Enough's enough

Friday was the last day of work for some of my colleagues in the press room. They weren't laid off -- they hit the Pick Six jackpot at the end of last month.

Office scuttlebutt says the $10 million payout, split three ways, works out to about $95,000 a year for the next 26 years. For all but a handful of people in the building, this was perceived as More Than Enough to live on while still setting much of it aside for the future. The youngest of the lucky winners, I've heard, is staying at his job for a while longer to lock in the benefits that come after 20 years. (He works hard, but he's good at his job and he doesn't hate it, so why not?)

I mention this because, for these three men, and for almost all of us who work with them, $10 million is a life-changing sum, even split three ways and spread out over 26 years. Yes, $95,000 a year is regarded by most Americans as a life-altering fortune. It is, after all, more than twice the median income for American households ($44,389 for a household of four in 2004).

But some American households aren't impressed by such a sum. Around 16 percent of American households are already making more than $100,000 a year, so for them $95,000 doesn't sound like a quit-your-job-and-go-fishing kind of number. And for the 2.3 million or so American millionaires, $95,000 a year probably sounds like a horrifically austere lifestyle.

Teresa Nielsen Hayden stumbled across a discussion among such folk in a New York magazine article extolling the addictively voyeuristic pleasures of the chat rooms at UrbanBaby.com. This excerpt caught Teresa's eye:

One night, a woman posts this seemingly non-rhetorical question: “If your [husband] had a 5mil trust fund would you stay home? 2 kids and [husband] does not work.” Responses range from a deadpan “uh, yeah” to “someone has to work ... 5 mil is not enough for forever.” A long thread branching off examines the premise that a trust fund providing interest of $350,000 to $500,000 is not enough to live on. “Not enough for whom?” asked one poster incredulously. Another poster replies, “Me. We currently live a 15k/month lifestyle, net, with 1 [child] and no school costs” -- and then promptly summarizes her expenses for an invisible audience: “7k rent, 1k PT sitter, eating out 1.5–2k, utilities 500, travelling 2k, clothing 1k, out and about ‘cash’ 1k.”

Here we have a group of people convinced that $500,000 a year is "not enough to live on." They would not understand the grateful joy of my fortunate colleagues in the press room. They wouldn't consider $95,000 a year as "striking it rich," but as "striking it poor."

I don't begrudge those millionaires their millions any more than I begrudge the lucky guys in the pressroom their tens of thousands. The trouble comes when these extraordinary people cease to realize they're extraordinary -- when elites fail to realize that they are elites.

These UrbanMommies who think that $500,000 a year is "not enough to live on" may be living in a deluded fantasy world, but they have the resources -- culturally, economically, politically -- to make that fantasy more real, to create a world in which it's harder than it was before to live on $500,000, or $95,000, or $44,389 a year.

It's clear from the New York article that this delusion isn't working out very well for them. It's not working out very well for the rest of us either.

Addendum:

Median household income for New York City (2004): $60,765

Median household income for San Francisco (2004): $60,031

Comments

[Jmiller]

$5M is exactly the right amount to live on. At a pathetic not-even-trying 1% rate of return, you're getting $50k per year to start. From there, you take $50k from the seed $5M. You now have a net income of $100k for your first year. Reduce your income by $500 (from the interest) per year over the next *Century* and then you're out of money.

If you are trying, you should be able to get 5-10% return and never run out of money.

Beyond that... If you can't figure out how to live (and have a family) on $100,000 USD per year, then you should definitely hire me as a financial advisor. I've been doing it for quite some time now.

[pat greene]

A lot depends upon where you live, and how many children you have. A study from 2003 said that it costs a family of four 70,000 just to get by if you live in the San Francisco Bay Area -- and housing costs have not come down since then. 95k would enable you to live a slightly nicer lifestyle, but not an extravagent one. Although it would allow you to quit working, if you made do with a modest income.

It's insane to think that you csn make nearly 100k here and only be living a modest lifestyle. But it's true.

What the UrbanMommies need to do is reexamine what "necessity" means.

[Linkmeister]

I strongly suggest everyone go over to Making Light (TNH's blog linked to by Fred) and read the comments (275 so far, and rising). They're amusing, enlightening, and sometimes discouraging.

[LL]

Some areas of the country are extremely costly, so I actually can see someone saying that $95,000 a year isn't enough. I don't know how people live in SF, NYC, Miami, etc., cities where housing is unbelievably expensive, property taxes are high, etc. How the hell do they do it if they don't make a couple hundred grand a year? No wonder so many people are in hock up to their eyeballs.

