Tuesday, January 22, 2013

Them negative waves

I want to finish off my series of blog posts about living on the wrong side of the poverty line with a look at what it does to you as a person. The poor and unemployed are always criticized for having a bad attitude, for being lazy, and for being persistently negative. Well, when you live like that, it's pretty much impossible to keep a positive attitude for long. I only had a few months of much less income than I'm used to while I tried to start up a business, followed by two months of virtual unemployment when that failed, and it affected me really badly. I was depressed, grumpy, permanently on edge, and negative about absolutely everything. I've never experienced long-term poverty, and I hope I never do, but the terrifying reality is that for millions, both here in the US, and back home in Europe, this is their life.

Kelly's Heroes: one of my all-time fave movies, mostly for this quote.
When you're at the bottom of the economic heap, negative attitudes become a survival trait. Slowly, inevitably, and inexorably, your entire thinking turns towards staving off disaster, not to finding ways towards a better life. Everything you do is eventually dominated by these four negative principles.

I mustn't

Once money becomes tight, you have to respond by cutting things out. You don't go out, you don't buy that tasty treat, and you don't splurge on luxuries. Then you start cutting deeper, and start denying yourself to basic food, medicine, and essentials, but you feel like it's the right thing, because you're trying to live within your means. Self-denial becomes your way of life. Your first instinct is always to say no, and that sets the tone for everything else. You're surrounded by adverts for things you can't have, and stories of your friends doing things you can't do, and you have to train yourself to respond by thinking, deep down, those things are not for me.

I can't

You soon start to realize that often, you're genuinely helpless. You're doing all you can, but it's not enough. If you don't have the cash, you simply can't pay that bill that's due tomorrow. If that guy who owes you money doesn't pay up, there's nothing you can do about it. If someone buys those games you put on eBay, you have some money for food: if they don't, you don't. You've left countless messages for the guy who promised you some freelance work this week, but if he's not calling you back, there's nothing you can do.  It's exacerbated by people helpfully telling you that all you need to do is... with no understanding that if you don't have those few bucks spare, it's simply not possible. Everything gets filtered through the viewpoint of whether something's actually feasible with your limited resources and without the cooperation of others, and most of the time, the answer is no.

You also become painfully, horrifically aware of your personal limitations. You look at endless jobs, and initially you're sure you could do them but then you realize you don't quite meet the official requirements. You talk to people and they tell you that your resume isn't good enough,  you need to go back to school, and you don't have the necessary skills. Sure, I can use Photoshop perfectly well, but I don't have an MA in Graphic Design with at least five years creating imagery for a major client, so I guess that doesn't count. It doesn't take long before you doubt your own ability so badly that it's paralyzing. You end up responding to every opportunity by thinking, I'd love to, but I can't.

I'm worthless

When you're struggling to stay positive, the last thing you need is other people beating you down, but that's usually what you get. Western societies have a very simple measure of someone's value. Money. When you haven't got any, you're quite literally worthless.

You've got people telling you to your face that getting a job is easy, and anyone who can't get a job inside a week is either stupid or lazy or both. There's a screaming, ranting, well-funded news media telling you 24/7 that the poor are lazy, workshy, scrounging, useless bums who are ruining life for everyone else. I was even told by one kind-hearted soul that people without jobs "might as well just die because they're not contributing to the economy, so who cares if they can't afford medical care."

But, you have to shut your ears to the endless insults, screw up your courage and plough on, applying for job after job, and then...

... nothing.

I must have sent out over 400 job applications in two months. I received precisely seven acknowledgements (of which two were rejections). I applied for about 160 freelance gigs. I got four responses. In other words, 98% of the people I contacted - in response to their ads - ignored me. I wasn't even worth an email. I didn't merit thirty seconds of someone's time, let alone an interview or an actual job. The employers didn't even show up for half the phone interviews they arranged. Recruiters wouldn't return my phone calls. After twenty-five years in business, with a degree from Cambridge University, nobody would even talk to me.

