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The Almighty Buck
The NYT Magazine this week focuses on a topic near and dear to its heart: money. Stories about the dotcom boom, priorities, the cult of Wall Street. Some of the stories are interesting, as with this comparison of how far a dollar goes depending on where you live. Some are disturbing, like this one on CEO salaries. And several are (unintentionally) humorous, like this one about bankrupt Etoys and this one, by a rich writer who believes everyone else is rich too.
An unemployed person gets a WEEKLY manicure and pedicure? Excuse me... weekly!?
And that gives her an hour a week when she can feel normal? NORMAL?
You are far from normal lady!
It's true.
Fact is, we spend more than most people in the world make. We're a consumptionist society. We invented disposable plates and cups and diapers and everything else. Sake of convienience, isn't it?
I agree with his article where it describes the 'poor' of the US as wanting things they can't afford. Poor here is defined as "earning between $17,000 and $34,000 a year."
I don't make much more than that, and I've got all of these computers, and an XBox, and a Dreamcast, and...well, not to get too far into it, but I've bought a lot of crap I don't need, but I want. I have nobody but myself to blame.
But don't hide under a rock and take this article as a joke. I've started to think about what the hell I'm spending all of this money on long before I read the article.
Next time you buy 3 DVD's at Best Buy, take a step back. Do yourself a favor.
It sounds to me like he thinks every American is rich. He has a point.
How many color televisions and refrigerators are owned by the typical poor person in America? How many color televisions and refrigerators are owned by the typical Bangledeshi?
How many times per week does the typical poor American get to eat clean food, versus his Third World counterpart?
Health care may not be free, but *no* injured person is turned away from an emergency room.
Poor people today don't have to worry about many problems that would have killed even rich people 75 years ago, so I think the author is justified in regarding virtually all Americans as rich.
Another interesting part of the story.
eToys had one subsidiary, Babycenter [babycenter.com], which they bought in 1999 for like $90 million in eToys stock. I still know many Babycenter employees.
Here are some stats:
- Number of employees in December, 2000:
eToys: over 1000, not including babycenter
babycenter: 90
- Number of layoffs by Feb 2001:
eToys: 700
Babycenter: 20
- Revenue in 2000 (not profit):
eToys: $70 million
Babycenter: $20 million (consider that they had
10% of the staffing)
- Expenses in 2000:
eToys: $100 million
Babycenter: $20 million
- Typical expenses in the FALL of 2000 (Which
is when they were considering bankruptcy):
eToys: Brand new shiney Pentium III with a flat
screen monitor for most employees
- Brand new shiny headquarters in West Los Angeles, with a $100 million 10 year lease
Babycenter: The poor schmucks are still using
PII/366 & Sun Ultra5 machines
- converted warehouse in SOMA, San Francisco
- Amount that the entity sold for in spring 2001
eToys: $7 million to KBToys
Babycenter: $12 million to Johnson & Johnson
- Number of employees who still work for the company:
eToys: 10 or so
Babycenter: 70 (almost everyone)
- Number of days that the website has been down
due to the bankruptcy
eToys: 90 - March - May
Babycenter: Zero
- Number of managers who came in from the parent company to replace existing managers:
eToys: almost all of them
Babycenter: 1 , the finance controler
Not to deny that these people are poor, but don't fall into the common trap of believing that a dollar number represents some objective thing.
A dollar isn't a dollar. A dollar is what you can *buy* with it.
When I lived in a Mexican fishing village I rented a house for $4/mo.
A lobster was less than a dime, as was a bushel basket of tomatoes or a 10 lb. watermelon.
Industrially manufactured goods are beyond the reach of many people, ( so they still have active communities instead of watching television), but the necessities of life are always inline with local incomes.
It's called the free market. Prices of locally produced items are local *variables,* and baring disaster and famine, food and shelter is often *cheaper,* ( in the real buying power), than it is in more "developed" countries.
I have never lived among more sociable and *happier* people than those with a self-sustaining local economy. True poverty is a lack of food, clothing, shelter and community, *not* lack of money.
KFG
Just to put a response on this from someone you're talking about... :)
:) Nobody in the house drinks, smokes, or does drugs other than caffeine and chocolate. I've always said I never did those other things because I couldn't afford them :) Yes, we have two cars; one is my economy car for shuttling to and from work, and the other is the grocery getter / kid hauler. Both cars are fully paid for, and over 10 years old.
:) (She's the one with the business degree, after all; I'm just a geek.) She says things are kind of tight, but they've always been that way; we still manage to get by somehow. We don't have the latest and greatest toys (despite my geeky wants and urges), but we're still a happy, "average" American family. I don't see that we're particularly well off, but we're holding our own. The trick to the financials of all this is -
:) Sifting through to edit out some of the more personal information...
:)
I live in Taco's neck of the woods - cost of living is a bit on the high end here, IMHO - and I'm working one job, while my wife stays home to take care of our two kids. We're paying the bank for the privelage of living under a single roof, and that privelage takes up about 50% of my monthly takehome pay. The only reason we could afford the house was thanks to an inheritance, which barely covered the down payment.
