Category Archives: Class & Wealth

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A Brief History of Retirement and the Social Security Crisis

Ah… retirement. That time in life when you’ve worked hard for long enough to “deserve” time to sit back and relax – maybe play some golf, or take classes to reignite an old hobby, or travel the world. Today retirement is so engrained in our culture as a natural phase of life that it’s easy to forget that it is a very modern concept.

In 1881, Otto von Bismark, a conservative minister president of Prussia, came up with an idea to have older adults not have to work to the very last second of their lives. Eight years later the German government started to provide a retirement system for anyone over the age of 70. At the time, not many people made it that long.

Across the Atlantic in the US, retirement was a fledgling idea. Municipal employees started to receipt public pensions in the mid 1800s and in 1975 American Express started to offer private pensions. It wasn’t until 1935 when the Social Security act passed and the official retirement age in the US was 65. (Life expectancy for men was 58 at the time.) Continue reading

Ambition, Or Lack There Of, Or Partial

In business, there are the hunters, and then there is everyone else. The ambitious play life as a game, moving one piece at a time and never fully being satisfied. The rare few have a greater mission, some intention for greater good or art, but most just enjoy the game itself, and, of course, winning.

My current mass media obsession is Mad Men, the television show, which I’m woefully behind on – all the way back on season three. The lag is due to the fact that I only watch television these days with my boyfriend, outside of the occasional reality trash, and he can’t stand the show. At first, I didn’t understand why he didn’t like Mad Men – it’s well acted, it has a long, drawn out storyline, and plenty of television connoisseurs adore it. But then, as I let myself drift through the slow-moving episodes, it hit me why he can’t stand the show, and why my own engagement has lagged: the show is entirely about ambition, cut-throat, self-absorbed, occasionally sociopathic American ambition. The 1960s were much like present day, although a New York’s advertising agency could be easily replaced by a technology startup. Or maybe any business which blends creatives and sales. It is, at least up until season three, a story of ambition and the American Dream.

I’ve forgotten what my American Dream is – or, quite frankly, I can’t make out if I ever had one. In Mad Men one thing surely that led to its success is that most everyone can relate to someone in the series – perhaps even more than one person. Peggy, the character who worked her way up from secretary to first female copywriter in the agency, who is awkward and an outsider, despite being successful for her gender and age at the time, is the one I can most relate to, in some ways. But her drive far surpasses my own. Maybe if I were a full-time creative I’d be equally ambitious. Maybe if I were born at another time, when writing copy for an ad meant coming up with the best content to fit in a 11×14 print, I could have found some other American Dream to pursue. Today, all I know is I feel entirely lost and ambition-less. I hate myself for it, for lacking that fighting instinct, for wanting to feel something, I don’t know, magical – that poof, here I am, I’ve made it, I’ve found where I’m meant to be. And the jarring, jagged edge of the reality that I’m no where near it, if it actually exists.

Maybe it’s just my millennial tendencies, my Achilles heal, the need to be credited for my work while ensuring that work is uniquely my own. I grew up at a time, in a community, where life was comfortable. Unlike my parents who grew up just on the cusp of poverty, I had everything, and thus sought to be different, to be – not a doctor or lawyer – but something – someone – outstanding and different. But ambition itself never painted itself clearly enough. I spent my life running blind towards a target I could not see or imagine.

I can’t say I’ve wasted my life because my bank account would disagree – but is this it? I should be grateful and thrilled to have the opportunity to thrive, I should shut up and keep my head down and fight to move up the corporate ladder because – that is what I should do. That is what young women in 2015 who were born without a trust fund do. We work and often our careers far outshine those of our significant others. Somehow we procreate and manage to keep a job that pays the bills of increasingly expensive households. We trap ourselves to never be free again, to be tied to the responsibilities of an overpriced life, or we settle for a life that is less comfortable than the one which we grew up in. Or we find a rich husband, perhaps, and likely watch our own Mad Men scenario play out and our marriages fall apart.

