Is it better to stay poor?

[CountZero]

Just got done talking with a friend. He's currently on Medicaid in NJ. He doesn't have to pay for his health coverage because he only made about $11,000 last year. He also has student loan debt but doesn't have to pay it back because of his income. In fact, he's currently on IBR.

Now, here is the kicker. He's trying to better himself. He's working 2 jobs which will put him in a higher income bracket. About $25-30k a year. I say good for him. You want to move up. That's the American dream. But, he just got off the phone with HealthCare.gov and they informed him that since his income has increased he's looking at $300 a month for health coverage. It's the same for his student loans. He will have to start paying them back. And he should. He took out the loans and he knows the deal. He accepts responsibility, but he doesn't know if he's going to have the funds. With rent, food, daily expenses, and additional bills there is going to be nothing left over for health coverage and his student loans. And, let's face it. $30k a year in NJ is peanuts.

It seems that unless you're making a ton of money it's just better to be broke so you can let the government cover your expenses. I'd never want to give the government control over my life, but when you're on the edge of poverty like my friend, it seems that poverty is the better solution. Hell, I've known people who collect unemployment and work under the table. It's not a great way to live, but at least they aren't busting their asses.

It just seems that the people who are really trying to better themselves are the fools, and the people who game the system are the smart ones. I don't want to believe that, because this is still America.

This situation is one of the big ones cited in support of minimum guaranteed income. In a system with means testing for benefits there is a perverse disincentive to improve your situation lest you lose all of your benefits.

Imagine working two jobs and not having enough to eat or a decent place to live vs not working at all and getting both. The best choice is obvious to anyone in that situation. Even worse it can take months to get on those programs thanks to the means testing and needing to prove you qualify. So if you lose that job and would qualify again it can be months before you get assistance. We've set up a donut hole where there's little to be gained by not being a "leech".

With a minimum guaranteed income everyone gets $X/year and all of the social safety nets for poor people go away. These plans are touted in areas that already have socialized medical so that's not part of it, and is likely required for such a system to work. But no longer do you need welfare, disability, unemployment, SS, etc. Since everyone gets $X than any job will mean you get more. There is always incentive to work. Can also remove minimum wage as the risk vs reward for the job has to be sufficient for people to bother.

Whether or not such a system is actually feasible is still unknown but you have seen first one hand of the ills our current system fosters.

 

[WackyDan]

Turn down $25,000 to $30,000 because you MIGHT have to pay $3600 (in reality the new job might just cover the difference)? The only fool is the one who chooses to be $21,400 poorer.

Edit: maybe I misread it (I read it as a higher income, about $25k to $30k). Maybe the real scenario is that he'd be turning down an extra $14k to 19k (from $11k to $25k). Still, the fool is the person who turns down $14k because he might have to pay $3600.

Also note, he'd be getting far more social security benefits with the higher income. So, he'd be earning thousands of future dollars too.

He'll be out more than $3600... that $3600 is just for what he'll have to pay towards an ACA approved health plan coverage. That does not cover what his deductibles will be either.

On top of his now elevated health care costs, he now has to pay his student loan debt per month.

On top of all that, his higher income is probably going to impact any housing assistance, food stamps, etc that he is currently on. Jumping to $25-$30k a year has fast diminishing returns.

****AND that is what is wrong with our welfare/medicaid/etc safety net. Should you lose benefits as you make more money? Sure, but I'm all for a more subtle racheting back of the benefits in a system that encourages those on it to get off it... And I'm a fucking conservative.

 

[Ken g6]

Another free thing for poor people: gigabit internet!

 

[highland145]

snip

but I'm all for a more subtle racheting back of the benefits in a system that encourages those on it to get off it... And I'm a fucking conservative.

Isn't that normal, Willis?

Edit: Sorry, not in the government's mind.

 

[OverVolt]

Yes its better to stay poor.

 

[Sonikku]

Another free thing for poor people: gigabit internet!

I wish. We're talking maybe a couple of cities in the whole country. My mother pays $40 for Time Warners basic 15 down and 1 up plan. Free google fibre would be a godsend. Then again, if Google was around where we lived, Time Warner wouldn't be so damn price gouged in the first place.

 

[Raghu]

I'm a firm believer that things do work out. You just have to keep pushing everyday.

Sometimes, do you feel theres is an establishment that exploits peoples work and this is exactly what they want you to believe?

 

[Ruptga]

Sometimes, do you feel theres is an establishment that exploits peoples work and this is exactly what they want you to believe?

Oh, you mean the job creators™?

 

[Fingolfin269]

Seems like the issue is NJ (assuming since OP mentioned 'especially in NJ'). Shouldn't be hard to make $25k/yr pretty much anywhere in the country, especially if working 2 jobs, but there are certainly better places to live making that amount.

