Some of you who are reading this post right now are thinking “I’ve never heard of this book.” Others are probably thinking “Why on earth would this book be reviewed on a personal finance blog?” The best way to explain, I suppose, is by providing a brief overview of what this book is about.
Nickel and Dimed is a nonfiction work that you would typically not find in the personal finance section of a library or bookstore; instead, you’d have much better luck looking in the sociology or current affairs sections. It’s written by Barbara Ehrenreich, a widely reknowned author who has had regular columns in Time Magazine and The New York Times and had pieces in magazines of all stripes, from The Atlantic to Mother Jones. In short, she’s an excellent writer, though not an expert on any way in the matters of personal finance.
So what’s relevant about Nickel and Dimed, then? The book chronicles Barbara’s experience living as a low income hourly wage earner in the United States, working at jobs that pay six to seven dollars an hour and living a lifestyle that matches that income. A cynic might say she was “slumming it” for a book, but the book does succeed in one clear way: it is a well written account of what life is like near the poverty line.
Typically, I wouldn’t really consider a book about poverty in America to have much interest for personal finance readers, but this book has two things going for it. First, Ehrenreich has an impressive writing pedigree. Her skill with words brings to vibrant life what would be a very boring and bloodless story in the hands of most personal finance writers. If you doubt this, find it at your local bookstore, open it to any page, and read two pages. The people and situations she writes about jump to life.
Second (and perhaps more importantly), her experience teaches many useful lessons about the real meaning of what personal finance is and what frugality is. Most of us think that personal finance means maxing out our Roth IRA and that frugality means buying the generic bow-tie pasta at the grocery store, but the fact of the matter is that if you’re reading Money360, you’re probably not eating beans out of a can and hoping that the heat isn’t turned off. There are a lot of lessons that can be learned from that way of life; I have a lot of memories from my childhood of poverty, but I could not hope to write about them as eloquently as Ms. Ehrenreich.
A Detailed Look At Nickel and Dimed
Over the course of this book, Ehrenreich moves to three different cities in the United States to experience poverty and working conditions in those cities; let’s look at each one.
Serving in Florida
During the first leg of the book, Barbara spends a month working as a waitress at two different restaurants in Key West, Florida. The experience of waitressing from Barbara’s eyes amounted to a lot of work for not much pay; the places she worked at targeted working class, student, and lower middle class diners, meaning that the tips were low and some of the patrons were quite demanding.
The most obvious principle that is exposed here is that education is the most valuable investment you can make in yourself. Most of Barbara’s coworkers had made choices in their lives that had excluded educational opportunities – they weren’t the “desperate single mother trying to make ends meet” type at all. Often, her coworkers were single who simply chose not to even try to better themselves; the high points of their existence were merely to have shelter from the rain, enough food to eat, and the opportunity to “party.”
At first, this seems like a self-motivation issue – they’re not bothering to better themselves. However, most of the other people in the book simply do not see further education as an option. They’re perfectly happy to keep running the treadmill that is their lives and, for the most part, this makes them content on a daily basis.
What makes this even more worrisome is the fact that minimum wage is not a livable wage. Barbara’s coworkers often find themselves either working two jobs, living in housing provided by others, or living in their cars. There is simply not enough money to maintain housing in an urban setting while working forty hours a week at minimum wage (it is possible in rural settings, but even then it’s not easy).
This brings up a real question worth pondering for anyone in any income bracket: what is the value of a way of life? Is it worth working eighty hours a week merely to keep a roof over your head? Is it worth working that much to “get ahead,” no matter what your job is? What does your life amount to if you spend almost all of your time working or resting, with no time left to enjoy life? I work much more than forty hours a week, but much of that time is extremely flexible around the constraints of my life; if I had to work as much as I do within a constrained timeframe, it simply would not be worth the life experiences I would be giving up.
Scrubbing in Maine
In the second portion of Nickel and Dimed, Barbara takes a job in Maine as a maid, cleaning the homes of the affluent as an employee of a home cleaning service. The job is labor-intensive, doesn’t pay well, and is fraught with potential injury issues, but the job holds even more disconcerting elements.
The first red flag raised is the inherent distrust of the working class by the affluent. Many of the people who hire cleaning services are clearly distrustful and disdainful of the workers that actually provide this service to them. They leave obvious “traps” (such as money sitting out with video cameras trained on it) in order to catch dishonest employees and leave borderline crazy instructions for cleaning their property, but even when the workers show themselves up to the challenge by being honest and forthright in their duties, the homeowners still treat them with great disdain. This merely causes the workers to do nothing more than resent the affluent, which does little more than cause the workers to do suboptimal work in the house because of the way they were treated.
