What is poor?

[Arrian]

What is poor, in a more general sense? Forget the exact numbers.

I figure it's when you cannot afford to both:

1) pay for the basics (rent, taxes, food, energy, clothes); and
2) save.

If you cannot save you cannot gain wealth. If you cannot gain wealth and you're just barely meeting basic needs... you're po in my book.

-Arrian

[Krill]

I take it that you would remove students from the numbers for population right?

[Patroklos]

What is poor, in a more general sense? Forget the exact numbers.

I figure it's when you cannot afford to both:

1) pay for the basics (rent, taxes, food, energy, clothes); and
2) save.

If you cannot save you cannot gain wealth. If you cannot gain wealth and you're just barely meeting basic needs... you're po in my book.

-Arrian

I would agree, however I am quite sure that most American's concept of "the basics" is quite different than yours or mine.

[Q Classic]

Originally posted by snoopy369
$800/mo rent ($9600)

Snoops, unless they're in the suburbs, or very far from safer neighborhoods, that's a rather crummy apartment, I'd think? (Of course, my numbers might be skewed entirely...)

$150/mo transit ($1800) (monthly bus pass for both parents)

Somehow, I don't think most of those in dire straits are capable of purchasing monthly passes--it's probably more along the lines of:
$2.25 * 2 * 5 * 4 for a month, at least, so about 90/month for 1, if they take no other trips; $180 for two; maybe up to $250, depending on how often the kids ride.

If they're using a car, on the other hand, regardless of how old... it'll likely be closer to $300 or $400, I'd think? (This, I know nothing about.)

$400/mo food ($4800)

Admittedly, I don't buy for four; but I recall when my brother and I were going through our growth spurts, our family of 3 in Atlanta was spending almost that much a month for food--and Atlanta's cheaper than Chicago. I'd push that sum up at least $100 to $150, depending on how often they go to Aldi.

$300/mo health insurarce ($3600)

I don't know how many poor families actually have health insurance... so I'd actually take this out. Unless they got sick, which means depending on whether they went to a public clinic or not...

$40/mo gas ($480)

Depends on the place they live, and winter actually kicks this up a bit, doesn't it? I've been lucky to live with radiators all my time here, but I've had friends living in townhouses paying at least $200/mo in winter--and that's excluding one-time fees, like connection costs and deposits.

$150/mo clothing ($1800)

Is this including laundry? Otherwise, I'd add another $50/month ($600/year)--4 loads a week at $2.50 for a wash and a dry, plust $10 a month for the detergent and dryer sheets.

Probably closer to $32,000 for a family of 4 in Chicago, which has a fairly low CoL for a large urban environment.

For a large city, we're cheaper than, say, SF, LA, or NY.

That doesn't mean we're that cheap, though, not when grapefruit juice costs $4/half gal, or 2-3lbs of beef close to $5...

[Jon Miller]

Originally posted by snoopy369
Where did I say it was defined as unable to live without assistance?

I'd define the level of 'poor' as less than 10% of income is 'disposable' income; ie, 90%+ income is used on food, clothing, rent, transit, healthcare, etc., based on standard measures for 'minimum acceptable' based on the area.

For Chicago, family of 4, I'd use the following figures:

$800/mo rent ($9600)
$400/mo food ($4800)
$150/mo transit ($1800) (monthly bus pass for both parents)
$150/mo clothing ($1800)
$300/mo health insurarce ($3600)
$100/mo other health costs ($1200)
$70/mo electricity ($840)
$40/mo gas ($480)
$40/mo heat for 6 months ($240)
$20/mo water ($240)
$20/mo telephone ($240)
--
24,840
so around 28,000 is the level at which you can spend about 10% of your paycheck on optional goods, by this calculation; I'd guess that some of those costs are low estimates (kids in school have school item costs, for example, while younger kids go through clothes faster, plus diapers etc; daycare; and I'm assuming zero taxes, which may be inaccurate at that level.) Probably closer to $32,000 for a family of 4 in Chicago, which has a fairly low CoL for a large urban environment.

I agree with this idea.

JM

[Jon Miller]

BTW, I also would guess costs would be higher for utilities, but this is based on Newport News and College Park numbers.

I also would guess more on food, I spend 500$ which is a lot, but I would expect 200$ per person as being pretty reasonable.