Having said that, I've experienced this attitude where I live (DFW area) from people who do not make $95,000 a year. They consider a monthly pedicure not as an option, but a necessity. These aren't trophy wives, but women who work for a living themselves and are certainly entitled to spoil themselves if they want. But sometimes I get the impression that because I don't do the pedicure thing ($35 for someone to cut my toenails? jeez), I'm somehow low-rent or white trash or whatever. They are also sorta snobby about area codes. They think anyone who doesn't live in 214 (Dallas) is suburban white trash. And they have disdain not only for Wal-Mart, but the people who shop there. It's not just Wal-Mart, but the kind of people who go to Wal-Mart, who are unacceptably trashy.

It's very weird, the odd little standards that groups (economic, regional, whatever) hold everyone to.

I do take Fred's point, that when you think $95K a year is slumming it, how the hell can you possibly understand (and thus sympathize with) people who have to live on the minimum wage? I don't really care, though, if the mommies at Urban Baby don't relate to me, because they're not making decisions that affect my life. Bush and Congress are. And they are no closer to understanding how the rest of us live than the affluent NYC mothers. Hell, they're probably even less able to relate, because their wives take care of all the home stuff. I have to wonder when was the last time any member of Congress bought a gallon of milk? Or gas, for that matter? They have security people, transportation, office space, postage, etc., provided by us, the taxpayers. It's no wonder they have no idea how hard it is to live on $44K a year. None of them have to. Even if they lose an election, they often get cushy "consultant" jobs with some think tank or industry association, membership on corporate boards, etc. They're so insulated from the life most of us lead, it's like they live in a different country.

[Duane]

I hate to be the one to have to defend greed and all that but 100K/year isn't really that much money when you're paying for a house, raising a family, have multiple car payments, pets, etc.

The air isn't as rare as you would have it seem, Fred.

[Sarita]

I think the reason that people would be hesitant to retire on $5M is that, as you grow older, inflation will reduce the purchasing power of that money at the same time that your spending on health care or long-term care increases.

If you're in your mid-twenties, you'll want that money to last for about 70 years. At a 2% withdrawal rate, you could have an annual income of $100k. But in 20 years, it could be the equivalent of $50k today; in 40 years, it could be the equivalent of $25k, and so on.

Now suppose you have to enter a nursing home after 40 years. I can't predict how much that might cost in 40 years, but I can give you a current data point. My grandpa moved to a nursing home in 2004. Because of his disability (traumatic brain injury), his nursing care runs him nearly $7000/month. After his assets are entirely depleted, Medicare will take over. This system leaves many of his fellow residents worried and ashamed - it's really hard for a person who grew up during the Depression to face the fact that he or she *will* die bankrupt. After 10 years in care, our hypothetical trust-fund baby could die broke, leaving his spouse indigent.

Just something else to think of.

[Mnemosyne]

I can't get over the fact that someone is spending $7,000 a month on rent. Why would you not buy if you're spending that damn much? It's just insane to me.

Of course, I'm speaking as someone who was upset when her rent went up to $1,300 a month, which is split between the two of us, which means it's actually $650 out of my pocket.

[Justin]

Sounds silly, but living in NYC with kids can screw up your entire perspective of what is normal. I have friends with household incomes of $400K who can barely afford to buy an apartment in NY, and certainly would not be able to get one big enough for a couple of kids. Of course, they could leave the city etc., but having finding $500K not to be a lot of money isn't as absurd as it sounds.

[pseudonym]

I come from a family with a good amount of money. I don't know the exact numbers and where the all goes to because I'm just the college aged kid in the family, but I thought I'd give my perspective. The combined income of my parents was somewhere around the 95K, although I believe a bit lower. If all of my family's assests were to be liquidated, the resulting value would make us technically milionaires.

The key is, though, it doesn't really feel like it. Most of this money is not liquid, and is not often spent in considerable amounts. I know intellectually that I have enormous priviledge, but it's often hard to remember that. I genuinely don't understand how poorer families live, and I count this as a great failing of mine. I know how they live, I interact with them often enough, but I don't really understand it.

That last paragraph reads as horribly elitist to me, but I don't know another way to put it right now. The "them" terminology implies a divide that I don't really feel. Pitfalls of english.

The largest effect of this on my life is probably the fact that I'm attending a very expensive liberal arts college without any financial aid or loans, although that will change by the time I graduate, while most of my friends there are on rather large amounts of financial aid, although not all.

I guess my point is that even when you realize you're the elite, it's hard to not forget that from time to time.

That said, even I'm still worlds apart from the people Fred talks about above.