This begs the question: how should people treat service industry workers? I tend to tip well if a strong service is provided to me in a restaurant and I often show additional gratitude when other service providers (such as secretaries, janitors, and so forth) perform what I need them to with speed, quality, and accuracy. A simple show of appreciation goes a long way in cementing a strong relationship with people who provide services for you. For example, at my previous job I used to give the janitor a birthday gift and would (every once in a while) bring a leftover meal from home and give to him. In return, my office was impeccably cleaned almost every evening and the bathroom on my floor was always pristine, while other offices and restrooms were perfunctorily cleaned at best. The simple fact is that tipping and respect of service workers pays dividends.
Another aspect of this general problem is “injury of the spirit;” in other words, when the reward to excel is minimal, why bother trying to excel? One could argue that the feeling you get from a well-completed task is reward enough, but how does that apply to an individual making less than a liveable wage? For that matter, how does that really apply to anyone? The maids in this chapter are instructed to simply “make it look good,” and there is absolutely no incentive to them to do anything more than that, even though they realize that, for example, scrubbing floors with only a tiny bit of water doesn’t actually clean the floor.
The lesson of this section is that you should reward service workers when they provide a regular service for you. If you have a home cleaner, leave that person a tip or a gift once in a while; if a secretary at work constantly solves your problems, leave a flower (or a similar gift) and a card for them. The service industry is often underpaid for the work they do, and showing them that you appreciate and value their work can do nothing but make your own life easier and better.
Selling in Minnesota
This portion of the book finds Barbara in Minneapolis, working at a Wal-Mart in the women’s clothing section. I found this section the least enjoyable in the book, because the class biases that Barbara largely kept in check here come shining through over and over again.
As I’ve mentioned before, there is a link between one’s personal appearance and one’s financial situation. I’m not talking about the need to wear a $2,000 pair of jeans; I’m referring more to the mere appearance of cleanliness and appropriate decorum in public. Barbara spends much of her time in this chapter commenting on the fact that many of the inexpensive clothing items at Wal-Mart are cheaply made and designed to (poorly) fit overweight people.
She even comments on the real cause of this, that inexpensive food is often loaded with empty calories and that there is a direct connection between food cost and nutritional quality. An individual must choose a point on this spectrum that they’re comfortable with, but the fact of the matter is that many people’s choices on this spectrum are limited by a severe cap on the cost.
She’s also critical of the behavior of the working class, commenting on the fact that many working class people allow their children to run amok in Wal-Mart, but here she’s quick to realize that this has a root cause, too: many working class people, especially those with children, have little or no time in which they’re not working, either at their employment or at the task of managing children, and Wal-Mart offers something of a respite from this drudgery. In short, the working class often uses Wal-Mart as a place to escape, if only for a little while, and not feel as though they are looked down upon. Where do you go to escape? I generally don’t go to Wal-Mart, but I do recognize that everyone needs an escape from the drudgery of life on occasion.
I guess I was disappointed by Barbara in that she allowed her upper-crust values to slip out here and blur her perspective on the Wal-Mart shoppers. The simple fact of the matter is that classism exists in America and the author of this book, even though she means well, is as guilty of this bias as anyone else.
Buy or Don’t Buy?
For most of this book, I was enthralled; it made me consider personal financial situations in ways that I really hadn’t before. The struggle that is working for less than a living wage is impressive and spending any amount of time really considering those who find themselves working for that wage to provide services to others is a really humbling experience.
At the end of the book, though, the same old class biases were exposed. Even when Ehrenreich would point out the root causes of some class-distinguishing situations, she falls back on general insults of physical appearance. The fact of the matter is that much of the food available to low-income people is loaded with empty calories, causing a high rate of obesity among the working class, and physical appearance is less important than food in your belly and a roof over your head.
The fact that this book even addresses real questions like the comparative value of shelter and food and health makes it a strong read, but the biases of the author somehow cheapen the whole thing. This book wants to make a difference, it seems, but it often just preys upon upper middle class liberal guilt about classism while maintaining that very same classism.
In short, buy this book as a gift for a literary friend. It’s very well written and will make them think about basic personal financial questions like those above. If the book sounds interesting, you might want to check it out at the library, but otherwise, this book is a pass – it starts off well, but then shoots itself in the foot by just sticking with the same old biases.
Nickel and Dimed is the third of fifty-two books in Money360’s series 52 Personal Finance Books in 52 Weeks.