Monday, August 14, 2006

The Throes of Poverty

I'd like to take this time to laugh, just a little bit, at our country's collective lack of understanding of basic economics. Ha ha. Ha ha ha.

Please, go read this. I'll wait.

Back? Good. Feel better already? Shaking of the dust of a few years of incessant beating about the shoulders by the MSM can really lighten the load of a capitalist, profit-loving pig. Moving on:

  • Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and about one-fourth of workers earning at or below the minimum wage were age 16-19. Among employed teenagers, about 9 percent earned $5.15 or less. About 2 percent of workers age 25 and over earned the minimum wage or less. Among those age 65 and over, the proportion was about 3 percent. (See table 1 and table 7.)
This, to me, is the most damning evidence of all. Anyone who is familiar with the bell curve should be proud to note that the bottom 3% of our society is earning minimum wage. That means that a staggering 97% of us are benefiting from the lovely embrace of capitalism, totally and completely bereft of Uncle Sugar's help. The bottom 3% is, in my opinion, not what we need to be concerned with. Surely you remember them -- the young hooligans in the back, pointedly denying any teacher's attempt to reach them, steadfastly holding to their ignorance? These are the folks making minimum wage. The rest of us, simply, aren't.
  • Never-married workers, who tend to be young, were more likely to earn the minimum wage or less than married workers. (See table 8.)

This can put to rest those horrified "family of three" scenarios.

  • Among hourly-paid workers age 16 and over, 2 percent of those who had a high school diploma but had not gone on to college earned the minimum wage or less. (See table 6.)

  • Part-time workers (persons who usually work less than 35 hours per week) were more likely than their full-time counterparts to be paid $5.15 or less (about 6 percent versus 1 percent). (See table 1 and table 9.)
Well, yes. That makes sense. Folks who don't graduate high school are most likely those who have refused any assistance in life. And still, only 2% of them earned the minimum wage. And, look -- if you work full time you are even less likely to be paid minimum wage -- a staggering 1%!
  • The industry with the highest proportion of workers with reported hourly wages at or below $5.15 was leisure and hospitality (about 14 percent). About three-fifths of all workers paid at or below the Federal minimum wage were employed in this industry, primarily in the food services and drinking places component. For many of these workers, tips and commissions supplement the hourly wages received. (See table 5.)
Thus debunking the myth that the blue collar hard worker is downtrodden; by comparison mechanics make $11-20/hr as a median (the top end making upwards of $26/hr). The folks who are on minimum wage are really getting what they're working for -- that is to say, they're sitting in the soft, cushy A/C jobs that don't require a lot of elbow grease or skull-sweat. And they're getting rewarded for their efforts.

Based on these lovely, lovely numbers I'll go ahead and answer an earlier post:

Saying that one class gains only at the expense of another is silly. If that were the case, the upper and lower classes would be completely static, and the middle class would not exist at all. In fact, I'll go one step further and say that on the global average, there is no poor class in America. I'll write it out one more time in case you skipped the last bit -- poor people. Do. Not. Exist. At least, not the poor that the left-wing socialist wants you to believe in.

Most of the folks who are "poor" in this country are transient poor. That is to say, young folks just starting off. They quickly rise up out of their entry level positions and start earning money, paying taxes, and being productive like the rest of us. The utterly stagnant, downtrodden, depressed social class simply isn't here in America.

What the left says sounds great, and its really heartbreaking, but its just not true. People who are willing to work as hard as is described (working their A** off for Ramen) do not stay poor. People who are content with their lot in life do -- and you can't force people to want to achieve. People who are poor are poor by choice, whether a conscious one or not. Lazy people are poor. Hard workers are not. For instance, you can go get a job, right now, today, at a Discount Tire and make $10, full time. Thats very nearly $20,000 a year, which is above "poverty line". Unemployment is low, the jobs are out there. Housing is booming; I guarantee you can find work on a framing crew if you can drive a nail. And I bet there are ranches that will hire a good, honest hard-working American. Failing that, you can take out a loan, go get a two year degree and become a welder (currently paying $25+/hr in the Houston area) or a machinist (likewise, $20+/hr).

Anyone who is poor at this point is poor by the weight of their own decisions, not that of an unfair or broken system.


