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$2 a Day: Living on Almost Nothing in Amercia

Posted: Mon Dec 31, 2018 2:34 pm
by AnalyticalEngine
I've been fascinated by the concept of poverty lately. The more I read about it, the more I realize it's not often about income per say. It's about a lack of all forms of capital: financial, social, and others. This book records the lives of families who live on $2 a day or less in the US and the strategies they use to survive. It's a fascinating read, and I highly recommend it for anyone who wants to learn more about the topic of extreme poverty.

It's also fascinating from an ERE perspective because you see how both mindset and dysfunctional family/friends contribute to poverty. For example, the book opens with a group of people living in a decrepit house with a running, empty fridge with nothing inside but a spoiled gallon of milk. It would certainly benefit this family to unplug the fridge to save electricity or to buy something more nutritional than milk, and yet they don't. Their sole source of food comes from two shared SNAP cards they're using to feed four people. They also catalog families in houses without running water.

An ERE approach to this problem (unplug the fridge, buy dried goods) isn't considered by most of the people in this book because they're essentially living under a constant state of duress.

So if you're ever curious about the difference between the low spend of ERE and the low spend of poverty, I highly recommend this book. It's been eye opening to me about the real conditions of poverty in the US.

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 8:48 am
by sky
I was hoping for a how-to.

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 9:33 am
by thegreatvoid
I would recommend you watch the 2013 documentary " Living on One Dollar " , if you have not seen it yet.

Thanks for the book recommendation.

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 10:33 am
by jacob
I think I read that (now I'm confused about the $1/day documentary: Was that a book too?). But yes, poverty is always multi-dimensional. It's the opposite of ERE. Whereas ERE strives to develop and integrate multiple kinds of capital (financial, social, technical, etc. see ERE book chapter 4/5), and a salaried consumer (over)develops specialized job capital (and some financial capital) to compensate for other shortcomings (which must therefore be purchased), those living in poverty have zero capital in just about all dimensions. Some of this capital might even be negative, e.g. a drunken or sick household member, a criminal record, unaffordable pets, student/car loans, health issues, mental issues, ...

The standard government and charity solution is to throw money at the problem. Oftentimes money doesn't convert well and therefore doesn't compensate for lack of capital in other areas. For example, it's pretty expensive to fix bad budgeting skills (a lack of education) with money and in trying to fix that problem with simple education it becomes clear that [adding] more education is anything but simple.

(Conservely, [households] who make say $100k a year, can easily compensate for poor or negative capital with money. Insofar you have a drug abuse problem: If you're poor, you eventually go to prison. If you're high-income, you eventually go to rehab. Or more generally... if you have money, you can pay to stay out of "the system". If you don't, you eventually end up in the system.)

Another way is to throw "programs" at it. Hence, SNAP, WIC, job retraining, required hoops for unemployment. Programs are an attempt to spend the money better than the person who would otherwise receive it would. E.g. you can only use "food stamps" to buy food. Of course this doesn't always hold/doesn't hold for everybody. There's a black market for converting food stamp money into real money by e.g. selling the food at a discount to get cash.

Politics is about different people having different ideas about the proper one-size-fits-all model.

To someone living in voluntary simplicity, "$2 a day" is highly click-baity, so it's important to realize that $2/day in this context is far removed from ERE in the sense that there's really nothing to be learned about frugal living by studying involuntary poverty. In the book I read the $2/day or $1/day measures disposable cashflow expenditure but does not measure any cost paid by any program. IOW, these are not people living on 0.1jacobs (JAINs?).

A more accurate title would be: Living fully dependent on charity and government programs in America. (I'm not good at titles but you get my point.)

A good way to see how living is different in kind is to look at budgets.

If you look at the budget of a standard consumer unit, you'll see a lot of items (say 10-20 different ones), e.g. gym, daycare, food, going out, entertainment, other, mortgage, credit card #1, credit card #2, heating, cable, cell phone, .... often adding up to thousands of dollars per month.

The difference between a consumer and a frugal consumer is that many of those items are lower and add up to something less than before.

The difference between a frugal consumer and ERE is that many of those items are now -ZERO- because they have been replaced with "renaissance capital".

