The Poverty Trap

mimo2005 · 02-10-2008, 05:22 PM

Woman moved from a $25,000 a year job to a $35,000 a year job, and suddenly she couldn’t make ends meet any more. Considering getting her old job back.

Quote:

The poverty trap is still very much a reality in the U.S. A woman called me out of the blue last week and told me her self-sufficiency counselor had suggested she get in touch with me. She had moved from a $25,000 a year job to a $35,000 a year job, and suddenly she couldn’t make ends meet any more. I told her I didn’t know what I could do for her, but agreed to meet with her. She showed me all her pay stubs etc. She really did come out behind by several hundred dollars a month. She lost free health insurance and instead had to pay $230 a month for her employer-provided health insurance. Her rent associated with her section 8 voucher went up by 30% of the income gain (which is the rule). She lost the ($280 a month) subsidized child care voucher she had for after-school care for her child. She lost around $1600 a year of the EITC. She paid payroll tax on the additional income. Finally, the new job was in Boston, and she lived in a suburb. So now she has $300 a month of additional gas and parking charges. She asked me if she should go back to earning $25,000.

http://content.ksg.harvard.edu/blog/.../2008/02/08/8/

RedScott · 02-10-2008, 07:40 PM

What a great lesson on how welfare stifles progress.

mimo2005 · 02-11-2008, 01:46 AM

Wages today are almost 10 percent lower than they were in 1973, after accounting for inflation.

http://www.nytimes.com/2008/02/07/op...th&oref=slogin

~~Nik00117~~ · 02-11-2008, 01:52 AM

Sometimes breaking the limit isn't worth it. HEre contractor jobs are tax free up to 88,000 a year. A friend of mine got a job making 90k a year he was so ticked cause he would of made more cash in his pockets at the end of the day had he gotten a 85k or even a 80k job.

**Drew1369** · 02-11-2008, 03:33 AM

Quote:

Originally Posted by RedScott

What a great lesson on how welfare stifles progress.

**Chode** · 02-15-2008, 07:25 PM

This isn't the kind of thing that happens just to welfare recipients. After more than 10 years as middle management for a Fortune 500 company, I was fired. Within 6 months, they wanted to rehire me and move me from Austin, TX. to Alexandria, VA. with a 50% raise. OK, 13 years ago the cost of living in Alexandria was supposed to be 33% higher than Austin, so I should have been slightly ahead, right? Nope, when the dust settled, money was tighter. Fortunately my wife's salary pretty much doubled.

Now, I see the problem with getting people off welfare in terms of offering them a better alternative. If getting off welfare leaves you worse off, where's the incentive? Even NeoCons should understand this, because it is just the basic forces of The Market at work.

You all know I'm going to say it, so let me get it out of the way right now: Government policies that encourage the concentration of of wealth in the hands of a small minority, and actively encourage American jobs being exported to Third World countries have resulted in the middle class being thoroughly shafted. And of course I blame the Republicans. Mostly. The Democrats share the shame as well, just not so much.

For anyone who feels the squeeze of rising food, fuel, and health care costs coming out of a static income, could I just suggest the possibility that the party who has spent the last 8 years telling you that they have your best interests at heart might have lied to you?

**EnglishPaul** · 02-16-2008, 02:55 AM

There is an interesting contradiction in this. If the poor are better off than the working poor, and if Chode was better off in a job before a pay rise, then how can it be that the rich are getting richer. I can only conclude that the rules just aren't equal for everyone.

**Chode** · 02-19-2008, 08:16 PM

Quote:

Originally Posted by EnglishPaul

There is an interesting contradiction in this. If the poor are better off than the working poor, and if Chode was better off in a job before a pay rise, then how can it be that the rich are getting richer. I can only conclude that the rules just aren't equal for everyone.

Stunning insight! It's almost as though you had read my post.

**EnglishPaul** · 02-20-2008, 01:58 AM

Er, think I was just thinking out loud with my last post. Couldn't quite bring myself to say 'I agree'.

And I kept the statement that 'welfare stifles progress' completely uncontested! Well, welfare also stifles destitution and slums. I don't think the problem here is with welfare, but with the pay and taxes for workers.
Which, again, could be read as 'I agree, Chode'.

**Chode** · 02-20-2008, 04:27 PM

I understood your point, I just couldn't resist a friendly dig.

