Australia’s flagship national broadsheet, The Australian, published an article today sporting the title Cut to the bone: working poor on the rise. To illustrate this terrible phenomenon, the Oz article provides the example of Vicki and Terry Rawiri, who
[by day] worked at the supermarket, while at night Vicki, 42, weighed carcasses and Terry, 43, classified as a labourer, worked as a slaughterman.
And even then they could barely afford the gruel, you might surmise. Well – not really. This pitiable couple
were trying to get ahead by paying off the mortgage of their $365,000 [about 150 000 GBP] home in Cowra in eight years
Your heart bleeds, no? The sacrifices abject poverty forces one to make! Leaving aside the horrors of working hard to pay off one’s mortgage quickly, the article goes on to quote a survey filled with anecdotal evidence of the plight of Australia’s poor; how they cannot afford to drive registered cars, thus risking the law’s wrath in unlicenced wrecks, how they can only find $20 to go to the movies if it comes out of the food budget. Well, here’s some anecdotal evidence that I have gathered in my travels – I once worked at a very large and very busy liquor store in an especially low socio-economic suburb in Perth. The poor may not be able to drive a registered car or spend $20 on a movie, but rest assured that a large chunk of them generally have quite a lot of money to spend on alcohol. Putting that aside, the tough luck stories of a few are not borne out by hard economic data from the Australian Bureau of Statistics pertaining to the poor in the aggregate:
over the period from 1994–95 [to 2003-2004], there was an estimated 22% increase in the real mean income of both low income people and middle income people and 19% for high income people
Even the very poorest who exist solely on government benefits have seen their real spending power increase by one eighth between 1995 and 2003, according to Peter Saunders of the Centre for Independent Studies, Australia’s premier liberal think-tank.
It is not hard to imagine what the financial backers of the survey – “the Brotherhood of St Laurence, the Australian Research Council, universities and trade unions”, otherwise known as “The Left” – conceive as a solution to these imagined woes. Yes, ever more government redistribution, ever more disincentives to work for a livelihood, less of the neo-liberal conditions that have directly and indirectly allowed so many formerly poor Australians to improve their lives and increase their wealth. I am again reminded that being a left-winger has a lot less to do with working towards practical improvement to the lives of those at the lower rungs of the economic ladder and a lot more to do with displaying to the world how much they care about such people. And when the “poor” make good – an increasingly widespread phenomenon as Australia’s wealth climbs – watch their former champions desert them like rats off a sinking cruise ship. As another Australian blogger, John Ray, puts it:
The Left love the poor. The Left need the poor so that they can feel good by patronizing and “helping” them. So they do their best to create as many poor people as possible.
Unsurprisingly, they squawk extra loud when the poor stop being poor. Mr and Mrs Rawiri are two ordinary Australians trying and probably succeeding in creating a decent future for themselves – they are far more representative of working class Australia than the small number of people who cannot find a few hundred dollars a year to register their car.
After the second world war, European countries set up the welfare state largely as a way of fighting poverty. While this might have been ultimately stupid policy, such things as urban poverty in London were actually real phenomena. Australia on the other hand didn’t have any actual poverty of this kind worth mentioning, but it nonetheless set up a similar welfare state because that was what was done in those days. In doing so, Australia was doing its best to create an unemployed and economically non-productive segment of the population and it managed to do so. What was different from Europe was that Australia’s governments were largely inclined to regulate everything to death rather than actually nationalise things (and while this was economically destructive, it was both not as destructive as the European approach and was easier to reverse) and Australia managed to avoid the worst excesses of European (and even American) utopian social housing construction. What exists of public housing in Australian cities exists largely of low rise detatched and semi-detached homes, rather than the unspeakable ghastly tower blocks that blight European cities. All this means that Australia’s welfare state is rather less destructive than most of those in Europe.
Therefore, despite the best efforts of the social utopians, from the point of view of material lifestyle, Australia remains an extraordinarily good place to live even (particularly) for ordinary suburban folks such as those described in this article. Loathesome as he may be, Prime Minister John Howard understands this extremely well, which is why people like those described in the article keep voting for him, much to the perplexity of people like those who write the articles.