Perhaps this is all impossibly dramatic, but I can’t help but constantly returning to this fact that I feel so empty and lost. I have this great job, I am making more than I could have dreamed of 10 years ago, and I continue to save towards my lofty annual networth goals. Yet the only happiness I find in life is waking up cuddled up in my boyfriend’s arms. I imagine us together in some small town, far away from this expensive region, far away from our few friends, and even far away from family, and still there I’d have him, and our walks together and our crazy jokes and my horrible and likely offensive accents and his which are spot on, especially his british, scottish and slightly gay german.

But we do still need money. Of course we do. Life isn’t cheap, even if it can be cheaper. We’ve locked ourselves into another year of our rent, now $2400 a month for our 850 square foot one bedroom, cementing another year of who knows what life will bring, but at least I know where it will bring it. I foresee a summer floating in the pool, unemployed, not by choice, attempting yet again to figure out what it is in this entire world that might fulfill me, or how to shut my needy, whiny, self-absorbed self up long enough to grow up.

While my boyfriend was never ambitious, and doesn’t have an inkling of ambition in his blood, I believe I once was ambitious. I can still relate to the characters on Mad Men, I can taste the excitement of the opportunities ambition paired with a little bit of luck and the right timing can bring. I wonder how different I am from my peers – are they truly happy or they just doing what they fell into, just getting by. I struggle to find motivation purely for pay, which is ridiculous, but I know for me I’d be happier if I had a job which somehow intrinsically motivated me – and perhaps I ought to cool off the aggressive savings for a while. Ambition is useless if it doesn’t fulfill any of one’s needs beyond the basics of survival.

Earlier today I read an essay from the creator of Mad Men who didn’t manage to get his first job in television until he was 30. He received his masters in film from the prestigious USC, but couldn’t get his foot in the door. He eventually obtained a gig for $600 to help make a television pilot funnier, which he did well enough to get offered another job. Even then his script idea for Mad Men was turned down by virtually every television studio. But a few people believed in him enough to give him more work, and eventually AMC took a risk on the project. The point of the essay, which is a collection of stories from “mentors” that I must read, is that few who are successful are willing to share how hard it is to get where they are. Artists are especially ashamed of the “brushstrokes,” so to speak. But it takes time and a heck of a lot of grit to make it.

It’s not the fear of failure that is holding me back. It’s the fear of not living up to my own expectations of myself – as a creator. When you’re not the best shaped cog for a machine it doesn’t hurt quite as much in comparison to building a machine that is missing half of the parts.

Middle Class? Not So Fast. A Tale of a Downwardly Mobile Society

With election season starting to heat up, so is reporting on the so-called “middle class.” Apparently, 9 in 10 Americans consider themselves “middle class” (I’m no math genius but something tells me medians and averages don’t work that way.) Given most Americans are middle class in their minds, and middle class today isn’t what it used to be, in short, everyone is freaking out.

Ok middle-class math, why does America hate you so much?

“The middle-class label is as much about aspirations among Americans as it is about economics. But a perspective that was once characterized by comfort and optimism has increasingly been overlaid with stress and anxiety.” — Telegram

I see. So most Americans aspire to be middle class, as everyone has been sold this dream of working hard to get the basics in American life — a decent house, backyard, education, healthcare, maybe vacation once a year. No one is expecting to afford regular Gucci on a middle class income. We were just all told work hard and you too can be middle class, and quite frankly upwardly mobile from your parents lifestyles. Yet, even if you’re doing exactly the same thing your parents did, you’re actually worse off today. No wonder we’re all anxious.

“A recent report from economists at the Federal Reserve Bank of St. Louis concluded that “families that are neither rich nor poor may be under more downward economic and financial pressure than common but simplistic rank-based measures of income or wealth would suggest. The study, conducted by William R. Emmons and Bryan J. Noeth, found that one reason many Americans viewed themselves as struggling was that their real incomes had not advanced significantly beyond their parents’ even when they reached higher educational levels, while those who matched their parents’ achievements were actually worse off.”

The New York Times published an article this week titled “Middle Class, But Feeling Economically Insecure.” That headline, brilliant, sums the middle class anxiety up to a T.

