
To Cut Down Poverty, Cut Down the Cost of Living - jseliger
http://www.citylab.com/cityfixer/2016/08/poverty-reduction-cost-of-living-center-for-neighborhood-technology/494348/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheAtlanticCities+%28CityLab%29
======
eggy
I think the idea of focusing on reductions in expenses is the right thinking.
I am not sure disguising it as increasing social welfare is the answer. I have
been teaching all of my children, and ranting about it online occasionally,
that a lot of younger people are financially illiterate, including so-called
smart or tech people. I was taught live within your means. I grew up below the
poverty line in a crime-ridden neighborhood in Brooklyn in the late 60s, early
70s, and now I am living in the impoverished rice fields of East Java,
Indonesia by choice. My son bought his own first used car by shoveling
driveways, tutoring, working for a tree company all the while maintaining an
A+ average at school. Financial literacy is not just being able to balance a
checkbook. It is about being able to keep a 3 month to a full year of cash
flow right in front of you, whether on a piece of paper or a spreadsheet. And
don't tell me it is unrealistic. I did this when I had nothing. I recieved a
shoeshine stand and kit when I was eight, and did newspaper routes, sweeping
floors for supermarkets part time and a bunch of other fun jobs. Yes, they
were fun for me. I smiled and whistled while I did them. I didn't see them as
holdovers until I could be a real scientist or write my novel or make my art.
Rather I saw them as another day towards buying that telescope on a fire sale
at the local hobby store, or a book I really wanted to own, not borrow from
the library. Besides, I met some really interesting people while doing them,
and some led to better opportunities. Teach your kids the value of a dollar,
and have them know what it really means in their gut. That is how poverty will
be eliminated eventually in spite of any obstacles societal or otherwise.

~~~
RangerScience
I live within my means but am not financially literate. It sounds like a good
practice for me would be writing down my in/out cash flow - like you say, "It
is about being able to keep a 3 month to a full year of cash flow right in
front of you, whether on a piece of paper or a spreadsheet".

Is starting out really that simple? Writing down what comes in, and what goes
out, and what you know will come in and go out?

~~~
toomuchtodo
[https://i.imgur.com/1rPEkGQ.png](https://i.imgur.com/1rPEkGQ.png)

~~~
eggy
That's pretty neat. I'll have a better look at it later. Thanks!

~~~
toomuchtodo
You're welcome!

------
fma
"For Philadelphia, the biggest-ticket poverty-reduction item is expanding
transportation access"

It looks like cities need to focus more on subsidized mass transportation. I
live in Atlanta where the bottom line is ALWAYS scrutinized. Our mass
transportation system, MARTA, must be profitable. When it's not profitable, a
certain segment of society always criticizes it. They don't think of the
impacts to society of providing cheap, reliable and convenient transportation.

The only impact they think when MARTA is up and running, or expanded, is that
the 'unwanted' (of certain skin color) have the opportunity to come to their
neighborhood to loot and plunder.

I had just read an article that my county is adding more toll lanes
([http://www.ajc.com/news/news/local/work-
begins-i-85-express-...](http://www.ajc.com/news/news/local/work-
begins-i-85-express-lane-extension-gwinnett/nr9ZT/)). That is exactly the
opposite of what this proposal is recommending. My county is charging money
for express lanes to bypass traffic - essentially a privilege of the wealthy -
rather than create a long term solution for everyone (and the construction is
using tax payer money!)

~~~
wutbrodo
> Our mass transportation system, MARTA, must be profitable. When it's not
> profitable, a certain segment of society always criticizes it. They don't
> think of the impacts to society of providing cheap, reliable and convenient
> transportation.

An easy way to shut up the idiots like these is to point out the extent to
which miles traveled are subsidized for car drivers (invariably more than for
transit, due to how horribly inefficient cars are). When they're forced to
imagine a society without transport subsidies instead of one with only _their_
favored transport subsidies, they tend to quickly shut up.

Though of course this only works for people you know: the voting public is
allowed to be as dumb and contradictory as it wants to be.

~~~
superbaconman
> An easy way to shut up the idiots like these is to point out the extent to
> which miles traveled are subsidized for car drivers (invariably more than
> for transit, due to how horribly inefficient cars are). When they're forced
> to imagine a society without transport subsidies instead of one with only
> _their_ favored transport subsidies, they tend to quickly shut up.

First, I don't think you're going to change anyone's mind by beginning with,
"You're an idiot." Second, you're right, I can't imagine a society without
transport subsidies; But, considering the state of my community's
infrastructure, it's equally hard to imagine being able to subsidize even more
transportation than it already does. Maybe if they were decommissioning roads
in sync with new transit roll outs...

