# How do people end up so poor? **URL:** \ **Category:** Great Debates\ **Created:** [September 15, 2011, 3:44pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398 "2011-09-15T15:44:17Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [September 16, 2011, 1:23am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/61 "2011-09-16T01:23:02Z")
> [@Incubus](#): > > Something that was written about in _Nickel and Dimed_ is that being poor is actually quite _expensive_ for what you get out of it. Poor people are less likely to have good credit, savings, access to an actual grocery store, etc. Paying for your own health insurance is more expensive than getting it through an employer. You’ll end up having to pay more interest, deposits, spend more time traveling if you can’t afford a car, etc. All these things really add up and really stifles social mobility for people. > > Being poor aint cheap! Tying into this is also Terry Pratchett’s Sam Vimes’ Theory of Boots: a poor man buys himself a set of cheap cardboard boots for 10 bucks. Three weeks later his feet are soggy, a year later the boots are in tatters. A rich man buys a pair of good leather boots for 150 - but they’ll last him all of his walking life. They’ll even get passed down to his son. Same thing with today’s poor - a clunker doesn’t work well, has shit mileage and costs a fortune in repairs to get it to run a painful thousand more miles before some other shit breaks. A shit microwave, or TV, or fridge will last what, 5 years ? 3 ? Or you can take out a loan for a good car, good appliances - or rent them. That’s pretty much self-lubing though, as you’ll end up paying many times as much in the end. The poor get fucked coming or going. If you haven’t got a starting capital, to invest with, to get you on your feet ? Good luck breaking even, let alone getting ahead. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [September 16, 2011, 10:54am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/62 "2011-09-16T10:54:01Z")
> [@Jas09](#): > > And you can do all of that on twelve dollars? Not twelve-thousand? I think most people figured out the typo 😛 Do you know how much a lower case “k” to go after $12 costs? Not in the budget this week, I needed the money for ramen noodles. ---
**Author:** ![Wendell\_Wagner](https://avatars.discourse-cdn.com/v4/letter/w/8491ac/32.png) [@Wendell\_Wagner](https://boards.straightdope.com/u/Wendell_Wagner)\ **Post date:** [September 16, 2011, 11:22am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/63 "2011-09-16T11:22:56Z")
Suppose that, magically, everybody born after some certain date was brilliant (say, above a 160 I.Q.). Say that, magically, they were all hard-working. Does this mean that they are all going to get great jobs? Well, no. The jobs that are there aren’t going to magically change to fit their intelligence and hard work. There would still be the same jobs that have to be done which don’t require a lot of talent and don’t pay well. The top jobs aren’t going to magically increase in number. There will just be more competition for them. Intelligence, other sorts of talent, and hard work may work for any individual person, but it doesn’t work for any entire society. The standard of living for everyone has slowly (very slowly) risen all over the world for many centuries, but that doesn’t mean that everyone suddenly becoming brilliant, talented, and hard-working would mean that the standard of living would immediately rise to vastly higher levels. Each person’s talent and hard work will contribute in some small way to an increased standard of living for everyone centuries ahead of now, but it won’t cause an immediate change in the level of society. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [September 16, 2011, 11:29am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/64 "2011-09-16T11:29:58Z")
> [@Icarus](#): > > I think you are severely discounting location. In much of the US that are non-urban/suburban the cost of living is much lower. So, the number of people living comfortably making \<$25,000 would have to include these folks. That’s an enormous pet peeve of mine, comparing dollar-for-dollar what should be put in terms of purchasing power. My flat cost less than 150K€, bought before the Spanish construction bubble burst. One the same size, age and distribution in Madrid would go for about 250K€ now (when prices are actually lower). Sure, other things cost the same in both places, but rental/mortgage is a big chunk of most people’s expenses - enough to make straight salary comparisons between the two locations wobbly. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [September 16, 2011, 11:43am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/65 "2011-09-16T11:43:25Z")