Some days, I actually started to wonder whether I even existed. I used to check my email sent boxes to make sure I hadn't imagined the applications I'd been sending out. I shut myself off from friends and family, and spent all day hiding in my office. I kept telling myself I was looking for work, but in reality, I was simply unable to speak to people. I seriously started to doubt my own sanity at times.

It's pointless

Insanity, as it's often said, is doing the same thing over and over and expecting a different result. But that's exactly what we expect job-seekers to do. I was spending fifteen or sixteen hours a day applying for jobs, chasing freelance gigs, and getting nothing back. Just keep going, people assured me. It's a numbers game. Sooner or later, something will come up.

Actually, that's bullshit. It's mostly a contacts game. It's very rare to get a job by simply sending out resumes. Most people get jobs through knowing someone and having an introduction. Every interview I got, bar one, was via an agency, not via sending off my resume. I'm fortunate enough to have enough skills and experience that an agency would actually take me on - though even they didn't respond to me until I got an introduction via a friend.

Eventually you start to realize you're wasting your time. Why bother spending all day, every day, playing the job-hunt lottery, getting more and more depressed, and achieving nothing? At least if you don't apply for anything today, nobody's going to ignore you, and you're not going to get your hopes up for no reason, right?  And, in many cases, even if you do get the job, it probably won't be enough to cover the bills. So after a while, you think fuck it, I'll play a video game, surf the net, watch crap TV, and lie in bed. At least that's better than thinking fuck it, I'll go knock over a gas station and buy some crack, but frankly, you reach a point where that doesn't seem any worse than any other plan.

You'd maybe like to do something creative - after all, if I'd spent those 15 hours a day for two months solidly writing instead of chasing crap jobs, I'd have written a whole bunch of stories or maybe a novel. In retrospect, that would probably have been a smart move - my current portfolio of just three stories brings me in a few hundred bucks every few months, even after nearly two years, and maybe writing some more could actually add up to a significant, if insufficient income. But when your head is full of negative waves, you don't feel like writing, drawing, or whatever your medium is. It's not the blues, where you pick up your guitar and sing soulfully about the bad stuff - it's that mind-numbing blackness where you can't think about anything except getting through to the end of the day, and wondering why you bothered to get up. All that goes through your head, every single day, is I mustn't, I can't, I'm useless and I'm going to fail.

It's not surprising that so many people give up on themselves, on the system, and on their future. Being poor is a real test of mental endurance. You have to keep picking yourself up day after day after monotonous, soul-crushing, joyless day. Time and time again, you have to brave the self-doubt, the financial worry, and the barrage of negativity, ignorance and criticism from other people. You have to cut yourself off from a society that only values people for their economic status and purchasing power.

Your entire life is a cycle of worry followed by (if all goes well) debilitating relief. You don't sleep when you know that tomorrow, the electricity bill is due, and if you can't raise $200 from somewhere within the next few hours, they'll cut off your net connection (which hampers your ability to find work), your phone charger (ditto), your cold food storage, your cooking facilities, your cooling and heating, your lighting, and your sole source of entertainment - and then charge you more money you haven't got to reconnect it. And that's not an occasional thing - that's every damn night, every damn bill. And when you're tired and stressed, you don't present yourself well to potential employers. You know it, and that's another source of stress.

And yet, through all of this endless crap, you somehow have to keep trying to get yourself out of the hell you're in. You have to keep telling yourself it's a mother beautiful job and it's gonna be there, even when you see it blown to hell in front of your face time and time again. Sadly, there's only so much optimism you can draw on.

2013 has so far been much better. I had one interview, and I was offered a job starting the next day. After just four days of earning money, and with the confidence that I will be able to pay all my bills this month and have a little left over for some treats, I feel like a different person. I feel valued. I feel intelligent. I have confidence in myself once again. I feel healthier. I sleep soundly at night, and I have a reason to get up each morning. I'm gradually getting my creative mojo back. I smile.

I have hope.

Monday, January 21, 2013

Taking responsibility

One of the things that annoys me most is being told by my more right-wing acquaintances that poor people should "take responsibility" for their circumstances. Most galling of all is being told that if they'd only saved something each month instead of "squandering it on luxuries", they wouldn't have any financial problems.