Main questions I have for discussion (mostly related to rail transit):

Will businesses that are not within walking distance of a mass transit
endpoint a see a positive benefit?

Will individuals that are not within walking distance of a mass transit
endpoint see a positive benefit?

Will their property values be adversely effected?

------
djrobstep
We already know how to cut poverty, based on other countries like the Nordics
where poverty is lower: Take more from the rich and give more to the poor.

Unfortunately, rich people love money too much, so we're not allowed to talk
about the real solution, and have to talk about all these fake solutions
instead.

~~~
programminggeek
That's all well and good, unless you are the one being taken from. Why should
someone's effort be rewarded with thievery?

~~~
nickthemagicman
You know I can't agree with you more. That's why we need a 100% inheritance
tax. So someone's effort doesn't go to someone who doesn't deserve it.

~~~
morgante
I'm not sure if you're being farcical, but I actually strongly support a 100%
inheritance tax. It might be challenging to enforce, but it seems like the
most equitable solution by far.

There's nothing wrong with people earning lots of money from their own work,
but they shouldn't be able to pass that on to heirs who have done literally
nothing to earn it.

~~~
RangerScience
This is definitely more complicated than that.

In the most basic sense, how much should I be allowed to do what I want with
my own money?

A step more complex; giving to your kids is, AFAIK, one of the biggest drivers
in why people try to make money during their lifetimes.

A step more liberal: Inheritance (the accumulation of wealth by a family),
again, AFAIK, is an important part of upwards mobility.

The current setup is definitely sub-optimal. 100% would also be sub optimal,
and, I'd argue, worse than what we've got here, because it's another thing
that rich people could dodge that not-rich people couldn't.

~~~
morgante
> In the most basic sense, how much should I be allowed to do what I want with
> my own money?

It's not your money once you're dead. As far as I'm concerned, dead people
don't have any rights.

> A step more liberal: Inheritance (the accumulation of wealth by a family),
> again, AFAIK, is an important part of upwards mobility.

On the contrary, I think it hurts economic mobility a lot more than it helps.
If you're competing for opportunities with people who inherited millions of
dollars (without doing anything themselves), it's a lot harder to advance
yourself.

Non-rich people don't generally leave enough of an estate for it to matter in
the first case. We could easily exclude the first $100k for that matter.

~~~
stickfigure
As mentioned earlier, you're going to have to completely ban (ie tax 100%)
gift-giving too. Or any sale of property that government auditors haven't
determined is completely equitable. A trustee would have to be appointed
immediately upon diagnosis of terminal disease - someone might "give away the
farm" so to speak.

I don't want to live in your world.

~~~
morgante
Yes, we would have to tax cumulative gifts aggressively as well. To deal with
things like real estate gifts, we could force the recipient to pay taxes on
the difference between the grand list price and the purchase price.

I don't particularly like living in a world where my hard work is confiscated
at a high rate while someone who just has the good fortune of wealthy parents
can receive millions tax free.

~~~
JanezStupar
And you would also get to tax charity just as heavily. Because charity is all
about giving gifts.

I have no interest in living in your dream world of justice. As it would have
been a totalitarian nightmare where everybody would be worse off.

~~~
morgante
Ideally charities should benefit people besides your progeny.

I really don't understand why you're so vehemently protective of inherited
wealth. Do you think it's abhorrent that Bill Gates is voluntarily donating
most of his wealth to charity instead of leaving it to his children?

Why do you think an inheritance tax is "totalitarian?" At least, why is it any
worse than income taxes?

~~~
JanezStupar
You are being disingenuous when comparing "willfully donating" and 100%
inheritance tax.

I don't care what people do with their property out of their own free will.

I do care when people are trying to instate authoritarian totalitarian
governments.

I oppose inheritance tax - as that inheritance has already been taxed at least
once.

I have plenty of good solid arguments on my side.

And I would advise you to put a bit more thinking into your ideas.

~~~
morgante
There's no need to get into ad hominem attacks.

If you have so many "good solid arguments" on your side, I'd love to hear
them. Or answer my question of why they're so much worse than income taxes.

Why do you think that an inheritance tax implies an "authoritarian
totalitarian government?" It's a total non sequitur. Does Denmark have an
authoritarian government because they impose a high income tax?

~~~
JanezStupar
Inheritance tax per say does not imply authoritarian totalitarian government.
100% inheritance tax does. Work out the details yourself.

Your conflation of income and inheritance tax is disingenuous.