> [@Wesley\_Clark](#): > > I make a little under 25k a year. I have a bachelors degree that 5-10 years ago probably would’ve offered me chances to be making 40-60k a year a few years out of college. But once the recession hit a lot of full time jobs with benefits were eliminated and replaced by part time temp jobs (and that is for those of us who are lucky, many are unemployed), and that is what I am doing right now. I have looked around for other jobs but they are more of the same (part time temp jobs). My hourly wage isn’t bad, but due to being part time I am not making enough money to live with dignity and security. > > Some of it is my fault though. I could look harder for a better job than I do. But a lot is just the restructuring of the economy. The growth of service sector work, the death of good paying blue collar jobs, the fact that professional class jobs that used to offer job security and high wages (professor, lawyer, scientist, engineer, IT professional) have been replaced by contract jobs that offer lower wages and less security, competition from globalization, etc. > > I’m surprised it is only 25% who make less than 25k a year since median hourly wage in the US is $16.27/hr, which works out to roughly 33k a year. I’m guessing you meant household income, not personal. I got out of college into the recession of the late 80s and did just that. Back then it was $7-$9 an hour - when I worked. I was offered a few full time jobs by the people I was temping for - often with a smaller salary than I was making temping. I managed to pull pretty much full time hours, but it did take a while to pull myself out of the hole. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [September 16, 2011, 1:19pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/66 "2011-09-16T13:19:23Z")
> [@Wesley\_Clark](#): > > I’m surprised it is only 25% who make less than 25k a year since median hourly wage in the US is $16.27/hr, which works out to roughly 33k a year. I’m guessing you meant household income, not personal. I generally meant personal, although the people throwing around the numbers in the other thread that I was following weren’t specifying. I don’t like the rise of widespread professional contracting either; it’s become pretty prevalent in IT, where I work. The mentality is that they can hire a contractor to do something menial or relatively short-term, without the hassle of having to do all the human factors stuff like, oh, insurance, a decent desk, 401k, real management, etc… They can shove the contractors in the conference room, pay them $25/hr and tell them to STFU for their 90 days, then not renew the contract. I wasn’t saying that joining the military would be fun, risk-free or easy, but that for a young kid growing up in poverty, it’s an almost sure-fire way to have a job, get trained in something, and through the GI bill, have a path toward something beyond. To me, at least, it seems like a no-brainer when compared to the prospect of a life in poverty. Granted, the kid would have had to identify it at a relatively young age to keep decent enough grades to graduate from school, but that shouldn’t be a remarkable achievement in any event. ---
**Author:** ![Icarus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/icarus/32/72_2.png) [@Icarus](https://boards.straightdope.com/u/Icarus)\ **Post date:** [September 16, 2011, 5:15pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/67 "2011-09-16T17:15:36Z")
> [@bump](#): > > I wasn’t saying that joining the military would be fun, risk-free or easy, but that for a young kid growing up in poverty, it’s an almost sure-fire way to have a job, get trained in something, and through the GI bill, have a path toward something beyond. To me, at least, it seems like a no-brainer when compared to the prospect of a life in poverty. Granted, the kid would have had to identify it at a relatively young age to keep decent enough grades to graduate from school, but that shouldn’t be a remarkable achievement in any event. Yeah, and a lot of poor kids do just that, and it provides a step up for when they get out. However, again IMHO a big factor in the generational poor is role models. For someone who has no discernible successful role models, instead only has poor folk role models, the road out is frankly invisible. In my case, growing up I did not know of one person in my family or my parents friends who attended college. It just wasn’t a path anyone that I knew of had taken. Everyone was blue collar working class or farmers. So, it wasn’t a negative, per se, but it also wasn’t setting me out on a path to advancement. Consider the poor, whose role models are - shall we say - also not setting their kids out on a path to advancement… ---
