How Cheap it is to Be Rich
Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor; and if one is a member of a captive population, economically speaking, one’s feet have simply been placed on the treadmill forever. One is victimized, economically, in a thousand ways — rent, for example, or car insurance. Go shopping one day in Harlem — for anything — and compare Harlem prices and quality with those downtown.
—James Baldwinv, Fifth Avenue, Uptown: a Letter from Harlem
That it is expensive to be poor is a succinct fact, one I know well, one many of my friends know well. While seeking a subletter for my apartment, I encountered another example of this. A couple wanted my apartment. They had lived in the Madison area for a few months, but they had not been able to secure permanent housing, and had been living in motels since then. A motel for two cost them $1,800 a month, whereas my one bedroom apartment costs $875. When I passed their application to my landlord, they were denied: they didn’t, according to my landlord, have enough local rental history to be considered.
Another American Catch-22. To rent, you need a rental history, and to not rent will see you facing expenses, charges, and fees. The landlord’s judgment aggravated me particularly because these folks had the money. Their income stream was lighter than mine, but diversified with a number of side hustles. They had enough savings for a security deposit. But, having been poor once upon a time, they had been pushed into temporary housing. And America conspires to make those who live in temporary housing live there permanently.
Due to a stroke of luck, a new job has fallen into my lap, paying me double what I used to make. Now, more than just not being poor, I am rich. I will make over $109,000 per annum, which is the threshold for the top 1% globally for income. This fact, as well as excellent reporting from Vox, helped guide me to the Nothing New challenge. It is those in my new income bracket and their expansive consumption habits which have fueled the rise of climate change.
But now I know something new. It is not just that the essentials are expensive for the poor, but luxury comes cheaper for the rich. The rich have purchased our hothouse planet, but they’ve done so with steep discounts.
Let me guide you through the general coupon-book available to the nouveau-riche.
Employee Discounts
Through my last job, at Epic Systems, when I was merely almost-rich, I purchased a fancy gaming laptop with a 0% interest loan. Furthermore, with my company providing free members’ access to Dell’s web store, the gaming laptop I purchased came at a discount: I was able to purchase the Dell G5 5587 with Microsoft Office and McAfee installed. Without membership this would be $1,600 while I paid a little over $1,200, a 25% discount. The interest free loan amortized the cost over a two year period, paid in installments of $50 dollars a month. As mentioned in other posts, I purchased more laptop than I needed, but at these prices I could be forgiven.
Other employee discounts that greeted me in my previous job included a commuter card that dropped bus fare from $2 to $1.40 pretax. At Fjallraven, a luxury coat brand, I received a 15% discount on all purchases. Free oil changes were available. Enterprise Rental Car offered employees the corporate rate even for personal travel. The cafeteria at my old offices gave restaurant-quality food with a 0% markup, with lunch rarely costing me more than $2.50. (My friends who work at Facebook, a much richer company than my last employer, get all their meals on campus for free).
FSA
An FSA is a flexible spending account which allows employees—should their employer offer them—the ability to save pretax dollars in an account for the purchase of certain healthcare-related items. With my new job providing me one, I turned to my dearest friend, online shopping, to see how I could get my money’s worth.
The FSA Store, helpfully, shows what you can buy. Many of these items are staples of good health, but The FSA Store also offers some high-end products, such as luxury sunscreen brand Supergoop and the FSA Hi-Tech Bundle. Furthermore, money saved in an FSA is only good for one year, with little money rolling over to the next year. Because of this, there is a need to get your money’s worth. The FSA Store can help here as well: while this link is sure to die sometime in January, you can currently head to its FSA Store deadline shopping guide (a new shopping holiday!)
Yet, FSAs are not just a portal to luxury. The most striking thing about the FSA Store, for me, was the presence of tampons and menstrual cups, authorized thanks to the CARES Act. Tax advantaged spending accounts, like an FSA, functionally give high-income earners a 35% discount on goods purchased through the account. Menstrual products are a necessity, and a necessity so excluded from the poor that numerous organizations exist to give free menstrual care to the needy.
This different set of price tags for the rich and poor are a major reason why progressives advocate against FSAs and their cousins, HSAs. For those who can afford tampons, menstrual products are 35% off, and should you not menstruate, or if you have more sophisticated tastes, you can purchase home blood pressure monitors and fancy sunscreen and other goodies that even the almost-rich do without.
Airline Miles
Now, a more personal, a more narrative example. When I moved back to California a week ago, I took three flights, all in first class.
Traveling for work is an easy and free way to gain credit card points and airline miles. The project managers at Epic Systems travel 50%-70% of the time. As such, there is an official guide book, maintained by a crew of project managers, highlighting the best cards for accruing airline miles. Since white collar employers like Epic will reimburse travelers for all food, taxis, and airfare, the project managers need to make sure they optimize their time on the road. A funny sight I remember witnessing multiple times is all of the project managers on a work trip offering to pay for the table, hoping to capture the miles associated with the surf-n-turf dinners they had eaten.
My position involved much less travel, maybe 10% in a good year. I did not get any of the fancy cards, but Epic would allow you to pass them your frequent flyer account so that when they booked your tickets, you accrued points. I had amassed enough for my one-way flight to California. Epic had paid for my move there with a relocation package—another discount for the rich—and now, unknowingly and poetically, they had paid for my departure.
I didn’t book first class tickets however—I didn’t have quite enough points for that. But, when first class seats become available, airlines first upgrade those who purchased their seats with points. Since I was flying the day after Thanksgiving, historically a lull in the season, and COVID-19 had depressed ticket sales, there were first class upgrades up for grabs on all my flights. I spent three flights—from Madison to Minneapolis, from Minneapolis to Seattle, and then finally landing in Los Angeles—with free beer and a row to myself, sealed away from the pandemic because I had been lucky enough to have an employer that gave me points.
On the Minneapolis to Seattle leg, I was greeted with another free luxury available to the rich. The stewardess had written everyone in first class a hand-written note, telling us how valued we were, and how much Delta appreciated our loyalty during these troubling times.
I had been loyal to Delta wholly by accident: early in my career I had been staffed to a client in rural Mississippi. The Golden Triangle Airport has only two flights a day, connecting only to Atlanta, and as with most airports that only connect to Delta’s home base, GTA only offered Delta flights. I visited them five times, which means twenty flights, ten in each direction, and twenty thousand airline miles.
With the luck available only to the rich, I safely returned to California. Whether a row of one’s own is a luxury during this era or a basic health precaution, it was mine. The poor pay the health risks of sardining together, whereas now I travel for free.