Wednesday, November 16, 2011

How is income inequality bad if US poor are obese, have cable TV, a car, and access to free education?

Income inequality isn't necessarily bad, but substantial income inequality can be. Growing income inequality can be problematical, depending on how and why it is growing. Worse yet, sustained acceleration of income inequality, which is what is happening in the United States, can be extremely problematic because it signifies a chronic flaw in the economic system.





I don't see how being fat, watching TV or driving a car have anything to do with whether or not income inequality is good or bad. If slaves were fat and watched TV in the 1800's would we have to assume there was nothing wrong with slavery? After all, if they're watching Dancing With The Stars and eating McDonalds everyday, how can there be a problem?



Anyway, to humor what is probably a troll trolling, I'll offer some obvious, common sense insights into how low income and even poverty-stricken individuals somehow manage to afford the luxuries you mention in your question.



Obesity

Food in this country, particularly corn, is highly subsidized. This corn is used as cheap feed for factory-raised meats and as the nation's primary source of low cost sugar. This results in artificially low food prices for high calorie foods like beef and foods with high sugar content. Food stamps can be used to buy these foods - there is no restriction requiring them to be spent on any particular type of food. The end result seems to be an American diet composed largely of high-calorie, low-nutrient foods that are far cheaper (and usually more convenient and delicious) than healthier alternatives.



Food is only one half of the equation. With even the poor able to buy more than enough calories to gain weight, all they then have to do is nothing - meaning limited physical activity. Few calories burned (which costs nothing) plus high calories consumed (which is heavily subsidized) equals obesity.



Cable TV

This requires two separate costs - the one-time cost of the TV and the ongoing subscription service for cable or satellite. The first is simple - TVs are dirt cheap. You can get a small sized TV (say 24") for around $160 on sale - an easy amount to take out of a low income household's tax return or maybe a paycheck with some extra overtime hours. That's a one time cost, so they barrier to entry is having $160 once in your life. Or, get a hand-me-down. I've given away and sold several TVs over the years as I've moved and upgraded.

Cable is different - it's expensive and ongoing. Of course, not all Americans have subscription TV, with roughly 15% watching only over-the-air broadcasts.



Car

Cars in this country are usually a necessity. People need to get to and from work in a timely manner, and they have an additional need if they have children to shuttle about. Cars can be very expensive, but they can also be surprisingly cheap. Insurance, for example, is something a low-income individual might forgo. Gas is expensive, but not overwhelmingly so if you don't drive long commutes. Parking in most of this country is free. The car itself can cost a lot, but just like with televisions I think you'll find low income households relying on hand-me-downs and cheaper used cars.



Education

K-12 is indeed free in America, but quality varies and low-income areas tend to have schools that are less effective, less safe and lacking resources compared to middle and upper income areas. Every American can get an education, but arguably not every American has access to a quality education. Not sure what this even has to do with income inequality. Are you suggesting that if all kids get to go to crappy schools it's OK if they are also cripplingly poor?
 
 
 
I think you don't have a good sense of what it's like to be poor [1]. Maybe work in a food pantry for a bit to gain a sense of the desperation and plight. See also the lyrics to the Ghost of Tom Joad [2] .




The poverty line for an individual is around $10,890 now [3]. That means you're making less than $1000/month. Make a monthly budget for an individual at the upper end of this bracket:



•Rent: $400 (usually a dump -- sorry no cable)

•Food: $200 ($7/day -- mostly fast food: (B,L,D) =($1.00,$3.00, $3.00) )

•Clothes: $50

•Transportation: $150 (mostly gas and minor maintenance and insurance)

•Utilities: $50 (sorry no cable or cell phone or internet)

•Household expenses: $50

This is $900/month. No entertainment budget. No savings. No medical. No dental.



The first unexpected expense will be very painful. May be you get an abscessed tooth -- there's $500. May be you get evicted (slumlords are crooks and assholes) and need 2 month's rent to move into a new place -- there's $800. Break an arm: $2000 in medical plus 6 weeks off work (loss of $1500 income).



A lot of the working poor that I see are living in their cars. They're going to soup kitchens and food pantries. They're on the brink of being destitute. When their car breaks down and gets towed, they will be living under a bridge. They'll lose their job (job security in $6-8/hour jobs isn't good) and getting a job when you're homeless isn't easy.



So it's not much of a life [4]. There is no upward mobility. Based on this definition of poverty [5], 16.0% of Americans in 2011 live like this - 49.1M in total, many of them children (about 50% of all poor are children and 20% of all children are poor) [6]. These at-risk children do not fare well in school - they have witnessed a lot of bad things in their lives, they are outcasts in the Darwinian society of schools, and they have no place to do their homework. These children are not easy to deal with for the under-funded public school system and they frequently fall between the cracks: they are held back year after year, suspended/expelled for bad behavior or carted off to juvie, and finally dropping out when they get their first chance.



What does this have to do with income inequality? The upper levels of society have personally enriched themselves (through both legal and illegal means). At the same time, they've benefited by driving down tax rates for themselves. All the while the US has neglected maintenance of society and let the social safety net evaporate. This means that we've created a country that is slowly failing and have pushed our national wealth into the hands of the few. These wealthy will either put themselves in enclaves or flee the country when it gets bad enough. I find this repugnant.

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