**Author:** ![fumster](https://avatars.discourse-cdn.com/v4/letter/f/e9c0ed/32.png) [@fumster](https://boards.straightdope.com/u/fumster)\ **Post date:** [September 16, 2011, 11:01pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/68 "2011-09-16T23:01:19Z")
> [@Jas09](#): > > There has been some discussion recently about the “signaling” effect that a college degree has. In particular, **bump** , I’m not at all confident that your grandfather(?) who started as a teller with no college could ever become a VP today without getting a degree. It’s basically impossible. > > In my field there are almost no non-degreed employees, although in the older generation (some of whom are still around) there were plenty. I see that as well. The computer industry used to be full of college dropouts and people who got degrees in English. The supply of trained engineers was short and companies were willing to let people learn on the job. A few companies, like IBM, would only look at college grads but they were seen as stuffy. The last time I did recruiting the search was limited to a handful of top schools and people with Masters degrees in very specific majors. It seems as though jobs are more and more bifurcated. You either have a professional job that pays extremely well or you are making less than you need to buy a house and raise a family. ---
**Author:** ![Icarus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/icarus/32/72_2.png) [@Icarus](https://boards.straightdope.com/u/Icarus)\ **Post date:** [September 16, 2011, 11:09pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/69 "2011-09-16T23:09:06Z")
> [@sh1bu1](#): > > I see that as well. The computer industry used to be full of college dropouts and people who got degrees in English. The supply of trained engineers was short and companies were willing to let people learn on the job. A few companies, like IBM, would only look at college grads but they were seen as stuffy. > > The last time I did recruiting the search was limited to a handful of top schools and people with Masters degrees in very specific majors. > > It seems as though jobs are more and more bifurcated. You either have a professional job that pays extremely well or you are making less than you need to buy a house and raise a family. A similar bifurcation has been talked about regarding our current unemployment condition. People who have jobs are essentially still doing fine, but anyone without a job has almost zero chance of getting back to where they were. It’s as if we’ve reached a new stabilization point. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [September 16, 2011, 11:18pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/70 "2011-09-16T23:18:34Z")
There are some very simple answers to this question, in no particular order: Kids Alcohol Tobacco Drugs Lottery/gambling Lack of (as well as too much) insurance I just watched a very strange movie call _Forks Over Knives_ and in it someone talking about the poor and nutrition said, “The poor are poor in every aspect of life.” They have poor education, poor information, make poor decisions. [Predominantly African American or Latino, low-income Chicago communities have generated the highest lottery sales in the state…](http://www.chicagoreporter.com/news/2007/09/illinois-lottery-poor-play-more) [Poor people spend 9% of income on lottery tickets](http://www.dailyfinance.com/2010/05/31/poor-people-spend-9-of-income-on-lottery-tickets-heres-why/) So we can bitch about luck, or education, or a system that keeps people down. Or we could look at the amount of money people making under $35k will waste on a daily basis. ---
**Author:** ![obbn](https://avatars.discourse-cdn.com/v4/letter/o/d6d6ee/32.png) [@obbn](https://boards.straightdope.com/u/obbn)\ **Post date:** [September 16, 2011, 11:25pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/71 "2011-09-16T23:25:10Z")
I am late to the thread, but I will share my own experience. I was a tech at BellSouth. I made a base of 50k a year and with overtime it wasn’t unusual for me to pull in between 65k and 80k a year. However in 2003 I took a fall from a pole and broke my back. Unfortunately I can no longer work and have to rely on Social Security Disability. My benifit is a little over $19k per year. To sum up it is very easy to “end up poor” even though you did your best to do everything right. I worked my whole life and worked hard. A simple mishap and I am no longer seated firmly in the middle class, but am now considered close to poor. It sucks, but I for one didn’t choose to be here, I am here due to circumstances beyond my control. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [September 16, 2011, 11:37pm UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/72 "2011-09-16T23:37:18Z")