Just save 10% of your income each month, I'd get told. That's a great plan, except that it shows a complete lack of understanding of the reality of the situation when you're on a low income.

For a start, even in the best situation, it doesn't really solve the problem. After a year, you've saved about one month's income, so when you lose your job, you've got one month's buffer. Since it can easily take four to six months to find a new job, that doesn't last anywhere near long enough. If you've got a nice, safe, secure job, then it doesn't occur to you how often low-income workers get fired without warning, or how often they find their hours cut and their weekly pay packet drops unexpectedly. And when everything's that tight, you can expect little emergencies every month or two - vets' bills, car repairs, or basic household maintenance.  You can count on having to dip into that savings pot frequently, and it doesn't build up to a nice healthy reserve.

And then there's the question of how the hell you actually make savings when you're living hand to mouth, week to week, and you're barely making enough to cover the bills, let alone food, transport or clothes. Cut back on luxuries, is the inevitable answer. What damn luxuries? As I said in a previous post, even a $5 treat once a month is no longer an option. Several people suggested cutting out health insurance. One suggested fasting two days a week. So, in other words, they're talking about "luxuries" like medical care and food. (And for the record, health insurance isn't an option when you're poor anyway - you have to pay for medical care as you need it, and hope you don't get sick or have an accident.) One particularly distasteful, but common, response is that poor people shouldn't have kids: so what happens when your income plummets and you already have kids? Are you supposed to get rid of them like unwanted kittens?

When money's tight, you raid every single one of these jars for  essentials. Is that irresponsible?
What puts the final seal on the total unreality is when real numbers get bandied about. You should be putting aside a couple of thousand a month, I'd hear. Not just once, but many times. Seriously? If you're on a low income, you don't even earn a couple of thousand a month. If someone honestly thinks that a couple of thousand a month represents 10% of my (after-tax) income, that would imply that my gross salary would be somewhere in excess of $300,000. How disconnected are these people?

On a similar note, I heard frequently how poor people should take responsibility for bettering themselves and get a proper education, then they could get a better job. Go to college - it only costs twenty or thirty grand for a degree. Where the hell do you get twenty or thirty grand when you can barely afford to eat?

Or else there's the often-made suggestion that you should move to where the jobs are. That's easier said than done when you don't have the spare funds to go somewhere new. Not only do you need to cover the cost of getting there, you probably need a couple of months' rent in cash to get a new place. It's feasible when you're single and have friends who will let you crash on a sofa for a while - not so easy when you have a family.

People on a low wage would love to be saving money every month. They'd love to go out and get a college education. They'd love to be earning enough to make that possible. They'd love to move out of areas with high unemployment. But they can't do it on what they earn: every single dollar is needed to cover the essential basics. They aren't the ones who make the decision to pay them so little they can't afford to save: it's their employers who make that decision. It's the government that sets the minimum wage and the tax rates. It's businesses that decide how much the basics cost. It's financiers who created the recession that caused massive unemployment and forced millions into unemployment or low-paid jobs. Blaming the poor for being poor is the economic equivalent of blaming rape victims.

Taking responsibility for your financial circumstances is all very well as a political mantra, but you can't do it if you don't have any flexibility at all in where your money goes.

Sunday, January 20, 2013

The fundamental inequity of poverty

The really unfair thing about being poor is that things cost more.  Not just in relative terms - when my income halved, my mortgage went from being 20% of my outgoings to 40% - but in absolute, dollars and cents terms. The less money you have, the more you have to pay for the same things.

You can't buy in bulk

If you only have enough coming in to cover the week's essentials, or what you need right now, you can't take advantage of any of the money-saving offers or buy in bulk and stock up. A 250g bag of rice for $4 is obviously not as good as a 1kg bag for $7.50, but if you don't have the extra $3.50 right now, you don't have that choice. You're now paying $16/kg for rice - over twice as much for the same thing as someone with a little more flexibility in their income.

