How Changing Prices Effect Poverty and Social Mobility

Toys are Cheaper, Essentials Cost More

Due to a variety of market forces, prices for goods and services are always changing. Some things seem to become more expensive over time, while other things tend to get cheaper. But, these prices changes actually tend to occur in broad categories and as a result, they have an effect on poverty and social mobility. Take a look at this graphic, which shows the relative price change in a variety of categories since 2005. You'll notice that the most important goods and services: college tuition, healthcare, childcare and food, have all gotten more expensive, while fun items, such as TVs and computers have gotten much cheaper.

The Effect on Poverty

Now that prices have changed so much, poverty has changed as well. As the adage goes "poverty now comes with a color TV." But ironically, even as the poorest among us have more purchasing power to afford fun items like TVs, they are actually less capable of purchasing the goods and services that lead to a way out of poverty. It has become more and more expensive to finance college and this has turn many low-income kids away. At the same time, it becomes increasingly expensive to afford the cost of daycare, which creates an incentive for low-income parents not to work.

Interestingly enough, the things which have declined in price also tend to be those products which have seen their manufacturing bases outsourced. The cost of labor is much lower in other countries, so as jobs have left American manufacturing, so have prices on these products dropped. 

Women, Marriage and Prosperity

Why Poor Women Have A Harder Time Rejecting Marriage

Over the past several years, many Americans have seen their dreams put on hold. Individuals within our society often struggle just to keep afloat, despite the many things that weigh them down. Unfortunately for women, marriage, or rather, the lack thereof, has become one such weight.

It would be nice if love was the only factor in the modern marriage game, but unfortunately it is not. For women especially, socioeconomic status plays a huge role in whether or not a marriage will occur and why. Let me explain.

Sarah and Mary

Let's consider two women on opposite ends of the income ladder, Mary and Sarah. Mary is a successful lawyer who lives comfortably in a spacious Manhattan condo. Sarah is a single mother of two who works at a fast food restaurant and at a Walmart. Despite their hectic lives, both women fall in love. As her relationship gets more serious, Mary begins to contemplate marriage. She considers whether or not binding herself to a man will restrict her independence, slow her career progression or contribute in some way to a male dominated world. As Sarah contemplates marriage, she thinks of raising her two children on two incomes rather than one. For Sarah, the prospect of marriage could mean not having to worry about going to bed hungry.

Both women are in love, but their relative needs are quite different. The wealthy Mary has the privilege of considering marriage in an abstract way, and wondering how it may affect her future lifestyle. Mary has a lot of power in deciding whether or not to get married. Struggling Sarah on the other hand, sees marriage as a question of love, but also one of opportunity. Sarah's decision on whether to marry has an immediate and tangible affect on her own lifestyle and on that of her children. Effectively, she has less power.

Now of course, Sarah and Mary are completely made up. But their stories parallel the reality of being a woman in America. Without using a value-judgment, the fact remains that married women tend to have brighter economic outcomes than unmarried women. And for women floating around the poverty line, this matters a lot.

Compare the top line to the bottom line: married working woman vs. unmarried working woman. Think back to struggling Sarah and imagine the improvement in her life and her children's lives if she moves from the red line to the green line. Mary, who is already floating above the green line, does not care.

Judgment Free Reality

My goal here is not to claim that poor women should get married or that men should rescue women from their sad lives. These numbers are in many ways representative of the persistent and unfair gaps in pay between men and women. But regardless of how fair or unfair these numbers are, they are reality. Sure we can and should work to make changes here, but for right now, marriage is an important predictor in lifestyle.

When I said judgment free I lied, I do have one judgment before I close. Our society always teaches young girls to want marriage and to hope for it. Girls dream about their wedding days and plan them out for years. But what about young boys? Our society never tells boys that love is important. We teach boys to follow their dreams and make big changes in the world with their careers. For boys, love is taught to be an afterthought. Perhaps this is the real problem. 

Snowstorm Parking Cones

Take Your Cones Off The Street!

Here in New England we are at the beginning of yet another winter storm. This year we have been attacked with words such as "smowmageddon," "Polar Vortex" and most recently "Bombogenesis." The fact that our media has nothing better to do than scare us into believing that each storm will bring the end of the world is annoying for sure, but what I find to be much more offensive is the fact that so many people think that it is somehow appropriate to save parking spaces for themselves and their extended families using traffic cones, chairs, or other items.