RedScott · 02-20-2008, 06:24 PM

Quote:

For anyone who feels the squeeze of rising food, fuel, and health care costs coming out of a static income, could I just suggest the possibility that the party who has spent the last 8 years telling you that they have your best interests at heart might have lied to you?

Only if they're totally ignorant to what actually causes rising food, fuel, and helthcare costs. Of course most people are.

Hint: Things don't cost more, your dollar is just worth less.

What year did we go off the gold standard again? I don't think it was 8 years a go.

02-10-2008, 07:40 PM	#2 (permalink)
RedScott Registered User Join Date: May 2007 Posts: 312 OS: Windows XP	Re: The Poverty Trap What a great lesson on how welfare stifles progress.

02-11-2008, 01:46 AM	#3 (permalink)
mimo2005 Manager, The Relaxation Room/Analyst, Security Team Join Date: Oct 2004 Posts: 10,771 OS: xp	Re: The Poverty Trap Wages today are almost 10 percent lower than they were in 1973, after accounting for inflation. http://www.nytimes.com/2008/02/07/op...th&oref=slogin __________________ TSF has outgrown its server, again. Please help "Gutta cavat lapidem, non vi sed saepe cadendo"

02-11-2008, 01:52 AM	#4 (permalink)
~~Nik00117~~ Troubled Join Date: Jan 2007 Location: Germany Posts: 1,572 OS: XP Pro, Vista Ulimate My System	Re: The Poverty Trap Sometimes breaking the limit isn't worth it. HEre contractor jobs are tax free up to 88,000 a year. A friend of mine got a job making 90k a year he was so ticked cause he would of made more cash in his pockets at the end of the day had he gotten a 85k or even a 80k job.

02-15-2008, 07:25 PM	#6 (permalink)
Chode TSF Enthusiast Join Date: Sep 2006 Posts: 809 OS: Windows XP Pro	Re: The Poverty Trap This isn't the kind of thing that happens just to welfare recipients. After more than 10 years as middle management for a Fortune 500 company, I was fired. Within 6 months, they wanted to rehire me and move me from Austin, TX. to Alexandria, VA. with a 50% raise. OK, 13 years ago the cost of living in Alexandria was supposed to be 33% higher than Austin, so I should have been slightly ahead, right? Nope, when the dust settled, money was tighter. Fortunately my wife's salary pretty much doubled. Now, I see the problem with getting people off welfare in terms of offering them a better alternative. If getting off welfare leaves you worse off, where's the incentive? Even NeoCons should understand this, because it is just the basic forces of The Market at work. You all know I'm going to say it, so let me get it out of the way right now: Government policies that encourage the concentration of of wealth in the hands of a small minority, and actively encourage American jobs being exported to Third World countries have resulted in the middle class being thoroughly shafted. And of course I blame the Republicans. Mostly. The Democrats share the shame as well, just not so much. For anyone who feels the squeeze of rising food, fuel, and health care costs coming out of a static income, could I just suggest the possibility that the party who has spent the last 8 years telling you that they have your best interests at heart might have lied to you? __________________ Sweet!

02-16-2008, 02:55 AM	#7 (permalink)
EnglishPaul Still no avatar Join Date: Sep 2007 Location: Sheffield Posts: 1,011 OS: XP SP2	Re: The Poverty Trap There is an interesting contradiction in this. If the poor are better off than the working poor, and if Chode was better off in a job before a pay rise, then how can it be that the rich are getting richer. I can only conclude that the rules just aren't equal for everyone.

02-20-2008, 01:58 AM	#9 (permalink)
EnglishPaul Still no avatar Join Date: Sep 2007 Location: Sheffield Posts: 1,011 OS: XP SP2	Re: The Poverty Trap Er, think I was just thinking out loud with my last post. Couldn't quite bring myself to say 'I agree'. And I kept the statement that 'welfare stifles progress' completely uncontested! Well, welfare also stifles destitution and slums. I don't think the problem here is with welfare, but with the pay and taxes for workers. Which, again, could be read as 'I agree, Chode'.

02-20-2008, 04:27 PM	#10 (permalink)
Chode TSF Enthusiast Join Date: Sep 2006 Posts: 809 OS: Windows XP Pro	Re: The Poverty Trap I understood your point, I just couldn't resist a friendly dig. __________________ Sweet!