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How to Give Financial Advice to People Who Ask But Won’t Listen

Recently a friend of mine from childhood, who now lives in a different part of the state, was in town on a road trip and stopped to have dinner with me. While we grew up in the same middle class neighborhood, her family was definitely more “middle class” versus mine which was “upper middle class.” So when she asked me for some financial advice due to a potential windfall from a recent family death, I paused before sharing my typical spiel.

Said friend currently owns property with a mortgage (her parents helped her with the downpayment), but otherwise lives paycheck to paycheck. She makes $60k a year and to her that’s a lot (I did not mention that my income is north of $150k right now, but that’s neither here nor there because that’s a short-lived situation anyway.) She mentioned that she was considering investing in Primerica Financial Services, which I hadn’t heard of before, but sounded a bit like a god-awful pyramid scheme. She acknowledged that it sort of a pyramid scheme, but she was interested in it anyway. If you tell me that and ask for financial advice, I’m going to give it to you.

My advice was fairly simple. I asked her if she had any retirement savings and she said yes, she had invested in 401ks at other jobs before, up to the match (great) but then went on to tell me that she had no idea where any of these accounts were. “Is there one 401k account somewhere that I can just call up?” She asked. I tried to explain to her that she should call her old employers, locate where her accounts are, and ideally roll these over into a Vanguard IRA. In the meantime, if she were to get the small windfall, to invest this in a Roth IRA in order to continue saving for retirement. She wanted access to the money sooner than that, so I recommended a taxable Vanguard STAR fund, but to consider putting it into a Roth anyway and forgetting it ever happened.

When she was asking me about stocks, it became apparent that she understood practically nothing about personal finance. It also became apparent to me that I’ve learned quite a bit in the last 10 years of my life since starting this blog – not enough to be a CFP but enough to hold my own in advising on basic money moves. I enjoyed providing advice and helping her, but I have a feeling she isn’t going to take a bit of my advice. Oh well. At least I tried.

Lopsided Star Struck: A Thousand Different Ways to Live

Los Angeles is the epicenter of my type of childhood dream. Whenever I visit the City of Angeles — and I’ve spent a month living here previously at age 17 — I feel further and further removed from the amorphous dream that is LA, and not even sure if I ever really wanted any of this to begin with.

I write from a Reality TV editing studio nearby all the other TV studios where my long-time friend is an editor. I’m visiting her for the weekend and have the pleasure of doing my daily work from a desk in a room with two producers who are plotting out the storyline for an upcoming series (not one you’d know, and no, I won’t be able to give away the ending of this season’s Bachlorette, sorry.) It’s certainly not glamorous. But here are two very creative people who are spending their lives scripting reality. I’m not sure that could have ever been me – but I feel like I fit here — making up crazy plots for reality series — more than I do in technology — making up crazy value statements about products.

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Game of Thrones: An Allegory of America’s Class Warfare

downloadOne of the best shows on TV today – Game of Thrones – is successful not only due to its typical onslaught of T&A HBO is known for (which is has plenty of, mind you), it’s because the show itself is an allegory of the age-old problem with societal inequality. Specifically, Game of Thrones walks the fine line between showing different families and individuals at war for wealth and power in a fantasy world, and one where us modern folks can relate by looking at what we’d sacrifice for the success and longevity of our own families.

I’m not the only one who sees the underlying commentary of humanity as a whole in the series, and beyond all the humping there’s a warning for us all: as long as wealth remains within families, there will always be conflict and violence. Peace is not possible, even for the peaceful.

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My New American Dream: A Backyard, Family, and Freedom from Chasing the Chase (Iowa?)

My hair stylist is my backup therapist. She is this perfect blonde who always seems to be in a good mood despite it being way too early on Saturday morning. She is consistently perky, routinely, as I go in to the salon on random infrequent intervals to get my frayed locks trimmed, to maintain some air of exterior professionalism and polish while my mind remains frayed and in desperate need of its own snip.