The same's true of just about anything else you buy. Small quantities cost more, whether you're talking about food, washing powder, or season tickets. When you're managing your finances day to day, your cost of living goes up, right when you need to be saving money.

You can't take preventive action

Everyone knows that maintenance is cheaper than repair, but if you can't afford regular maintenance, sooner or later, you're going to have a major incident that will inevitably work out more expensive. It's the same with insurance. In the long term it saves you money, but when money's tight, it's one of the first things to go. And of course, when one of those repair bills comes in, it's catastrophic to your finances. What would have been a quick $50 maintenance job if you'd had some spare cash turns into a $500 disaster.

Finance costs you more

If you have money, you don't pay bank fees. The banks will fall over themselves to offer you free banking. When you're not earning as much, though, then you suddenly find that every month, the bank starts charging you just to keep your account open. And if you accidentally slip up and go overdrawn - often thanks to those damn service charges - you'll end up with hundreds of dollars in surcharges, right when you can least afford them.

The cost of credit is also often tied to your income. The less you earn, the more expensive it is to borrow money - not just cash, but car payments, mortgages, and so on. If you don't have the cash for a $400 fridge when you need one, the actual cost over a few years could work out to way over $1000. If you were earning more, but still wanted credit you might only end up paying $600 for the same fridge.

You also don't get the opportunity to pay bills in instalments when your income isn't great. Not only does this mean you have to find the entire sum in one go - a huge problem when you're living week to week - but many places give you a discount if you spread your payment. It's only poor people who pay full price.

You can't buy money-saving devices

Technology is full of gadgets that can reduce your outgoings. They involve a bit of up-front cost, but your monthly bills will go down, and over a year or two, you'll see big savings. These can be simple things like heat-reducing window coatings, low-flow shower heads, or energy-saving refrigerators. Looking at larger items, a new a/c system, a new boiler, or installing solar panels will have a big payback over a few years, as long as you have a few grand spare to install them.

When things are tough, it really hurts to realize that our economic system is designed so that you're paying over the odds for almost everything you buy. Not only do you have less money, but what you do have doesn't go as far. It's a cruel double whammy.

Saturday, January 19, 2013

Little luxuries - the essentials of life

One of the things I'm looking forward to, once I have a regular income again, are a few of the little luxuries I had to cut back on. It's one of the truly soul-crushing things about tough times - having to cut out even the tiny things that make life not just pleasant, but bearable. When you're literally watching every penny, scraping together enough money to pay the water bill before it gets shut off, then everything non-essential has to go. Your whole perception of household economics gets changed: if you have to go to a job interview 20 miles away, you find yourself calculating whether to take the toll road and spend a buck each way on tolls, or whether the extra gas from sitting in traffic on the main road will actually cost you more.

In those circumstances, you're reduced to nothing more than what you need to survive. Life becomes bland, boring and depressing. You say no every time your friends invite you to something, and you make up excuses because you don't want to be embarrassed that you can't even afford the gas to get to the event, let alone tickets or food. Everything that made life fun has gone away, and it becomes harder and harder to motivate yourself and present the right attitude to potential employers. You work your butt off chasing jobs, and at the end of the day, you don't even get to reward yourself for whatever you do achieve.

Just those few little moments of happiness that brighten up your day can totally change everything. Much though I'd love to say that the best things in life are free, and you don't need money to find happiness, it's not entirely true. Some things, you need money for. Not a lot - a few bucks is plenty - but there are only so many invigorating walks you can take before they lose their power to make you smile, especially when you live in suburban Florida and don't have gas money to go anywhere.

2013 is looking much brighter. I'll still be paying off debts for a while, and dealing with some of the neglected maintenance on the house and vehicles, so it'll be a while before any of the big ticket items are going to happen, but there's now room in the budget for a few little luxuries, mostly under $10. I don't see them as luxuries, though. They're something to look forward to. They make me happy, and when I'm happy, I'm less prone to illness, more productive, and more motivated. They're what gives me a reason to keep going.