The Left love the poor. The Left need the poor so that they can feel good by patronizing and “helping” them. So they do their best to create as many poor people as possible.
And didn’t we see that in spades at the Live8 farrago. The great irony is that the educated, middle-class left have no idea what poverty really is. They believe it is improving in some vague way because they slummed elegantly as students. They don’t see it for what it really is – stultifying ignorance, stupidity and habitual, state-funded drunkeness. I live in a relatively poor area of Manchester and the people I meet 24/7 fall into two categories. They are the poor that really want to be middle-class and move to the suburbs (or city centre if they’re young) and total scumbags that don’t care and have never received a cheque in their life that didn’t have the DSS logo on it.
The middle-class left has enormous fun taking the piss out of the right-wing working classes – the Alf Garnets and Archie Bunkers of this planet. They don’t even begin to appreciate that these people are trying to better themselves. It is only the middle-class left that regards being “working class” as something positive. The actual “working class” desperately wants to be something better paid.
Having said all of that, am I right in thinking that the Express lead with a story about Diana again today?
True. It is also – as far as welfare states go – a much more efficient redistributor of wealth than most European models. Middle class welfare (pay enormous tax, get back a whole range of social services and payments minus bureaucracy cost) is relatively minimal, and thus the welfare state makes up a smaller – though still obscenely large – proportion of government spending. I suppose that is preferable to the continental model. Still sucks, though. 🙂
What kind of “poor people” are fat and all have cellular telephones?
The door to the welfare office ought to be 18 inches wide. If you can’t fit, you’re not broke enough.
The poor may not be able to drive a registered car or spend $20 on a movie, but rest assured that a large chunk of them generally have quite a lot of money to spend on alcohol.
Maybe we need to petition the UN to include the right to a weekly night out at the flicks and a weekly bottle of Bundy in the Universal Declaration of Human Rights?
Seriously, who takes such articles seriously? The Australian is generally not too bad a broadsheet and have oft made calls for tax reform leading to a flatter tax structure. Mind you the Australian keeps Phillip Adams on the pay roll, and that must be considered a crime against humanity.
In the US, poverty is a behavioral problem not an income problem. It is a person’s self-destructive qualities that keeps him poor not the lack of opportunities.
That is why income redistribution creates poverty and does not solve it. Unearned income not only removes the incentive to eliminate self-destructiveness-it finances it.
“In the US, poverty is a behavioral problem not an income problem. It is a person’s self-destructive qualities that keeps him poor not the lack of opportunities.”
Isn’t that true in every developed country, unless say you have a crippling physical disability or something?
Jake and PJ,
Almost. But don’t forget government’s ability to cause poverty (that then needs ‘solved’ with entitlement programs) by enacting work blocking laws like minimum wage, madated benefits, anti competition laws, etc.
By the time the gov gets done making the workplace ‘safe’, there is often no work that can be done.
Midwesterner – exactly. And look at the couple in the article; they are both victims of that kind of government intervention (they cannot work longer hours at their main full time job because employers are not willing to pay them the overtime rates imposed to encourage employers to “spread the labour around) and beneficiaries of partial liberalisation of such regulations (as a second job, they work as “casuals” in a supermarket with less mandated benefits traded off for higher wages and more employment flexibility).
Why not just deregulate the market and let them work as long as they want at the same job?
When I was a kid (before the recession/depression of the late 70’s) we didn’t go to the movies regularly, and fast food was a three or four times a year thing. And we were middle class, albeit on the lower side, but we had a roof, some clothes, food, and TV. We had a bike, some trading cards, a couple of match box cars. That was middle class. I suspect now that is considered poor. Just goes to show how things have been redefined to keep the bureaucrats in business.
And, yes, during the years 1978-1980, we were poor, but so were a lot of formerly middle class folk.
>Still sucks, though. 🙂
It certainly does.