 

[Ackmed]

and the bolded is the problem.

people are lazy as shit now a days and feel they shouldn't "have" to bust their asses to work their way up. everyone wants everything handed to them. i mean look at the people who want mcdonalds to pay $15/hr. that is fucking ridiculous.

people gaming the system living off of welfare aren't smart at all, they are dumb as shit which is why they are in that position.

i'll gladly take my $100k+/yr salary that i busted my ass to get to and all of my toys, vacations, and my home theater over living in section 8 housing shopping at walmart for everything where going to the public pool in the summer is the most vacation they will ever have.

Pretty much hit the nail on the head. I am in the exact same boat. Except no home theater.

Lots of people don't want to work more hours because they don't want to lose free benefits. There have already been cases where people who got this $15 an hour work less hours so that they keep free benefits. It was designed to get them out of poverty, but it's backfired a lot of the time.

Too many people are afraid of actually working, busting their ass. Everyone wants free stuff. Really pisses me off to see people ride the system because not working is easier than working. I have a few in my family that do this and it pisses me off. I have decided to just not talk about it with them because it starts an argument. They're all the time making comments about "must be nice" for this or that, when they don't have this or that because they're fucking lazy.

my wife only has a highschool diploma and she's making more than my sister and brother who both went to college. my brother isn't even using his degree and is a fire fighter now, and my sister is using her degree for her career. she's also making more than double that $30k number you threw out there.

college degrees don't really mean as much as people think they do. sure they help if you want to go a certain direction, but not having one doesn't mean you can't make a lot of money.

I think I used to disagree with you a lot. In this thread I agree again. My wife has a masters, does not use her degree at all. And makes more than if she were in her field. She was a teacher, but makes almost twice what she did. Her masters did help with negotiations for her salary she has now though.

I never went to college until late 2014. Set to graduate with a bachelors may 2017. Won't get me a dime more at my job and I waited a very long time to do it (41 now) but I just wanted to. I will graduate college the same month my oldest graduates high school. Just wanted to do it. I agree with you that college isn't the end all as it once was. Sure it can help, but far too many people put too much stock into it and go in debt for too much money. Being good at something (job experience), the right connections, and hard work pays off big time.

 

[Scarpozzi]

If you get a college degree and get work experience...continually try to learn new skills and move up, you are statistically more likely to earn more money. How much more? It could be a difference of $500k-$1M+ over your lifetime....or even a lot more.

What's more important is when you have a family... Once you set an example, you are positioning your children to be in a higher income bracket because they will often follow in your footsteps. I know I am privileged because I came from a good family and had opportunities thrown my way, but I have worked a full time job since I was 19 and earned 2 college degrees that I mostly paid for by working. My wife was the same way and we've paid her college debt off as well. It just takes time and dedication to dig yourself out and making choices not to live beyond your means.

After a solid 16 years of hard work, I see light at the end of the tunnel and we should be totally debt free in another 5-6 years and the only debts we have are 2 autos and our primary residence. It definitely sucks when you're in the middle, but until your friend makes over $55-65k a year, he'll still be able to get some tax breaks.

Edit: Here's a basic graph....this is all subject to how well you can market yourself and what field you're in...but it's averages. And when you're a first-year college graduate, you are potentially going to impact your family beyond 1 generation.

Of course, in some fields (particularly science/math/medical), you may have potential to do far better than this with a bachelor's or even master's level degree. Tax accountants and auditors, computer programmers, and other jobs can pay 6 figures and if you don't mind travelling or taking contract work, you can get paid extra hazard pay.

 

[skyking]

I don't know so much about staying poor, but learning to live frugally is a gift.
So many people buy into the 'stuff is happiness' vapid line of thinking.

 

[purbeast0]

If you get a college degree and get work experience...continually try to learn new skills and move up, you are statistically more likely to earn more money. How much more? It could be a difference of $500k-$1M+ over your lifetime....or even a lot more.

What's more important is when you have a family... Once you set an example, you are positioning your children to be in a higher income bracket because they will often follow in your footsteps. I know I am privileged because I came from a good family and had opportunities thrown my way, but I have worked a full time job since I was 19 and earned 2 college degrees that I mostly paid for by working. My wife was the same way and we've paid her college debt off as well. It just takes time and dedication to dig yourself out and making choices not to live beyond your means.

After a solid 16 years of hard work, I see light at the end of the tunnel and we should be totally debt free in another 5-6 years and the only debts we have are 2 autos and our primary residence. It definitely sucks when you're in the middle, but until your friend makes over $55-65k a year, he'll still be able to get some tax breaks.

Edit: Here's a basic graph....this is all subject to how well you can market yourself and what field you're in...but it's averages. And when you're a first-year college graduate, you are potentially going to impact your family beyond 1 generation.

