Monday, March 12, 2012

Racing to Last Place

 People are in such a hurry in life that they often don't realize they are running as fast as possible and still falling behind.

Today, I am driving the dog to the park for a run.   The speed limit here is 35 mph, 25 in some places.

As I approach a stop sign, I see a young girl in an older Japanese luxury SUV racing the other way, doing at least 50 mph in a 25 zone through a residential street that says "no thru traffic."

I am at the stop sign with my signal on, when she rolls right through the stop sign coming the other way - barely slows down.

Accelerating rapidly, she is now doing 50 mph to the golf course, in another 25 zone, to get to her waitress job at the golf club.

She tears into the parking lot, arriving 10 minutes late for work.

Query:  What is the point of all this?  Racing around to get to an $8-an-hour job?  How much would this cost if she got a ticket or got into an accident?  How much is she paying for a Lexus to go to an $8 an hour job?

I suspect that, if you added it all up, she likely is breaking even on the job.   The first hour of every workday is just barely paying for gas for the SUV to go to and from work.  And the most of the remaining hours are paying for car insurance, car payments, maintenance, and the like, as well as State and Federal taxes, Social Security taxes, and Medicare taxes.  What's left over?

The automobile really can eat up a lot of your income, if you are in a low income job.   But most folks don't think about that - if indeed, they think about anything at all.

Teenagers live this way - they get an after-school job so they can afford to buy a car.  And they say they need the car so they can get to their after-school job.  It is circular reasoning, pretzel logic, and yet they fail to see it.   But, we don't expect deep thoughts from teenagers.

But for adults?  Many are living the same way.  Take our waitress as an example.  The first two hours of her work day make enough money to possibly pay her taxes.   Since she makes little, she pays little in taxes, but still, Social Security and Medicare taxes take a bite.   The next hour is spent making enough money to pay for her car ride to and from work.  And that is just presuming she is paying gas, minimum liability insurance (on a clean license, so less) and basic expenses on a second hand car that is "paid for".   I suspect she owes money on the Lexus.

And of course, she has cable and a cell phone - at $100 a month each, that eats up another hour.  So far, it is lunchtime, and she has yet to make a single nickel.  Now, if you throw in rent and food - basic living expenses - that pretty much takes up the whole afternoon.   She has to hope for some good tips.  But based on the way she drives, I suspect she is also a hurried and sloppy waitress.  And if she is typical of the waitresses we get here on the island, she is a horrible waitress.  They don't get big tips here, so they don't try, which means they don't get big tips, so they don't try.... and so on.

At least she probably gets a free lunch at work.  Many people working low-wage jobs think nothing of spending one or two hours' pay on lunch at a fast-food restaurant.   The other day, I stopped at the DQ on the way to the beach.   They don't have a "dollar menu" but you can get 2 items for $3, 3 items for $4 and four items for $5.  I got a chicken wrap and a side salad, Mark got a cheeseburger and a side salad.  Total cost, $5, and actually not too unhealthy, considering it was fast food.  I try to avoid the place, usually.

The lady ahead of me, who had a neck thicker than her head, was wearing the uniform of a hotel maid.  She spent close to $9 on a supersized "meal" package with something called a "Slurry" or some such - a quart of melted ice cream whipped up with cookies in it.    Not only was she spending more than an hour's pay on lunch, she was accumulating 2000 calories - an entire day's worth of energy.  And most of it was starches, sugar, and fat.  Ouch.  Talk about bad choices.

How do such people get by in life?  If you look at their incomes and their expenses, it just doesn't add up.  And in many cases, it doesn't.   Debt, in the form of credit cards, slowly creeps up, over time, until it hangs over their head like the sword of Damocles.   They can never realistically pay it off, so it just keeps accumulating, until it reaches crises proportions, and they end up in bankruptcy court - perhaps again.

Is there a better approach?  Or are people like this just screwed from the get-go?   Maybe there is no way to make the numbers add up - no matter how hard you try.

But there, perhaps, ways to make it work, but it takes some effort.   And the amounts saved seem trivial at first, but they add up quickly.

Commuting is a huge expense, to begin with, and one that can eat up your income to the point of bankruptcy.  As I noted before, many folks live "out in the country" because they like to hunt or fish or claim the air is fresher or the schools are better - all of which is often coded language for "less black people"

So they drive huge distances to get to work, which not only sucks up gas, but causes them to burn through cars rather quickly.   Trust me when I say you never want to buy a used car from folks like that.

Compounding this is their vehicle choice.    You have to have a pickup truck, of course, to haul that deer carcass once a year, and that is sound logic for choosing a 15 mpg vehicle to commute to work in - 50 miles each way.

Next is driving skills - or lack thereof.   Since they are forever late for work, they tailgate, speed, and drive distractedly (texting makes that long commute seem shorter!).  So there are accidents and speeding tickets, which are costly and crank insurance rates through the roof.

Pretty soon, commuting takes not one hour of work to pay for, but four or five.  Folks like this are working just to own a car.

And let's not even talk about day-care!    So many people park their kids in day-care and then rush off to a job, not bothering to do the math on whether they are actually losing money in the proposition.  A friend of mine, a school teacher in a private school, decided to quit her job after their second child, as the economics of it didn't make sense.  And the weird thing was, she felt guilty about it as though she had to explain the math to people, because, hey, in this day and age, everyone is a two-income family, right?

But I understood, completely.   Her salary was barely covering the cost of commuting, day care, lunch at school, state and local taxes, and the like.  They could be a "two income family" and be bumped into a higher tax bracket, or she could stay home, be with her own kids, and their net income would be the same, if not greater.   And the quality of life?  Fantastic.

But yet, I meet a lot of people working very low-wage jobs and they pay a lot of money for day care and complain about it a lot.  And I wonder if they ever did the math on all this driving and stress and day care and thought about whether it was really worthwhile.

Or whether they were just racing to last place.