[robert p]

I shared a house with boy from Connecticut a couple of years back. He worked here in New Zealand for 6 months and could not believe the price of clothes, shoes, gas, electricity, rent in NZ compared to income; and was mystified as to how we ever made ends meet. The hard fact is that an awful lot of people don't. Average income earners do not own houses, new cars, or clothing labels. According to a recent study, from 2001 to 2004,

• income inequality increased
  
• median house prices increased by 43%, at a faster rate than incomes
  
• debt levels increased, savings decreased
  
• the rise in severe hardship is pronounced
  
• beneficiary families with children (10% of population) had lower living standards in 2004 than in 2000 and a substantially higher proportion in severe hardship

My heart goes out to those poor Americans on 100k.

[L (not LL)]

Well, I live just over the hill from the SF Bay Area in Santa Cruz County, and I'm just getting by on around 100K/yr. No doubt I could live more frugally than I do and develop more of a financial cushion, but I'm supporting a family of four including a barely functional wife (clinical depression + serious back injury) and two special needs kids -- one severely disabled with CP and the other high-function autistic -- so there are certain drains on the resources. Not to mention the medical benefits that come with my job cannot be easily dispensed with in my circumstances.

Having said that, I could easily save 5,000/yr by not commuting over to Santa Clara Valley every day, and I could choose an occupation I enjoy, the only consideration beyond that being benefits and not so much income. I'd do it, I think.

[Steve]

To the people saying...gee, 5 million isn't all that much to live on...

Why not enjoy the blessing of the 5 million bucks and the options it affords you, BUT STILL WORK? What is this notion that we should all hope to retire and sit around doing only what we want to do as soon as possible? With the 5 million you could take a job you love, is meaningful and helpful to you society, and convenient to your family life. And supplement your income with the trust fund, still saving much of it for retirement.

Oh yeah, and maybe you could be generous too.

[Ray]

Duane, 100k a year really is a lot of money, even if you're raising a family.
As Fred points out, median household income in the US is 43k, and only the top 15% have incomes of 100k or more. (And that's the top 15% of the richest country on the planet.)

[NBarnes]

For me, my happiness for their good fortune turns to scorn for their blind priviledge when they go from, 'I wouldn't know how to live on only 100k a year' or 'I wouldn't want to try to live on only 100k a year' to 'I couldn't live on 100k a year'. I understand that you don't want to downgrade your lifestyle; who would? I understand that you've never had to live on 100k, let alone 50k, let alone 30k, and it's very understandable that you regard the prospect of trying with some trepidation.

But you could do it. Lots of people do it, because they must, because they have no choice. And if you had no choice, you'd do it, too. So be grateful. Be humble. Help those who don't have your staggering luck, to be amongst the richest people living in the richest country. You don't deserve it, nobody could, so at least be thoughtful about it.

[Nate]

As another New Zealander, I have no idea how people live in hugely expensive places in NYC or any other big US city. Rent costs due to our housing bubble are rising here so fast it's insane, but the USA just seems to hit another level of mind-warping.

(I make around NZ$40k a year, which is what, US$25k, working full-time and consider myself pretty lucky. It's enough to live on and save, and I own my own home (*very* lucky), and I'm single. I feel a bit guilty for being better off than lots of others in my neighbourhood, but I guess I'm probably downscale from where maybe I should be if I were more ambitious. If I were married and trying to live on a single income - could get messy. I dunno - I've really kind of lost all track of what are sensible dollar values any longer.)

It does depend a great deal on where you live. There was an article in the Washington Post a few years ago mentioning that it would take a single parent with one child about $55K per year to get by in the DC area. Given that housing prices have risen a good deal since then, I imagine that figure is even higher now.

We live in the outer suburbs of the DC area (have about an hour's commute to work), and have seen the value of our home go from $165K when we bought it to almost $500K now. We're lucky we bought when we did; we couldn't afford our house if we were just entering the market now. And we have one of the smaller houses in the neighborhood.

But yes, if you aren't living in a major urban area, $95K is more than enough to be comfortable. Congrats to your colleagues!

[jwhook]

Sarita -

You haven't kept in mind that on that income, you would be (at least) purchasing housing which would rise in value with inflation. There would also be enough yearly income to invest in other ways -- additional property, stocks, etc. You described someone young, which also means that early purchase of insurance would be inexpensive and very extensive to help with medical care. Finally, at a 2% withdrawal rate, after 40 years, there should still be (at least) the original 5 million, which at a $250K withdrawal rate, would provide 20+ years of money.

It's enough money to live on for most people. But I agree with the posters who wrote about not retiring, but doing meaningful work when money is no longer the issue.

- jw (who never plays the lottery, but would go back to college if he won)

[bellatrys]

I begrudge them it. Just like Micah et al. Because that 5 million only comes because millions of people are and have been exploited, and from their poverty comes the fat and excess that these few elite can consider "normal." For those who eat up the poor like bread and work to take away even the little the have-nots have, the fate of Dives awaits - or should, if there were any justice in the universe.