Don’t forget also what a wonderful thing a 48.5% top income tax rate is at discouraging Australia’s immense number of expatriates from ever coming back, too. Why pay 48.5% in Australia when you can pay 16% in Hong Kong?
Careful Michael, you might inspire Australia to adopt the US approach to income taxes. Don’t US types have to pay it any where in the world as long as we keep our citizenship? I could be wrong, I’ve never had foreign income.
Yes, Midwesterner, but in most countries with reciprocal arrangements, the tax you pay in that country is written off against your American taxes. You may end up owing some extra to the American government (or maybe not), but you are not paying two whole whacks of income tax.
Midwesterner – I believe you are correct, although I also believe there are some rebate programs in effect depending on where you work, etc.
We’ve also got the wonderful state and local govt’s in California and New York taxing people who work there and income tax even though they don’t live there. This was only supposed to be for the super rich athletes and entertainers who live outside the cities and states but get paid for performing or playing in those locations, but it’s now being applied to airline pilots and others who often travel to and from certain locations as part of their employment. Maybe New South Wales and the other Aussie states or maybe Melbourne could do the same.
Verity, thank you. That makes sense. And works good if your citizenship country taxes lower than the coutry you live in. But if the Aussie’s did that, it sounds like they would take their 48.5% top rate with them when the travel. At least it’s not a double hit but it would dampen the escape traffic.
SKP, I would like to think you’re joking but I’m pretty sure you’re serious. Do they even tax long haul truck drivers?
‘Oh what a tangled web we weave when first we start to tax.’
Hello there, James, and top of the morning to you or top of whatever time it is over there in Ozland.
Glad to learn that at least we have the prolific John Ray as common ground. BTW John is an expert on the cognitive dimensions of human population genetics… no I said I would not troll at Sammy’s Data ever again honest teacher I won’t I couldn’t help it just once … … and his mildly sanitised version of Chris Brand’s website is recommended reading on the part of your much-maligned and long-suffering but ever-patient Eurostatistician.
[TROLL MODE OFF]
I’m not sure that my good buddy, John, is being completely fair to the Left, though, when he writes:
The Left love the poor. The Left need the poor so that they can feel good by patronizing and “helping” them. So they do their best to create as many poor people as possible.
It’s more like good intentions leading paving the road to purgatory, I reckon. The Left don’t really do they best to maximise poverty, if only in the sense that no matter how hard they try, they may always make a mistake and get things right after all. Besides, I think many bleeding hearts do, in fact, bleed. [PREACHER MODE ON] The Left do want to make the world a better place for each and every one of us …. [PREACHER MODE OFF]
Of course, in real, absolute terms these white trash types you refer to aren’t poor – of course not. We all know that. The point about poverty is that there really is a relative dimension that cannot be eradicated and that libertarians tend to sweep under their ideological carpet. Of course we all know that the poor today are better off than the aristocracy of bygone times in terms of (say) dental care. We all know that. Yet a libertarian society will not eliminate poverty, since there will always be smart men and dumb men, comely girls and homely girls, kids brought up in normal families and kids brought up in broken homes or by sexual perverts with rings on their noses, people who win life’s lottery, people who sweat and pay taxes, and people who don’t sweat and to whom taxes are paid. Etcetera.
However, a gated-community type libertarian society (conceivable, though not achievable, in the real existing world) would probably reduce poverty a la Malthus in that total reliance on (voluntary) charity would render some of the poor so poor that they would no longer reproduce, or that they themselves would die of malnutrition or that many of their children would die in infancy because of their exclusion from the rich man’s table and reliance on the occasional Mother Theresa.
In other words, a libertarian society would combat poverty by combating the poor, in the (somewhat devious) Sartrean or Good Samaritarian interpretation of ‘combating’ as meaning also ‘failure to assist’. But I suppose that takes us into sophist territory.
Just to test what you really think, when you do think.
