From: Cinci Inst of Graduate Home Edu
To: Barbara Ehrenreich
Date: Thursday, November 20, 2003 8:22 PM
Subject: FW: nickelanddimed.net article
Barbara...
At the bottom of this note (as well as in the attached rtf file) is the article on expense-reduction strategies as promised. It's based on both a financial plan approach and personal testing, but the spreadsheets and results are converted to story format and logic for the text. A suggested "byline" follows the article. After 7-8 years of refining/living the test, I'm looking forward to your response.
J.H. Raichyk, PhD
Dectiri Publishing Co-op
The rtf format is pretty portable across different systems and platforms. If you need it in another form, let me know and we'll see what we can do..
----------
From: Cinci Inst of Graduate Home Edu
Date: Sat, 18 Oct 2003 11:04:08 -0500
To: Barbara Ehrenreich
Subject: Re: nickelanddimed.net
Would be delighted to contribute to nickelanddimed.net. I've been working on an engineering project but will put together an article on expense-reduction strategies and the logic of why this is all that's left.
JH Raichyk, PhD
on 9/21/03 10:58 AM, Barbeh@aol.com at Barbeh@aol.com wrote:
Dear Dr. Raichyk,
Sorry for the very late response to your letter. I'd be very interested in seeing your suggestions for expense-reduction strategies, though I don't think you give me enough credit for holding my expenses down while working on Nickel and Dimed! Perhaps you would like to write something for nickelanddimed.net?
Best,
Barbara Ehrenreich
=================================================
Operations Management Scheme for Freedom and Wellbeing
In a recent email exchange with Barbara Ehrenreich, Barbara more or less challenged me to prove, present and make explicit my claim that there is a route to escape poverty, one that still works and is very doable. So let me introduce myself.
I was one of four children in a family with a mother the world saw only as an immigrant housekeeper and a father whose non-union blue-collar printshop jobs brought home, at his best seniority, what would just exceed the defined poverty level for a family with 2 children, not four. Yet 3 of us graduated college, supported at home all the way. In my case, it was a PhD in an esoteric math field whose job market collapsed when the space program folded. With Vietnam and ERA, I found myself an immigrant in Canada, doing academic migrant work, baby in tow and my new husband jobless and debt-ridden. Ten years of struggle, I had re-invented my career, climbed the corporate ladder, pioneering decision analysis and strategic computing in the risk/insurance industry. After my second child and reaching the glass ceiling, an opportunity to cleanly escape an increasingly abusive marriage emerged and I took my children, dumping the career, and started over, living again with my parents. (See Token Woman ) This time my path, though moderated by a growing need/taste for simplicity, was rocked by my mother's death and by tumultuous, successive corporate takeovers and an engineered corporate bankruptcy. Almost 10years ago now, as my children chose their careers in arts/entertainment, I resigned that corporate connection to become an experimenter in making a difference, first with an intentional community in the beautiful BlueRidge Mountains of Virginia and now networking locally or online.
As we explored this freedom, the path has become clearer. My decision analysis tells me that many, if not most, of the activist agendas, just like middle class lifestyles, are exercises in futility in our current circumstances. We need to face the reality of what our two-tiered structure implies. Any plan that is predicated on getting government or some contingent with power to fix the problems we see around us is likely in vain, at best, or an invitation to worse entanglements. In a two-tier society as imbalanced as this one, the system is structured to create only opportunities similarly skewed, and further, is rigged to fill the few choice places with insiders (see NYTimes 11/22/02 article "The Sons also Rise"). It's then obvious that precisely those groups have no incentive to respond to impotent pleas to change any substantive facts that undo the security they schemed so long and hard to build. This is a system engineered to amplify the concentration of wealth. Witness the Dept of Labor's 15-20year projections of significant job growth only in the bottom tier jobs, constant new technology-based turnover and increasing burdens shifted to individual workers. Even desirable midlevel technical jobs are being outsourced to low-wage countries and the statistics show that CEOs who shortchange their workforce, their customers and the taxman are the most rewarded. Protesting vigorously will likely do no more than bite the ankles of those who walked on you, or worse, incur petty bureaucratic wrath for embarrassing the system, provided you even succeed in breaching media's directed blindness and spin.
