Rich get Richer?

[72Tiger]

I am a pretty avid reader of the Simple Dollar, even though I don't always agree with Trent. In this post, I think he was just responding to the mindset that some people have that if they are poor they will always be poor, because only the rich can get richer. If you accept that 'myth', you don't have a chance, but you won't even try to better yourself.

My exact response in the comments (made really soon after reading it) was,

Whether one chooses to believe #3 is a myth or not, the only way to better oneself is to work at it. If you believe #3 is true, work to be the exception, and not the rule. If you believe #3 is myth, work to sieze the opportunity that is out there for everyone.

Having slept on it a little, I guess my thoughts are that many people today, particularly in the western world, are presented daily with opportunites that were not even dreamt of in the past, and even today are never present in much of the developing world.

Having said that, there are those in the western world that, for all practical purposes, don't have a chance to make it due to circumstances they were simply born into. The deck is too stacked for 99.999% of them to succeed. Are these people to be considered failures, and cast aside because of that?

In my mind, there are those in our society that we have an obligation to care for, and if we don't, we will have much to answer for. There are others that have every obligation to care for themselves, but if they stumble a time or two along the way, we can do much more than provide them with a pithy 'get a job', or 'I told you so' to help them get back on their feet.

[Miss Rosie]

Originally Posted by kav122

thanks for that info!

My net worth is really low, like negative 1000 and something, but I always think it is crazy when they say the mean for people my age is so high! I guess this explains it. On networthiq there are people who are my age that are on up into the 6 figures! I can understand that some people have incomes in the 6 figures, but man, to have a net worth that high is crazy!

That just shows the HUGE range in America.

Another thing that plays into this is that the gap between executive compensation and rank-and-file wages has been steadily widening since the 1970s.

Ironically, my own income has increased gradually but consistently since the early 1990s. My friends, whose lives have had more normal trajectories, have been mostly running in place, especially in the last ten years. Only my sister and her husband have moved forward significantly, but they're two professionals with no kids.

[lucille]

There was a discussion on NPR about 10am CST today about wages and many of the current people having troubles. This was sort of an end conversation to a subject about older people having adult children and their families move back in with them after losing homes or jobs.

The guest mentioned that wages have stagnated quite a bit even within the last few years. Wages have not substantially gone up for most workers. At the same time the cost of gas, utilities, food and many other things have gone up by significant amounts of money. What the end result of this is, is that many people are technically making less than they used to. So even if your getting ahead a bit you may feel like your running in place because you are.

On a similar note to tell you that it is not just a select few with bad decisionmaking having issues. Xcel Energy changed their minds about starting to send late paying customers status to credit reporting agencies. Powers that be in Minnesota urged them not to do this and Xcel agreed. Right now they have the largest amount of past due bills in dollars they have ever had. Now when large numbers of people in a region are struggling with their heating bills this should make people stop and think. I hear this the day after there was a news piece about all of the foreclosed homes in Cleveland that are being vandalized and being so run down they are starting to tear them down. Now the city of Cleveland is suing lenders for letting these properties decline. This isn't a few houses this is huge.

But one of the biggest things that trip up poor people is if they are uneducated or uninformed about some of the predatory traps that suck their money. Buying food in convenience stores, pay day loan places, rent to own stores and plenty of other businesses that only exist in poor neighborhoods with the purpose of fleecing the poor.
We need to help the people who end up poor understand the traps set before them. It might be with social services programs, some classes for new immigrants and more consumer education in high schools.

[kav122]

ok, I totally agree with what you guys are saying.

Like I said earlier, my husband had the odds stacked against him, and he did well. Xin Lu's parents, too. There have been studies on immigrants. Those who have all the reason in the world to fail (language, xenophobia, not understanding "how America works", lack of an American university diploma, etc, etc)--yet they succeed! They pull themselves up, and work hard, and have amazing success. And that is awesome.

I guess what frustrated me about the comments on the other blog, were these types of success stories followed up with comments like "if I can do it, they can do it." My view is that just like inherited wealth, a great ivy league education, and fabulous connections can be unevenly distributed and "locked out" to some, so can AMBITION and INTELLIGENCE and SOCIAL SKILLS.

It seemed like some of those people were willing to toss people aside, because they COULD do better but...just...don't. I don't believe in a socialist society, but I do think that instead of programs dedicated to "buying the poor people a suit to go to an interview in" and "offering them services to find a job", as wonderful as these programs are, there should be a more wholistic approach to the poor. If this is the case--understanding the reason they can't keep a job (social skills, anger problems, etc), in addition to helping people who need a little help with their grocery bills, or need subsidized housing until they get on their feet.