This is Illegal

Yes really. It is against the law to save yourself a parking space using an object on a public street either before, during or after a winter storm and there are actually several good reasons why. Let's take a look.

You Don't Own the Street

This is fairly simple. A public street is owned in common by everyone. This means that no individual has a greater legal right to occupy the street than any other person. Essentially this creates a first come, first serve environment. Public roads are maintained by the city you live in and this maintenance is funded through taxes, which are paid by everyone. Put simply, everyone pays for all of the roads and therefore is equally entitled to use them. 

Placing an object to reserve a space that is not being occupied by your car is an example of claiming ownership. This would be similar to someone fencing off a section of a city park to prevent others from using it and then walking away. Everyone can see that this is ridiculous. So why then do we think it is okay to do on the street?

Here is a particularly brazen act of space saving. A bag, really?

It is Inefficient

This one may not be obvious at first. It might seem that a parking space is just a parking space and and that saving a specific spot does not necessarily interfere with others. It does. Take a look at this picture for a clear example.

In this photo no cars are occupying the parking spaces, but they are all reserved by chairs. Perhaps the people who own the chairs and have "reserved" themselves a parking space are all at work. But it doesn't really matter where they are, all that matters is that they are not in the spot. 

Suppose for simplicity that these people work from 9-5 and place chairs out in the morning when they leave. Perhaps there is another person who wants to visit a friend or relative on this street at lunchtime. If there were no chairs, the person would have no trouble parking while on a lunch visit. They could then leave and the spot could be open again when the workers returned at 5. But because the chairs are preventing other cars from using the space when unoccupied by cars, it is inefficient. 

Now What?

I admit that it is frustrating to have "your" parking spot taken and have to look for or shovel a new spot. I really do understand, it has happened to me many times. But it is much worse for any given snowy city as a whole when individuals try to own public streets. This type of behavior should not be tolerated.

If you are trying to navigate a snowstorm and you happen to find that a parking space is occupied by a cone, chair or handbag, know that you have every right to move it and take the space. In fact, I urge you to do so in order to help reverse the sense of entitlement that Northern city dwellers feel during the snowy winter months.

America's Broken Dream

Chasing Money and Getting Lost

Once there was a dream. A dream of raising our children with more than we had, a dream of houses on cul-de-sacs, a dream of consumption: The American Dream. Anyone could be anyone; society preached of upward social mobility. For decades, we believed in this dream. We moved our families to the suburbs, worked long hours at work and expected that we could create our own idealized life. 

But did this make us any happier?

It appears not. 

We have now reached a time in this country where our traditional American dream is broken, and economic signs seem to indicate that there may not be a way of resurrecting it, at least not anytime soon. We could take this as a sign that our country is falling apart, but I think that it could provide a wonderful opportunity for us all. Rather than focusing on consuming more than our parents and living in a bigger house, why not focus on being happier versions of ourselves? Why not ask ourselves what really makes us happy? If we focus less on changing our socioeconomic group, maybe we could really all be a bit happier. Most of us have somewhere around 80 or so years to live, why not make the most of our time here?

I realize that this may seem counterintuitive. Doesn't an increasing standard of living make us feel more satisfied? Perhaps it could, but it often comes with sacrifices that we tend to overlook. I want to explore happiness in our society.

Seriously, there are several reasons that the American Dream is worth giving up. 

What Makes Us Unhappy

There are a variety of things that could contribute to happiness in a persons life. Surprisingly, money is less of a factor than many people think. Once we reach a certain middling level of income, money does little to increase our happiness. And sometimes chasing money can actually contribute to our unhappiness. At some point, the cons of more money often outweigh the pros. 

Commuting

One of the biggest factors influencing well being is commute time. People with longer commutes are more likely to be unhappy. The American Dream which has encouraged suburban home building has increased commutes for many americans over time. 

Commutes Over Time

Commuting and Happiness

Taken together, these graphs show exactly that. Over time commutes have increased for Americans despite the facts that commuting further tends to reduce satisfaction. 

Stress and Loneliness

When people are extremely stressed out, they are less likely to find time to nurture themselves. Whether due to full schedules or lack of energy, this also tends to lead to lack of social activity. People who spend less time socializing and more time stressing tend to be less happy.

This chart shows that as social time increases, so does feelings of happiness. People who work long hours in pursuit of larger and larger paychecks inevitably are left with less time to spend with others. The stress from extra work and the isolation from other people is certainly not a positive addition to one's life.