--Which I am no longer convinced that there is, having seen the puling uselessness of liberal Christianity demonstrated repeatedly this past few years, giving me less and less confidence in any of our creed. I know why they had to excommunicate Tolstoy now.

[Jaswinder]

Long time reader, first time commenter here -- your post touched on so many things I'm going through right now I just had to say something.

I come from a poor family from rural Virginia. My father held blue-collar jobs that paid $8-$9 on and, for the most part, off. He was unemployed for long periods and my mom never worked, so most of the time we were living on money from my grandmother. Between his jobs and the money from my grandmother, we never had a household income of more than $20,000 a year. And while we could have probably qualified for all kinds of government assistance programs, my parents were too proud to apply. All clothes and all our furniture and appliances were acquired from thrift stores. We never ate out; we rarely left the house. As a result, I had a lot of free time, and I spent that time teaching myself amature web development on a spotty dial-up connection, with a home-made computer cobbled together from the functional parts of dead machines.

A few months ago, a sympathetic boss and my experience got me a job in the Research Triangle Park, in NC. I'm twenty, no college -- hell, I only have a GED. I haven't gotten my contract yet, so I don't know my final salary (I'm getting $10hr for this intermediary period) but I found out that the position I applied for and have secured earns $55-$60k. I imagine mine will be less than that due to no college degree and not much professional experience, but even half of that would be more than my family ever made. I was floored by what most people would probably consider a median salary.

Even just moving here has been a kind of culture shock. Back home, I always shopped at Wal-mart -- here, there aren't any Wal-marts because the area's too suburbany and affluent. Instead of rusty pick-up trucks and churches on every corner, there are Lexuses (Lexii?), BWMs and coffee houses. Even though I'm farther south I end up suppressing my twang so I don't get weird looks from the northern transplants.

I find myself in a constant state of gratitude and wonder. I feel like I'm going to be living the high life. I'll be able to have health care for the first time in my life. And I'm afraid of losing that sense of awe and thankfulness after a while. Forgetting I'm -- by my own standards -- now 'elite', forgetting to appreciate where I've come from and all the people still struggling in those conditions.

[Alan]

My boss once asked me, seriously, if I thought I could survive on $100k a year. After the shock wore off, I politely told him that I could probably make it for several years on $100k. Of course, I was a high school music teacher before going to law school, and I still live like it as much as possible. I have too many law school friends who are already in debt up to their eyeballs to the point that being out of work for more than a month would ruin them.

[pat greene]

Fred, that median household you quoted? There are a lot of people in the SF Bay Area, and in all of California, who live in poverty. When you adjust for cost of living, California comes in third in terms of number of residents living in poverty.

[Daniel Martin]

I have trouble comparing my current income to the prospect of having approximately $100K a year after taxes (unearned income is taxed less than earned income, and drawing down principle is taxed not at all). On the one hand, that'd be a very, very nice raise. On the other hand, that comes without health insurance attached. How much does private health insurance cost? How about private health insurance that's in any way comparable to the insurance one gets as part of a large union?

For those not in the US, understand that having health insurance in the US is much, much more than merely insurance. It also radically changes the amount of money that services cost based on large network agreements between doctors and insurers. It's not uncommon for me to see an insurance statement that works out something like this:

MM/DD/YY SOME MEDICAL SERVICE: Dr. So-and-so
Initial cost: $350
Allowed cost: $210
Plan pays: 50%, $105
Patient pays: $105

That is, aside from paying part of my costs according to the insurance agreement, they routinely wave their magic "allowed costs" wand and make a third to one half of the bill simply vanish. That vanishing act happens even after I max out the plan benefit on some category of costs for the year. Now, someone without medical insurance (such as the hypothetical person living on their trust fund alone) of course doesn't get the magic insurance wand, so I'd want to continue working.

The big freedom afforded by that kind of windfall for me would be the freedom to stop thinking about money - I could pay someone else to think about my money for me. Every time I try to sit down and seriously think about our money and where it goes and why we don't seem to have enough of it, it's a majorly stressful occasion for all concerned, and I still never discover where the money goes. That kind of windfall would let me hand the process over to a professional.

[cjmr's husband]

Concur. If I suddenly acquired that much cash, I'd still be at work for the insurance. I bloody well wouldn't be working overtime, though.

[Ray]

You can't buy health insurance for less than 10k a year?
(Or you could move to a civilised country...)

[colin roald]

A bit of perspective: from the point of view of the average resident of the planet, every person here has a lifestyle indistinguishable from the Urban Mommies'. Yes, even Jaswinder's father.

If you've never thought of yourself as one of the richest people on the planet, well, then, that's the same mindset they're in.

