Part of the problem seems to be, then, a distribution of jobs evenly. But there is also the problems of inflation and pay not keeping up with inflation.
It’s such a Gordian knot, I’m not sure how we even begin how to untie it…
I think the start of cutting the gordian knot is destroying this de rigeur idea of trickle down economics. There’s no way we are going to do anything to capitalism itself. Maybe in 100 years. But this one thing, that so many people currently believe, must be knocked down off its pedestal and killed once and for all. It has been proven time and again that it doesn’t work, that big profits and keeping money offshore and corporate welfare, etc etc etc do NOT translate to more jobs, increased pay and better working conditions.
When the rich get richer, the poor get poorer.
We must replace the trickle down economics lie with that, which is the actual truth.
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You’re entirely correct. I’m not seeing how we get there from here, since both parties buy into the endless tax cuts rhetoric. It’s a popular stance, because they tend to cut across the board, even as the lion’s share of the benefits go to the rich.
My hope is that Bernie-style messages, which did play well last election cycle, become more common and not confined to one old white dude. When those kinds of messages, like health care for all, college should be free, etc., become the standard, then we will know we are making progress. We need to make sure people like Bernie, for all his faults, aren’t one-offs, and more politicians set the tone of the conversation along those lines.
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Let’s take two people, call them Jane and Kim. Both Jane and Kim work similar jobs for the same company, making the same salary. For simplicity’s sake, both are single, with no kids. They live in similar parts of town, with similar housing costs.
Kim has very little debt, and puts aside $200 a month in savings. Jane has debt that she can never seem to get out of and no savings.
According to some people, Jane is more irresponsible than Kim. Obviously, she should be able to save like Kim, right?
Except: Jane needs glasses, Kim doesn’t. Jane’s family couldn’t afford a dentist when she was younger, and she needs more extensive work done, now. Kim’s teeth are in good shape. Jane has ongoing prescriptions and Kim doesn’t.
Result: Jane has to spend well more than Kim’s $200 just to have the necessities to live and not have health problems that cost even more. Jane didn’t ask for any of these issues. And on top of that, she gets the stress of people who compare her to Kim and begrudge her any bit of happiness. A night at the movies? How dare she. She has debts to pay and no savings, how irresponsible of her to want to have any sort of fun. No one bitches about Kim having fun, even as her “entertainment budget” is three times larger.
In other words, if you have been successful at saving, odds are you had a shitton of other things going for you, too. And none of this takes into account systemic issues like racism that may mean that Kim can get a lower interest loan than Letisha, even if Letisha manages to save more and has never missed a payment in her life.
I used to buy that bullshit about if you were responsible with your money, you would be fine, but it’s all just a pile of bullshit. Maybe 5% of the bulk of people’s financial situations are within their control. The other 95% is external: other people may have more say over someone’s financial life than the person trying to live it.
Poverty is not a moral failing. Treating the poor like it is, is.
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I gave similar examles earlier in the thread. You will always find examples like that, but it is a numbers game. The real question is to find out what makes some people bankrupt, in average of large samples of people, because that is what social economic policies should correct.
Indeed, in the USA, comparatively low wages and the lack of health insurance are large contributors. But unreasonable spending facilitated by a combination of runaway marketing and advertisement and lax credit laws are also obvious contributors.
About 30 years ago, France and other European countries lowered poverty amongst the poorer classes by passing laws which made consumer credit more difficult and riskier for the banks. One could argue that the poor were weak if they spent beyond their means, whatever. The truth is that by making it more difficult for them to borrow beyond their means, the problem became less acute.
When you consider large numbers, it is never the fault of individuals and always the fault of the legislator.
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Something else, which people living in the US may not notice because they are used to the situation: living in the USA is surprisingly expensive compared to Europe. I travelled to the USA last summer and was genuinely surprised at hidden costs.
Of course, my observation are little more than anecdotes and part of the extra cost is being a tourist and not knowing my way around. But maybe these observations from a tourist may make you think.