The difference between a consumer and someone living in poverty is that most of those items have been replaced with "government/charity program".

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 11:51 am
by Jason
jacob wrote:
Tue Jan 01, 2019 10:33 am
that there's really nothing to be learned about frugal living by studying involuntary poverty.
Well, except why you want to avoid it at all costs and how frugal living can serve as a precautionary measure in order not to wind up there. Also, I think the much discussed "expensiveness of poverty" does have a corollary in a non-impoverished environment. Anecdotal accounts of the impoverished equating poverty with not having "things" as opposed to not having money and how that perpetuates and often deepens the cycle (predatory lending etc) is the dark side of the consumer culture tent that we all live under.

I know there are degradations and different ways of determining poverty, but when you consider that an impoverished family could have a higher net worth (0) than a non-impoverished family (negative net-worth), studying involuntary poverty can serve to inform that making money is not a real hedge against finding oneself living in poverty. ERE can show how its best to learn how to live without money when you actually have it.

I would recommend Matthew Desmond's "Evicted" to OP.

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 4:38 pm
by Dream of Freedom
jacob wrote:
Tue Jan 01, 2019 10:33 am
so it's important to realize that $2/day in this context is far removed from ERE in the sense that there's really nothing to be learned about frugal living by studying involuntary poverty.
You are right that there is little to learn from welfare recipients. Which is what this is about. I am less convinced that there is nothing to be learned of frugality from involuntary poverty when it happens on a societal level. Not everyone in a poor nation is going to be unresourceful and they have often had generations to develop frugality skills.

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 5:43 pm
by jacob
In the uni-dimensional measure of money-spending, economists differentiate between absolute poverty (can you afford basic stuff like shelter, clothing, food, and clean water) and relative poverty (can you afford to spend more than half of the median in your country).

I've made the point before that this can be viewed analogously to a Dupont version of the IPAT formula (also see the Kaya identify which is just that) so

quality of living = quality of living/standard of living * standard of living
or rephrasing
quality = skill * spending

Or more abstractedly (and way more useful)
value = capital/flow * flow, where flow is the effort (input) of various resources and capital/flow is a matrix that transforms them into value.

It's possible to be absolutely poor but relatively rich if the flow is very low and the capital/flow transformation is high but not high enough. That is the situation ERE can learn the most from. E.g. relatively well-off people from very poor countries. Also see economic migrants.

It's also possible to be relatively poor but absolutely okay if the capital/flow transformation is broken/self-destructive but the flow is increased high enough and compensate to provide clothes, shelter, clean water, etc. I don't think there's much to be learned here beyond the ability to be sympathetic(*) and see it as an example to be avoided if possible. My point is that this is not something that's desirable to emulate.

In contrast with average people with average capital transformation and average flows.

Also in contrast with the "there but for the grace of God (an inheritance) go I ...", that is, people with poor capital (lots of problems) but high flows. Also see trust fund babies gone wrong.

(*) Sympathy is often judgmentally dismissed by noting that someone who can afford a cell phone (thanks to government handouts) is not poor [enough]. This has a mean streak to it. The sympathy might be better placed in recognizing the non-monetary/non-consumer aspects of poverty: Someone who can't help themselves. [Of course this can equally be seen as condescending. Tread carefully!]

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Tue Jan 01, 2019 10:18 pm
by classical_Liberal
USA anecdotes of the above distinction probably look like; first generation immigrant/family farm owner poor vs 2nd or 3rd generation urban welfare poor. I would venture to guess most have had some type of contact with these examples, and noted the complete difference in these types of poverty lifestyles.

Re: $2 a Day: Living on Almost Nothing in Amercia

Posted: Wed Jan 02, 2019 4:45 am
by oldbeyond
The emergence of the unskilled poor is quite a big deal. If you're low on financial resources, skills are more important. Unfortunately a lot of skills seem to decrease with lower income, at least below a certain threshold. This leaves some people with below average skills and below average resources, which seems very different from the situation a couple of generations back were most poor people had household economics, basic trades and perhaps some farming skills going for them. At least it seems that my grandparents generation did, along with social capital, including some direct access to food from the countryside(still having family/friends back on the farm). Both financially and psychologically the difference must be huge.