It hurts me to hear people doing well, that are so quick to judge, and assume that we are playing on a level field, economically and otherwise.

Thanks for letting me rant

[Miss Rosie]

Originally Posted by kav122

It seemed like some of those people were willing to toss people aside, because they COULD do better but...just...don't. I don't believe in a socialist society, but I do think that instead of programs dedicated to "buying the poor people a suit to go to an interview in" and "offering them services to find a job", as wonderful as these programs are, there should be a more wholistic approach to the poor. If this is the case--understanding the reason they can't keep a job (social skills, anger problems, etc), in addition to helping people who need a little help with their grocery bills, or need subsidized housing until they get on their feet.

It hurts me to hear people doing well, that are so quick to judge, and assume that we are playing on a level field, economically and otherwise.

Thanks for letting me rant

I think something I haven't made clear in my various rants here is that I'm exceptionally lucky. Okay, I have a vindictive ex-husband who has dragged me through 2.5 - 3 years of pointless, expensive litigation, but on the plus side, I have enormous resources, not the least of which is a marketable skill that doesn't require a college degree to use and can be done in bed. All I need is a computer, an internet connection, some flexibility with deadlines, and the time it takes to edit out the weird crap my faulty hands leave behind. I have a few lifetimes of frugality, starting from my great-grandmother and continuing through my mother. I have a dresser scarf my great-grandmother embroidered and later patched that my grandmother also used. I can homeschool, which allows us to live in a crappy school district. That, too, runs in my family. I also have the family itself, which is no longer poor. They expect me to handle day-to-day stuff, but tend to give us either critical appliances (my sewing machine) or electronic playthings (our Wii) for holiday gifts. I also have a temperament that's well-suited to both freelancing and homeschooling, and I'm good at fighting systems.

Most people in my situation have none of these things, or maybe one or two, and that's just not enough. I've known a few of these folks: a woman who hadn't bought any new clothes in ten years because she couldn't do the shopping, a woman who lost her child because of epilepsy, a woman with two kids and MS who was trying to work as a waitress while dragging one foot behind her. They couldn't do it. They were missing something, not out of any character flaws but because they were just people. I'm missing a few things myself. I'm just lucky they're not critical.

The thing people forget, and the reason I won't write a disability success blog as was suggested in another thread, is that for every success story, there are even more failures. Success is a convergence of luck and hard work, and I don't have the hubris to think for even a second that I'm totally responsible for everything that's gone right. I've been able to follow up on my good luck pretty well, but I've dropped the ball a few times, too. If I were to write only about the first five years, or about the last three, it wouldn't be so nice.

One of my myriad odd jobs when I was younger was data entry for a men's shelter. That brought me face to face with how precarious life really is, and how rarely efforts to help are effectively directed. How do you get a schizophrenic a job? Who's going to pay for life-saving cancer treatment for a homeless man? Or rehab? Donations of toothbrushes, soap, razors, deodorant and clothing poured in, but every time one of the men put the address of the shelter on a job application, he was turned away. It was especially bad if he had a gap in his work history. Sometimes something came through, but not always, not even usually, and what works for a mentally ill man won't necessarily work for an addicted one.

Are these men really disposable? Do they really need a urine-stained mattress on a crowded floor and an address that's worse than useless? More importantly, is it helping us any to have them in this situation, especially if their numbers are growing?

[lucille]

Rosie, our city started a program that put homeless people into an apartment with some day to day ongoing help like they would get in a shelter. I think the prescreened people so if there was some extenuating factor like mental illness or addiction is was addressed first.

They felt that giving people a home was the biggest step in the right direction for everything. I was really surprised it happened here, so many people just dismiss the poor or they try to pretend the problem doesn't exist here.

The city also started a program that took all the local non-profits and churches and urged them to put their money and efforts into one central network of services rather than each one trying to run their own little effort to help people with something. Sending pallets of food or $500 or ten volunteers to the food pantry does so much more than some church keeping some bags of groceries on hand if someone asks for help.

I really hope this works. For a smaller city we have a pretty big homeless problem and I would guess half of the population would qualify as poor while the rest is split between middle income and the wealthy. I see people driving around that are clearly living in their cars at least once a week. So I am glad the city is repeatedly addressing it all the time. I think where they were at right now was either all the non profits and churches adequately deal with this or the city is taking over and opening a shelter and running the programs.

[Gootsy]

Originally Posted by kav122

It hurts me to hear people doing well, that are so quick to judge, and assume that we are playing on a level field, economically and otherwise.

I couldn't agree with you more. My mom was struggling when I was younger, and was far left because of the various programs available to her/us.