The reality of this designed, bottom-heavy hierarchy in the workplace also eliminates the old income path out of poverty achieved by climbing the job ladder. There are precious few new jobs to climb to in their hierarchy plan. And the class-nepotism diminishes any merit in pursuing standard higher education as the escape. In fact, even a slight 1% bias in the mathematical simulations of hierarchies has been shown to produce major shifts in favor of the bias' beneficiaries. My OM, operations management, tells me that the only way to wellbeing then depends on the other variable, namely expense reduction. For those objecting that the bottom tier has reached the limits of that strategy, I have as counterintelligence both my mother's achievements and the current experience of a segment of 'cultural creatives' we've shared exploring with over the past several years. Recognizing the current opportunities and hazards, we've been relying for the past 8 years on exactly those expense reduction strategies to carry myself and my children long term in creative careers with traditionally vulnerable incomes in the arts. So, though variations would work for others, let's illustrate it explicitly with a hypothetical single mother.
Actually two single mothers, one with a 2yo and one with a 7yo; when they'd read this, they sought, found and enlisted one another in this scheme and combined households, salvaging one apartment deposit. Between them, they have a crockpot and maybe a yogurt maker, maybe an inexpensive TV/VCR, a few dishes, pots, utensils, a couple fans, a sewing basket and a few basic handtools, plus sleeping matts, comforters, and basic clothes. In fact, starting fairly lightly is a good idea, space is a valuable commodity not to be wasted on furniture when children need ample indoor area for play. Think productivity. If one or both are on ADC or some equivalent, this step may require some variation, such as adjacency instead of apartment-sharing for the moment. Check the rules in your area. But if they are on ADC then they probably have a housing subsidy which this example doesn't assume.
Since we've assumed no computer of their own yet and since the mothers will focus better with their children's direction suitably set, the very first thing they do is enroll the 7yo in a cyber charter school and begin reading up on homeschooling at the library. This will ensure their children will receive quality time, excellent resources and their own computer with full peripherals and internet access. A genuine empowerment tool for the whole family as well and useful for research, communication, dealing with authorities and much more. Although cyber charter schools are not homeschooling technically, homeschooling philosophy will help our single mothers cultivate and cope with the freedom that they seek for their children and that cybers show some approximation to, while avoiding the system's notice.
Next, they will team up to restructure their diet and food shopping, which we will discuss in detail, precisely because it offers immediate relief and advantages. With that research and its benefits established, they target an apartment in a decent area, a parttime job for each mother and a sensible used car, if they don't have one or more of these already. Each of these objectives will be elaborated in turn.
With interest rates as low as now, better apartment deals are promising because so many former apartment dwellers have abandoned that option for home ownership, even at the expense of higher risk mortgages. For example, we rent a quiet, very well-maintained, 2BR, 2bath, 1000sf garden apartment for $625/mo, including water and waste collection, and it's a mere 2mi from the major access freeway. Importantly, it's close to a good grocery, library and not far from a thriftstore and Walmart. Parking would be outside and they would casually canvas their acquaintances for recommendations on car mechanics, even though they've selected an old model with a good repair record in Consumer Reports for a precious sum of about $800-1000 as soon as possible, selling any other one if its repair reputation is not good or reserving it for those incidents where the first string car is in the shop.
With job creation in this economy producing mostly lower tier positions, they fairly easily got $6/hr jobs so that their hours didn't overlap, eliminating a need for childcare expense and avoiding away-from-home eating expense. With small children, five hours is about the limit for mothers to be separated from their children. For five hours a day, the grind of that work is more sustainable and not that difficult to find, even relatively nearby since most of their neighbors have eyes for better pay. They will also do the paperwork so no federal taxes would be deducted; in fact, each can expect a couple hundred dollars each April from Earned Income Credits. Their parttime wages are sufficient to earn them social security credits toward vesting while doing little damage to the size of their retirement benefits since SS payout scales are compressed anyway. Roughly, their takehome pay, together, totals $1100/month which after rent leaves $475.
