Yesterday we took a look at The Heritage Foundation’s recent report: “Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?” We found that the authors think that the “allegedly” poor enjoy a better lifestyle than they are perceived to have by the general public. They think the poor acquired various amenities two ways. First, they acquire goods through the steady drop in product price after the introduction of a new product, that is to say, through retail price competition. Secondly, they acquire these goods when they were previously not poor, and they have only lately become poor. Today I’m going to propose another idea as to where the amenities the poor enjoy come form.
Let’s take another look at the amenity list:
Firstly, we can explain a large number of major appliances through apartment rentals: refrigerator (seriously – an amenity? I can get a room at the Motel 6 with a refrigerator*), stove and oven, air conditioning (the one bedroom walk-in closet I rent has central air, and I live in a pretty crappy apartment complex), dishwasher, and a ceiling fan ($30 at Home Depot – luxurious!) Not all poor people rent, of course. Some own houses. What about them?
Here’s where we get to my proposed idea. Look at the list above. Do you notice anything about it? I mean, aside from all the stuff listed being electronics, although it is related. All the stuff listed here depreciates rapidly. For example, a refrigerator that was purchased new 10 years ago for $1,000 may be, today, worth between $50-$100. A microwave can be purchased used for $30. VCR’s are virtually worthless since the introduction of the DVD, and people are practically giving those away. Speaking of giving things away, if you make it generally known that you don’t have a 1) microwave or 2) television, you will receive offers of other people’s surplus microwaves and TV’s. For some reason, people find it unacceptable that anyone wouldn’t have a microwave or TV, and if they have an extra, they will offer it to you. I have acquired two microwaves and a wonderful TV in this fashion.
Now take a look down this list. Is there anything on it that can’t be bought used at a very low price? A few things like internet, cell phone, cable and a jacuzzi or big screen TV (seriously?).
If we do the math on the cell phone, internet, and cable, we end up with a pretty low monthly bill. A pay-as-you go cell phone can cost $15 or less per month. Internet can also be had for as little as $15 per month, and cable costs about $30 or so per month.
Suddenly all these “amenities” don’t look quite so luxurious. If you’re buying your appliances heavily used and and paying out $15 a month on cell phone service, you’re not living in the lap of luxury.
But all this leads me to a final point, in How Can The Poor Have So Many Amenities? Part 3.
* I have actually done this.