The first little $5 treat I bought myself, last Tuesday, was a small jar of Marmite. I'm not one of those expatriates who has to have all the comforts of the home country, but I do like to start my day with toast and Marmite. On Wednesday, everything was different. It felt right. It felt like the bad days had come to an end, and things were finally picking up. I felt like me again. Tastes can do that - they're comforting, and they touch a very deep part of the psyche.

My plan is that every week I'll pick up one more little tasty thing for the cupboard. I'm not talking about a bottle of wine or other things that are gone right away, although those are nice too. I'm talking about things that will last for a while, and which you don't think of as luxuries until you can't afford to replace them.  A weekly visit to the Winter Park Spice & Tea Exchange for a $5 treat is definitely part of the plan.

  • Truffle salt. A little of this sprinkled on scrambled eggs turns breakfast into a delicious taste explosion.
  • Vik's Garlic Mix. Add to olive oil, and dip home-made bread into it for a Mediterranean style snack. 
  • Saffron. Add to fruit salad and it takes it to a whole new level. Put it in a curry, and make a mind-blowing korma.
  • Medjool dates. My favorite snack. Regular dates just don't taste the same.
And then there are other little luxuries. Not everything in my life is food-related!

  • Some decent shaving oil, so my face doesn't feel like it's been sandpapered. And knowing I can change the blade in my razor as soon as it starts to get dull, not seeing if I can make it last another week, or two, or three...
  • New shirts. Sure, I have smart shirts, but they're old and worn, and wearing them to the office makes me feel unprofessional. Two for $6 each in J.C. Penney's sale last weekend? That'll do nicely. I don't need new ones, but I feel better, I work better, and I'm sure that's unconsciously reciprocated by the way my clients treat me.
  • Replacing the power supply in the stereo for the hot tub, so we can listen to music and relax. Actually, one of the first things we did was get the hot tub going again. We had it powered down after solstice because we couldn't afford to keep it running, and we couldn't afford to change the water either. The hot tub's not really a luxury either. Both of us suffer with back problems, and a daily hot tub is far cheaper than a regular visit to a doctor or massage therapist. 
  • A set of steel files. Decent model-making requires decent tools. I managed okay on Kong with just a knife, but the joins weren't as smooth as I wanted. $6 in Hobby Lobby with a coupon, and I'm ready to start making models again. On a similar note, I'll be taking a trip to Office Max and getting them to print out the next cardboard model. 
  • Going to a dollar movie. One freaking dollar is all it takes for a few hours of escapism. Last weekend, we saw Cloud Atlas. Lincoln and Skyfall will be coming up soon. Eventually we'll be able to afford going to the Enzian again, but for now, this will do.
  • Buying a bunch of flowers for my wife. A little romantic gesture can go a long, long way.

As hobbies go, it's pretty damn cheap, but even making things out of paper isn't free. 
All the above adds up to well under $100 over the next two months. It's not really a lot of money in the big scheme of things, but those few little items are worth everything to me. It's the difference between enjoying my life, and enduring it. 

I was only out of work for a few weeks, although things were tight for a while before that. I was lucky - I had good contacts and a good resume with skills that are in demand. I know how much this affected me in that period.  Some people have to go through unemployment for much longer - six months is nothing unusual. I can't imagine how it would feel to go through it every single day for months on end, knowing there was nothing to look forward to except another day of living in a culture devoted to telling me about all the things I can't have, being told by employers I'm no good, and being told by society I'm clearly lazy and useless. 

Luxuries aren't just luxuries. They're the rewards we give ourselves for getting through the daily grind. In moderation, they're essentials. 

Saturday, January 12, 2013

How to avoid paying minimum wage

Chris Rock sums up the problem with minimum wage nicely. It's a pesky law designed to tell business owners that hey, this is as low as you can go. Any less, and you could find yourself in court.

However, that shows a remarkable lack of creativity. There's no need to pay people minimum wage. You can get away with paying them far less - and indeed nothing.