While I think of my hair stylist as old(er) and myself as young(er) she’s actually 31 and I’m 30, but she’s married with older kid(s?) and I’m single and finally moving in with my long-time boyfriend. Her life is very different from mine, and who knows if she’s actually happy, but she seems to appear calm and content. Still, we both share a longing for a house with a backyard, for her, a place for her kids to roam free, for me, a place for my future children to cut themselves on sharp blades of grass and dig up worms under the slip-and-slide on long, hot summer days.

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Why I Have a Love-Hate Relationship with Negotiation

You’re sitting across the table from someone – likely a man if you work in tech – who holds the key to your standard of living for the next few years of your life. Whether you’re negotiating a raise at your current job or focused on securing a fair offer for a new one, this happens over and over again in one’s career. And I hate it. I really, truly hate it. And yet, if I end up feeling like I’ve won the negotiation, well, then I love it.

Of course, negotiation teachers would say that in a successful negotiation everyone wins. You get what you want. The other party gets what they want. And everyone is happy. That rarely happens. You have to know how to ask for a reasonable amount, but not too little. You don’t want to come across as crazy. You need wiggle room. You need room to move the price down and end up where you want to be. But you’d also be extremely happy should the starting price not budget. It probably will. Continue reading

The Jewish-American Quarter Life Crisis

The oh-so lovable Asian-Jew duo, Amy Chua and her sidekick husband Jed Rubenfield, are at it again. This time, they are on a mission to motivate the next generation of great Americans. How? Tiger Parent our country back to a golden empire. Make sure that as a culture and individuals we obtain this ever-important trifecta of highly-depressing traits: a superiority complex, an inferiority complex, and, last but not least, impulse control.

The superior inferior, impulsefully-controlled pairing believe these are the elements of building a culture that is, well, superior. Their argument stems from research about different cultural groups that have been more successful financially and fame-wise than others. To some, this is the new racism, not much different than the old. However, there is some merit to the argument, which at least removes genetics from the equation (ala my father’s favorite explanation of racial superiority borrowed from The Bell Curve.)

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My So-Called Privileged, Upper-Middle Class Life

“She lives in the apartments,” I remember my mother saying as if she had just swallowed a spoiled bit of food, nose wrinkled, voice disturbed, as I made friends with a Pakistani girl who lived with her large family in a sprawling apartment complex behind my elementary school. The neighborhood was predominantly blue collar white, if I recall correctly, however it had a larger share of black and latino families compared to the rest of our town. She questioned my safety when I would go over to visit. While the complex, compared to many other locations, was quite safe, due to her constant nagging I had a fear that if I visited my friend’s house I’d surely be shot at any time of day.

My neighborhood, by contrast, was one of the nicest in our suburban New Jersey town at the time, itself a sprawling community of 1960s-built tract homes with lawns, large, quiet streets, and a pool club with summer crafts classes and the popular swim team. Our own home, not a mansion by any means, featured the largest backyard in the entire community backing up against tall trees that would sway violently in both winter and summer storms.

Middle Class Grandeur, Middle Class Delusion

My mother, who worked as a designer in New York City until I was born and became a stay-at-home mom, would constantly discuss her jealousies over the families and homes of neighboring “rich” towns Marlboro and Holmdel.

As my parents relationship always seemed primarily about my father providing and my mom taking care of myself and my sister, as my father would disappear in the morning and return late at night from his long work days in New York, my mom would gaze longingly at some advertisement and mention that she wished she married a “rich” man, this, despite the fact that my father actually did quite well for himself as an actuary, having once accumulated nearly $1M for the sale of the private company where he worked.

Growing up in the suburbs of New Jersey, there isn’t much to do. My diverse town of 40 square miles, according to census stats, had a population of 65,000 in 2010 – in 1950 its population was 7,000 and in the 80s when I was born, 51,000. In 2010, the median inflation-adjusted income for a household was $98,634, with 4.1% of the population below the poverty line. It was a nice place to grow up, one I now respect more for its diversity and opportunity, but still, it was a suburb where entertainment was created by its own residents. While I lived in a little bubble, largely due to my parents being friends with members of our temple from more wealthy towns nearby, most adolescents entertained themselves with drugs, alcohol, and sex. I just went shopping.