Also, one thing your 10% savings rate doesn't include is emergy expenses. This is to buy things like:

Fix up the Car
Health Problems
etc

I know you did include Health Insurance there, which would take out some of these extremes. But still, they exist, and they kill a poor families savings and (especially health) can put them in debt for a decade into the future.

I know that was the case with my family.

JM

[Deity Dude]

Originally posted by snoopy369
Where did I say it was defined as unable to live without assistance?

I'd define the level of 'poor' as less than 10% of income is 'disposable' income; ie, 90%+ income is used on food, clothing, rent, transit, healthcare, etc., based on standard measures for 'minimum acceptable' based on the area.

For Chicago, family of 4, I'd use the following figures:

$800/mo rent ($9600)
$400/mo food ($4800)
$150/mo transit ($1800) (monthly bus pass for both parents)
$150/mo clothing ($1800)
$300/mo health insurarce ($3600)
$100/mo other health costs ($1200)
$70/mo electricity ($840)
$40/mo gas ($480)
$40/mo heat for 6 months ($240)
$20/mo water ($240)
$20/mo telephone ($240)
--
24,840
so around 28,000 is the level at which you can spend about 10% of your paycheck on optional goods, by this calculation; I'd guess that some of those costs are low estimates (kids in school have school item costs, for example, while younger kids go through clothes faster, plus diapers etc; daycare; and I'm assuming zero taxes, which may be inaccurate at that level.) Probably closer to $32,000 for a family of 4 in Chicago, which has a fairly low CoL for a large urban environment.

You're forgetting a few things. First of all if both people work and the children are young you need daycare. $200/wk = $10,400 year.

So now we are at $24,480 + 10,400 = $34,880

Remember the $34,880 is take home. Add withholdings (Federal State, Local, FICA etc) at 15% and you get (34,880/.85) = $41,035.91.

If you live in an area without public transportation subtract your bus pass ($150/mo) and add a car payment, gas and car insurance. Let's say you get no-fault $75/mo, a cheap car $150/mo, you don't drive much - gas $50/mo, repairs and maint $25/mo and you come up with:

(75+150+50+25-150) = 150/mo or another $1800/yr So, you have to take home another 1800/.85=$2177.65 if the 2 adults can somehow figure out how to share the car.

Or a total of $43,213.56. Add you 10% discretionary and you get $47,534.92.

Based on that $48,000 doesn't sound too far off.

[Zkribbler]

"When I was a kid, we were so poor we had to sleep five kids to a bed."
"You had a bed???"

[Velociryx]

Arrian.

-=Vel=-

[snoopy369]

Originally posted by Arrian
What is poor, in a more general sense? Forget the exact numbers.

I figure it's when you cannot afford to both:

1) pay for the basics (rent, taxes, food, energy, clothes); and
2) save.

If you cannot save you cannot gain wealth. If you cannot gain wealth and you're just barely meeting basic needs... you're po in my book.

-Arrian

You cannot forget the numbers, however. This is economics after all.

[Patroklos]

I also would guess more on food, I spend 500$ which is a lot, but I would expect 200$ per person as being pretty reasonable.

We already discussed this, your estimates on food are wildly out of all relation to normal people who don't eat Tofu

[snoopy369]

Originally posted by Mrs Snuggles

Snoops, unless they're in the suburbs, or very far from safer neighborhoods, that's a rather crummy apartment, I'd think? (Of course, my numbers might be skewed entirely...)

I based that on my own rent, actually; I have a 1BR that is big enough for a family of 4, if they were cramped (2 living spaces, one for the kids, one for the adults). It's actually in a slightly more expensive area of town (Hyde Park), so I imagine you could get a bigger space for the same amount in a slightly worse area of town (say, Kenwood).

Somehow, I don't think most of those in dire straits are capable of purchasing monthly passes--it's probably more along the lines of:
$2.25 * 2 * 5 * 4 for a month, at least, so about 90/month for 1, if they take no other trips; $180 for two; maybe up to $250, depending on how often the kids ride.

Monthly pass is a convenient number (gives you free rides for 30 days), and is the most efficient way to purchase it. Even the poor can save up one month's paycheck to pay for a transit card, if they choose to. They often don't, of course, but they could. In calculating these numbers, you should always assume the correct choice when it's reasonable to be made; certainly people making $80k a year can be 'poor' in the sense of having no savings, but that is due to poor choices.