Now What?

So there you have it. Perhaps the American Dream is dead. Perhaps many Americans are dealing with stagnating wages and lifestyles and perhaps the homes that we raise our children in will be smaller than those we ourselves grew up in. 

But so what? Having more possessions cannot make us happier and I have pointed out a few ways that the dream that our society subscribed to actually may have reduced our collective well being. I urge you to reject the American Dream. Manage the money that you do have well, but do not let money become your biggest motivation in life.

Search instead for happiness and your world may become brighter even if your wallet becomes lighter.

Priced Out of San Francisco

San Francisco Becomes Too Cool

San Francisco has long been considered a "cool" hotbed for bohemian culture. It is a very left leaning city that that thrived with the help of artists, hipsters and musicians. For decades these people have been the heart and soul of the city. But, as more and more people have been attracted to the city, those who make up it's cultural background are quickly being priced out.

San Francisco Rent Growth

As you can see from this graph, San Francisco was a relatively inexpensive city for most of the 20th century and it was easy to afford to live here. By since the early 1980's, rent prices have risen at an alarming rate for residents of the city. The current median rent in the city is $3,396 according to CNN, that equates to over $40,000 per year. This is more expensive than any other American city. It's no wonder many working class residents can no longer afford to live in San Francisco. Many of these people are hopping across the bay to Oakland where rents remain more reasonable.

Why Has This Happened?

Most large cities have seen rising prices across the country, but San Francisco is an outlier. Many residents blame an influx of high-wealth technology workers for rising costs, but this is really a symptom instead of the problem for the city. The real problem in San Francisco is that residents are resistant to new construction of higher density housing. San Francisco is not generally zoned to accept new high rise construction out of fear that it will ruin the character of the city.

Economically speaking, the problem is with supply and demand. There is a severe shortage of housing supply in the city at a time when demand for living within the city is skyrocketing. Because the shortage is not being addressed effectively, prices continue to drift upward. If the city could change some of it's zoning laws to allow more construction, housing supply could be increased and counteract some of the upward price movement. Many long-time residents want to see their city stay the same, but if they want to afford to keep living there, they eventually must be willing to accept change.

Mealku: Urban Food Sharing

Mealku Food Sharing Application

As a sign of just how interconnected we are becoming, New York City has an ambitious new company called Mealku that is striving to promote the sharing of food among strangers. In the past we have seen other somewhat intimate forms of sharing. ZipCar allows strangers to share cars, Airbnb allows strangers to share their homes and decades old consignment shops allow strangers to share clothes. Many of these ideas have seemed controversial at first but have proved to be extremely beneficial to all parties involved. Meal-sharing brings the amount of trust and concern to a whole new level, but it will likely still be a great new innovation.

How Mealku Works

Before discussing why Mealku is such a great idea, we should look at exactly how it works. Right now, the company exists only in New York City but has plans to expand to other cities in the near future; food sharing can only reach it's niche market in large cities. The concept behind Mealku is that most people prepare more food than they can eat at once. Inevitably that leaves the average person with leftovers. You are then faced with a choice. Do you keep eating the same meal for several days and get sick of it, or do you throw away the leftovers? 

What if there were another option? Rather than throwing away those extra tacos or eating them for days, what if you could give them away? That's the idea behind Mealku. When you have made extra food, you can display it on the Mealku app for other users to see. You earn points for the food that you put onto the app.

Now the other side. You are a busy person and you are very hungry. There are plenty of places to get fast-food but you would much rather cook a healthy meal for yourself. But you just don't have time. The Mealku app allows you to choose fast-food like speed options that have been home prepared by other people. You see the tacos and think wow I would love a taco and so you order one.

Mealku delivery staff bridge the gap between the cook and the consumer by picking up the food from one location and delivering it to the next, free of charge. The cook earns points by cooking and the consumer spends points to buy food. You don't need to cook to earn points, you can also use money. The point system is intended to reward cooks. Another note is that Mealku will inspect your kitchen before allowing you to cook, this is intended to provide a quality control.

Mealku's Benefits

As people start to use Mealku, we begin to as a society realize great benefits. First and foremost we reduce food waste. Every year millions and millions of tons of food that could be eaten are just thrown away. Companies like Mealku can cut into these numbers and increase the efficiency of our food distribution system. On a large scale, bringing alignment between food supply and demand could help to control food prices and ensure that everybody gets fed. This is so important but until now it has been hard to achieve.