As Europeans, we think that the US is cheaper because consumer prices appear lower on high-priced items (e.g. electronics) and fuel is much cheaper. But on a day-to day basis, I noticed:
- transportation is more expensive, even if fuel is cheaper. The average car uses more fuel. The lack of public transport makes it necessary for more people to drive by car or use a taxi. Parking is horribly expensive with hidden costs like valets.
- it seems that more people use convenience stores and large supermarkets. You do not appear to have small size supermarket in cities, which are normally the better option: decent prices and you don’t buy as much things you don’t need as in large supermarkets.
- restaurants and bars are more expensive, sometimes considerably so. Drinks are cheaper in your restaurants, but service charges and taxes are hidden costs.
- talking about hidden costs, it is more difficult in the US to realise how much one pays. Electronic pay and credit card are more commonly used. When I pay with banknotes, I notice easily when the wallet is empty and need to go to the bank, less so when the only requirement to pay is that my phone or credit card should be somewhere in the vicinity of the shop. It makes spending less tangible. This is also true with the subscription model pushed by the modern world: 9.99$ an month may not seem much for videos, music, etc… until you realise that before that model, you only bought 5 CDs a year and listened to free radio. But Europe is rapidly catching up on that game.
- last but not least, advertisement is much, much more present in the USA than in Europe. I am not really sure of the effect, but there must be one or the advertising industry would not strive.
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I agree. Much of our lives our based on luck. When I look back at my life, more and more I see that there were many instances of being at the right place at the right time, pure chance gave me opportunities. Of course, being ready when those opportunities presented themselves was helpful, but chance played a big part.
USA resident here. I’m not sure I agree. If I don’t order drinks at a sit-down restaurant, I feel (yes, anecdotally) that I pay a third less on the final bill. Service charges, ie, tips or gratuities, yes, that will usually add 20% to the final bill.
I won’t argue with that. I also usually pay cash (banknotes, I like that!) and I feel like I’m the outlier. My observations from my usually brief sojourns in Europe seem to suggest that bank cards (credit cards? debit cards? Not sure what they are known as there) are also used quite a bit. I have a feeling you are in Germany, where, I hear, cash is used extensively. I haven’t spent much time in Germany, but that’s a trait I share, use cash and keep the transaction private, keep the banks out of the mix!
That’s a good assessment. I was just in Italy and noticed that alcohol, such as wine with dinner starts at much lower prices per bottle. It’s common to find a bottle of wine around 10 Euro. In the USA, you’d be lucky to find a bottle of wine for $15 at a mid-level restaurant. All places seem to charge around $10 a glass +/- a couple dollars, and bottles generally start at $20, but usually much higher. Food is also cheaper at restaurants in Italy as the base price, and then of course the non-tipping or minimal tipping on top. Put it all together and food is much cheaper in Europe. A normal meal for four people at a “nice” place (not Michelin starred) in Italy, even the heart of Rome is <$100 US. In the US, that same meal for 4 is $150+. It sucks.
Also, the quality of food in supermarkets in Italy was generally higher. The meats and cheeses were all local. 1kg of Parmesan was about 5 or 6 Euro where we were. In the US, 1kg of Parmesan, even locally produced in the US, is $15 to $20 a pound, and will set you back more than $30 at the low end, or about $50 on the higher end. That sucks too.
The USA is a charade. Because most people don’t get to go other places, most do not realize how much it costs to exist here, and that it is out of step with the rest of the world. We have the most incredible distribution system, probably one of the most efficient mass-transport of goods on the planet, and yet our prices are high. Go figure, why doesn’t it translate down to the consumer?
Oh, that’s right… as the rich get richer, the poor get poorer. We are being had. And most of us do not realize it.
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Correction here. Drinks may be cheaper in Europe, that depends on the drink and country. What makes a difference is that in the USA, it is not a problem when you don’t order drinks. If you don’t order drinks in a restaurant in Europe, you are the outcast.
As to cash, indeed Germany uses it a lot. France uses cards more often, but not for tiny sums as I have seen in the USA. The procedure to pay is also often more involved in Europe.
As I said: nothing here is a scientific study, it is just the feeling of a tourist.