I lived in the same house from birth until age 17 when I moved out to go to college in another state and didn’t look back. My weekends were filled with shopping trips to any of the local malls — the nice one by the fancier towns, The Freehold Raceway Mall, opened in 1990 and started my lifelong addiction to Nordstrom. My mom and I would go to the mall together when other kids would be spending time with their friends (even though in middle school I started making a few friends, those friendships were mostly limited to school time and official school activities.) Shopping was a bit of a sport. It made us both happy, temporarily. We were both addicted.

Buying a pile of new clothes made me feel good for a while. But that feeling wore off quickly, and we were back at the mall for another item we had to buy, only coming home with hundreds of dollars more than we had intended to spend. This would often be followed by a shouting match between my parents. At some point my dad gave up in trying to real in the spending.

He had the money to spend, compared to most other people in our town – while we could have moved to a larger house in a fancier town, or my parents could have purchased BMWs, we never did. Even our shopping expeditions were limited to middle-class designers. My mom never bought high-end stuff, she just bought a lot. She taught me if you find a shirt or pair of pants that fit, buy a few of them in the color you want and then buy them in every other color they come in. I recall coming home one year after shopping for clothes for school at J.C. Penny with the same turtleneck in six or seven colors.

In sixth grade, I went shopping at the mall to get presents for my friends at school. Except, I didn’t really have friends, I had acquaintances and people who I wanted to be my friend. So I went to Claires and spent hundreds of dollars on earrings and bobbles for people who most likely talked behind my back. I tried, in a sense to buy their friendship. That, of course, didn’t work.

The Unclear Path from Child to Career Woman

While my mother taught me how to shop, there was no discussion about one day becoming self-sufficient. My parents encouraged my pursuit of art, or, I should say, inspired it with their constant praise of my modicum of talent. I didn’t have a lot of adults around with different professions to aspire to — I was clearly not going to be an actuary like my father, who majored in physics and loved math. I didn’t want to be a teacher, as I didn’t even like other kids when I was one myself. So my mother’s prior life as a fashion designer seemed as good as any to attempt to make my own. I enjoyed fashion, well, shopping, and spent much time making collages of cutouts from fashion magazines.

But I still avoided the introspective question needing an answer of how to retain my lifestyle as an adult. Going from where I was then, a girl who could draw a picture that non-artists said was good, to a person who made a living and a good one at that, was beyond me. College was the logical next step after high school, but it never was about getting a job. I figured at some point that would all fall into place. Afraid to pursue fashion design after a stint in a $3000, paid-for-by-my-parents, pre-college summer program at a renowned fashion design school in New York, I opted for costume design at an equally renowned, expensive, theatre school at a large liberal arts private college, but really had no idea what the fuck I wanted to do with my life.

My parents, for better or worse, never pushed me to major in something due to its career prospects. My mother, on the other hand, wanted so badly to go to college for art history at UC Santa Barbara. Raised in Los Angeles, California, her mother, who herself grew up in New Hampshire, brought up her three daughters in a small apartment. My mother’s father, a Rabbi, became a funeral salesman (or so I hear) at the encouragement of his wife who wasn’t happy living on a Rabbi’s salary. Their life in Los Angeles was not one of wealth, nonetheless, and my mother would tell stories of how they moved to an apartment just on the border of Beverly Hills to attend a better school, despite being much poorer than most of the student population. My grandmother told my mother not to pursue her dreams to become an art histori man, but instead to move to New York and become a fashion designer, a real career.

So she did. She moved to New York and earned her associates degree from a top fashion school. She met my father her first weekend in college at a party at a technical college in NY. He was really her first boyfriend, as she was 17 at the time, and she went out into the working world at 19, becoming a designer for a childrenswear company. But by the time I was born, she was ready to leave the career world and become a full-time mother. Apparently, my father assumed she’d return to work, but she never did. When my sister came seven years later and had a learning disability prevent her from doing well in school without outside help, it sealed the deal on my mother’s full-time profession as a housewife.