So, for business owners who are looking for ways to reduce their costs, here are six ways to pay less than minimum wage. They're all perfectly legal, and all quite genuine. I've been exposed to every single one of these business strategies personally within the last twelve months, and I've seen the businesses that use these strategies flourishing. After all, reducing costs is the key to increasing profits, increasing profits is good for business, and what's good for business is good for America, right?  So it's your patriotic duty to deal with the recession by circumventing minimum wage.

1. You don't work for me - use "independent contractors"

Minimum wage only applies to employees. But if someone's working for themselves, then it's up to them how much they charge you. It's just a business arrangement. So if someone agrees to do this amount of work for that amount of money, and it happens to work out as $3.50 an hour, that's their problem, not yours. Of course there are rules about whether someone qualifies as an independent contractor or an employee, but you can usually ignore those. After all, if they're not happy, they can choose not to work for you any more. Get some competitive bids going, and see how low you can drive the price. You may be surprised.

Pro Tip: when they've agreed the rate, tell them it looks a little low, and offer to increase it slightly. You're still only paying $3.60 an hour, but it makes you look like you care.

2. Doesn't apply here - go overseas

More and more jobs can be done by people working remotely. And if they're remote, they can be anywhere. Why pay an American $60 for a full day's work if someone in Sri Lanka, Pakistan or the Philippines will do it for $20? Look around on places like Elance and oDesk, and you can get people who'll happily work for $2 per hour or even less and think they're making good money.

Pro Tip: always ask for a "test project".  If you're lucky you can get this for free, but at the least, they'll keep their rates low in the hope of more long-term business. Then never use them again. Repeat ad infinitum.

3. Just until you get up to speed - mandatory training

If the job requires any skill at all, then you can require your staff to take a training course - at their own expense, of course. Conveniently, you (and only you) offer this specialist training at an affordable price, which you deduct from their wages. Alternatively, you generously offer to cover the cost of training, which happens to involve on-the-job experience for three months. Obviously, they won't get paid during this training period, but at the end of it, they'll have a real, well-paid job... and then you fire them and start over with new trainees.

Pro Tip: If you're really smart, fire them before they complete their training, then point at the small print that says that they're liable for the full costs of the training if they fail to pass the course. Then you send them a bill. Hey, someone might actually pay it, and now your employees have become a revenue stream.

4. Why pay at all? - use interns

You don't need to make people think that they might get a job with you in order to get them to work for free. That's what interns are for. They're just there to build their resume. If you run a fairly straightforward business, you can run almost everything on interns. College kids can build web sites, operate tills, write copy, answer phones, and so on.

Pro Tip: remember to offer a staff discount. That way they're still spending money with you, you're still making a profit out of them on top of the free labor, and they think they're getting a great deal!

5. It's just helping out - unpaid overtime

Business is tough. Everyone needs to put in just that little bit extra. Of course, you can't make people work for free, but you know, you've got to go with the hardest workers, and if they don't want to do those extra few hours, there's someone else who will. Pay for 20 hours, get them working for 30.  That cuts the wage bill down and fosters a sense of company loyalty.

Pro Tip: remember to call in at odd hours so it looks like you're working your butt off too. Send emails at midnight, or leave text messages at 6am. Investigate scheduling services, or else employ an intern or a low-cost Filipino to send out of hours messages on your behalf.

6. We're all in this together - make them shareholders

In a small business, you can really get people to do ridiculous amounts of work for free by promising them a share in the profits. Obviously you can't pay them right away, but when the money comes in, you'll give them a cut. Remember to pay out your bonus and all your other expenses before you calculate the profit share, and practice your "disappointed" face when you tell them that because of unexpected financial issues, there's only about $160 profit to share between five of you.

Pro Tip: soften the blow by saying that under the circumstances, you're willing to pass on your share, so you'll just split the profit four ways, but hopefully next year will be better. See, now you're being generous and understanding, as you hand over two $20 notes for a whole year's work.

So, next time one of your staff complains that they don't have enough money for food, or gas, or medicine, or somewhere to live, explain to them how generous you're being by paying minimum wage. Then fire them and replace them with someone who'll be happy to work for half that.You now have a happy employee and you're making more profit - everybody wins!