[Journ-O-LST-3]

This reminds me of "Bonfire of the Vanities" There is a scene one of the characters is thinking about his monthly costs and how he somehow makes all his money and keeps winding up broke.

That said, I am getting by on about 14K a year even paying for college. When I worked at a gas station I and the other employees were getting by on about 12k a year (we had a 45 mile buffer between us and SF/Marin housing prices).

These people would not have been impressed with the various arguments about how 5million is so small and won't last. These people won't make 5million in their life, I likely won't. Maybe it isn't enough to pay for the best private schools, shiny new cars, the newest clothes, eating out every day, your own luxury house in a major city and retireing in wealth to the tropics. But when you look at the people living paycheck to paycheck it is unimaginably huge. 5million is the kind of money that people joke or dream about.

And if living on 100k a year is somehow hard, maybe there is something wrong.

[Erick Oppeen]

Where I live (north-central Iowa) 95K a year would allow me to be one of the wealthy elite.

As far as the super-expensive metros go...finish this sentence: "A ____ and his _____ are soon ______."

I will say, though, that a lot of the expense of living there is because of ultra-high housing prices (compared to Flyover Country, at least) which, in its turn, is often the result of stupid, poorly-thought-out schemes of various sorts...rent control, forex.

Although it's a cute, bouncy song, I despised Malvina Reynolds' "Little Houses" for its awful boho-snobbish attitude toward the "ticky-tacky" houses and the people who lived in them.

[Jeff]

I hate to be the one to have to defend greed and all that but 100K/year isn't really that much money when you're paying for a house, raising a family, have multiple car payments, pets, etc.
Buy a smaller house. Have a smaller family. Have one car and/or take mass transit. Keep the pets small and few.

If you don't see these as viable options (and to most Americans, not to mention the rest of the world, these are not "options"), you have the same blinders as the UrbanMommies.

(The people who do the menial tasks in your urban environment have to live there too, and they're not getting 50K per year, much less 100K.)

[Scorpio]

One of the things I read that made me shake my head in disbelief was about the well-to-do who suddenly find themselves unemployed and without savings -- how aghast they are that unemployment is not going to pay their 8,000 a month in house payment and bills.

Some people live in an amazingly insulated universe.

[corbie]

Jeff, good luck finding a "small" house in one of the more expensive areas of the country (like the Northern VA suburbs). They're all going for $500K to $750K at the very least, because they're considered "teardowns" -- i.e., the land value is so high that the smaller houses are being torn down and replaced by McMansions that are built as close as possible to the lot's boundaries and dwarf their remaining, smaller neighbors.

The shortage of affordable housing is a crisis in this area. Nobody builds "starter homes" anymore, because there's no profit in it. All the new houses being built in my neighborhood are huge, and I don't know how people afford them -- they are probably house-poor and overextended. Young singles and couples find it hard to find an apartment to buy or rent because when developers want to build apartments or townhouses there's resistance from the local homeowners, who fear that the lower-cost housing will bring in an "undesirable element". Those same homeowners then find that their kids can't find housing when they graduate from college; the kids wind up moving back home to live with Mom & Dad until their incomes rise enough that they can afford a place of their own.

Many of the working poor live in DC itself, but there’s a definite housing crunch there, too. I work in DC's Chinatown area. When my company moved there about 10 years ago, it was a run-down, dangerous neighborhood, but there were row houses available for about $150K. Those same row houses are now going for $500K - $750K. Some have been torn down and replaced with tall condo buildings; the condos start at $500K and go into the million dollar range. Homeowners in the older DC neighborhoods, like Shaw, are having to take mortgages out on their houses simply to pay their property taxes. I was just reading an article about people commuting from Baltimore to DC, because you can still buy a townhouse in Balt. for about $150K. I could go on…

The working poor are being pushed further and further to the edges of the region, which means that the people who can least afford it are the ones with the longest commutes (sometimes 2 or more hours), have the least access to public transportation (house prices rise drastically when a new Metro station is built in the neighborhood), and are the most vulnerable when their transportation arrangements break down.

Makes you want to volunteer for Habitat for Humanity, doesn't it?

[Erick Oppeen]

And "use mass transit?" Shyeah, right! Where I live, even _bus service_ between towns is iffy. And flying out of Des Moines to go anywhere reminds me of the movie _Deliverance:_ "You got a purty mouth---now squeal like a pig!"

[Beth]

One of the things I read that made me shake my head in disbelief was about the well-to-do who suddenly find themselves unemployed and without savings -- how aghast they are that unemployment is not going to pay their 8,000 a month in house payment and bills.

This is one of the reasons to be so concerned about this conspicuous consumption: it puts people in an economically precarious situation. Schadenfreude aside, it doesn't matter whether a family is made homeless because of the loss of their $5,000 shack or their $5 million McMansion. Either way, it's a tragedy for them and a burden for society.