As to credit vs debit card: there does not appear to be a difference in Europe. Actually, I am not sure what the difference is in the USA and why shops would want to know about it.
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True, in most cities I’ve been to in the US, it’s common to use cards for even small things like a cup of coffee. The one exception I’ve seen is New York City. It’s been a few years since I was there, but I was surprised to see that most restaurants require cash and coffeeshops have purchase limits on debit/credit charges ($20+ only).
I suspect that those restrictions on card transactions are in place because of the erosive effect that card processing fees have on margins. In a high-rent place like NYC, small shops in particular probably have enough trouble keeping the lights on without basically taking a bath on frequent low-total transactions paid in plastic.
I’m fairly certain it’s part of the reason why even massive fast food chains like McDonald’s were slow to jump on the plastic bandwagon. I do feel a little bit bad paying for a $1.00 soft drink with a debit card, but then I remember it’s McDonald’s and I stop losing sleep over it 
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The law in the US treats them differently. The consumer has more protections against fraud using a credit card, such as a maximum limit about how much the consumer is liable for. From my perspective, using credit is like a free mini loan. I charge up a month’s worth of expenditures, and pay it all off before the due date, and I get charged nothing. It’s kind of a game, though, because if you are late, you get charged interest plus a late penalty. Or if I don’t pay off the entire amount, I have to still pay interest, which is way more than it should be.
The other reason to use credit vs debit cards is that it’s not linked directly to my deposit accounts. If my debit card is compromised, I could see that the bad guys can potentially drain my account, my money. That would hurt me more than it would hurt the credit card company if their account (ie, my charge account) was compromised.
As for merchants, I think there might be different fees for them. Maybe they get charged a little less when a debit card is used, though I’m not sure.
In any event, cash is still king in my book. The banksters don’t need to be in on every single one of my transactions, swiping nickels and dimes, slowly and surreptitiously getting rich right under my and my small business friends. Now, companies like Comcast or insurance companies, screw 'em. They can have my card, so I get my 1% back or whatever.
Absolutely, and they aren’t uncommon in places like indie coffeeshops around the Boston area, either. What surprised me was the cash-only policy at multiple expensive famous restaurants.
Every time i see a restaurant that is cash only my first thought is that it is a money laundering operation and they’re definitely not reporting their tips.
Interesting observations, but remember, those are all things which are in our control. You, as a tourist, might not know where the small size markets are, but I do, and I shop there because you are right. If someone shops at a convenience store, that’s under their control. You’re also right about electronic pay; also under our control.
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The difference for merchants is substantial due to the concept of “interchange fees”. Credit processors charge upwards of 4-5% of the transaction amount in fees for the “privilege” or using the major networks (Visa, MC, etc)*. Debit fees are substantially lower because the merchants (and merchant processors) have direct connections with major banks and therefore avoid some of the interchange fees.
Remember that credit transactions are more inherently risky (from a merchant and bank standpoint) because the consumer is essentially borrowing funds to pay for the item. Banks are fronting the money for the purchase and any fraud is pushed back onto the merchants so they are taking on greater risk compared to debit - which is an immediate transfer of verified funds (eg: less risk) - although the risk is pushed more onto the end consumer in this case.
This is why you will always see merchants push debit at their Point of Sale as preferred option since it saves them a lot of money. From a consumer standpoint however, you have more protections doing credit transactions.
*[interesting point: for a long time Amex charged much higher merchant fees compared to Visa and MC because of the perception that Amex cardholders were higher caliber - with no spending limits - and therefore less risky. Many merchants still won’t take Amex because of the much higher fee structures.]
Actually the biggest factor for slow adoption of credit cards in places like McDonald’s was speed. Before the widespread rollout of high speed networks, credit card transactions were done over dial-up and could take upwards of 1-2 mins to process. For a quick service restaurant, that’s a death sentence.
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Well, I remember that both Babbo and the Jekyll & Hyde Club were cash-only, so you may be quite right.
That’s another difference that makes cards more viable in Europe.
Here, Interchange fees were capped by law a couple of years ago, and can now be no more than 0.2% of the transaction value.
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