
The cost of hand-to-mouth living - cs702
http://www.ft.com/intl/cms/s/2/f5763610-b2bb-11e2-8540-00144feabdc0.html
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gruseom
Walmart's CEO talked about this a few years ago—how crowded their stores get
around midnight on the last day of the month, because that's when people's
payments clear:

 _about 11 p.m., customers start to come in and shop, fill their grocery
basket with basic items, baby formula, milk, bread, eggs, and continue to shop
and mill about the store until midnight, when electronic — government
electronic benefits cards get activated and then the checkout starts and
occurs. And our sales for those first few hours on the first of the month are
substantially and significantly higher. And if you really think about it, the
only reason somebody gets out in the middle of the night and buys baby formula
is that they need it, and they’ve been waiting for it. Otherwise, we are open
24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are
there at midnight, you are there for a reason._

That stuck in my mind. It's a poignant image.

[http://blogs.wsj.com/economics/2010/09/20/watching-
walmart-a...](http://blogs.wsj.com/economics/2010/09/20/watching-walmart-at-
midnight/)

~~~
dopamean
I worked at WalMart for 3 years. I worked overnight doing inventory management
and I saw exactly what the CEO described. One thing I noticed that he didn't
mention is that a large number of the people I worked with were part of that
group of people waiting at midnight to buy their baby formula. I always felt
like the wages at our store were subsidized by the government.

All of the people I talking about worked full time. They all had ungodly sums
come out of their paycheque every two weeks to pay for health insurance (from
what I understand it was not a great plan either). I don't really know what
kind of point I'm trying to make here. On one hand it's nice that there are a
lot of cheap options at WalMart for people on small budgets. On the other
hand, it's sad that so many WalMart employees (in my own experience) are the
ones who so badly needing to take advantage of those prices.

~~~
gruseom
That is why I like Costco better: the people who work there don't seem as
downtrodden. Either I've been fooled by corporate propaganda or they really
have figured out a way to make money, lower prices, _and_ treat people
relatively well. Walmarts feel like places of despair to me and Costcos like
places of hope. I know how ludicrous that sounds, but the feeling is real. I
often chat with workers at checkout counters to gut-test my theory, and it
seems to hold up, though it could all just be confirmation bias.

Edit: there's one big difference, though. To shop at Costco you have to buy
twice as much (plus typically pay membership fees). That step could be too
steep for the people most living hand-to-mouth, even though it would save them
money within weeks. So there could be sample bias here too.

~~~
protomyth
The membership is the too steep part for Costco.

~~~
malandrew
It would be nice if CostCo allowed people of low income to apply for a
financial aid in the form of free membership if their income was low enough.
It's unfortunate that only the people with greater purchasing power get access
to the lowest cost per item unit.

~~~
rogerbinns
> ... free membership

The membership is the per member profit. Costco doesn't mark up items more
than 14%. In some states they aren't allowed to require membership to access
the pharmacy. If what you proposed was workable, I'd expect groups of people
in an area to band together or have a middleman in order to only have one
membership and break up bulk items.

(And technically there is such a middleman doing their best to lower prices -
they are called Walmart.)

> ... greater purchasing power get access to the lowest cost ...

Same thing happens with the US health system - the uninsured pay the most for
exactly the same procedures at the same place. At least in the case of Costco
it is economically sensible because buyers purchase a bigger volume and the
store has greater throughput. (Costco typically has 4,000 SKUs per store while
a normal supermarket will be around 16,000.)

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danso
I was hoping to see some data on how limited funds forced people to buy
inefficiently...that is, buying cheaper quantities that are per-item more
expensive than bulk buying because they can't afford the up front cost of
buying bulk. My roommate will do this when buying dish soap for the household,
always getting the smallest bottle than just paying for the large one at a 30%
discount per ounce.

Also, some cheap items are disproportionately bad for one's health...if I were
poor, it'd be hard to justify buying two apples over a Big Mac, given the
calorie per dollar ratios.