While active in the school district, my mother never offered a sentimentality of charity or giving. If she gave, it was to a Jewish or arts organization. Poverty was not her problem. She was the middle class, the upper middle class, longing for the life of the rich. Not once did she give thanks for what she had, or mention that we should help those less fortunate. Those less fortunate who lived in the apartments were not the type of people we should associate with. Of course, the neighborhoods with less wealth within our town also were generally more diverse, with our neighborhood having one known black family and communities like the apartments having many. Despite having friends who are black, I still catch myself from time to time thinking something that I know is racist or classist, and scolding myself for it. How am I any better? How can I make myself better?

So when I read an article like — Invisible Child: Dasani’s Homeless Life, I feel helpless on so many fronts. Caught between my own desire to somehow create an upper middle-class life for myself and my potential future children, and a deep, clawing sadness of the inequalities of the world, I am lost. Homelessness is real poverty. And it exists, not just in third-world countries, but in America, my country, where I undeservedly make over $100,000 a year because my parents paid for my college degree and somehow, despite being too anxious and distracted to do well in school, I learned how to write.

Class in Session: Hopelessness, Guilt and Inescabable Privilege

This holiday season I’ll go home to New Jersey and have another useless argument with my Republican father over the inequalities of the world, and walk away feeling like a hypocrite in my own right. Capitalism inspires productivity but it also relies on systemic inequality both domestically and globally.

“Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, for the problem is more deeply rooted and intractable than generally recognized. Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it — because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords.”  — Jerry Z Muller

In nearly every discussion on inequality and government, I’ll find myself stuck on the fact that despite living in a country without slavery or caste systems, the whole notion of passing down wealth from generation to generation within our own blood lines makes for an unequal society, especially when many families were just freed from slavery less than 100 years ago.

The Invisible Child article – or should I say book – follows the life of one homeless child living in a rat-infested, over-crowded shelter in Brooklyn. Sixth grader Dasani takes care of her siblings (5 or 6 of them) and shares a 520 Square Foot room with them and her parents. There are 280 children in Auburn, this Brooklyn homeless shelter which, which NY Times Reporter Andrea Elliot poignantly describes as, “a decrepit city-run shelter for the homeless. It is a place where mold creeps up walls and roaches swarm, where feces and vomit plug communal toilets, where sexual predators have roamed and small children stand guard for their single mothers outside filthy showers.”

Dasani, the lengthy article goes on to explain, is a promising student, fighting through all of the challenges in her life that she has no control over as a child. Her parents, recovering drug addicts, cannot afford rent in New York, nor can they afford to move somewhere else. The article (which I’ve only read part one of so far) details New York City’s problem with homelessness, but uses this as a microcosm of cities across the country dealing with growing poverty.

One in five American children is now living in poverty, giving the United States the highest child poverty rate of any developed nation except for Romania. This bodes poorly for the future. Decades of research have shown the staggering societal costs of children in poverty. They grow up with less education and lower earning power. They are more likely to have drug addiction, psychological trauma and disease, or wind up in prison.” — NY Times

Cities like New York are focusing more on serving the wealthy than those who cannot afford to put a roof over their heads.

With the economy growing in 2004, the Bloomberg administration adopted sweeping new policies intended to push the homeless to become more self-reliant. They would no longer get priority access to public housing and other programs, but would receive short-term help with rent. Poor people would be empowered, the mayor argued, and homelessness would decline.

But the opposite happened. As rents steadily rose and low-income wages stagnated, chronically poor families like Dasani’s found themselves stuck in a shelter system with fewer exits. Families are now languishing there longer than ever — a development that Mr. Bloomberg explained by saying shelters offered “a much more pleasurable experience than they ever had before. Just three days before the mayor made that comment at a news conference in August 2012, an inspector at Auburn stopped by Dasani’s crowded room, noting that a mouse was “running around and going into the walls,” which had ‘many holes.’”

In my personal quest to wealth and financial independence, I know I am contributing to the problem. I can, of course, take any additional income I make beyond my needs and donate it to charity. Earning more automatically takes more of my income and puts it back to work through taxes. Yet trying to become the 1% or at least the owner of over $2M in networth (however unrealistic that quest might be) is perhaps the wrong goal. Maybe it’s time to take all of my privilege offered via luck and use it, somehow, to help the problems caused by, not contribute to, this grow class divide.

