How We Spend Our Money

“Clothes make the poor invisible. America has the best-dressed poverty the world has ever known.”

—Michael Harrington

In about three weeks (on July 24), the federal minimum wage will be raised 70-cents, from $6.55 to $7.25.  At the new rate, if you work 40 hours a week, 52 weeks a year, and never miss a day, your annual gross will be $15,059.  That’s before any deductions, and assuming you can land a full-time, 40-hour a week job.

I used to live in India, back when it was still a “poor” country.  I’m being facetious, of course.  Despite what we hear about all those U.S. jobs being shipped over there, and the prodigious wealth of tycoons like Ratan Tata, president of the Tata Steel conglomerate, India remains a crushingly poor country.

While there’s been enormous economic growth over the last three decades, India, with a population of just under 1.1 billion, still has hundreds of millions of illiterate people condemned to subsistence-level poverty.  Malnutrition haunts the subcontinent, infant mortality is high, and universal rural electrification is still a fantasy.

And because India is a poor country, it behaves like a poor country.  Unlike America, where poor people make the lifestyle choice of “pretending” not to be poor, Indians don’t have that luxury.  For that matter, neither do the underclass Mexicans living and working in the U.S.—those who wash our dishes, scrub our floors and pick our fruit.  They don’t lease new cars or dress beyond their means.  That’s more or less an American story.

Poor Indians are easy to identify because they don’t step outside themselves. A poor Indian would never think of saving up to buy $90 running shoes or splurging on a rented limo, to see how it feels to live large.  At Indian markets you can buy a single egg or single cigarette, because people can’t afford full cartons or packs.

By contrast, it’s amazing how we Americans spend our money.  The same conscientious consumer who’s willing to drive five miles out of his way to save 5-cents on a gallon of gasoline will, without flinching, pay $3.50 for a cup of Starbucks coffee, and $12 for a container of popcorn and a soft drink at a movie theater.

What makes this phenomenon “amazing” is that these people have to know, on some level—consciously or subconsciously—that for that same $12, they could go to a supermarket and buy a case of soft drinks and enough raw popcorn kernels to make, literally, twenty or thirty containers of theater popcorn.

And of course, as if the mark-up on movie beverages isn’t already exorbitant (what’s the wholesale cost of a squirt of syrup and some carbonated water?), these customers drive the profit margin even higher by uttering the three words every concessionaire longs to hear:  “Extra ice, please.”  Yep, fill that canister so full of ice, it will barely require any “cost” ingredients at all.

There are bars in Santa Monica that sell a bottle of imported beer for $9.  That computes to $54 a six-pack.  Mind you, we’re not talking about paying top dollar for some exotic dish prepared in a specialty restaurant, something you could never hope to duplicate at home.  We’re talking about paying $54 for the identical six-pack you can buy at your local liquor store for a fraction of the price.

When I bring up these grim economic facts to friends (yes, even on my “consumer” high-horse, I’ve managed to keep a few friends), they pooh-pooh me; they argue that my examples are bogus comparisons, that you can’t look at it that way, that what you’re really paying for is “service.”  Some of them have even said, cryptically, that it “all evens out in the end,” whatever that means.

But there’s a larger issue here.  Not to sound holier-than-thou, but it should be noted that the same people who willingly pay $14 for a hot dog and cup of beer at Dodger Stadium—who impulsively blow $15.99 for Season One of “Hill Street Blues” (and then never get around to watching it)—are resistant to giving immigrant workers a leg up.

It’s hard to explain.  When it comes to sharing our purse with those who toil at society’s crappiest jobs, we become less generous.  For whatever reason, when given the opportunity to spread it around to those on the bottom, we tend to hold out.

The same people who tip Las Vegas casino dealers don’t leave a nickel for the housekeepers who clean their hotel rooms.  The same patrons who are willing to pay $18 (say what??) for a deluxe mango margarita at an upscale LA restaurant—and then leave a commensurate gratuity for the actress-cum-waitress—don’t bother tipping the guys at the local carwash who work their tails off.

One could almost applaud this willingness to throw away money on wildly frivolous stuff—write it off as some post-millennial, “easy-come, easy-go” mentality—if only these good people would throw their money at manual laborers the same way they throw it at blackjack dealers and cocktail waitresses.  But they don’t.

Instead, they argue with Mexican gardeners over their rates, and complain about how lazy their Mexican baby-sitters are.  They haggle with those day-laborers outside Home Depot, trying to convince them to clear their whole goddamn backyard for $50.  They won’t slip the trash collector so much as $10 at Christmas.

People are already complaining about the increase in the minimum wage.  The same people who have no problem with monthly cable TV fees rising every month for no apparent reason, regard an increase in the minimum wage as unfair.

A person I know (an insurance executive) fears the increase could actually destabilize the economy by (drum roll, please) “causing inflation.”  He’s the same guy who supports a trillion-dollar banking bailout, the same guy who opposes limiting executive compensation.  Alas, he’s the same guy who orders “extra ice.”

DAVID MACARAY, a Los Angeles playwright (“Americana,” “Larva Boy”) and writer, was a former labor union rep.  He can be reached at









David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at