Give an honest answer to this question. Let’s say you have a choice between the two following options (offered to you by a Supreme Being):
(1) You are to be a young man seeking love and you are the only one in your town who can afford a Vespa, which makes you so attractive to young women that many of them will melt into your arms;
(2) You are to be a young man seeking love but, alas, every young man in your town can afford a Porsche, which means that possession of a Porsche does not give you a competitive edge in the battle for the girl you want to fall into your arms.
What male would not choose the first option?
Which male is richer? Which is poorer?
Discuss.
Best of the Web has a running feature about the ebb and flow of stories highlighting the poor and homeless. They become more numerous and poignant whenever a republican is in office, then fade away from journalistic interest when a democratic admin. takes over. The stats between the number of stories from the 80’s to the 90’s is remarkable.
Apparently, all those thousands of homeless suddenly fall off the edge of the earth when a “friendly” regime takes power.
There are two groups that are regularly cited by “poverty activists” as revealing the racism and lack of compassion of the US and its cold hearted capitalist economic system. Native Americans and African Americans are always pictured as the exploited victims of racist commercial interests and negligent governmental policy. There was another aricle along those lines in my regional, very liberal, newspaper just the other day.
But what glaring fact about these two groups is always left out?
If one looks at US history, there are two groups whose primary disability has been that none of their members are ever considered as individuals, but only as members of the group—Native Americans as tribes, and African Americans as a racially defined underclass before the “Great Society” of the 1960’s, and then as members of a protected class ever since.
The members of these two unfortunate sub-cultures are distinguished by having been declared “wards of the state” by a de facto attitude which, regardless of whether it was benevolent or actively hostile, resulted in much of their lives being lived under the kind of close, statist supervision usually reserved for orphans in a government orphanage.
The bleak and impoverished conditions on most of the Indian reservations is well documented. What rarely seems to be remarked upon is the utterly collectivist posture of a governmental policy which doesn’t deal with individuals and their rights, but tribes and their treaties.
Even the recent adoption of gambling by some of the tribes hasn’t solved the overall problem, and the disparity between successful tribes, who have acted in defiance of local and federal gambling regulations, and those who can’t make that gaming miracle work, is vast and growing.
As for the black population, as I have said before, if the KKK had been given the opportunity to devise a method of destroying the culture and social coherence of the African American sub-culture, they could not have developed a better program than the all intrusive, all controlling, and totally destructive welfare state.
Like the tarpits at La Brea, the enticing vision of a cool pool of water on a hot day drew the victims into a trap which closed about them and drowned them in a sticky, viscous goo of good intentions and high minded moralizing. The compassion of the statists has been every bit as deadly as the malevolent intentions of blacks’ worst enemies.
It is no surprise to anyone who values the dignity of the individual as a first principle that a set of programs and attitudes based on a philosophical abandonment of the individual in favor of the collective, whether based on race or tribe, has led to disaster for the alleged recipients of this compassionate largesse.
The remedy is not more of the same.
Check out the two anecdotes in this USA TODAY article.
First couple – in their 70s, have owned their home for 45 years. Only one of four children were born there so the kids moved out years ago. The article fails to mention any reason they still have a mortgage on their home – such as medical crisis. Yet they do. Most mortgages extend for a maximum of 30 years. Here’s my guess, they lived a lifestyle above their means and kept taking out mortgages to pay for it thinking they would never live this long. Now they are and their foolish decisions are taking a toll.
Second couple – I have no idea what USA TODAY is trying to illustrate here. A couple in their 50s moves to Georgia – without having a job lined up. They buy a house using an interest only loan (fools). Paul, in an economy with less than 5% unemployment, can’t find a job. Then they lost their savings in a “business venture”. Their mortgage “jumped” from $2,275 to more than $2,800. The couple is filing for bankrupcty.
Consider this, my current home mortgage is just under $1300 – for a 2500 sq foot, brick house on a half acre lot with beautiful pine trees, a two car garage, deck and in-ground swimming pool, and dual zone heating and cooling.
USA TODAY wants us to empathize with these two poor couples but I couldn’t help thinking they were four financial fools. And these were the only two couples this national newspaper could find who are having mortgage problems? The U.S. economy must be doing even better than I thought.