My crown argument against inheritance tax is that the property being inherited
has already been taxed before.

Another would be that taxing inheritance destroys capital base, which no
society really wants.

Third would be that governments are really bad at managing capital. There are
plenty of issues in the nordic models, where there are already signs that
their massive welfare states are going to implode in the next couple of
decades.

p.s.: How is me remarking that you have poorly thought out positions an ad-
hominem?

~~~
morgante
> Inheritance tax per say does not imply authoritarian totalitarian
> government. 100% inheritance tax does. Work out the details yourself.

Why? What is the taxation level where the government is _automatically_
authoritarian? 99%? 90%? 80%?

You can't just assert things and then not provide a causal chain.

What makes double taxation an unmitigated evil? Sales taxes are double taxes,
as are taxes on corporate dividends. Yet I don't hear people railing about how
they're symptomatic of an authoritarian regime.

> Another would be that taxing inheritance destroys capital base, which no
> society really wants.

How does it "destroy" capital base? Redistribution of wealth does not equal
destruction of wealth.

I agree that many governments do manage their capital poorly. Instead of
having government hold on to the capital, I'd say we should collect all estate
taxes and channel them into an annual basic income for all citizens. Let the
living decide how to use the money.

> p.s.: How is me remarking that you have poorly thought out positions an ad-
> hominem?

It's not attacking the merits of the argument but instead the thinking of the
arguer. I have actually thought about this quite a bit.

~~~
JanezStupar
I am not going to engage in this discussion anymore as you have convinced me
that you are arguing in bad faith.

p.s.: for readers - see what Milton Friedman had to say on the very topic, to
a person that seems very much on the same level as some of the contributors to
this thread:
[https://www.youtube.com/watch?v=MRpEV2tmYz4](https://www.youtube.com/watch?v=MRpEV2tmYz4)

------
vertis
This week is national homelessness week in Australia. I attended a panel by a
bunch of charities here in Melbourne earlier in the week, and one of the
things that kept coming up was the need to do more about affordable housing.

In Australia at least the major population centres are very expensive to live
in (and there isn't much in the way of regional centres to offer
alternatives).

It's such a risk for lower socio-economic groups that a bad run of luck can
put them into a position of losing their accommodation.

Interestingly, some of the stats being shared by the panel indicated that the
amount of money expended on dealing with the problems surrounding a given
homeless individual are actually more than it would theoretically take to
remove them from homelessness more directly (don't know how accurate that is).

~~~
empressplay
There's plenty of work in the regional centres (for example Bendigo) for
people who have mid-level skills and salary expectations. These cities are
hardly the sticks. The truth is people like living in the capital cities
because of the amenities, but the amenities are what drives up the housing
prices!

So, while I agree that the housing prices in Melbourne and Sydney are insane,
currently, they would still be quite expensive even in an ideal situation, so
wouldn't it make more sense to make regional centres better able to handle /
more attractive to lower socio-economic groups / homeless people who can't
afford to live in the capital cities?

Bendigo, for example, is two hours from Melbourne on the train (which costs
less than $20). Seems to me like an ideal place to offer low-cost housing...

~~~
jacalata
> people who have mid-level skills and salary expectations.

The really difficult homeless population doesn't have either of those.

That aside, to make Bendigo attractive, you need to move/duplicate all of the
social services infrastructure and family connections that people have in
Melbourne (which are the 'amenities' that are important to the borderline
homeless group). If their kids are in high school in Frankston then many
people would rather stay homeless in Melbourne than move to Bendigo. Then if
they have existing food bank connections, court dates, legal clinics, etc -
it's a big risk to leave this for some temporary housing and a theoretical
job.

~~~
ruste
If they'd rather stay homeless when other options are available there's not
much you can do for them is there...

~~~
jacalata
Of course there is, it starts with not pretending that just because they're
homeless they must have no commitments, no attachments, no fear of new and
unknown scenarios etc. If the only possible option you can think of is "let's
ship them off to another city" then you can't have put more than 1 seconds
thought into the topic.

~~~
ruste
>Of course there is, it starts with not pretending that just because they're
homeless they must have no commitments, no attachments, no fear of new and
unknown scenarios etc.

Everyone has commitments and attachments, but looking after your own well
being should generally take priority. If you prioritize those attachments
first you do so by choice. Fear of new and unknown scenarios should not be
keeping people homeless.

