up with reasons not to do something but if you are so poor that you are on welfare, the cost benefit is really in your favor.