Yes, we have two color tvs and two vcrs, but that's only because we spent good money on the first ones, and they still work well enough to be used in the basement on occasion. There's also an original Nintendo connected to that tv in the basement that we bought used years ago - no Playstations, no XBoxen. No Game Boys in the house, either. I splurged last month and ordered one of those 76-games-in-one game systems that were mentioned in an article here recently, and it's the best thing in the world as far as the kids are concerned. The dvd player that we just got last Christmas is a no-name Best Buy special, and we don't own any dvds (yet). The newest computer that was purchased was a used Bondi blue iMac, and that was two years ago. There's also the G3 that I bought five years ago (wow, that thing's getting old...) with a G4 upgrade that I put in it last year.
We don't go out to the movies, and if we're lucky, we go out to eat once a month. It's too expensive for these things, and the kids are too much hassle to take out in public sometimes
According to that article, we're a "below average" household, based strictly on the income numbers and education levels. Strangely enough, our household basically is the 50s/60s standard model - I come home from a day at work, the kids run up to greet me at the door, and the wife is getting dinner ready after her long day of cleaning / laundry / kid corraling. She does the bookkeeping too - I just bring home the money
wait for it -
live WITHIN your means.
Just like they did back in the "good old days" before all the PDAs and TiVos and cell phones (oh yeah, one Tracfone in the household - $20 every two months for a phone I barely use for thirty minutes a month), you only spend what's in the bank, or what you KNOW is going to be in the bank come the next paycheck. There's only been a few times that our total credit card debt has been over $1500 at the end of a month, which from what I understand is WAY below average. This is something that people seem to have forgotten - the people that give you those pieces of plastic want their money back someday, and someday SOON.
Like that NYTimes article says, everyone acts like their financial salvation is coming just over the next hill... but the odds are REALLY good that what's over the next hill is just the next paycheck. If you live life expecting that next check, you won't be surprised - or at least, you won't be disappointed when the monthly bills show up. If you learn to take care of what you have, and make do with what you have, you don't have to be throwing tons of money out the window every month for the next "newest and bestest". Regular oil changes are a lot cheaper than a new car every few years because the engine blew up after you kept treating it like crap.
We may not be financially compared to other households in this country, but we're financially stable, and we're overflowing with intangibles that a happy family provides.
/me checks the preview... wow, I was in a mood to write tonight, wasn't I?
And after this lengthy monologue about money and happiness and making do, I leave you with a link to a site where you could win new geek toys, and put some affiliate money in my pocket in the process so I can buy more toys
-----
Apple hardware still too expensive for you? How about a raffle ticket?
Come to the University of Mars! Classes starting soon!
Shit, dude, it doesn't matter how much you have, you'll always be wanting a little more. Psychological studies have shown that people's happiness levels is relatively set, and while major events may elevate or depress their overall happiness (such as winning the lottery for happiness or death of a loved one for misery), before too long people are back to their previous happiness levels. So, even if you think you'd be damned happy and things would be great if you won the lottery and became a millionaire, that happiness would be relatively short-lived, I'm afraid. Essentially, you'd find other shit to bitch about.
I could not justify my existence if I were a turkey farmer. Would I terminate myself? Undoubtably, yes.
Comment removed based on user account deletion
* Good CEOs are very scarce.
* Good CEOs build companies and produce profits.
Therefore, good CEOs are worth a lot of money.
There's two problems with this:
1. Even poor CEOs are paid extremely well.
As seen in the article Edward E. Whitacre has led SBC for the past 12 years, his results? Below average growth. Now he may have done good things for other companies in the past, but he's simply been mediocere for SBC, yet doesn't receive a mediocere CEO salary.
When the board actually does wise up and fire a CEO, the exCEO receive multimillion dollar severence packages. And what did they do to earn this? Balance sheets with wonderful red accents.
2. When a company does well, those in the company should be rewarded. From top to bottom. But this isn't what happens. In 1999 CEO salaries increased 37%, while the average worker's salary increased a measly 2.7%.
Between 1990 and 2000 CEO pay has increased 571%. By comparison, the US's GDP over the same time period only increased 3.7% anually, or 37%. Since average corporate performance couldn't possibly outstrip the GDP growth by 15 times, something is wrong. Think of it this way. If the minimum wage increased along at the same rate as CEO salaries, a janitor would be making $25.50 an hour, instead of a measly $5.15.
There are very real economic issues to be considered. I suggest you read up about how The Market actually works. For starters try United for a Fair Economy.
We as Americans are vaguely aware that we are better off that most people in the world. I thought I 'got it' before I travelled a bit. I know I could have been the one who posted how hard it is to raise a family in New York.
No.
I tell you truly: a homeless person anywhere in the US is far better off than the average African. We are so steeped in wealth, what one person I met called "an embarrassment of riches", we have no perspective.
We truly do not understand what poor means. Not a clue. The average american roughing it in the great outdoors brings more stuff in his backpack than the average african ever owns.
No running water. No electricity (ha!). No roof. No car. No bus. No sidewalks or pavement. No shoes. Nothing.
Disease is rampant; 80% of the population is HIV positive in Malawi. The average age is 15.
If the world is getting you down, take a trip to Malawi. It will change your perspective.