You make it sound like poorer Americans are blowing their paychecks on designer handbags, but the article makes it clear that that's not what's happening. "Luxury goods" as economists define them are not what you'd expect. To quote the article:
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.
while smoking and lottery-ticket buying are categorized as necessities.
I gave up smoking a couple of months ago after 30 odd years - I now feel rather stupid, given how clever I really am. I have never been a gambler but the parallels are very clear to me and I have a couple of friends who are gamblers and display the same stupidity. I keep my gob shut.
I do not agree with the definition of necessity implied above. Gambling and drug taking (smoking int al) are not basic requirements for life. Eating is. Eating at McDs is simply buying calories and possibly a few other basic life sustaining requirements and consuming the same. McDs may not provide you with all the nutritional requirements for a healthy life but you will get a lot of calories in. Until embarrassingly recently, the sole stated purpose of eating was calories. Brits are still not known as Limeys for nothing.
Fags and bandits can go and *////~~~~ bbbbzzzzt OFF!!!!
> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.
A rational actor defers maintenance when money is scarce. That doesn't make maintenance discretionary, just deferrable and indefinitely deferred maintenance eventually causes unavoidable, huge spending.
It's a definition that works for how economists talk about things, but is extremely out of phase with the colloquial definition. Hence the stated outrage from the parent on how the poor spend so much of their income on "luxuries", when that refers to different things than what most non-economists would define as "luxuries".
No it's not. Poor people live in food deserts and buy 5000 calorie dinners for $2 at Dollar General. It's hardly discretionary to try to feed yourself real food. Now let's tie in the cost of healthcare associated with eating cheap junk food and you've got a problem. This is like an argument with someone who denies global warming.
Unless someone is starving, spending more on food as income rises is discretionary. A proper food budget is stable, it should not change as someone earns more money.
As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.
I’m amazed that your personal experience was so representative that you don’t even have to consider that other people’s circumstances might be different.
As of 2012 food costs as a % of spending are the lowest in the US than anywhere else in the world. [0] During the Obama administration there was a massive increase in enrollment with the SNAP program. [1] Between government programs and charitable organizations I'd argue it is practically impossible for someone to go hungry through no fault of their own. You'd have to be unlucky on a cosmic level.
> Unless someone is starving, spending more on food as income rises is discretionary
It's also not discretionary if at lower income levels they receive a greater share of direct food aid that isn't counted in their spending because they never exchange money or a money-denominated voucher for it.
> As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.
Many of the poor:
(1) Aren't able to find work (and may not be able to work; permanent disability is a thing, and positively correlated with poverty),
(2) May not work find full time work when they work, and
(3) May be supporting non-working (and unable for age or other reasons to work) dependents on their part-time, intermittent, minimum wage income.
If you don't mind me asking, how long ago was your experience with minimum wage? Also, did you have access to a store where you could purchase fresh fruits and vegetables?
> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
In other words, the whole study is complete nonsense because those definitions are ridiculous and completely detached from any sensible definition of those words.
they're not useful for the discussion we are trying to have in this thread, but it seems a bit presumptuous to say that the entire study is complete nonsense because they use certain terms of art in the way they are normally understood within their field. a paper talking about the "power" of turing machines is not hogwash simply because other people mean something different when they talk about compute power.
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.