Why does being poor cost so much?

It’s getting more expensive to be poor these days. Ironic, isn’t it? You would think being rich would cost you money, poverty would come for free. But no, poverty is getting more expensive. That’s down to another somewhat ironic term; the cost-of-living. Living, just being on this earth and breathing, comes at a price, for Humans, anyway. Animals make their way for free, but we Humans built A Society. We invented money, now we are all shackled to it.

The Cost-of-living is going up, up, up. Energy prices, food prices, National Insurance, transportation, housing; scarcity, supply chain issues and paying for the pandemic; they say we’re all in this together. The Beast will take the same size bite from everyone’s wallet. Too bad everyone’s wallet is not the same size. Big wallets will have a mouse nibble taken. Small wallets will be swallowed whole.

How do you economise when you’re already at the bottom of the scale. If you’ve been buying the top tier, luxury brands, it’s easy to scale down. You can buy the second most expensive, the only cost is to your pride and sense of entitlement. If you’re already buying the cheapest brands, how do you cut down? Even if you cut out the convenience foods and cook from scratch, basics are going up in price too. You reach a point where there’s nowhere left to go. Do you remember the 5:2 diet, where you fast for 2 days and eat the other 5? It’s made a comeback as a budgeting plan, rather that a weightloss plan.

For those struggling with the “Heat or Eat” dilemma; well, the National Insurance increase doesn’t kick in until April, it will probably be warmer then.

It’s always been more expensive to be poor. Terry Pratchett summarised it beautifully in his Discworld novels with the Vimes ‘Boots’ theory of socio-economic unfairness:

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

Pratchett wrote that nearly 30 years ago, and it’s an analogy whose time has come, even truer now than it was back then. It’s the entry fee, the up-front cost that keeps people struggling.

The problem goes beyond just things costing more. Wages have stagnated relative to inflation, as cost-of-living went up, wages either didn’t go up at all, or didn’t go up as much. £30.000 per year doesn’t buy what it used to. People are bringing less real money home. And there are some expenses you can’t opt out of.

Heating your home. Energy prices are rising, steeply. One solution is better insulation, but that costs money as well. It would pay for itself eventually, but who has the money up front? (I finally understand why Insulate Britain have become such an extreme protest group).

Petrol prices, insurance, congestion charge, parking, road tax all make owning a car increasingly unaffordable. So you use Public Transport. Except the price of that is going up as well, while services are being reduced due to staff shortages or cutbacks.

Technology. 30 years ago, this wasn’t really an economic factor. All you needed was a TV and a phone in the front hall. Now, technology is a necessity. All communication is done online, so you need the Internet, which means you need broadband. Paying bills, booking appointments, looking for work; it’s all done online. Even shopping is cheaper online, but you have to have the tech to do it. Smartphone and computer are as essential today as the kettle and the oven. (And you can eliminate the kettle if you boil water on the stove).

We all have these expenses. If you have money, you have options. Too many people today have No Money, No Options, but still so many Expenses.

The thing is, there is money out there. And it’s just sitting around. Some people call them the 1%, or the Upper Crust, or the Moneyed Classes. I call them what they really are: HOARDERS. They are hoarding their money in off-shore accounts and hedge funds. They aren’t using it. A 2%, a 5%, even a 10% wealth tax would make absolutely no difference to their lifestyle. But the money that tax accrues could benefit millions of people, or at least make their lives a little less hard.

Money gives you options. We live in a world where rich men build rockets to fly them to space for 5 minutes, not for scientific research, but just so they could say they’ve done it. We live in a world where people can’t afford to eat every day.

Until we eliminate the second thing, we shouldn’t have the first thing.

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