The origins of the Australian welfare state are somewhat skipped over there. There was a confluence of factors, one of which you have identified. Another was overt socialism, and another was the systems put in place to handle war veterans.
But relative superiority ought never to be a reason for complacency, especially when an extraodinary number of people are actively trying to undermine whatever superiority there may be.
Careful Michael, you might inspire Australia to adopt the US approach to income taxes. Don’t US types have to pay it any where in the world as long as we keep our citizenship? I could be wrong, I’ve never had foreign income.
You get a (roughly) $80,000 US deduction, income in excess of that is taxed at the usual sliding-scale rate.
I’m of the opinion that if I’m overseas and making more than $80k US a year, I’m going to have more interesting recreational options than bitching about taxes. Then there’s the SHTF factor- knowing that if things go pear-shaped you’ll get evac’d by the USMC is, IMO, an insurance policy worth having.
YMMV, but I have a hard time taking that kind of gripe seriously. It’s not like the US goes to any effort to keep people from emigrating.
Consider this, my current home mortgage is just under $1300 – for a 2500 sq foot, brick house on a half acre lot with beautiful pine trees, a two car garage, deck and in-ground swimming pool, and dual zone heating and cooling.
David, are you commenting or trying to get into the real estate business…
Me? I’m enjoying 2.5% tax on my income, along with a 5% consumption tax on goods and services.
Not too shabby, not too shabby at all…
*gloats*
TWG
I’m sorry, I didn’t make myself clear. I was noting that, like Australia, the media in the United States works themselves into a frenzy about the desperate situation faced by the working poor. The linked article was on the front page, but when I thought about the two examples, they didn’t make sense. I gave my home info as a reference point. The second couple has a mortgage twice mine. I live in North Carolina, they live in Georgia – relatively similar home prices. They must have a mansion – and they are working “poor”? I’m sure most people in the Third World would kill to be poor by this standard.
So why would a newspaper use such laughable examples of the dire straits of the poor unless the poor in America just aren’t in that bad of a situation.
rosignol, it’s not a gripe. In my opinion, the USMC factor alone is worth most of it. But Australia doesn’t have that same capacity. And their citizens could easily find themselves traveling with an almost 50% top tax rate following them. And nothing to show for it except better paid welfare recipients back home.
Get this about Australia’s unemployment benefits – they never run out. In the States, you get assistance for how long? 18 months? Even in many parts of Continental Europe, there’s a limit of 4 or 5 years. Of course, what happens in those places is that over time, if the unemployed individual hasn’t found work, they progressively set their sights lower until they get a job stacking shelves in a supermarket or their benefits cut out. Nothing wrong with that – if you can work, you should and wherever you can find it. But in Oz, there is no termination period. So that VCR repairman is still looking for the job he lost five years ago. And people wonder what to do about the long term unemployed in this country. Crazy.
I posted a comment on this thread 2 days ago that was, I was informed, going to be reviewed by the admin. If it was unacceptable, please tell me why. If it was ok, please post it.
Australia doesn’t tax foreign income. In fact one unpopular distortion is that it doesn’t even tax non-resident foreigners’ domestic income, and when it does taxes it less.
veryretired,
The same thing happened to me a while back. The next time it happened I tried to post three times. Eventually, it appeared in duplicate.
If it’s part of some sort of process helping to keep some of the knuckle dragging race ‘realists’ out, (or spammers) I’ll wish it success. And if some of our posts eventually show up multiple times, I can always skip the extras.
It is pretty frustrating, though. Kind of cuts off the flow of debate.
Midwesterner-
I don’t think the “race realists” (a contridiction in terms?) are the real issue. I have read that the knuckle dragging Islamist scum have decalred an “Internet Jihad”. These wankers now are realizing that the Dead Tree media is not their worst nightmare but that the net is. As such, computer savvy wackos in every Islamist Butt Crack of a country are researching ways to spam or DOS servers that host blogs critical of their pathology… er, ah religion.