If they're using a car, on the other hand, regardless of how old... it'll likely be closer to $300 or $400, I'd think? (This, I know nothing about.)

A car is a luxury in Chicago, not a need.

Admittedly, I don't buy for four; but I recall when my brother and I were going through our growth spurts, our family of 3 in Atlanta was spending almost that much a month for food--and Atlanta's cheaper than Chicago. I'd push that sum up at least $100 to $150, depending on how often they go to Aldi.

Obviously this number can vary - even by where you live - but $400 for a family of four can feed them adequately. $400 is $3-4 per person per day, which for younger children is plenty. For teens it would probably be higher, yes. That's a pound and a half of ground beef per day, after all (if your diet were entirely ground beef, which is not an unreasonable standard price-wise). 8oz ground beef ($1), 1/4 of a frozen veggie bag ($2/4=$.50), a bowl of cheap cereal and 8oz of milk ($3/16 + $3/12, or about .45), and a PB&J ($1.50/8 + $2/15 + $1.75/15 or about .45) makes $1.50+$.90 or $2.40, with some room for additional food (say, another 1/4 bag of veggies). Shopping on sale is of course even better...

I don't know how many poor families actually have health insurance... so I'd actually take this out. Unless they got sick, which means depending on whether they went to a public clinic or not...

I consider it a necessity, so it's included. You can choose not to get it, just as you can choose to walk to work instead of taking the bus ... but in most cases it saves money overall (if you take away the relying-on-society-for-medical-bills).

Depends on the place they live, and winter actually kicks this up a bit, doesn't it? I've been lucky to live with radiators all my time here, but I've had friends living in townhouses paying at least $200/mo in winter--and that's excluding one-time fees, like connection costs and deposits.

Obviously this varies, this is one of the estimates I know less of ... but a smaller place heated by radiators will be quite cheap (possibly less than I list - in fact, I don't pay heat at all, it's central heat by radiators).

Is this including laundry? Otherwise, I'd add another $50/month ($600/year)--4 loads a week at $2.50 for a wash and a dry, plust $10 a month for the detergent and dryer sheets.

I didn't include laundry directly, probably not an unreasonable cost to add (though not sure what water costs would be - again, I don't actually pay water myself).

For a large city, we're cheaper than, say, SF, LA, or NY.

In fact, we're not much more expensive than Atlanta; rent and utilities are the only major areas where we're significantly more expensive (bestplaces.net rates Atlanta as a 112 and Chicago as a 126; compare to San Francisco at 187, San Diego at 147, NYC at 165, etc.)

That doesn't mean we're that cheap, though, not when grapefruit juice costs $4/half gal, or 2-3lbs of beef close to $5...

Ground Beef is less than $2 a pound NOT on sale, probably closer to $1 (I estimated $2/lb above, but that's honestly quite high). That's not an unreasonable price. I'm not sure why grapefruit juice should be a price estimator, though... Milk is more useful ($3/gallon if you buy it at Walgreens).

[onodera]

200$ a week for daycare?! O_O
That's insane.

[snoopy369]

Originally posted by Deity Dude


You're forgetting a few things. First of all if both people work and the children are young you need daycare. $200/wk = $10,400 year.

So now we are at $24,480 + 10,400 = $34,880

Remember the $34,880 is take home. Add withholdings (Federal State, Local, FICA etc) at 15% and you get (34,880/.85) = $41,035.91.

If you live in an area without public transportation subtract your bus pass ($150/mo) and add a car payment, gas and car insurance. Let's say you get no-fault $75/mo, a cheap car $150/mo, you don't drive much - gas $50/mo, repairs and maint $25/mo and you come up with:

(75+150+50+25-150) = 150/mo or another $1800/yr So, you have to take home another 1800/.85=$2177.65 if the 2 adults can somehow figure out how to share the car.

Or a total of $43,213.56. Add you 10% discretionary and you get $47,534.92.

Based on that $48,000 doesn't sound too far off.

I did leave out daycare, on purpose; during the school year it is not needed for two people working, and parents often can provide daycare for younger children. Regardless, it's not $200/week unless you're going high-end... my sister pays less than $100 for her one child (2yro), and she has a relatively nice daycare (very low adult:child ratio) and no two-child discount. Maybe $7000.