The real irony is how little they're benefiting from their enormous wealth when so much of it gets eaten up in an economic vicious circle. They still end up struggling to simply maintain a 'normal' lifestyle, to socialize with people in their circle, to impress business contacts, to ensure their kids' futures by getting them in the right schools and introducing them to the right people. Why does a decent apartment in a 'good' Manhattan neighborhood cost 7k/month? Simply because there are enough people like them who can and will pay it. If economic distribution were more equal, they might only have half that to devote to rent, but half that would be enough to pay for that same apartment.

I have a friend who is in the same business as me. His income is a little higher than mine, and -- thanks to generous parents -- his economic situation is much better, but he feels like a failure and I do not. You see, his family is rich (summer home in Nantucket rich) so the yardstick is different. When he goes to his college reunion, he sees the 6 and 7 figure incomes all his old Harvard buddies seem to have and feels like the class loser. He has a decent home and makes a decent living, but that's not likely to impress his parents, not when his brother is a hot-shot corporate executive. The problem, of course, is not his bank balance but his mindset, but the latter can be a lot harder to change than the former.

I'm afraid of losing that sense of awe and thankfulness after a while.

Don't worry, Jaswinder, you will. It's simply human nature. You may always be a little more appreciative of what you have and a little more conscious of the poor than those who were to the manner born, but we can and do get accustomed to anything and appreciation inevitably slips away.

[the opoponax]

"Although it's a cute, bouncy song, I despised Malvina Reynolds' 'Little Houses' for its awful boho-snobbish attitude toward the "ticky-tacky" houses and the people who lived in them."

have you ever actually heard that song or listened to the lyrics? it's not a song from the point of view of elitist urban bohos decrying the "tacky" homes of the working and lower middle classes. it's a FOLK song lamenting the exact same things we're lamenting right here in this thread. if you notice in the song, the people who live in the ticky-tacky houses are suburban doctors and lawyers and businessmen who belong to country clubs and whose overindulged children grow up to be just as boorish and alienated as their parents. THAT is what the song is about, not how gauche non-bohos are. not how much it must suck to have to live in a small house. it's not a judgement on "middle america", the working class, or rural life at all.

also, while i'm here. having been born in "flyover country" and having lived in new york for 6 years now, i wouldn't apply "a ____ and his ____" at all. sure, a lot of people here pay way too much for way too little (especially the Urban Mommies and others of their ilk who are the subject of this thread). i can think of scores of reasons i'm glad i live in new york and not back in rural louisiana, and that's on a "below poverty line" income, let alone the national "averages" for a family of four.

for example. i'm a filmmaker. in new york i'm able to have a relatively secure job in my field. back in louisiana i'd be a schoolteacher (a noble career, yes, but not my first choice). in new york my total transportation costs come in well below $100/month. in louisiana i'd have a car note, insurance, and gas. in new york i share a 750 square foot apartment with a friend. in louisiana i'd either have to live alone in a much larger footprint or move back in with my parents. in new york there's so much free and cheap entertainment that i don't need to pay for cable or internet service at home and rarely go out drinking. in louisiana TV and alcohol form the backbone of downtime because there isn't much else to do. and that's not even getting into the cultural, educational, and aesthetic reasons why it's great to live in a world-class city.

do i pay more rent than you probably do? sure. but my cost of living is still far lower than that of most americans, and i come out with a lot more for that money. i'm glad you like living the rural life, but it's unfair to blame everyone who hasn't chosen that a fool just because their monthly budget looks a bit different from yours.

[Bill-O-RLY-1]

Posted by: Journ-O-LST-3

Nice Paranoia reference, there. What happened to your first two clones, citizen?

[LL]

It seems a bit assholish to tell people how to spend their money. If you can afford a great car and huge house, why shouldn't you buy them? A house and car are at least useful things that have some market value if you have to sell them, as opposed to vacations or restaurant meals. I try to live a little below my means, but that's not too difficult, I don't have kids or college loans to pay or a mortgage or high health expenses, my car is five years old and gets about 35 mpg.

What some people have observed above is correct, apparently, builders don't build "small" houses anymore, because people don't want small houses, they want giant houses with giant spa-like bathrooms and triple garages and enormous living areas with vaulted ceilings. Every time I move into a new apartment, one of the first questions people ask me is "how big is it?" like that matters when you're renting. Americans seem to be obsessed with bigness, as if anything that isn't more than you need is pathetic. Giant house, giant car, giant meals. Still, I refrain from telling people how big their house or car should be, but I also decline to sympathize when they bitch about how much gas costs to fill up their giant SUV or how high the electric bill for their huge house is. I do have some sympathy for people in the extremely dense population areas (SF, Boston, NYC, etc.); there is apparently little buildable land left, so it all costs a fortune. Read a few years back that 40% of the cost of a house in NJ is just the land; about 20 years ago, it was 20%. And I don't know how people who make the median income or less live anywhere really, if they have kids. I make $35,000 a year in the DFW area and it's enough for me, but I'd hate to have to raise one kid on that, much less several kids. I know people do it, but I wouldn't want to.