Matt said...

You could have shortened that entire post down to one sentence and not wasted so much time trying to say in an academic way, "if you're a poor person in this country, you're lazy!" That's it... thats about the only point that you made in that whole post.

Those numbers are great. Now let's wiki: poverty in the united states. This is what we find...

Current poverty rate and guidelines
The official poverty rate in the U.S. has increased for four consecutive years, from a 26-year low of 11.3% in 2000 to 12.7% in 2004. This means that 37.0 million people were below the official poverty thresholds in 2004. This is 5.4 million more than in 2000. The poverty rate for children under 18 years old increased from 16.2% to 17.8% over that period. The current poverty rate is measured according to the 2006 HHS Poverty Guidelines[5].

I'm not sure what you mean by the "stupidity of the american people" when it comes to economics. What exactly are we stupid about? Is it all americans, or is it just us lefties?

A recent NPR report states that as much as 30% of Americans have trouble making ends meet and other advocates have made supporting claims that the rate of actual poverty in the US is far higher than that calculated by using the poverty threshold

There are 45 million children in this country without healthcare.

Nobody ever said anything about the economy going to shit. I only said that the distribution of wealth is incredibly unequal. In 2000, it was reported that less than 1% of the population owned 40% of the total available wealth in the U.S. 5% owned over 60%. Your party keeps cutting all of their taxes, even as they accumulate more and more and more of the total available wealth every year. Under the rules of pure capitalism, this is what happens. All the power is attained by a handful of people at the top. CEO salaries shot through the roof in the last decade, while the average workers pay remained stagnant as overhead costs increased.

When presented with the fact that 1% of the most powerful people in the U.S. control over 40% of the available wealth, you come back with the claim that this is all because the 99% of the rest of us aren't working hard enough. Right?

k2aggie07 said...

No, I say that they earned it. And you can too. Work hard, keep your nose clean, and you can be the next Bill Gates.

Don't demonize people for being successful.

Don't throw statistics out there that are irrelevant; if people are having trouble making ends meet, I will say thats because they don't know how to live within their means. I would suspect that those people in "poverty" have cars and TVs. Thats not poor.

Children without healthcare -- pass a law? I'm not sure what you're saying here.

The distribution of wealth will be unequal as long as people are unequal...and all men are created unequally. No one has the same skill set, talents, or ingenuity as the next guy. Therefore, no one should be rewarded exactly as much as anyone else.

The distribution of wealth should be unequal. So what if the top 1% owns 40% of the total "available" wealth (something which I agree with. The wealth is there to be created). That same top 1% pays 33% if the tax load. The top 5% pay 54.5% of all personal taxes.

So, it seems to me that the taxation is about right. If the rich are getting tax cuts disproportionately to the poor, its because they pay more in the first place.

By the way, I don't ascribe to a political party in particular. If I had to call myself something, I'm a socially conservative libertarian.

I don't hold any particular fondness for the Republican party.

k2aggie07 said...

In addition, you didn't address your earlier comment about how people are working so hard trying to make a dollar and can't get better than ramen. The popular misconception is total myth. If anyone is eating Ramen in this country, its because they lack the gumption / will power to get up and do something about it. Thats something no amount of government can fix.

You make all these problems out. Ok - do something about it. Are you going to take money from the rich and give it to the poor? You'll see the country fall into ruin. If you're socialist, come right out and say it. You can't be a proponent of capitalism and hate those who win at the game at the same time.

Matt said...

I'm not demonizing anyone! And I definetly never said I hated any fat cats. It's a consequence of the lack of rules in the system that allow this to take place. I believe that it's way too easy to become super-duper-uber rich once you're already just plain old rich. That's fine... you work really hard for that first 5 million dollars. But after that, it's smooth sailing baby. You have to be a complete idiot to not be able to triple that amount in half the time that you made it.

You still haven't tried to explain the concept that overall wealth doesn't remain constant. Looking at a distribution of wealth graph, it's broken up into percentiles. When the richest 1% percentile goes up, the lower classes percentiles go down... explain. The more money is pumped into the economy, the less valuable it becomes.

