I’d like to add in, less costly when a bad event occurs as well. A wealthy person can afford to make a poor decision or so and survive to have another swing at bat. A poorer person cannot. There is a threshold effect. Fall below it and it is hard to get back up.
The medical world has an understandable analogy: fitness and strength. Get ill and bedridden with good fitness and muscle mass beforehand and you lose mass and fitness but you can still get up and start exercising after. You recover. Have poor fitness snd little muscle mass you don’t recover.
I should add that the theory really depends on the item in question. In particular, in the context of big-ticket items, it doesn’t generally apply to cars. Certainly not when a brand-new car loses at least 10% of its value the minute you drive it out of the dealership, whereas a well-maintained older vehicle can have a service life of decades.
I’ve bought new cars in my foolish spendthrifty youth but I don’t do it any more. The only reasons that organizations that provide company vehicles insist on them being new are (a) image, and (b) the cost of being out of service – not the maintenance cost per se, but the overall cost and aggravation of having a car that’s not operable. If you work the numbers, a used car as a stand-in for a cheap boot is always a better deal (unless you get stuck with a lemon).
ETA: As I mentioned somewhere before, I have a fairly comprehensive study done on the total lifetime cost of ownership on keeping versus replacing cars. Admittedly, it was done by a business self-interested in car repairs, but I found the evidence convincing and consistent with my experience.
Yes, that used to be the case - but what about a place like Texas which essentially criminalizes a woman seeking an out-of-state abortion? The point is, “not procreating until financially stable” is not an entirely voluntary situation.
But, of course, women have throughout history been faulted for getting pregnant at times deemed inconvenient.
So… is the average person deemed to be male, and thus avoiding the major costs of avoiding inopportune pregnancy, or is that even taken into consideration in your model?
In other words - they’re human beings just like the middle-class and wealthy folks. The main difference being a lack of money. Which is more or less the definition of “poor”.
These are valid points.
Possibly due to greater government support.
For one thing, “cost of medical care” is largely a non-issue in most parts of the industrialized world outside of the US. Which makes a HUGE difference in regards to emergencies, savings (or lack thereof), and unexpected costs. Many countries have greater mass transit/public transit systems that make owning a vehicle much less of a necessity. The mere fact more people walk from home to bus or train stop makes a significant impact on health due to that exercise.
We’re talking about poor people. No matter how frugal you are, you can’t get a surplus greater than your income. Plus, of course, even the median income isn’t anywhere close to that. It’s less than $40,000 per year, in the US.
Yeah, you can’t use an average in a country rife with income inequality.
I can’t take that as a given. Pretty much everything I know about social science and behavioral psychology indicates that people don’t have as much agency as they think. The idea that this all comes down to personal responsibility is a lie that the ruling class is very interested in perpetuating.
Middle class and rich people have varying degrees of making rational financial decisions, but they are well beyond the 100% rational actors they delude themselves to be. We all make mistakes, or if not mistakes, we make choices that put us further out of alignment on our goals. Sometimes only a little, sometimes a lot, but at no point are any of us perfect. That is a fact of life. The difference is, those of us with more resources have more room for error. We don’t notice all the little irrational decisions we make because they don’t affect the bottom line so much.
To hold poor people to a different standard than the rest of humanity is really unfair.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Sure, and plausibly those tie in. Plausibly, they don’t. I don’t discount the possibility but, minus research on the topic, we’d just be making an assumption to peg it down on either side. Quite likely, it’s a mix of factors.
That puts us above Canada, Ireland, Israel, etc. but let’s compare specifically to countries with a GINI coefficient higher than the US:
Mexico
Turkey
Costa Rica
Chile
Colombia
Probably the two closest for comparison to the US would be Turkey and Chile. I’ve kicked off a request for a research report:
I just skimmed the v1 and v2 reports but didn’t do more than skim to see what was covered/missed. In v3 we get…
So, first it notes that US has the 2nd largest welfare spending in the OECD, once you incorporate private spending (e.g. employment benefits), where it’s only in the middle on public spending.
Gemini is giving a different GINI coefficient for the nations, putting the US as worse than Turkey and Chile, but doesn’t offer an alternate. If they can swing around on either side, depending on the dataset, probably we’re close enough for comparison.
It agrees that all four countries are highly developed.
It confirms that the US has been on a “decades-long shift away from traditional family households toward solo and non-family living arrangements”, giving some specific numbers. Multi-generational households - especially among immigrants - is on the upswing but mainstream culture still holds that living with family is a “deviation from the ideal”.
“This dynamic suggests that the American cultural ideal of independence acts as a de facto ‘tax’ on its low-income population, pushing them toward a high-cost living arrangement that is fundamentally at odds with financial reality.”
Reviews of Turkey, Chile, and Ireland…co-residence, co-residence, co-residence.
Fertility - All four countries are having fewer births overall (not relevant for our discussion) but the US is 10 for adolescent births per 1,000 women aged 15-19, Chile is 7, Turkey is 10, and Ireland is 4.1.
Substance Use - US, Chile, and Ireland are high on binge drinking, Turkey is low. US is highest on cannabis at 19% of pop, Ireland at 6.5%, Chile is 1.73%, Turkey at 5.9%. The US has high drug use across all classes - not just the poor - but that use exacerbates the problems of the poor.
Diet - US, Turkey, and Chile are all seeing issues with obesity and diabetes among their poor at similar levels. Ireland is starting to see a similar effect.
In general, it concludes that the US’ big problems are the solo-living tax and drug use.
We probably need to also look at the total poverty levels, and I notice that it says that 60% of people in Turkey are under massive debt - yet it says that, because they co-reside, they can easily work their way out of poverty. I think we’re getting to a stage where the AI is coming up against its work cap and won’t do proper thinking unless I start a new topic, so we would probably need to start a new chat to get it to properly evaluate budgets and average living costs per nation, to see how everything plays out.
Can you boil that down to the names of a few countries that have their poor “making different choices than our poor. They might have big families but they’re not suffering from diabetes. They’re gardening or buying food that is healthy”?
Mind you I am not necessarily disagreeing with what you are saying: fewer poor people and more of a culture that “pushes people to buy and eat real, healthy food” is likely a good recipe for less health disparity.
What I read you responding with though is claims in an AI response that several countries similar to the US on a measure of income disparity scattered numbers on which drugs are abuse, and are mostly all “seeing issues with obesity and diabetes among their poor at similar levels”. Other than tendency of living arrangements nothing about the poor in each country making different lifestyle choices.
In what way do you think this AI “report” supports your claim?
Not very different choices, similar diabetes rates, not anything about choosing healthier and lower cost foods.
OTOH I am very familiar with how badly we do compared to peers on health outcomes, that is typically mostly attributed to our health system structure.
Basically poor folk given money used it as rational actors. The most potentially irrational act from that perfect rational actor economically was helping others of their social networks in need.
My suspicion is that wealthy person given the same money would spend it less rationally. Maybe on some new toy.
Not to mention another massive elephant in the room here, namely dependence on a personal automobile for transport.
Having a transportation system that’s heavily skewed towards privately owned cars is in itself an immense burden on the poor, and AFAICT that skew is worse in the US than in any other developed country. Poor people either have to take on the severe financial burden of owning and maintaining a car, or rely on frequently inadequate public transit systems that limit their access to jobs, healthy food shopping, and so on.
For the few American cities that actually have “adequate” public transportation systems. Plenty of cities / metro areas have a bus system. It’s the “adequate” part that’s lacking.