Now that she's doing very well financially, it's like those days never happened, and she's moved far into the rightwing supporting massive tax cuts. Very unsettling.

[Miss Rosie]

Originally Posted by lucille

Rosie, our city started a program that put homeless people into an apartment with some day to day ongoing help like they would get in a shelter. I think the prescreened people so if there was some extenuating factor like mental illness or addiction is was addressed first.

They felt that giving people a home was the biggest step in the right direction for everything. I was really surprised it happened here, so many people just dismiss the poor or they try to pretend the problem doesn't exist here.

The city also started a program that took all the local non-profits and churches and urged them to put their money and efforts into one central network of services rather than each one trying to run their own little effort to help people with something. Sending pallets of food or $500 or ten volunteers to the food pantry does so much more than some church keeping some bags of groceries on hand if someone asks for help.

I really hope this works. For a smaller city we have a pretty big homeless problem and I would guess half of the population would qualify as poor while the rest is split between middle income and the wealthy. I see people driving around that are clearly living in their cars at least once a week. So I am glad the city is repeatedly addressing it all the time. I think where they were at right now was either all the non profits and churches adequately deal with this or the city is taking over and opening a shelter and running the programs.

This is really wonderful!

I've lost track of how the shelters are doing here, mostly because my focus shifted, but homelessness was a big problem The churches help, and they coordinate with each other pretty well, but about fifteen years ago, the state emptied the inpatient mental health facilities, and guess where everybody ended up?

We could use a program like that, especially one that offers ongoing support. These folks have difficult transition to make, and don't always have the skills or social networks they need to make it happen.

[mbhunter]

Some people do have more opportunities than others. But just as there are self-made millionaires that started with nothing, there are ones that started with $10 million. This was already mentioned.

Also, a well-known carpenter once said: "The poor you will always have with you" (Matthew 26:11). This won't change.

I think that myth is only partially true. The rich do indeed get richer because they're in a position to influence the rules by which we all must live. The term qualified investor is one example. The purpose of this is not to "protect unsophisticated investors from themselves" but to secure higher yields for not more sophisticated, but richer, people -- those with either high income or high net worth. Rupert Murdoch? There's a very rich person who influences the political climate every day towards leadership that is rich-friendly. Earned income -- the type of income most of us get -- is taxed the heaviest (before we even see it) and affords the fewest deductions. Ever wonder why we can't deduct mileage for our commutes?

However those who are not rich, and who have the ability to change their position in life (not everyone does) definitely can, and some of the best ways are mentioned in that post. Fill your "free time" with productivity. Honestly, a lot of people are going to get blindsided into thinking that a 9 to 5 is enough. No one cares about my financial success more than me -- not my employer, not my business associates, and not my government, frankly. The rich are working to sheer sheep more efficiently, and a lot of people don't even know that they're being sheared day in and day out.

[Miss Rosie]

Something just occurred to me. Something the rich have that gives them an enormous edge is a safety cushion against risk.

One thing that a lot of poor people do is buy brand name products. It seems counterintuitive until you realize that they don't always think they can afford the risks if generics don't work out. If you can only buy one box of oatmeal, you'll buy Quaker because you have some assurance of quality. If you buy generic and find it full of rat poop, you get no breakfast until your next paycheck.

However, if you can afford to buy every box of oats in the store, an experiment with generics is perfectly acceptable.

This is an example on a small scale, but it works on a large one, too. Poor people can't risk losing too much on the stock market, either, nor can they always afford to take a temporary pay hit in order to grab for a bigger ring in the future, especially if that bigger ring isn't guaranteed.

Rags to riches stories aren't really stories of hard work, or just stories of hard work, they're stories of extraordinary moxie. For the most part, the risks required to go from rags to riches don't pass most of our cost-benefit analysis systems. Granted, those systems may be faulty in some cases, but they still exist and even faulty ones are probably working. They may not have you working at optimum, but they're working nonetheless.

When people ask me how I've managed to get as far as I have after starting in negative numbers, I tell them, with a perfectly straight face, that it's because I'm nuts. I'm not kidding, either. I'm willing take jobs I'm not qualified for, do things most people fail at, and risk constant rejection in order to get even one hit. I'm also willing, even eager, to go up against Goliath from time to time. What I guess that boils down to is that in certain areas, I'm less risk-averse than most.

Or I'm suicidally stupid. However, since it's working for me, I think I'll stick with it. But the idea is worth tossing around. Okay, the rich are figuring out how to better shear the sheep, but to the sheep, it's better to be sheared than to risk starvation and wolves in the wild.