That said, when the middle, and upper middle class are so squeezed that they cannot fight the government anymore -- then who is left to? When economic (or class, whatever your favorite rhetoric) mobility has chilled, who will rise to the ranks of those who can fight who have memories of the time when they could not?
Anyway, this is the way these problems are postured in my mind.
While possibly true, that doesn't necessarily mean they are poor. Plenty of middle class people operate on see-money-spend-money. There were plenty of them at Boeing when I worked there - the paychecks were distributed on Thursday morning, and at noon a flood of engineers would run to the parking lot to deposit the paycheck before the checks they wrote bounced.
About 6% of the US population (20 million people) are at or below half the Federal poverty rate.
http://poverty.ucdavis.edu/sites/main/files/imagecache/mediu...
No matter how you slice it, that's a lot of people. More than the populaton of California.
This number is probably the truest measure of a person’s real wealth: What is the largest unexpected financial shock you could sustain without the cost of that to you suddenly becoming ten times the original cost or more? That number isn’t something easy to calculate; it depends on whether you have a family that can help you out, on your income, on whether that shock involves losing your job (and thus your health insurance, if you live in the US), on whether you have access to any other sources of security (including public assistance).
From Yonatan Zunger's "Your 'Financial Shock' Wealth".
https://medium.com/newco/your-financial-shock-wealth-4845e6d...
Other commentators have similar arguments. Economist Emma Rothschild makes the explicit point that Adam Smith's "liberal philosophy" was one of material liberty, that is, of an abundance of material wealth at the individual level, which allows for a freedom of actions without catastrophic consequence.[1] Several recent modern commentators have noted that the chief characteristic of poverty is a lack of choice: if there's only one way to do things right, without consequence, you have no freedom.
Among Zunger's references is the point that very nearly a majority of US households, 47%, cannot sustain an unexpected $400 expense.
https://www.theatlantic.com/magazine/archive/2016/05/my-secr...
Whether or not living paycheck-to-paycheck is necessarily a characteristic of poverty is of course debatable in specific instances. But one cannot look broadly at the population of the US and claim both that market economics succeeds on the basis of individuals making intelligent and rational economic decisions and that many millions of those people, very nearly if not majority of those same people fail to do so.
Something is very rotten in the "free market".
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Notes:
1. I'm trying to track down the Emma Rothschild reference, though I suspect it may be in Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment.
The question works well to answer the question "what sources of emergency financing do you have access to?" It's less well-structured to answer "could you pay for an emergency expense without either selling off nonfinancial assets or incurring long-term usurious debt".
Since multiple selections apply, adding percentages isn't applicable. Though 50% of respondents do mention paying with current cash savings --- that could apply to all or part of an expense.
I do read "unable" and "by selling something" as mutually exclusive, which suggests a 20% portion of the population at least who'd be severely stressed by such an incident.
Even 14% is much higher than I would wish for answers to this sort of question, of course.
Anyway, if I had to read the tea leaves I would guess the "real" number is somewhere in the ~30% range based on EF5A and EF5B (EF5B was only asked if the respondent answered they would pay all bills in full for EF5A). That is, 22% of the respondents are having trouble paying existing bills in full (though what that means is another complex question, I bet) and another 11% (14% of 78%) would have trouble doing it if they had an unexpected $400 expense. That gets us to 33%; some of those might be able to recover from the $400 expense over the course of a month or three by temporarily running a small credit card balance and then paying it off, but it's not going to be too many I expect.
Which is pretty horrible. Not 47% horrible, but horrible.
You can feel sorry for them if you like, but I don't.
https://news.ycombinator.com/item?id=28462889
And where you'd dragged it to: "There were plenty of them at Boeing when I worked there".
> And where you'd dragged it to
The point being such people are neither rare nor necessarily poor at all.
50 millions live below the Federal poverty line.
47% of Americans cannot meet a $400 emergency expense.
You deny their poverty?
Your personal experience with a comparatively small cohort of Boeing engineers and employees may have been illuminating in any number of degrees. It's a poor basis on which to make assessments of national wealth, poverty, and/or inequality. And even if it were, it still knocks a rather major hole in a foundational premise of free-market economic theory.
Robust sampling and measurement methodologies exist for quite substantial reasons.
Yes. You yourself posted: "About 15% of the US population (50 million people) are at or below the Federal poverty rate." You refuted your case.
> small cohort
I've seen these middle class people everywhere I've worked. They're not a "small" cohort. In fact, most of the people I've worked with fell into this category. As far as I could tell, I was the only engineer in the office building who did not deposit the paycheck the same day. I know this because others expressed shock that I didn't.
> it still knocks a rather major hole in a foundational premise of free-market economic theory
No, it doesn't. These people chose to behave this way. It's their right to. Nobody made them buy the boat. One of these boating people would sell his boat when he needed cash, and when he had cash, he'd blow it all on another boat, or a new car, or an RV, or whatever caught his fancy. Free market theory posits that people have a free choice. Not that what they do makes fiscal sense to anyone else.
> It's a poor basis on which to make assessments of national wealth, poverty, and/or inequality.
How much cash is in your bank account is a very, very bad assessment of wealth, poverty, and/or inequality. But that's what you're putting forward.
For another example, I have next to $0 in my checking account, and don't have a savings account. But I'm not poor, even though you'd classify me as poor. I keep it all invested. I only use cash as a transfer mechanism.
P.S. I actually did have a boat once (!) and me and my friends had a couple marvelous summers waterskiing on Lake Washington.
I and most of the rest of management bring leftovers from home or eat a yogurt and some fruits and nuts. My parents would have been very disappointed in me for spending that much on delivered food, especially with how low quality and mal-nutritious it is.
As I pointed out above, this does not seem to be a correct interpretation of the actual survey data involved.
> You deny their poverty?
Yes, given that the claim is based on a misrepresentation (or, more charitably, misunderstanding) of the actual survey data.
I do not deny that there are plenty of people in the US who are in terrible financial shape and really would be thrown for a loop by a $400 expense. They do not make up 47% of the survey population.
The other interesting question that I do not have an answer to is whether the survey sampled individuals or households, and hence how to translate the survey percentages to population (of non-dependent adults?) percentages.
This means they need to bail hearing, since the lawyers will even demand immediate bail based on charges.
No jail time, not even 24 hours. No dealing with bail bondsmen. That is huge. Most jails only offer free calls within their area code. Not being in jail means their life continues uninterrupted, as does their job/income. A poor person will likely lose their job if they can't afford bail, as they are stuck an inmate until their hearing. If their public defender is backed up, which they always are, they will likely push thw court date back for more time.
It's just a complete nightmare. The rich have straight up taken control of everything, including the government.
If you require a safety-net to speak up for your rights, be prepared to lose them.
Also consider that now the system has perfect memory. Moving to another county or state, waiting a few years, it doesn't matter.
The only hope is that people who are able to fight back do fight back for the rest of us. However we have seen that many people who are able to do this benefit from the current situation. Effectively 80% of this country live to serve the other 20% and thats why I believe we don't see as much progression of many areas as we should.