The best opportunity is in the food/diet area, a major key in the scheme depending on their circumstances. In such a neighborhood, with a good, efficient, well-stocked grocery our food, paper, soaps and plastic have run between $2-3/day/person for adults with due consideration for quality and variety. No junk foods nor nutritionally inferior items. Although baby diapers of the disposable type run a little high, they are worth it and our single mothers, with parttime at home, can prepare healthy foods which require only slight adjustment for infants, especially since their babies nursed for a fairly extended babyhood. Vegetarian diets with a substantial proportion raw foods, can be simple to prepare, more economical, and healthier which reduces grief and later medical bills as well. If anyone doubts the significance of diet in establishing longterm health, there's evidence that it takes three generations of good nutrition in order to have untroubled, healthy children. And short term, there's even growing data that diet not only improves medical prognoses, but also improves behavior and performance. For this example these single mothers budget for food, based on nutritional requirements and good grocery price management. Buying bulk rice, potatoes, dry milk, beans and nuts; fresh produce in season and on special; setting up a substantial pantry to keep their in-home stock of out-of-season canned goods, preserves, pasta and cereal/grains well supplied. Our local Kroger carries all our items for $.03-.13/oz with cheese at $.16/oz and a few exceptions in the spice/condiment category. Since our single mothers are most likely eligible for foodstamps, usually somewhere around $300 between them in the beginning, which is about $75 more than needed, they can build up that pantry for those "rainy days" as their allotment of foodstamps is reduced faster than their income increases. Using those sorts of guidelines, they still have $475 a month left plus a majorly growing pantry.
Next come car and heating and cooling budgets, of which roughly $75 is for gas for the car, $50 for insurance and a cushion for repairs though they will change oil, monitor radiator fluids and other simple maintenance. For heating/cooling and electric, we pay about $80/mo on average, using conservation methods such as setting the thermostat at least 5deg higher in summer and lower in winter than the standard 72 but dressing accordingly. This requires some focus in heating season on loose, comfortable layers and warmth, for children especially. One fellow from our alternate energy club, a former Peace Corps member, sets his furnace thermostat all the way to the high 50s and wears outdoor clothes all winter long, but he doesn't have children's needs to contend with. We cycle our water heater for bathtime each day, put compact fluorescents in our most used lights, add insulating layers to ersatz drapes and around outer walls. Check the phone company for a low usage line, probably around $15 a month and that leaves $265.
Remembering that their goal is to find a new haven, not to emulate the middle class nor "to fit in", will make them more creative, more resourceful. Think neo-pioneers. Entertainment, as well as research, can be found at the library in music, books and videos. Many health problems that plague those around them will not torment them because they have left one of the major vectors of communicable disease, namely the public schoolsystem. And with the library's crosscultural wealth of ideas, they improvise a version of eastern medicine's defense against respiratory infections by relying on a simple, mildest solution of baking soda and water used as nosedrops each night. Similarly a primitive bidet cup eliminates the frequent female UTI problems. From there they investigate the medicinal properties of common plants that our society looks down on as "weeds". Free indian strawberry for herbal tea for coughs, plantain mashed in oil for cuts, the inside of banana peels to relieve the soreness of bruises, insect bites and blisters.
They have not bought the health insurance scam because the majority of services those provide are repugnant, as well as being over-priced and badly delivered. What occasional needs we have encountered -- from atrial tachycardia to the proverbial rusty nail -- were paid for from current financial funds and making payment arrangements with hospitals -- after rigorously scrutinizing bills and self-managing our treatment options. The bulk of the insurance costs are for excessive waste, bad planning and delivery as well as extremely questionable treatment options, but that's another whole dissertation.
For the first few months they will mimic Crocodile Dundee's laundry methods till they can afford a repair-free washer. We dispensed with our dryer in favor of a more time- and energy-sensible clothes rack and fan for clothes coming from the washer, and an extra shower bar over the middle of the tub for comforters and blankets.
With that cushion of $265/month they plan their future acquisitions and financial goals. Financial goals include a health fund, a housing fund, and an equipment replacement fund, all of which we can calculate in a moment. Acquisition targets would include a gravity/ceramic water purifier, a second frig, a blender, small coffee grinder, convection cornpopper, a second crockpot, a spritzer and a DVD player, as well as their own computer setup for when they graduate to homeschooling. Reusing a few well designed bottles, jars and tubs that their groceries came in, they manage saladgreens, leftover soupbases, and store their homebaked cookies. The plastic bags they carried their groceries home in are mostly adequate for collecting and carrying the waste and garbage out for disposal. Confident that our bodies, once initial nutritional balance is achieved, only need input that's balanced over roughly each 3day period, we radically simplify meal plans to 1-2 dishes for timesaving as well. Before anyone protests that this whole domestic focus is too trivial, look at the numbers this strategy is producing and -- click, it dawns -- this is exactly "women's work", baselessly disparaging ourselves is hardly appropriate. Any industrial engineer would be applying for patents for each bit of operational creativity women take for granted, except that the ideas cannot be sequestered from free access by the buying public -- though the domestic products industries would like to sell you substitutes and convince you with their hyped, sanitized, overdressed advertising that you should be loathe to use any but their store-bought solutions. It is so middle/upper class to think that every problem or need should be solved by buying some thing or commercial service. We are the neo-working-class and women's work is powerful.