Of course, in some fields (particularly science/math/medical), you may have potential to do far better than this with a bachelor's or even master's level degree. Tax accountants and auditors, computer programmers, and other jobs can pay 6 figures and if you don't mind travelling or taking contract work, you can get paid extra hazard pay.

i don't think anyone is arguing that overall people who go to college make more than those who don't. but NOT going to college doesn't mean you can't make a boatload of money.

in general to go to college and get a degree, you have to have SOME kind of work ethic and do some hard work to do so. that means that the lazy people who don't even have that in them will not go to college, so since they are already lazy, of course they will be lazy in all aspects of their lives.

but you also have people who simply don't want to go to college because they simply want to work and go another direction, who make boatloads of money.

 

[CountZero]

Pretty much hit the nail on the head. I am in the exact same boat. Except no home theater.

Lots of people don't want to work more hours because they don't want to lose free benefits. There have already been cases where people who got this $15 an hour work less hours so that they keep free benefits. It was designed to get them out of poverty, but it's backfired a lot of the time.

Too many people are afraid of actually working, busting their ass. Everyone wants free stuff. Really pisses me off to see people ride the system because not working is easier than working. I have a few in my family that do this and it pisses me off. I have decided to just not talk about it with them because it starts an argument. They're all the time making comments about "must be nice" for this or that, when they don't have this or that because they're fucking lazy.

How did you read this thread and come out the other side blaming poor people? You call them lazy yet the OP lays out the exact problem.

Let's put some numbers to it shall we? These are just examples, I don't know the cutoffs.

Let's say you make $15/hr. If you work 20 hours per week you also get medicaid, food stamps and other assistance. If you work 30 hours per week you lost $800/month in benefits. Which choice makes financial sense?

Let's say, by some miracle, you found a place willing to let you work full time at $15/hr. You still lose the $800/month but you offset some of it with insurance available through work for $200/month. Now you've lost housing benefits, so you have to move. It took a year to get into this house to begin with, if you leave you have no idea how long it might take to get back should you lose your job. Good move?

We set up a system where in order to get help you can't be helping yourself and then call them lazy for making sound financial decisions. We have a system where you must get a relatively high paying job to offset all of the losses you'll take by taking the job.

Helping people is good but we need a system that doesn't penalize you for working which is what our current system does.

 

[zCypher]

I've been poor to the point of not being able to pay bills and not knowing how/where I'll get my next meal. I eventually got my head out of my ass, and now I'm doing much better. Still not an ATOT 1%er, but I feel confident in stating that it's absolutely not better to stay poor. Does escaping poverty demand a lot of sacrifice, blood sweat and tears? Possibly yes. But is it worth it? Yes. I've kept my living expenses extremely minimal while roughly doubling my income over the past few years, and I'm starting to push myself again now that I'm stagnating and reaching the limit of what's possible in my current role. Although I can now afford to live comfortably, buy things i like, take vacations and still save money - i still have far too little to accomplish many of the things I'd like to do, so I have to keep pushing forward. When you stop giving yourself the effort you deserve, things go nowhere.

Everyone's situation and life circumstances and challenges may be different, but in the end if you put forth what's required to get over that hump, I think it will always be worth it. At a basic level, a lot of the time people are just bad at math and don't understand how things work, too. I hear a lot of people saying it's not worth making more money cause you pay more taxes, etc. Sure you do, but you still make more money, more money is always better than less money. But it sounds like your friend's situation is definitely a bit more complex than that. Still though... my vote goes to doing all that's possible to get out of poverty, it's not a good place to be.

 

[FrankRamiro]

Seems like a question based on some kind of entitlement mentality. Yes, you said he took loans and owns his responsibility to those. Yes, he also will have to pay more for his insurance if he makes more money. That's to help out the people who are/were in his lower income situation so they can be taken care of.

Look, here's the bottom line. My first job was delivering newspapers snow, rain, or shine for like $25/week at age 13. I worked my ass off to get my first black and white Gameboy. That motivated me to bust my ass for more as I aged. I chose to ride a bicycle to my first few jobs to save up money, again, rain or shine. Then, I bought a used motorcycle to get me around.

I busted my ass each time and each time earned more until I got where I am now. I still don't sit on my ass. I listen to podcasts related to my line of work to and from work each day to stay relevant.

The bottom line is, sure, if he wants to be entirely dependent on others and feel like shit his whole life, he should quit those jobs and just maintain his status quo. But, if he has ANY kind of human dignity, self-motivation, or sense of decency, he will bust his ass like a great many people do and be patient enough to rise above. He will accept that when he has to contribute more of his hard earned money, that he's doing so for someone in his former place that needed a handout or some help. I'd very much like to keep all my money and not pay nearly 1/3 or more in taxes, but at the end of the day I help single mothers like mine was, and lazy asses like your friend who choose to take it easy and do nothing instead of bust his ass to contribute to society.