> [@obbn](#): > > I am late to the thread, but I will share my own experience. I was a tech at BellSouth. I made a base of 50k a year and with overtime it wasn’t unusual for me to pull in between 65k and 80k a year. However in 2003 I took a fall from a pole and broke my back. Unfortunately I can no longer work and have to rely on Social Security Disability. My benifit is a little over $19k per year. > > To sum up it is very easy to “end up poor” even though you did your best to do everything right. I worked my whole life and worked hard. A simple mishap and I am no longer seated firmly in the middle class, but am now considered close to poor. It sucks, but I for one didn’t choose to be here, I am here due to circumstances beyond my control. Two question: did you have disability insurance, and how much of your bonus were you saving each year? What you describe is the sort of scenario I’m terrified of, but it’s something few people consider. I remember reading a list of “how to avoid being poor” a few years ago, and the number one recommendation was simply, “don’t get sick.” ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [September 17, 2011, 12:12am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/73 "2011-09-17T00:12:20Z")
> [@emacknight](#): > > There are some very simple answers to this question, in no particular order: > … > Tobacco > … Holy crap, a short Google search turned up this: [Taxing the Poor](http://www.ncpa.org/pub/st300?pg=3) Almost 29 percent of adults with incomes of less than $15,000 are smokers; by contrast, only 17.2 percent of people with incomes higher than $50,000 smoke. [See Figure I-2.] Nearly 40 percent of people with only a GED [General Educational Development] certificate are smokers; just 11.7 percent of people with a college degree - and 8 percent of people with a graduate degree - are smokers. 7 People in the bottom 20 percent of income earners, as a group, spend 2.33 percent of their income on tobacco products, more than 10 times the percentage of income paid by the highest earners. In raw numbers, “High school dropouts who smoke spend an average of $1,301 on tobacco products each year; high school graduates who smoke spend $1,453.” ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [September 17, 2011, 12:19am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/74 "2011-09-17T00:19:14Z")
> [@emacknight](#): > > There are some very simple answers to this question, in no particular order: > … > Alcohol > … Also from [Taxing the Poor](http://www.ncpa.org/pub/st300?pg=4) "The bottom quintile of income earners spent 2.1 percent of income on alcohol products, on the average, twice the middle quintile and more than three times the highest earners. " - - Lower-income earners who actually purchase alcohol spent $1,158 per year. [See Table II-3.] - The highest-income earners who actually purchase alcohol spent $1,583 per year. - The lowest earners spent some 13 percent of total income on alcohol products, compared to 1.3 percent for the highest earners.\* Someone barely above the poverty level who smokes and drinks could easily spend 5-10% of his/her pre-tax income. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 17, 2011, 12:38am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/75 "2011-09-17T00:38:26Z")
> [@Bricker](#): > > Paul Allen was VP (and co-founder) of Microsoft. No college degree. You forgot to mention Gates, who doesn’t have a college degree either, since he dropped out of Harvard. However he did have a very well-to-do father and so had a nice safety net. > [@](#): > > Michael Dell, Dell Computers – no college degree. Who formed his company **in** college - and was making enough to not have to bother to graduate. You can include the NBA stars who got signed in college and so didn’t graduate also. But making a fortune being an NBA star is so unlikely that it is fair to call it basically impossible - I trust you wouldn’t advice kids to shoot baskets instead of doing homework, right? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 17, 2011, 12:44am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/76 "2011-09-17T00:44:10Z")
> [@L. G. Butts](#): > > I am sure that some of the jobs are gone to China and Mexico, but a much bigger problem is that a lot more are being done by robots. I am having a hard time find stats, but for vehicles the US still made 8 million passenger and commercial vehicles last year, down from 13 million in 1999. Looking at the data, it looks like a big part of that drop is due to the recession as we were holding steady at 11 million up until 2008. You can look at the statistics here ([OICA.net](http://oica.net/)). People have been worrying about automation for ages, and the usual response is that automation also creates jobs. Which it does, and you listed some. The problem is that the person on the bottom of his class at school could get a factory job paying good money pretty easily, while he can’t get a programming job. My mother was a bookkeeper. That job has been automated away also, but people who could do it are probably in good shape for this environment. Not so the factory guys. ---