~~~
jacalata
It's a failing strategy to build your social services around some kind of
condescending shit around "maybe homeless people should be better and mentally
stronger and then they would see the cornucopia of opportunity that is
available to them". And not to get too abstract - nobody has even solved
homelessness in Bendigo for the locals, let alone for people shipped out from
Melbourne! This entire topic is a stupid hypothetical that is not a realistic
solution in any way except that it really easily ends up as a justification to
dismiss homeless people as causing their own problems.

~~~
ruste
That pretty well agrees with what I'm saying...

~~~
jacalata
Pretty sure we're not saying the same thing when your comment was "there's not
much you can do for them" and mine is that there is plenty you can do that
doesn't rely on them giving up everything they do have to take your help.

~~~
ruste
Yes, if you're homeless because you want to be that's your choice, I'm not
going to try to convince you otherwise. What I'm saying is that it's dumb to
assume most people are homeless because they made bad decisions. Rarely are
people homeless by choice. Hence the whole "Fear of new and unknown scenarios
should not be keeping people homeless." bit.

Edit: I admit, it is a bit unclear. I can see why you thought what you did.

------
bryanlarsen
No discussion about the biggest cost for poor people: rent.

And the fix is simple (not easy): eliminate rent control and zoning laws.

The rent in Tokyo has gone _down_ despite an increasing population in a very
dense city with scarce land availability. Why? No rent control and very lax
zoning laws.

~~~
ThomPete
Thats hardly the reason since the exact opposite happens in NY where rent has
gone way up at places which doesn't have rent control.

~~~
enraged_camel
That's because some places have rent control and others don't. You have to
make it like Tokyo where nowhere in the whole city had them.

~~~
ThomPete
Please point to any evidence of that claim.

------
didibus
The best thing I heard about dealing with poverty, is to half the maximum
allowed work week. If you made full time 20h a week for a lot more jobs,
forcing employers to pay double or triple for extra, then you'd inevitably
force people to share jobs. Employers would need to employ twice as many
employees, but it would not cost them more. It's an easier sell then higher
tax, since people get to have more free time. It also adapts better, since all
the offer and demand and market laws would apply. No unjust or artificial
taking more from some but not others.

~~~
Qantourisc
I wish this was try, but for my country and I suspect most, hiring 2 employees
is more expensive, even before mentioning any overhead. Maybe we should pay
companies for each person they employ ?

------
pnathan
Add mass transit infrastructure. Strip rent control. Strip zoning that limits
density. This dramatically increases supply over a wide geographical range,
giving broad choice. Stop focusing on social programs, let market competition
itself drive down prices.

These things are pretty well understood at this point.

------
swframe
"Applied" education is the best path for the poor. Don't teach the 3-Rs. Teach
them how to fix their problems: 1) fight the cycle of poverty 2) weaken gangs
3) reduce crime and drug usage 4) renovate local housing, schools, and
infrastructure 5) create and run local businesses 6) employee all teenagers
after school and during the summers, etc.

Once they have pass those classes, they can learn the other stuff.

And this is how we should pay for it. Sell treasury bonds like we would to
raise funds to improve our national infrastructure. In other words, invest in
poor people in such a way that you can repay the investment from their future
taxes. Specifically, pay poor people to work their ass off to fight poverty.
(No person should be paid to do nothing; that is a horrible idea.) Allow the
wealthy who want to reduce their taxes to keep $x in taxes for every $y they
invest in hiring poor people to fight the causes of poverty. In fact, we
should create poverty fighting companies who complete and measure their
success by the quality of life improvements they cause. The higher performing
companies lower the taxes of their investors.

(This isn't even expensive. Paying a teenager to avoid a life of crime costs
$1000s/year and putting them in jail costs $10,000s/year. Furthermore,
providing teenagers with IUDs costs $100s and saves $1000s.)

~~~
matt4077
Just pointing out some assumptions you're making in your post:

1\. Poor people are stupid/uneducated ("Applied education is the best path for
the poor")

2\. Poor people are lazy ("pay poor people to work their ass off")

3\. Poor people are criminals ("reduce crime...")