Great speech,i couldn't agree more,also there are those that make fan of people that take a risk and have success in life that work their tails off to be a little bit richer, and after he's got more money in the bank, they call him a fascist.and want him to share his money with those that don't want to do nothing.

 

[JEDI]

Not really. Those jobs don't really have a career path plus they have a low barrier of entry so they don't make much money anymore.

(plumbing, electrical, welding)

this is soooooooooo not true in DC.
they make around $40/hr.

 

[CountZero]

Everyone's situation and life circumstances and challenges may be different, but in the end if you put forth what's required to get over that hump, I think it will always be worth it. At a basic level, a lot of the time people are just bad at math and don't understand how things work, too. I hear a lot of people saying it's not worth making more money cause you pay more taxes, etc. Sure you do, but you still make more money, more money is always better than less money. But it sounds like your friend's situation is definitely a bit more complex than that. Still though... my vote goes to doing all that's possible to get out of poverty, it's not a good place to be.

You know how people don't understand tax brackets and claim that making $1 more means they pay that new bracket on all of their income? That situation actually exists at the lowest income levels for benefits. You make $1 past a particular line and you lose all of a particular benefit. It means there are levels of earnings at the lowest levels where you will be net negative for the higher pay.

Let's say a benefit is worth $1000 and the cutoff is $10k. At $10,001 you now net $9,001. Until you make $11,001 you will always be worse off.

If we at least ramped down the benefit you'd see a much better position. Let's say from $10k to $11k every dollar earned reduces benefit by a dollar, now you just tread water from $10 to $11k. Not terrible. If you ramped it so that every two dollars earned reduces the benefit by one dollar you never tread water or go negative. At $11k you lose $500 in benefits but are making $1k more (net $500), at $12k you lose all benefits but are making $2k more (net $1k).

We do this for some tax writeoffs. The amount of student loan interest you can write off ramps down instead of just cutting off. I think we can do the same for benefits, actually I am pretty sure we do for some benefits just not all.

 

[Ackmed]

How did you read this thread and come out the other side blaming poor people? You call them lazy yet the OP lays out the exact problem.

Let's put some numbers to it shall we? These are just examples, I don't know the cutoffs.

Let's say you make $15/hr. If you work 20 hours per week you also get medicaid, food stamps and other assistance. If you work 30 hours per week you lost $800/month in benefits. Which choice makes financial sense?

Let's say, by some miracle, you found a place willing to let you work full time at $15/hr. You still lose the $800/month but you offset some of it with insurance available through work for $200/month. Now you've lost housing benefits, so you have to move. It took a year to get into this house to begin with, if you leave you have no idea how long it might take to get back should you lose your job. Good move?

We set up a system where in order to get help you can't be helping yourself and then call them lazy for making sound financial decisions. We have a system where you must get a relatively high paying job to offset all of the losses you'll take by taking the job.

Helping people is good but we need a system that doesn't penalize you for working which is what our current system does.

Because except for certain circumstances it is their fault they are poor. Playing the system, keeping hours at 20 per week is lazy. Working 40 to not need benefits is the more respectful thing to do. Living off of $15 an hour should be pretty easy almost anywhere in America. Especially getting a huge tax check every year. Living within means is what some people have a problem with. It's not just about what makes financial sense, it's about not being part of the problem and lazy person. Having some pride and contributing to society. Obviously this is not universal and some people really need the help due to disabilities, etc. The fact is there are plenty of capable people out there who do not work full time, because it is easier to not. Or because they can't find a decent job because of criminal history, which is also their fault.

The help is meant to get people off their feet and being able to support themselves. Not having families that are generational section 8/food stamp leeches.

 

[CountZero]

Because except for certain circumstances it is their fault they are poor. Playing the system, keeping hours at 20 per week is lazy. Working 40 to not need benefits is the more respectful thing to do. Living off of $15 an hour should be pretty easy almost anywhere in America. Especially getting a huge tax check every year. Living within means is what some people have a problem with. It's not just about what makes financial sense, it's about not being part of the problem and lazy person. Having some pride and contributing to society. Obviously this is not universal and some people really need the help due to disabilities, etc. The fact is there are plenty of capable people out there who do not work full time, because it is easier to not. Or because they can't find a decent job because of criminal history, which is also their fault.

The help is meant to get people off their feet and being able to support themselves. Not having families that are generational section 8/food stamp leeches.

Would you work harder for less? Not proportionally less like a tax bracket but wholesale less. I find it hard to believe you would. I find it hard to believe anyone would but, unless I'm wrong, you think this group of people should do that.

You can talk about morals and ethics all day but at the end of the day you should do what makes financial sense for you and your family.