The large scale gains translate into economic benefits for everyone involved. It costs extra money to purchase and cook food that you ultimately throw away. It also wastes your precious time. Assume 20% of your food is extra and becomes wasted. If you spend $100 per week on groceries you are essentially shredding $20 per week, $80 per month, $1040 per year! Now you can recuperate these losses because someone else is paying you for these excesses. 

Finally we should look at the health benefits. By engaging with a company like Mealku we reduce our reliance on fast-food. Rather than eating quick unhealthy food from McDonalds, you now have the option of getting quick healthy food via Mealku. Think about how much healthier we could be if everyone stopped eating at fast-food restaurants. Even if you were the type of person to avoid fast-food, you may sometimes be stuck eating leftovers. It is important to have a balanced diet and so removing repetition from meals is a great way to make sure that all food groups are being covered. 

Fast-Food "Recovery" into Poverty

Since the end of the last recession, unemployment has fallen from over 10% to around 7.4%. While this is generally good news, many of the newly created jobs since 2010 have come in low-wealth industries such as fast food. In fact, growth in the fast-food industry has been faster than that of any other industry; employment has expanded by over 10% in the past three years. More than 100 cities now see these workers striking for higher wages. The average wage for a fast food employee in the United States is around $8.50 per hour, not nearly enough to live on. The central theme of this strike is to request a wage of $15 per hour.

Given the fact that last year McDonalds reaped after-tax profits of around 6.5 billion dollars, they could probably afford to pay their employees a bit more. 

But I'm more concerned with the bigger picture here. The healthiest portion of our economy happens to be the sector that arguably contributes most to making us unhealthy. Obesity rates continue to rise and yet more and more fast food jobs are created. We know that American need to lose weight, but our new jobs simply expand unhealthy options for Americans. This seems like a huge paradox.

Furthermore, the jobs are not good for the employees either! (Even those who choose not to eat the food) Working for a fast food restaurant where you make close to minimum wage will not allow you to improve your life, it will keep you in poverty. As far as I see it, McDonalds and other unhealthy fast-food chains are almost like a collective black hole. 

These jobs are actually making the country much worse. Employees have almost no opportunity for upward mobility and end up trapped in poverty, patrons use these businesses as a way to become fat and unhealthy and yet the economy grows. Something has to change here. We as a country need to learn to look more into economic numbers and realize what they really mean. A country that grows fatter by the day while expanding low wage job options is not a country heading in a positive direction.

Improving The Driving Experience: Dynamic Parking and Driving

Yesterday I was watching a video about new innovations that will likely come to the car industry over the next 20 years. Most of the new ideas focused on cars themselves but my two favorite takeaways were actually about the driving experience as opposed to the physical car. Some cities like San Francisco have begun experimenting with what is known as dynamic parking and driving, bringing economic theory to life for drivers in congested areas.

Dynamic parking is essentially supply and demand brought to life in real time. Have you ever spent an hour driving around a city looking for a parking spot? Well no more. Really. In San Francisco, as parking spaces get taken, the prices of other meters increase continuously up to a current $6 dollar per hour cap. As prices rise higher, people are less likely to want to pay to park, but for those who really need a spot and are willing to pay, spots will be available. Once the program finishes the pilot phase, the maximum cap will likely be removed from the meters so that the system can work even more efficiently.

Learn more about this map and San Francisco parking here.

The second thing that I like even more than dynamic parking has a variety of names but for purposes of consistency I will call it dynamic driving. Picture a crowded four lane highway with cars stuck in every lane for hours trying to get to work, school or wherever. Now imagine cars cruising at non-traffic speeds through one of these lanes. This is dynamic driving. Much like getting a fast pass at an amusement park, drivers can opt to pay a price to drive in the traffic free lane. Depending on how congested the other lanes are, this price will fluctuate to ensure that the traffic free lane really remains traffic free. This will allow people the option to choose to pay to remove the inconvenience of traffic which is a remarkably new idea.

Both dynamic parking and driving new ideas but they come with great benefits. They can boost government revenues both at local and federal levels as people pay directly for the convenience of using roads and parking spaces. Despite the increased revenues for the government and overall efficiency gains, consumers have the option to keep their current habits; if you don't want to pay, you can stay in traffic just as you always have. There seem to be few if any downsides to these new programs and other cities will soon likely follow San Francisco in adopting these new innovative traffic control measures.

Despite all of these innovations, car use may be on the permanent decline.