[Duane]

Get rid of a kid or two and shoot the pets, then 100K/year will seem like a lot. Great advice. This is why I read Slacktivist.

[Josh]

Just offering my own exprerience for comparison. I'm single, childless, in good health and living in a college town in the Midwest, so obviously people in a different situation will have additional expenses which I don't have a clear perspective on. That being said, I make ~18K a year gross as a grad student and I live quite comfortably by my own standards. I don't think of myself as rich but then I start listing my possessions and privileges: I own a good car and live alone in a decent apartment with heat and A/C, I have a TV and a playstation, a stereo and (obviously) a computer with internet service. I am never hungry and while I don't go out every day I can eat at a restaurant or see a movie any time without feeling guilty. I maintain a cat, have more clothes and shoes than I want and live in an area with low crime, good health care and excellent sanitation. It fills me with both wonder and cynicism to realize that I live incomparably well compared to the poor in many parts of the world and yet I can't conceive of the gap between myself and the rich in this country.

[Erick Oppeen]

"Get rid of a kid or two."

ISTR people who've tried this---Susan Smith, for example. Andrea Yates is another good example. Thank you, but no---even if I did have kids. I'd just as soon stay out of prison completely, particularly since prisoners are known to have such a...welcoming...attitude toward child-killers.

Some of the above posters have made excellent points about people who get themselves into situations where they're making 100K+ a year and still barely scraping through. I think that a large part of that is that many of those people are like the author of _Nickled and Dimed_...they _don't know how_ to be poor, or even to throttle back the spending. Myself, while I detest my poverty as much as I do the Westboro Baptist Church, even if I suddenly became Obscenely Rich (and that would be by the Sultan of Brunei's standards---where I'm nice to Bill Gates because I feel obliged to be good to the less-financially-endowed...*grin*) I'd still be saving money by, forex, _not_ having to have the latest toys when they're still bleeding-edge new. I'm looking to replace my computer monitor, and when I can get an older-fashioned monitor of the sort I'm used to for, say, twenty dollars, spending two hundred on a flatscreen strikes me as insane. Same goes for transportation---why buy, for example, a big fancy Harley when a Japanese four-cylinder is often just about as good and a lot cheaper (not to mention, less attractive to thieves)?

[Ray]

Have you actually *read* Nickled and Dimed? A lot of it is about how poor people have to make expensive choices. It's emphatically not about how Ehrenreich spends all of her paycheck on a new pair of shoes that OMG she had to have.

[Journ-O-LST-3]

Bill-O
I lost my first two clones in heroic service to the Computer, we can't all use traitorus secret society contacts to advance through the ranks.

[Jeff]

Duane: Does your garbageman have kids and/or pets? Your janitor? The guy who cooks the food at the local Denny's? I bet their not "scrimping by" on 100k a year. Go tell them just how much you're suffering. I'm sure you'll find a sympathetic ear.

[Duane]

Jeff:

First, I didn't say I made 100K/year. I simply pointed out that it isn't all that much, relatively speaking. Secondly, we can play this stupid game all the way down to 0K/year and accomplish nothing more than giving everyone a chance to whine.

Why create an artificial divide between the rich and the poor at 100K? Why not make it 90K? Or 80K? Or 70K? Or 60K? Or 50K? You tell me what you make and I'll bring up an example of someone making it by on much less and tell you how much you suck for being such a greedy sonuvabitch while this other person shines with the light of Jesus for not providing for his family better, or for not putting to better use the talents God gave him or just for being an unmotivated couch potato. I'll bring up statistics that show what percentile of affluence you are living in relative to the rest of the world.

There really couldn't be a more pointless discussion than this one. It's just providing all of us with the opportunity to envy someone else for working a little harder or making better choices.

[Ray]

Nobody is saying that people at 100k are rich and the people at 99k aren't. I don't think anybody has even said 100k a year = rich. A lot of people have said that 100k a year is enough for any reasonable person to get by on, which is quite different.

[Duane]

So then a family of four would reasonably get by on 400K/year? Or does the "two can live cheaper than one" rule kick in twofold thereby requiring four reasonable persons to get by on significantly less than 100K?

[Jeff]

Except, Duane, I know I'm making quite a bit more than most people in this country. I don't whine about how much I'm making (and it's nowhere near 100K).