Taxes? Why would you have withholding if you make $30k with 2 children??? You'll pay no tax at $30k with two children. FICA/Medicare is all you'll pay. In any event, I'm assuming takehome pay, not pre-tax income (perhaps that should have been explicitly stated).

I'm talking about Chicago here; so no car. I don't have a car, and I'm above this level, after all ... it's unnecessary.

As I said, $32k is a reasonable level for Chicago in my opinion; $28k is certainly low. But $48k is way over the top. $35k is the most I could believe is considered 'poor'.

[Q Classic]

Originally posted by snoopy369
I based that on my own rent, actually; I have a 1BR that is big enough for a family of 4, if they were cramped (2 living spaces, one for the kids, one for the adults). It's actually in a slightly more expensive area of town (Hyde Park), so I imagine you could get a bigger space for the same amount in a slightly worse area of town (say, Kenwood).

I suppose that's true. I've a studio in Uptown that's just $100 cheaper, and it's big enough for me and my adorable little kitten... but not for a family of four.

Monthly pass is a convenient number (gives you free rides for 30 days), and is the most efficient way to purchase it. Even the poor can save up one month's paycheck to pay for a transit card, if they choose to. They often don't, of course, but they could. In calculating these numbers, you should always assume the correct choice when it's reasonable to be made; certainly people making $80k a year can be 'poor' in the sense of having no savings, but that is due to poor choices.

While I agree that they could save up to buy a transit card, and that it's a smart choice, that doesn't mean that it's the one they'll take--and I disagree that you should assume that they'll take the 'correct', rational choice; instead, I think one should use the most common, or likely choice.

Often times, the 'correct' choice is a luxury only the comfortable can undertake.

I've friends who could easily afford the monthly pass, and yet they still go weekly--laziness being the factor. For someone who's living paycheque to paycheque, earning not very much a week, I can see how it's better for them to simply pay as they go--if they only have $20 to spare, it'll get them to work for a week, but then they don't have the option of saving it over a period of four weeks to pay the $75 for the next month.

Additionally, while I know that you can get paper transit cards for a month, the simplest method is the Chicago Card itself--which requires a charge card of some sort (debit or credit)--something that many impoverished families may not actually have.

A car is a luxury in Chicago, not a need.

Well, it's not like the CTA has any dry/problematic spots in its coverage, or that it has budgeting issues and perennially threatening to cut routes in the poorer regions of the city... right?

I myself do tend to think of a car as a luxury; that said, and you should know this living in Hyde Park, mass transit has a whole host of additional issues--particularly when you start getting past 75th street.

Obviously this number can vary - even by where you live - but $400 for a family of four can feed them adequately.

I do make an allowance for that. I'm simply saying that I'd actually raise that amount by maybe a $100, since if a family of three in Atlanta buying things on sale and at wholesale stores can rack up $400 bills, I wouldn't be surprised if a family of four in Chicago ends up paying more--especially when the cost of living in Atlanta is cheaper, by and large, than Chicago.

I consider it a necessity, so it's included. You can choose not to get it, just as you can choose to walk to work instead of taking the bus ... but in most cases it saves money overall (if you take away the relying-on-society-for-medical-bills).

I know it saves money in the long run--but see my reasoning from above. Just because it's the right, logical, sane, correct choice, does not mean people have access to it. Impoverished families may not have access to it through their workplaces; insurance companies may not be willing to cover them for a reasonable amount, either due to 'pre-existing' conditions, or a host of any other bureaucratic reasons. They could get the insurance for only life-threatening issues, but even that may require a monthly expense that they cannot afford.

Why do you think so many people end up going to the emergency room, rather than their GP?

I didn't include laundry directly, probably not an unreasonable cost to add (though not sure what water costs would be - again, I don't actually pay water myself).

That, I don't know. $1.25 is what I've always seen, but I've never been to a laundromat, where things might be more.

Ground Beef is less than $2 a pound NOT on sale, probably closer to $1 (I estimated $2/lb above, but that's honestly quite high).

Well, I suppose ground beef--I was thinking more of beef stew cuts, so. *shrugs*

That's not an unreasonable price. I'm not sure why grapefruit juice should be a price estimator, though... Milk is more useful ($3/gallon if you buy it at Walgreens).

Milk's not so useful for the lactose intolerant--which is why I couldn't think of the price off the top of my head.