4\. ...and junkies ("...and drug usage")

5\. The broken window theory is right ("renovate ...")

~~~
swframe
Agreed, I made gross assumptions based on my crazy background and experiences.
I grew up in public housing (80% welfare families) in East New York (Brooklyn)
during the 80s when that tiny (crack infested) neighborhood had the highest
murder rate in all of NYC. For the last 3 years, I currently fund the
education, teach and mentor several people in the 3rd world who make less than
$10/day. The poor people I grew with and I now try to help are ...

1\. Smarter than me but don't know how to end the cycle of poverty (one had a
baby recently at age of 19 and both parents are unemployed).

2\. Are not lazy but work in dead-end 60-hour/week jobs where they are not
learning the skills that allow them to make enough to escape poverty and have
no time to learn new skills.

3\. Are not criminals but have accepted their fate and are not working to
change their neighborhoods to reduce the temptation of their kids to enter a
life of crime.

4\. Are not drug users but drug related crime and extreme violence surrounds
them (they have seen dead bodies in the streets on their way to work).

Other kinds of poverty exists. My proposal should be adapted to work in the
situations I've not experienced.

------
fsaneq2
This reads like a huge tautology. If you cut down bills people have to pay,
they'll have to pay less. Brilliant..?

> The good news is that reducing poverty by cutting monthly expenses would be
> a big boost for people on the lower end of the economic spectrum, without
> hurting the middle or the top

Oh, well if you also assume you have a source of money appearing out of thin
air (!), then, well, this is just pure genius.

~~~
toomuchtodo
Notice how one of the largest expenses for the poor are energy and
transportation. Then note the cost of renewables driving down the cost of
energy, and electric cars on a steep cost curve decline.

Technology is deflating costs (to the chagrin of central banks trying to stoke
inflation). We must continue to innovate.

Remember, there is no need for poverty if clean energy and automation can
provide for everyone's basic needs. We are almost there.

~~~
fsaneq2
Okay, but what does that have to do with the article? It brings nothing to the
table.

Of course we should innovate and keep bringing costs of everything down; this
will happen with or without city planning.

~~~
toomuchtodo
But it does! If you're performing city planning, you should be requiring the
installation of solar panels on low income housing. You should be ensuring
electric vehicles can be supported (as simple as making a weather proof NEMA
dryer plug available for each vehicle parking spot). You must ensure that low
income citizens can directly benefit from these cost-reduction technologies.

EDIT:

The only three resources that have been inflating in cost are real estate (can
be fixed with policy), education, and healthcare. Those last two can also have
their costs driven down with technology.

It's first principles all the way down.

~~~
fsaneq2
I agree with you, I'm just disappointed with the article I guess -- it seems
to dress up completely banal information as research/news.

For instance it basically says that a largely fixed dollar amount that doesn't
vary that much by house, electricity consumption, looks large if you make
$10,000 a year but looks tiny if you make $100,000 a year.

------
0xfaded
In Sydney where the cost of living is high, a typical non-skilled wage is
~$20. The result is all service based industries, cafes to full service
laundromats, are relatively expensive. However if one is willing to forego the
luxuries, it is a livable wage.

In this way, a higher minimum wage ultimately leads to a fairer redistribution
of income and is in my opinion a possible solution.

Reducing the cost of living implies downward wage pressures, which has the
opposite effect.

------
surfmike
This study (and they are quite transparent about it) doesn't focus on the
number one cost, housing. There is some room for technological innovation
there but it's mostly a policy issue.

The best-paying jobs in the US are highly concentrated in a few areas, and at
the same time cost of housing is skyrocketing in those areas. We could do a
lot to improve people's wellbeing by figuring out how to make housing much
more affordable. (Technology can help with transit, building techniques, and
better remote collaboration software; but policy is required for
zoning/planning, and for transit as well).

------
keithpeter
'Consumer confidence' and growth rates currently big news in UK. Basically,
the economy, or at least the numbers used to measure it at present, depends on
people borrowing money to buy stuff.

"Living within your means" is almost impossible (housing) and regarded as
somewhat unpatriotic. Strange times.

Back to OA specifically: I take it that the emphasis on transport access
implies long commutes to jobs? Any research on the impact of commute time on
social factors?

~~~
pitay
This article: [http://www.economist.com/blogs/gulliver/2011/06/perils-
commu...](http://www.economist.com/blogs/gulliver/2011/06/perils-commuting)
One of the standouts is a 40% greater divorce rate for couples, although that
statistic is slightly misleading. 14% of couples with at least a 45 minute a
day commute divorced in 5 years of the study, 10% of couples divorced that had
a commute less than 45 minutes.

------
known
Prevent
[https://en.m.wikipedia.org/wiki/Tax_avoidance](https://en.m.wikipedia.org/wiki/Tax_avoidance)
and
[https://en.m.wikipedia.org/wiki/Tax_evasion](https://en.m.wikipedia.org/wiki/Tax_evasion)

------
kazinator
_" A city cannot just give every resident more money”_

So the answer then is some sort of "rebates", which are basically stamps under
a different name (food stamps, "energy stamps", "transportation stamps").

------
chubs
Sounds like 'supply side economics' to me. Great to see Hayek relevant again!