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [September 17, 2011, 12:53am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/77 "2011-09-17T00:53:03Z")
> [@bump](#): > > I wasn’t saying that joining the military would be fun, risk-free or easy, but that for a young kid growing up in poverty, it’s an almost sure-fire way to have a job, get trained in something, and through the GI bill, have a path toward something beyond. And my point is: it’s not easy, it’s not pleasant, it’s not a sure shot getting in, and even if you _do_ get in, those years spent in the military might as well have been spent in prison for all the good they do to a body. Well, except in prison you don’t have to lift heavy things. Coming out of the military, barring specialty MOS (which you’re probably not going to get unless you’re enlisting out of higher education anyway) the only thing you’re gonna have learned is how to assault a building or clear a trench, which have surprisingly few applications in civilian life. OK, if you’re in a supply company or in the tanks, you might get a driving license out of it, admittedly. Whooptidoo. > [@](#): > > To me, at least, it seems like a no-brainer when compared to the prospect of a life in poverty. Except of course it’s not an alternative to a life in poverty. It _is_ a life in poverty. With the benefit of getting shot at and scarfing MREs. I reiterate: joining the military as anything else than an officer out of West Point is a retarded, retarded idea. It really is. Ask any enlisted man on any forum. ---
**Author:** ![Indygrrl](https://avatars.discourse-cdn.com/v4/letter/i/58f4c7/32.png) [@Indygrrl](https://boards.straightdope.com/u/Indygrrl)\ **Post date:** [September 17, 2011, 2:52am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/78 "2011-09-17T02:52:03Z")
You might find this old column interesting, the comments are good too…[Being Poor | Whatever](http://whatever.scalzi.com/2005/09/03/being-poor/) ---
**Author:** ![Zoe](https://avatars.discourse-cdn.com/v4/letter/z/a4c791/32.png) [@Zoe](https://boards.straightdope.com/u/Zoe)\ **Post date:** [September 17, 2011, 5:21am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/79 "2011-09-17T05:21:44Z")
The poverty rate since the census has gone up. Just recently I learned that 15% of the population is living below the poverty level which is set at maybe a little more than $11,000 for an individual. Can you imagine trying to live on less than a thousand dollars a month? How do you budget for that? > [@](#): > > **Huerta88** : Many “rich” people (call it top 5% of income earners) in 1971 lived without air conditioning, color television, restaurant meals, certainly cell phones. Every nominally poor person I see has all these things. Doesn’t mean their lives are perfect or that some needs aren’t going unmet, but it’s clear that the attainments of the producer class have beneficial spillover to the lower classes. Every generation has its own luxuries. I don’t recall many wealthy folks leaving off restaurant meals in 1971. And many wealthy people and poor people _still_ don’t have air conditioning. And I wouldn’t think that many people who have incomes below a thousand dollars a month have cell phones, televisions, or air conditioners because too many of them don’t have homes. The shame is that businesses _are_ doing well. But the Average American isn’t benefitting from it. We give corporations tax breaks with the idea that they will hire people and they don’t. That is not working. Either we should make it contingent or do away with the tax breaks. How do you know whether the people you see are rich or poor? Whether they have color TVs and air-conditioners or not? ---
**Author:** ![RandMcnally](https://avatars.discourse-cdn.com/v4/letter/r/b782af/32.png) [@RandMcnally](https://boards.straightdope.com/u/RandMcnally)\ **Post date:** [September 17, 2011, 6:15am UTC](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398/80 "2011-09-17T06:15:03Z")
> [@Kobal2](#): > > I reiterate: joining the military as anything else than an officer out of West Point is a retarded, retarded idea. It really is. Ask any enlisted man on any forum. I disagree with that. The military isn’t for everyone, and there’s a lot of plenty good reasons for someone not to join…but it is the reason I’ll be able to get my way into the lower-middle class. I grew up poor but I’m able to use the GI Bill to go to college, without which I’d either still be in the military or working some job in the fields. [Previous page](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398.md?page=3) [Next page](https://boards.straightdope.com/t/how-do-people-end-up-so-poor/596398.md?page=5)