Income inequality has been much in the news the past several weeks, after Pope Francis’ denunciation in November of “trickle down” economics, and President Obama’s Dec. 4 speech at the Center for American Progress in which he called income inequality “the defining challenge of our time.”

For anyone who wants to live in a bubble of their own money and pass this wealth down from generation to generation, there will come a time when the class divide is so great and our country will be divided by civil war. I can’t imagine we can go on like this forever. What’s different from our country’s historical class divide and depressions is that now, somehow, some, maybe many people on the wealthy side of the coin seem ok with limited opportunity for the poor. We’re no longer a country where everyone can get ahead, but who cares? “The basic bargain at the heart of our economy has frayed,” said President Obama.

Walmart, McDonalds and Minimum Wage

The economic topic de jour in America is the minimum wage. With the federal minimum wage at $7.25 an hour, the reality is that a 40-hour-per-week (aka Full Time job) at this rate keeps one below the poverty level. According to one study, American fast food workers receive more than $7 billion dollars in public assistance. Meanwhile, Wal-Mart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients.

Those on the conservative right often argue that minimum wage jobs are not designed for full-time, adult employees. To be fair, these arguments are supported by data as well (see The Heritage “Who Earns Minimum Wage? Suburban Teenagers, Not Single Mothers.“)

Data from the Bureau of Labor Statistics and the Census Bureau show that most minimum-wage earners are young, part-time workers and that relatively few of them live below the poverty line. Their average family income is over $53,000 a year. “Employers respond to higher labor costs by hiring fewer workers. Higher minimum wages eliminate entry-level positions that provide unskilled employees the opportunity to gain experience. Less experience makes it harder for workers to become more productive and earn higher wages,” writes conservative James Sherk. MarketWatch’s Diana Furchtgott-Roth backs up this point, noting, “when the minimum wage is raised, employers hire higher-skilled people, or switch to different forms of technology, such as placing orders through touchscreens.”

Raising minimum wage both gives businesses an excuse to hire fewer low-level workers and provides them an opportunity to charge more (since those who are making money have larger incomes to spend.) I’m not sure this ultimately helps reduce poverty in the long run, but no full-time working person should earn less than the poverty level when they are working for a business that is making a profit.

A November Gallup poll showed that 76% of Americans support raising the minimum wage. But practically everyone with a heart is in favor of raising wages, as long as those higher wages are paid by someone else. “People might respond to pollsters saying that they are in favor of raising the minimum wage, but they are rarely willing to pay $13.90, or $20.00 for a service for which they pay only $10.00 today. They would not buy as much of the service if the price increased,” explains Furchtgott-Roth.

Liberals argue raising the minimum wage would inspire more spending. “If the minimum wage rose to $10.10 per hour, as Senate Democrats and President Barack Obama propose, 27.8 million workers would see their wages go up as a direct or indirect result of the boost, according to the Economic Policy Institute, a left-leaning think tank. These workers would take home about $35 billion in additional wages and they would probably spend it, as low-income people living with little financial cushion tend to do.” — The Huffington Post

“Today’s minimum wage isn’t enough for a family of two to live above the poverty line, according to the EPI study. In fact, it takes an hourly wage of $10.20 per hour for a single person to afford basic needs in America’s cheapest county, according to a July analysis from Wider Opportunities for Women. That wasn’t always the case, as Cooper noted: ‘The increase that is proposed would get us back to almost exactly what we would had as a real value of the minimum wage in the 1960’s.'” — Jillian Berman

How to Get Ahead and Help at The Same Time

Just like the class divide, there is a great divide between dedicating one’s life to a career that helps those in need versus chasing after greater salaries. There are a few roles in between, fundraisers for large non-profits, for instance, which enable a reasonable income for a middle class life while also daily work to help others.