No I don't want to "take money away from the rich and give it to the poor". The rules of the game allow for way too much cheating, i.e. offshore accounting. What about free-trade globalization... both are contributing to the inequality of wealth distribution. The United States is the most lax on regulating capitalism out of all the western countries in the world. It shouldn't be a surprise that it's also the most unequal in terms of wealth distribution.

k2aggie07 said...

I don't what your saying about cruising onwards to fantastically rich from rich. There are only approximately 85,400 super-rich folks in the world (meaning $30M or more), compared to approximately 8.7 million millionaires. If what you're saying were true, the super rich would be a much larger percentage of the group.

I don't need to explain the concept that overall wealth remains constant. Look at GDP. It grows every year -- who is losing in that? The GDP for the world as a whole has been increasing since we starting keeping such figures. If China's GDP increases, is that at our expense? What you're not factoring in here is growth. For example, if a stock on Wall Street jumps 50%, that is entirely new wealth that did not exist prior to that day. Who paid for that? The answer? Nobody. No one has to suffer for wealth to be created.

You say the more money in, the less valuable it becomes. That is only true if growth is a non factor. Inflation runs approximately 3% historically. As long as growth outpaces inflation, wealth was created. If inflation outpaces growth, the net wealth of the nation went down.

Let me ask you this -- if the rules of the United States are so messed up, too lax, and unfair, and the other so-called regulated capitalist markets of the world are better, why are we consistantly beating the pants off of every single country in the world? Why is our standard of living phenominally higher than any other country? Why are our people richer?

Wealth distribution isn't something to measure! Thats so irrelevant. Thats like saying Montana has less water than Florida...well...yes? And? If everyone is rich (which, compared to everyone else in the world, we are) why does it matter if some are richer than others? Especially if every single person involved in the game has an opportunity to win, and become the "fat cat".

Matt said...

You're no better than the MSM. Sensationalizing everything that I say as if I'm a communist. I don't hate capitalism, I don't hate rich people, or the economic policies of the US. You're absolutely right, we're competitive because of our lax on regulation. I'm grateful for it obviously because my life is better for it.

You know infinitely more than I do about how the economy works. I didn't factor economic expansion into my argument. All I'm saying here is that it's also beneficial to have a society in which the margin between social classes, rich, middle, poor isn't so large. I think the policies of this president show that he's only concerned with benefiting the small number of people who own so much of the wealth in this country.

You beat me at the capitalist argument, I don't know enough about the subject. But I do know that poor people DO EXIST in this country, and that this is not solely because these people are "lazy".

k2aggie07 said...

I'm not necessarily refuting things you, personally are espousing; this kind of rhetoric runs rampant in this country. Its a tired, old subject that keeps on rearing it sugly head. Socialism has performed abysmally in every situation it was tried. Capitalism simply works better. And yet, people continually gravitate back towards socialism.

You say it would be beneficial for people to be closer in relative wealth, but I don't see how thats going to happen. Like most things with human nature, in a free market the wealth is going to be distributed in a bell curve. The vast majority of people are going to be smack dab in the middle (68% of a bell curve is within one standard deviation of the center). People at either end are in the major minority (within three standard deviations you have 99.7% of the population).

When you basically have everyone thrown into a pot, opportunity being equal, you'll see similar distribution. Go to nice high schools - income will follow normal distribution. Harvard grads? Same thing.

The point is that people are going to vary their success based more than anything else on personal factors, not environmental. All this pandering to victimhood does nothing but hurt our society, especially the people we typify as victims.

In addition, right now in the US the poverty line is $9,800. For a family of two, it is $13,200. For three its $16,600 and so forth. However, this means to me that if you go and get a job, any job, you won't be classified as below the poverty line. Even at 5 dollars an hour working full time you slide right into $10,000 a year. Two parents working full time below minimum wage generate enough income to be above the poverty level for having two children.

How can anyone at all claim that people who are in poverty are there by any other reason other than their own decisions?

As a parting shot, let me add this: 91% of households in the bottom ten percent own a color televisions, 55% own a VCR, and 42% own a stereo.

At that point, you're not poor.

k2aggie07 said...

Not to be snarky, but based on this

But I do know that poor people DO EXIST in this country, and that this is not solely because these people are "lazy".

I have one sentence for you.

"Don't believe everything you know".

Matt said...

Haha you got me... Right back at ya.