~~~
nijk
You get 6 apples per big Mac. It is actually a better meal.

~~~
jzwinck
6 apples: 600 kcal. A full day's worth of fiber, vitamin C, and sugar. But not
much else. No protein or fat to speak of.

Big Mac: 600 kcal. Half a day's worth of fat, protein, and sodium. 12% RDA of
fiber, 30% of calcium, 25% iron.

If you could only eat one or the other, you'd probably be better off with the
Big Mac. If you wanted to turn these two poor choices into a full day of three
meals, you should probably eat two Big Macs and 6 apples (plus lots of water,
and hopefully a vitamin supplement).

------
ilaksh
I consider myself to have some pretty useful development skills. I keep up to
date with things like HTML5, CoffeeScript, AngularJS, AWS, Node.JS etc.
However, I don't know what my problem is, if its lack of social or business
skills or no degree or what, but I have been living hand-to-mouth doing
freelance software development for years.

A lot of my projects have been from outsourcing sites. But some of them have
been from small companies that weren't trying to outsource, just didn't have
the biggest budgets. There seem to be quite a lot of software projects that
have fairly restricted budgets, and unfortunately those are the ones I know
how to get. Sometimes things are good for a few months and I don't have to
worry, but oftentimes I need to complete some aspect of a project and get a
PayPal from the client right away or I won't be able to pay bills.

Maybe I am the exception, but I doubt I am really alone in this, and thought I
should admit it in case anyone else is struggling.

~~~
patio11
Stop using outsourcing sites to source clients. Your new rate is $100 per
hour, until I can convince you to switch to weekly rates in any case. Go out
there and beat the bushes to find businesses which have problems which you can
address in AWS/NodeJS/etc which are worth paying your new rate.

After your income spikes, start saving some of it so that you can tolerate
lean periods between clients. This will let you stop working for less-
desirable clients and try experiments like bumping your rate without having to
worry about what this will do to a count-on-one-hand number of clients in the
pipeline.

~~~
ilaksh
When you say "go out there and beat the bushes" what exactly do you mean? I
have tried networking a little bit at one or too networking events but few
people seemed interested in my help.

~~~
patio11
Networking events are generally not the best place to meet people with
business problems -- they tend to attract a bit more of an aspirational
audience. Business owners with budget congregate in predictable places:
conferences for their industry, their own offices, locally organized meetups,
the Chamber of Commerce, etc etc. If you absolutely can't find an appropriate
event, throw one yourself. I'm totally serious. Throw a seminar on How to (Put
Any Business Goal Here) With (Pick A Technology They Have Heard About
Recently) For (Pick An Industry). Rent out a room for a few hours at the local
civic center or whatever you have in your neck of the woods. Buy coffee/donuts
for everyone. Teach folks for an hour. Give a five minute sales pitch at the
end. Let folks mingle for a while so they can enjoy your coffee and donuts.
_Many people_ will come up and introduce themselves to you.

(This can be done on approximately a $100 budget in Ogaki, so that's probably
the upper bound for you. If you can't afford that, write up how this advice
actually worked out for you in a blog post and I'll reimburse you.)

Invite people via pre-existing networks like e.g. the Chamber of Commerce,
which is generally happy to tell their members about free events which aren't
(explicit) sales pitches.

When meeting people, ask about their business problems. Listen. Tell them that
you understand those problems. If appropriate, say that you think you can
produce a solution to those problems, since you are in the business of doing
that as a technology consultant, and offer to discuss that problem in more
detail after the event.

~~~
tomfakes
Also plan on doing this more than once, and analyze your performance to ensure
you get better.

One thing that programmers forget is that, at some point, you weren't good at
programming, but over time, you learned and now you are pretty good.

Your business/social skills may be at that same starting level, and this isn't
something you read about on the internets and are immediately good at.

Start now, plan on doing this over time, and learn to get better at it. It
takes effort, but it will be worth it.

~~~
hiddenfeatures
Oh god, Tom.

That right there: "One thing that programmers forget is that, at some point,
you weren't good at programming, but over time, you learned and now you are
pretty good."

That's just an enormous revelation. I can't even tell you how good it was to
talk to Dave Rodenbaugh and he basically said: "See, you are now good in
giving talks. Do you remember the first time?" and I was like: "Yeah, I
remember: I nearly cried afterwards"

And I _needed_ someone to tell me this!

------
k3n
There really isn't much to this article. From the title, I thought it was
going to discuss the problems that people face when they live paycheck-to-
paycheck and/or near the poverty line, which is a story that's been told but
bears repeating and further exploration.

Instead, it merely remarks that some US corporations have noticed an upward
trend in the number of their customers who are a part of this very predictable
cycle (pay/benefits days, usually at the end of the month), and mentions that
more "middle-class" are now a part of the cycle.