You think it's tough "getting by" on 100K. Goody for you.

[Jeff]

So then a family of four would reasonably get by on 400K/year? Or does the "two can live cheaper than one" rule kick in twofold thereby requiring four reasonable persons to get by on significantly less than 100K?
Somewhere in between, I think. Rent for a one-bedroom is the same regardless of whether there's 1, 2 or more occupying it. Most health-care plans offer significant savings for spouses and dependents. And cooking for 4 is the most economical.

That said, there are individual costs that are not combined. Clothing costs for 2 are the same regardless of whether they're pooled or not (discounting the "hand-me-down" factor.

Children tend to have fewer up-front costs (they don't need transpotation, they eat less, their clothes **used** to cost less), but figuring in college, may be more expensive in the long-term (I have no kids, so I'm guessing here).

I would think, offhand, that if we accept 100k as a base-line for one person (I still think it's way too high), 250K to 300K should be the equivalent for a family of four (2 parents and 2 kids).

That's just my very rough guesstimate, though.

[Duane]

I would think, offhand, that if we accept 100k as a base-line for one person (I still think it's way too high), 250K to 300K should be the equivalent for a family of four (2 parents and 2 kids).

Why don't we decide what the real cap on one person should be and then extrapolate it for four persons?

[LL]

RE "Secondly, we can play this stupid game all the way down to 0K/year and accomplish nothing more than giving everyone a chance to whine."

I agree up to "accomplish nothing more." I don't think a conversation about what it costs to "get by" in America (whatever your definition of "get by" is) is pointless. It's just too bad it's confined to a website, rather than a national discussion of how much things cost vs. how much we have to pay for them. If it only kept Republicans from whining about how they're not getting any credit for the "great" economy, it'd be worth it.

RE "children have fewer upfront costs" - I don't have kids, either, but I know better than that. They cost before they're born. Just giving birth (in a nice, clean hospital vs. in your house) is about $15,000. Baby stuff - crib, carseat (mandatory in most states), stroller, clothes that they grow out of roughly every couple months, continued medical costs, diapers, formula (then baby food), etc. It costs a shitload of money to have a kid. If you're fortunate enough to have "help" with these costs (ie, family and insurance) good for you, but a lot of people don't. And you need a bigger house/apt, unless you want the kids sleeping in the living room. If I'm remembering correctly, someone estimated the total cost of raising a kid to age 18 in the US at about $170,000.

RE Duane's point: yeah, we could all live in a cruddy apartment, walk to work, buy no clothes until they become ragged, eat the cheapest possible food every night and then give all our extra income to the "poor" (whatever we think "poor" means), but why should we? People come here from other countries to achieve a better life, not the same one they left back in Mexico or Africa. Yeah, I know people in those places live worse than me, but me giving up all my worldly possessions here isn't gonna change that. I know that wasn't Fred's point, he was just trying to start the "how much do you need" discussion going. Mission accomplished.

As for how much people "should" make vs. how much it costs to "get by": My rent on a one-bedroom apt. in the Dallas area in a fairly nice neighborhood (though I was carjacked a few years ago) is $640, so I'm thinking for a 2- or 3-bedroom house, it's gotta be at least $2000 a month. So you've gotta pull in $24,000 a year just to pay for a house in Dallas in a neighborhood you're not afraid to let your kids ride their bikes around in. And Dallas is one of the more affordable areas of the country. Add up all the other things you have to pay for and $95,000 starts to look not unreasonable, depending on where you live. Plus, you really need to consider retirement savings, since most people aren't gonna get a company-provided pension, and Social Security may not be very secure, depending on how badly the govt screws it up.

[Duane]

I would think, offhand, that if we accept 100k as a base-line for one person (I still think it's way too high), 250K to 300K should be the equivalent for a family of four (2 parents and 2 kids).

Why don't we decide what the real cap on one person should be and then extrapolate it for four persons?

Jeff? Did we decide on a realistic figure for a family of four? How about 100K/year for a family of four? That is about a third of what you were projecting. Now let's revisit my original comment:

I hate to be the one to have to defend greed and all that but 100K/year isn't really that much money when you're paying for a house, raising a family, have multiple car payments, pets, etc.

Thanks for coming around. Truth is, when you are young and single, you can likely get by on close to nothing because you've always got mom and dad to freeload off of.

But when you have your own family, you don't ever feel like you can do enough to provide for them.

[Ray]

Duane, no, I think 100k is a reasonable amount for a family of four to get by on too. (There's no contradiction between 'any reasonable person can live on 100k' and 'any reasonable family of four can live on 100k')
If you start talking about much bigger families, or multi-generation families, or families with serious medical problems... sure, 100k will eventually start getting tight. But two adults, two kids, on 100k? Most manage on a lot less.