So this is my first diary at Daily Kos and really it's an extended response to a comment on another diary on the subject of poverty.
The commenter referred to the quote from a 2009 census report that puts the average cost of housing in the U.S at$808 (.pdf).
His comment, titled "Nonsense - "flyover country" is cheap" was this:
When a high school friend of mine bought their house in Pittsburgh in the mid-90s, their house payment was less than their car payment.
My mother's 3BR/2BA house in a 25k person town in central IL was $68k. A 30 year mortgage at 6% interest is $407/mo.
An Apartmentfinder search for Champaign-Urbana, a 100k+ person city, shows several apartments for less than $420/mo. I lived for 12 years in C-U and never paid more than $295/mo. Granted prices have moved up a bit since I left, but it's still clearly possible to find housing there.
And I can guarantee you that IL is not the cheapest real estate around.
Even my 1BR apartment in Austin is $550/mo. That's a major city.
Sure New England and California are expensive. But they aren't all of the country.
My response follows the orange squiggle.
1) Your friend in Pittsburgh with the low house payment, know why it's so low? Because the steel industry was sold overseas and Pittsburgh still hasn't entirely recovered. You can't get a high price for a house in an area where people can't afford to live 'cause there's not enough work. My father-in-law had to sell the house that he had built with his own hands, for a song, when J & L Steel closed in the mid-eighties. How nice that your friend was able to take advantage of that market.
2) Central IL, really? Is your mother a corn farmer? Does she work in an agriculture support industry? Are you suggesting that "poor" folks need to move to the heartland to snap up the millions of small town jobs that pay so well? And while we're on the subject of 30-year mortgages, how is it that our hypothetical poor person gets that loan these days? What kind of deposit do you think they have saved up? Has your mother put any money into maintaining that house? Roof? Furnace? Hot water heater? Does she shovel her snow? Mow her lawn? Do any gardening? What kind of equipment/tools does she own? How much does she pay annually (or monthly, whatever) because she "owns" a home that the bank holds title to (if she has that 30-year mortgage)? How long could she stay there if she lost her job?
3) The chance that you will find affordable housing close to work is an inverse ratio to the availability of quality work.
You can earn minimum wage at a slaughterhouse and live next door, the only way that you can afford housing and transportation. Or you can get a job that pays a bit more, and pay more to live close to it (because you're competing with other higher wage earners for the convenience), or make up the difference in travel.
4) Let's be friendly and go with that $407 number (disregarding the obstacles to ownership or the reality that renters would pay a premium above it). Hell, let's take a trip to fantasyland and assume that EVERY POOR PERSON has the ability (i.e. resources) to move freely about the country for that $295 housing deal and will have no trouble finding work for minimum wage. Let's see if that works:
First, no way that $295 rent covers utilities.
7.25/hr @ 40/wk @ 52 wks/yr (can't afford a break so that's all good) = 15,080/yr; 15,080/12 = 1257/mo.
If you're single, you don't get the tax credits, and you're not just over the poverty line, in fact, you're more than 133% of the poverty line, but let's say you pay no income tax, for the sake of argument.
$1257 - $138 (payroll taxes @ 11%) = $1119 take home/mo.
To earn that wage, you have to travel to work. We'll be generous and assume that there is public transportation available for the low sum of $2/trip. That's $4/workday (deeply discounted compared to the cost of owning a car) plus at least one additional travel day per week (gotta get those groceries). Call it $24/wk = $104/mo.
$1119 - $104 = $1015 after transportation
Of course, you'll need clothing in order to work since the nude modeling gig is never a full-time deal. Realistically this represents an up-front investment but let's annualize it with the assumption that you will purchase an outfit every 2 weeks from Goodwill (this seems like a lot of clothing until you realize that after 3 months you will only have one week's worth of clothing, good for a season and a half, and all of it is used). With shoes and underwear, call it $15/week (which is ridiculous, but as long as we're having this fantasy..). $65/mo.
$1015 - $65 = $950 after taxes, travel & clothing.
Darn! We'll have to wash that clothing if we want to keep our jobs! Can't afford a washer/dryer, no local river we can go to to beat our clothes out on rocks, looks like we're headed to the laundromat..good thing it's next door to the grocery store. Of course now we have to figure out how to get our laundry and groceries back home on the bus but we're the clever, crafty and innovative poor, we'll work it out. Speaking of groceries though, our minimum wage job is fairly demanding, we really need 3 good meals a day in order to stay healthy; so we'll set aside the laundry issue and move on to our diet. We can't buy a whole lot in bulk because our fridge is small, as it would be in most tiny apartments, but we shop carefully and spend $42/wk ($2 per meal) on average. We don't EVER eat out. We don't EVER entertain. $182/mo (I realize this is at the high end of 1/4 of the USDA discount family food budget #'s, but we're feeding one Adult, USDA is frankly full of shit, and USDA's numbers will shortly be even more of a dream as the drought kicks fully in, plus, we'll need toilet paper, cleaners, toiletries, etc., besides when have you achieved $42/wk for food and sundries in the last 4 years? Really? I doubt it).