However, it doesn't delve much deeper than linking it to the recession, and
doesn't offer any insights into how these businesses are adapting other than
vague references to "big data" (with a hat-trick of references to the term).

~~~
ctdonath
Yeah, I was hoping for practical quantification of the minimum viable cost of
living. Fascinated with $1 meals, I get a lot of flack over "cost of living"
which usually includes a lot which I consider relative luxuries. Take those
waiting for the midnight EBT recharge and see what they really buy, and see
whether their choices are more a matter of need, desire, education, awareness,
and/or availability. Methinks the real issues are buried under the heated
rhetoric.

------
protomyth
You'll also find the cops setting up "safety checkpoints" on the day welfare
payments go out / checks clear. It happened a lot on the road from the
reservation to town. Its not like its easy to keep a car running and
maintained in a place where it gets above 90F in the summer and -40F in the
winter[1].

1) there is no bus or other public transportation

------
ck2
My personal saying is "It's very expensive to be poor".

~~~
alxp
Obligatory Vimes quote:

The reason that the rich were so rich, Vimes reasoned, was because they
managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus
allowances. A really good pair of leather boots cost fifty dollars. But an
affordable pair of boots, which were sort of OK for a season or two and then
leaked like hell when the cardboard gave out, cost about ten dollars. Those
were the kind of boots Vimes always bought, and wore until the soles were so
thin that he could tell where he was in Ankh-Morpork on a foggy night by the
feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could
afford fifty dollars had a pair of boots that'd still be keeping his feet dry
in ten years' time, while the poor man who could only afford cheap boots would
have spent a hundred dollars on boots in the same time and would still have
wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”

Source: [http://www.goodreads.com/quotes/72745-the-reason-that-the-
ri...](http://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-
rich-vimes-reasoned)

~~~
daeken
That's a great quote, but this all really just boils down to short- versus
long-term thinking. When you're poor, your long-term thinking goes out the
window in exchange for making it to next week. Getting out of that is hard --
harder than you can imagine until you're in it -- because it's like your long-
term thought center just atrophies in survival mode.

~~~
HCIdivision17
Poor people aren't ignorant of the long-term. Note that Vimes himself is poor
(he never really becomes a noble, at least); his point is you need boots _now_
, and can't wait a year to save up for a good pair - the boots you get today
leave you without enough to ever buy nice boots. Most depressingly, many don't
see how they can save at all, making just slightly less than what's needed to
make it to next week.

I suppose part of the trick is to realize you're living less than a zero sum
life, and then grinding _even worse_ off for a long while to save enough up
for a pair of boots that will _then_ save you enough to lift your life up by
the bootstraps.

~~~
nijk
There are a few options when your life is negative sum:

Take on debt to amortize against future positive sums.

End yourself.

Change the weights in your utility formula.

~~~
e12e
You forgot: organize a revolution.

------
venomsnake
My grandfather's saying - I am not rich enough to be able to afford buying
cheap stuff ...

------
laurentoget
Every year, those post apocalyptic novels feel more and more like they are a
documentary.

~~~
thoughtcriminal
We are experiencing slow motion Armageddon. I'm serious.

------
AlexeiSadeski
You can eat quite well on $3/day. $1.50/day of food is comfortably above
subsistence in the US.

A diet of strictly rice and beans will net 1500 calories for $.30 - $.50 per
day. That's not an appetizing diet, but provides a base number for
calibration.

Cheap eating discussion:

<http://forum.earlyretirementextreme.com/topic.php?id=599>

~~~
infinite8s
It can be quite appetizing if you are able to purge a bit on dried whole
spices, which I'll go a long way.

------
encoderer
"The rich get richer. The poor get -- Children"

~~~
forinti
Life goes on. If people stopped having families because they are poor, we
wouldn't be here.

~~~
e12e
Indeed. We might have been in a better place (overall).

------
lifeguard
<http://www.youtube.com/watch?v=mwAQwItEjUo>

If minimum wage was $22 an hour the price of dinner for two at Applebee's
would increase around 80 cents. $22 an hour is what the wage should be in
keeping pace with workers increased productivity.

If the minimum wage was in fact a livable wage young adults could support
themselves with an entry level job. I believe unemployment is the highest
among males 18 - 22 years old.

Where does the missing 80 cents go?

~~~
AlexeiSadeski
If it takes $22/hour to "live," what are the people in Mexico, earning $5/DAY,
doing? Are they not living?