…. I wonder how much of Samizdata’s problems emanate from Islamist sh*tholes?
Uain, very likely. Just some advice to anyone out there who sees an Islamic (or other) web page that they want to point out. Don’t just bookmark it, hard copy it.
A couple of months ago, I found a particularly gloating Muslim page about Norway and announced it on Samizdata and that I had sent the URL to some tv media. Within minutes to a couple of hours, the page was sanitized. Not taken down. Just sanitized of the points that I had made. Got my hackles up a little bit, it did. Fortunately I did hard copy the before and after.
Back in the early 1990’s, I worked part time for a video rental company in Perth. I spent most of my time working in the store in the high income area of Claremont. It was still the go-go ’90’s, so half my customers seemed to be driving a red Porsche. Funnily enough, most could not afford to pay late fees of a whopping $5 a day, and some would pay for their movies with a stack of 5 cent coins that they had obviously scraped out of the ashtray in the car. Most seemed an inch from bankruptcy.
On some days, I was banished to the shop in the northern suburbs that at the time had a reputation as the heroin capital of the West. The customers were a horrible looking lot, and they drove the oldest, most beaten up cars known to man. They also had a predeliction for R-rated movies that was completely at odds with the ritzy suburbs that I normally worked in.
However, when it came to paying, they would all pull out a fat roll of $50 bills and peel one off to pay for half a dozen movies. Their pockets were bulging with cash, and they had all day to lie around at home watching new release Van Damm action movies. I don’t know where all the money came from (ha ha) but I bet that statistically, they would be nominated as “poor” due to the low levels of income that they actually declared.
People will always have money to pay for the things that they care about, and will not pay for those things that they think they can get away with not paying.
Get this about Australia’s unemployment benefits – they never run out. In the States, you get assistance for how long? 18 months?
It varies from state to state. Six, where I live, and I’m under the impression that Washington state is one of the more generous.
Of course, this is one reason why there are so many people on disabled pensions in the UK and other parts of Europe: these generally don’t ever run out. (Well, that and the fact that people on such benefits don’t tend to show up in unemployment numbers).
Heh, sounds like Oz, too.
James,
One of the things that has always struck me about Australia compared to much of Europe is that it is a relatively good place to live if you have only a modest income. The basics are generally inexpensive, while luxuries (e.g. imported European cars) are relatively expensive. This seems to have a levelling effect that ‘works’ far more efficiently than bureaucratic and expensive state wealth distribution schemes with all their perverse disincentives.
Any thoughts on why this might be? I suspect the lack of things like the CAP (which inflates food prices) and other government interventions which tend to act against the poor may be a large part of it. If I’m correct, it is an illustration of how high levels of government intervention (as in Europe) tend to discriminate against the poor, not help them.
HJHJ :
I think that, relative to more crowded countries, Australia is a good place to live because housing and land is relatively cheap. Two people on a low salary can afford to mortgage and build the default four bedroom, two bathroom home on a reasonable chunk of land located on the fringes of the suburbs – and still have access to good local services.
As for the luxury goods – have you been to Australia recently – say within the last five years or so? Thinking back to the turn of the millenium, it’s remarkable how much richer Australia has become since now and then – at least in terms of conspicuous consumption. To use your example, expensive European cars are considerably more ubiquitous today, and even ordinary people are replacing their nearly new cars with the latest models far more frequently than before. It wasn’t all that long ago when a 20 year old mid size sedan would fetch $5000. Now you’d be (very) lucky to get $1000.
Of course, I believe most of this new wealth rides on the back of an unsustainable boom in China, but for the moment, the (in)famous Australian egalitarianism and disdain of ostentatiousness seems to be taking more of a back seat. The perception of Australia has come the full circle in little over half a decade – during the tech bubble, Australia was dowdy “old economy”. Now it’s leading the vanguard of the world resources boom. The stockmarket’s going through the roof and so are housing prices. Everyone’s feeling wealthy. The savings rate is negative and has been for a couple of years. I have a feeling there’s some serious and widespread economic pain lurking around the corner.