$950 - $182 = $768
OK, things are looking pretty good! We've made it to work, we're clothed, washed, and fed (still a little murky on the laundry, but that can't be that much ($5/wk = $260/yr, but only $22/mo).
But wait, we've forgotten a few things. We're working our way down to housing, but we'll need some things in order to make a "home". Mattress? Bedding? Linens (towel(s)/washcloth(s))? Furniture (dresser, table, chair, sofa, rug)? Mop? Broom? Vacuum Cleaner? Lamp? We can't afford a TV so we'll have to read in those hours between work and sleep; whups, can't afford books so it'll have to be the library; whups, can't afford to travel to the library so it'll have to be "found" newspapers. We'll furnish our home via Goodwill or similar (we could garage sale or garbage pick some furniture except that since we rely on public transportation, we don't have that option).
For the sake of argument, let's just assume that everything we need, including the mattress, doesn't end up costing any more than our clothing budget (of course, it will also cost us our dignity and self-respect, but those are luxuries).
$768 - $65 = $703/mo.
$30/mo ~ phone (could do discount cel or home phone and machine, no computer, so no Vonage, Magic Jack? I don't think so, we have no TV so we've never heard of it).
$20/mo ~ trash pickup (most rental deals include this, but our rent is so discounted that I think we need to include a waste agreement even at this low level; not all our our poor folks will be renting apartments, most folks will pay more for trash removal).
$120/mo ~ energy utilities (this is a joke given the climate extremes that we experience in this country and the quality and efficiency of the systems that are available in our hypothetical ultra-low cost housing, remember, we're doing ALL of our own cooking).
$30/mo ~ water, sewer, etc (this is a generic fee category, most midwest rentals include water and sewer, some do not, in some places water is an issue, in others, sewer or septic service is a more significant cost, if our hypothetical poor person has a bank account, there will be fees, if not, there will still be fees, they will need I.D. card(s), utilities typically carry connection fees, they'll need to buy postage for bills, etc., etc.)
$703/mo - $200 utilities, etc. = $503.
Well, doggone! All this work and it turns out there's plenty of money for rent. All we had to do was to game the numbers so that an incredibly unlikely best case scenario prevailed. Our hypothetical poor person has a massive $208/mo to fritter away on (in)conspicuous consumption to feed the economic machine on which their job depends (and which depends upon their barely compensated labor). I can hardly believe it! Oh, Joy!
Oh, wait.
The only way this works at all is if our hypothetical poor person is never ill.
Hmm.
That would seem to require access to regular, quality health care, particularly in the absence of any recreational activities, the main method for humans to cope with normal life stress.
Sadly, there is simply not enough money for medical insurance outside of catastrophic coverage.
If our poor person is extremely fortunate, they can skip the health care, save that $200/mo and in only 5 1/2 years they will have saved up the 20% deposit on the $68,000 house in Central IL that they can afford to make the mortgage payment on but can't afford to furnish or maintain.
Oh, and we didn't talk about renter's insurance.
"Nonsense"?
Fly over this, "friend", I live in Chicagoland, where jobs are ordinarily fairly plentiful, because there are a lot of people who need things. In the suburbs, a tiny one bedroom in a questionable neighborhood runs $650. If you're willing to look hard and accept a higher level of danger, or cockroaches, you can get in under $500 (except that, of course, you can't if the landlord requires 1:3 rent/income ratio, thank God the minimum wage is higher in IL). The places where this housing exists are actually not the places where the good public transportation, or the jobs, are. So you need a car. With mandatory state insurance (which BTW is a good thing). With a $106 license plate. Should I tell poor acquaintances that they need to move to Champaign-Urbana? Where will they work? Are there really that many jobs in a college town of 100k? Compared to the Chicago-Metro area with over 7 million people?
Of course IL isn't the cheapest real estate around. You can go where there are fewer jobs, where employers pay less, offer fewer hours, fewer benefits, less security. You can go where the weather is worse (not sure where that is, but hey), where the air is dirtier, the water is dirtier, where the environment has been so damaged that it makes you sick. You can go where people don't want to live, and it will cost you less, for HOUSING (not necessarily for food, clothing, transportation, etc.), to live there.
But don't think that because the housing is less expensive that the area has less poverty. Or that telling poor people to move is some kind of solution. Because what we need is sense, and that's just nonsense.
That was my response.
At the suggestion of another commenter in the thread, I have posted this as a diary. I'd love to hear your thoughts unless you think that offering vouchers to assist with moving costs for the poor is a large scale realistic practical solution. People live where they do for many reasons. Some have nothing to do with economic opportunity.
Mon Aug 20, 2012 at 4:21 PM PT: A quick thank you to everyone who has posted comments thus far, I really appreciate your time.
The original diary was on poverty, and gave out the chart for the "official" poverty line. A single person, with no dependents, working full-time at minimum wage is (well) above the "official" poverty line (and ineligible for most, if not all, public assistance).
Does that mean that the minimum wage is a living wage for single folks on their own?
My argument is that even under the best of locational assumptions on housing and related expenses, the answer is almost always "no".