Now financial plans. The primary fund is the housing fund and it will have a shortterm goal and a longterm goal. Shortterm, they will be seeking rural land to build on and a nearby, older, probably doublewide, with DIY repairs needed and with little or no zoning. For this exercise, we'll assume they find a fairly decent 15-20yo home for about $36,000 though we were almost quick enough to get one recently for $24,000. It had once been a fairly nice design but it now required serious insulation, drainage and heating/cooling revamping which our preparation to build our own home would have enabled us to do for the practice and in the process resurrect this 1344sf once-upon-a-time hopeful.
Their ultimate financial goal is to build their own spacious home based on techniques they will be researching while they accumulate their funds. Before you envision monetary mountains to accumulate one spoon at a time, consider this: our multigenerational homedesign that we've been developing over the last 7 years -- with home-based business office space, spa and greenhouse, all earthsheltered and passively heated and cooled -- will require no more than $15 per square foot for materials, tools and special services. Our construction schedule is for parttime, 2-3 years, good weather work by two novices and one aging deskjockey. For comparison, a new doublewide, sensible but plain vanilla, would cost about $27/sqft and the typical 20yo midsize stickbuilt ranch in the standard housing market costs over $50/sqft plus an outrageous price for land -- probably over $60,000/acre--, together with a monstrous bank bill for mortgage interest that basically doubles the cost, and a vampiric monthly heating/cooling bill besides, assuming they could even get a good deal on interest or a mortgage at all. Such typical houses will deteriorate seriously within our lifetimes and be vulnerable to increasingly menacing extremes in climate. Which together with the increasingly confining rules prohibiting everything under the sun in how you use that space makes our savvy single mothers cringe at even the thought of such a trap. Get your spreadsheet programs in gear, there are better ways to go. Preliminary analysis, assuming $0.33/hr annual pay increases for the first few years, shows completion of their home and comfortable retirement in about 20 years, roughly in their mid40s. Secure independence with time to enjoy life at least 25 years ahead of the standard-issue, middle-class dronelives' best expectations.
And lastly, socially, our single mothers run a listserv on Yahoo for their peers and have made several good friends. Their contacts in the homeschooling community will help expand their local horizons and, with their new direction comes self-assurance and comparable standards in companions. Their own special interests in life develop along with their children's, as homeschooling parents have usually experienced. The plan had them staying together as a family all the way, as well as having them gradually accumulate savings til they could buy that doublewide fixer-upper for cash so the banks couldn't interfere in their choice of home or income arrangement. Other assumptions lead to other spreadsheets. Once they were mortgage- and rent-free, about when their children were 12 and 17, the savings rate climbs quickly Their commitment to communal support for one another begins as one of need and should be agreed upon for some minimum fixed number of years because mothers with young children need stability -- 6 years at least in this scenario. Other ideas and possibilities require other plans, including the lovely complications of MrRight. Nor is this strategy limited to young women and children but their plight always seems particularly vulnerable. Adaptable in myriad ways, this plan is simply a fairly generic model.
So ultimately we arrive at a new definition of wealth, one that has freedom, security, health and wellbeing built-in, happy family-clan in tow. With that blueprint in hand, living happily ever after, in our socially, economically and environmentally sustainable homes is achieved by relying almost solely on women's traditional work to engineer a clean escape from the two-tier tyranny trying to label us as losers. And that, Barbara, is how we make it in America with nickels and dimes. Isn't math fun?
J.H. Raichyk, PhD.
Writing occasionally for bergerac.tv, LifeLearning magazine and others, J.H. is a professional mathematician, and decision analyst with 25 years of applied experience in both the insurance and retail industries, as well as 15 years of extensive reading and experience in math education trends as a homeschooling mother.