Good journalism inspires one to action, and as I work through the lengthy five-part piece on homeless children, I want to do something. But what? I am sure I can start by donating a percentage of my salary to a charity I believe in. I could volunteer on the weekends. There are plenty of things I’m not doing right now that can help. Still, while a little helps, it just feels like unless I dedicate my life to actually getting in the weeds and helping impoverished districts, whatever I do is no where near enough. The best I can do is try to make a lot of money, save it, invest it, avoid having children, live a simple life, and donate my remaining networth to a quality charity.

It’s just the part of me that is my mother’s daughter, and my father’s daughter, wants to be wealthy, or at least reasonably well off. I live in Silicon Valley, a part of the country where wealth bleeds from the soil. Silicon Valley had the second-highest concentration of wealthy households during the period of 2007-2011, according to a report the U.S. Census Bureau released Monday, Feb. 11. The report stated that 15.9 percent of Silicon Valley households are in the top 5 percent of the nation’s income earners — those who make more than $191,469 per year. The statistical area is defined as “San Jose, Sunnyvale and Santa Clara” and includes Palo Alto, according the Bureau.

What’s more, affording life in Silicon Valley requires some sort of luck. “An average Bay Area-based young couple has to own equity in a business if they hope to send their kids to a good school and to be able to retire well,” according to Wealthfront. “Our analysis found you need to work for at least one company where your equity stake can generate at least a few hundred thousand dollars after tax to make your economics work in the Bay Area.”

So theoretically, I’ve played my cards right there so far. I’ve risked $20,000 for the chance to maybe turn my shares into “a few hundred thousand dollars,” post tax. (Yet I’m probably going to lose that $20,000 because 9 out of 10 startups fail. So much for that.)

The Wealthfront article about how to afford life as a couple in Silicon Valley makes me a little ill to read, as it bases its assumption on a “professional Silicon Valley couple” in their 30s. “We assumed they earn a generous $250,000 per year and spend $60,000 per year on items not related to supporting children.” Of course, they also get raises of 3% every year at least to offset inflation costs.

The couple has two children, one when both are 30 and the other when they’re 32. Each child costs about $22,000 a year to support. (This number includes housing costs for the United States. In Silicon Valley, we think $22,000 is the cost without housing).

The couple needs to save $1,100 per month for 18 years to afford to send each child to private college. Alternatively, they could save $6,500 per child per year for 18 years to afford to send their kids to a public university.  (Unfortunately, families that currently earn $250,000 per year do not qualify for financial aid at most universities.)

After putting aside what their kids need for college, our couple has nothing left for retirement savings by Year 3. By Year 4, the couple has negative cumulative savings (i.e. they owe money) even after giving up on their retirement savings plan. Cumulative savings remain negative through Year 21.

This is about a couple who are 30 who earn $250,000 and can afford a $200k downpayment on a house. And they still cannot afford retirement if they chose to live in The Bay Area. “A year after their second child goes to college, the couple has enough left after expenses to save for retirement again.” Of course, the article notes that since it’s so expensive to live in the Bay Area, lots of kids move home after college, and these parents would then have to pay for their kids until they figure out how to start making over inflation-adjusted $125k.

In other words, if you and your significant other do not make $250,000 with 3% raises year over year AND have the opportunity to obtain a few hundred thousand dollars via equity or an inheritance. “In Silicon Valley, your best chance of generating the cash you need to get you from here to there is to work for a company that offers an ownership stake that can become liquid in a reasonable time period.”

I hate writing posts about how with a $110k income I’m scared of not being able to afford the kind of life I want, and this is exactly why. I feel ill questioning if I should be making more than $110k because I feel like I don’t deserve that much, and yet in order to afford being a mother here I would probably need to make more. I shudder at the inequalities of this country and yet I’m on this almost robotic mission to somehow afford this life I think I want to have. Even with my relative success, I’m so far away from that. My boyfriend now makes about $60k (adjusted given that he does not get benefits at work) and I make $110k, so if we were to have kids today, we’d have a joint income of $170k, not $250k. In other words, we really need to leave The Bay Area if we want to have a family.

It could be worse. I could be raising six children in a homeless shelter in Brooklyn. Or I could be a homeless child who has never own a new pair of clothes in her life.