When I was in college, I thought I was poor. I could only afford a Chevy Cavalier with manual windows, a small apartment, and we ate a lot of Ramen noodles. I got by doing freelance videography and odd jobs wherever I could. I at least had the basics covered, and didn’t know until much later that things could be a lot harder. Later, in my 30s, I had two businesses fall apart in a row due to anti-LGBT discrimination, and ended up with income from Uber, and nothing else, for about a year and a half. It paid better than McDonalds, but not enough to pay the bills and debts.
With bills going unpaid, my credit got ruined, and hard. I barely avoided homelessness when family stepped in and helped us keep a roof over our heads, but we still lost one of our cars when a futile attempt to use Turo to extract income from it failed. We were barely able to keep food on the table for about a year. Mental health declined for the whole family, and there were points where we barely kept going.
While I wouldn’t choose to go through this again, the experience of going through all that did teach me a lot about how easy I had always had it, and how much better my family has it now with our income coming back up. Instead of living in the “top half” for our whole lives, we got a glimpse of how a good chunk of the “bottom half” lives. We also learned a lot about how to stay away from and not rely on the people who had brought us to such a bad place.
It’s easy to forget that 40% of American families couldn’t come up with $400 in an emergency without asking family for help, turning to debt (often as stupidly high interest rates), or selling something like a computer or phone. Part of the time, it’s because the household’s income sucks (low education or a job loss is a big cause of this) or income is OK, but the family is deep in student loan and/or mortgage debt. Savings? Fughedaboudit. Same goes for retirement — the money just isn’t there.
If you can afford a Toyota Camry, you can probably afford a Tesla or similar electric vehicle too.
— Whole Mars 🤖 (@WholeMarsBlog) August 4, 2021
I don’t think at all that Whole Mars (Omar) meant anything bad with this tweet, but I wanted to use it as an example of something I see a lot on Tesla Twitter, and at times even in our articles here. It’s true that you’re better off to buy a new Tesla Model 3 than a new Toyota Camry once you consider the increased cost of fuel and maintenance for the Toyota. Yeah, your car payment will be higher for the Tesla, but over 5 years, you’re paying a lot for things like gas, oil changes, new shocks and struts, transmission service, etc.
But let’s get real for a bit. I keep hearing that the average new car is $37,000 these days (and that’s a dated figure that’s probably low now). But let’s talk about that Camry for a minute. If you buy the cheapest one, it’s $26,070. Knock 10% off (because, as we know, everyone is a great negotiator and dealers will never rip you off), and you end up at $23,000. At 5% for 72 months, that’s a $370 car payment.
What It’s Like Toward The Bottom
If you’re making $8/hour and working 40 hours, that’s $1344 of income per month, and only $1200 after taxes. In a small town (where such a low pay job is more likely to happen), you can get an apartment for $500, spend $100 on electricity, $50 on gas and water, $75 for car insurance, $50 for gasoline, set $30 aside toward your next oil change, $250 for food if you’re very frugal, $50 for various household supplies, $50 for an internet connection, and — well, you’re done because that all adds up to $1155 and you haven’t even gotten as far as a car payment or having a cell phone.
Someone in those shoes is probably driving whatever cheap, old car they could get their hands on. Maybe a family member gave them one, or they used a tax return (with the refundable Earned Income Credit) to buy a cheap used car. When something major goes wrong with it, they’d have better saved that extra $45 a month they were making, right? You know, because they aren’t allowed to ever buy a cheeseburger or subscribe to Netflix.
And this all assumes the person has good credit and a good rental history, and isn’t getting hit harder on rent or car insurance due to bad credit. Make just a few bad moves or suffer from health problems more than a day or two, and it’s not a very long slide from barely getting by to living on the streets, where getting any form of shelter is often criminalized.
Cops bring assault rifles to evict the homeless off of Venice Beach pic.twitter.com/19I0veJcbS
— OccuWorld 🏴 (@OccuWorld) August 3, 2021
Bottom line here: you’re not going to be buying a new car when you’re teetering on the edge of criminalized homelessness, and even the cheapest used EVs are going to be out of reach, and likely until well past 2030. Worse, it seems like even liquid-cooled EVs aren’t living much past ten years before the pack needs rebuilt, which will likely keep people at the bottom of the income game from owning an EV even after that unless a technology like solid state batteries makes EVs a lot more durable.
And putting solar panels on your roof? You’d better be able to qualify for and pay for a mortgage on a home that’s increasingly out of reach even for the lower middle class in most places. In other words, it’s just not happening unless you’ve got a really cool landlord.
Let Them Eat Cake
While there are many non-productive discussions to be had around this problem (things like blaming the poor for being poor), even the best suggestions tend to fall short in the United States.
In larger cities, this isn’t as big of a deal. Subways, trains, buses, and other public transit makes it possible to get around without a car. Other options, like riding a bike or using micromobility, are easier for the people on the lower rungs of the income ladder, because those low-speed modes of transport can get you there in a reasonable amount of time. In theory.
Everywhere else, it’s not so easy. In El Paso, Texas, I knew a guy with a minor developmental disability who was working as a janitor at a school. When his busted minivan’s transmission gave out, he used an old, rickety bike to commute for 45 minutes to his job each way. He had initially tried the bus, but that was a 2.5 hour ride with transfers, and he wanted more time with his family. Between what little he could spare, along with money his wife made illegally selling burritos closer to home while the kids were at school, it took him six months to get a book about rebuilding transmissions, some basic tools, and a rebuild kit.
After rebuilding his own transmission, the car ran for two weeks before his inexperienced repair job failed and they got stranded too far from home to afford a tow. The car was taken by the city to a storage lot, where the storage fees quickly exceeded anything he’d ever be able to afford.
At the time, El Paso’s population was about 700,000, so it’s not really a small town. The situation in most of the US is even worse than that for people without a busted car that barely runs. For most of the country, infrastructure hasn’t been built to be friendly to people who don’t own a car in 70 years.
Dealing With This
I don’t want to just leave the article like this without any ideas about how to improve it, but it’s already running long. In a followup article, I’m going to cover some of the systemic problems that feed this, as well as some ideas about how the United States can do a lot better.
Featured image provided by Tesla.