How To Live Comfortably On $10.10 Per Hour

Earlier this week, Jon Stewart had Florida Senator Marco Rubio on The Daily Show to discuss his new book. During their interview, which contained many good points, Sen. Rubio said that it’s impossible to get ahead on $10.10 per hour, the new federal employee minimum wage.

This is an oft-discussed issue, that the American minimum wage is too low to support yourself on, let alone get ahead. There’s even the Live the Wage challenge going around the past couple years to demonstrate how impossible it is.

Bullshit.

The problem isn’t the wage base. Rather, it’s the exhaustive consumerism of the standard American lifestyle.

Much has been written about the Standard American Diet (SAD), and it has become mainstream thought to accept the fact that, in general, Americans eat like crap. Two thirds of us (myself included) are fat, and the reason why is not a mystery.

Much less, sadly, has been written about the waste that exists in the average American household. The cadre of bloggers and authors covering the topic is small, albeit vocal within their specific sub-groups. Unfortunately, those of us that embrace simpler, low-budget lifestyles are viewed as oddballs — the idea of living well below your means has not yet crept into the American mainstream. I don’t expect this post to have any impact on that, but I’m at least going to take the time to throw my two cents into the debate.

I’m going to specifically address Sen. Rubio’s comment about not being able to get ahead on the new federal employee minimum wage. All of the numbers I’m about to put out there onto the Interwebs are on a per person basis.

The first fact that I want to mention is that almost everything that we spend money on is a want, rather than a need. Westerners in particular are too quick to confuse the two.

Needs are things like oxygen, water, and food. Technically speaking, humans don’t need shelter and clothing — they’re simply contrivances that allows us to extend our habitat range. For the sake of this discussion, however, I will put those into the “need” category.

I also want to point out that a large chunk of what we spend money on is straight up a waste of money. The irony never ceases to amaze me when a low-income individual complains about their finances while smoking two packs a day.

So let’s see how to go about living comfortably on $10.10 per hour. I’ll make the assumption that such a person is working 40 hours per week. That’s $404 gross per week, or $1737 per month, or $21k per year.

Let’s start chopping.

The average American earning $21,000 per year actually has a negative effective tax rate. In other words, due to such things as the Earned Income Credit and the Child Tax Credit, the average low-income worker doesn’t actually pay income taxes, but rather receives a refund for, well, free. Yes, this is a wealth redistribution mechanism, but that’s a topic for another post.

For the sake of argument, we’ll consider that this is a single person with no children. For 2014, that makes their combined personal exemption and standard deduction equal to $10,150. This person is not eligible for the EIC or CTC, so their tax bill is actually $1,178 for the year. As an aside, one of Sen. Rubio’s other suggestions is to expand the EIC,which would impact this particular single taxpayer.

Let’s not forget Social Security and Medicare. That’s going to eat up another 7.65%, or $1607, from our Jane Doe’s paycheck.

State and local taxes are also going to take a bite. The national average for all income earners, of all wage levels, is just under 10% for state and local taxes. I prefer living in states with no state income tax, but others don’t hold that view. Since there is such a wide range of possibilities, I’m going to pick my old home state of Colorado and say that Ms. Doe is paying 4.65% to the state, or $505, on her taxable income.

Add that all up, and we see that she’s paying $3,290 in federal and state payroll taxes. That’s an effective tax rate of 15.6%. Don’t try comparing this number to other articles you find online, because most sources are only taking income taxes into consideration when running these numbers, which simply isn’t accurate.

I’ll also point out that if Jane had one child, she’d actually have a $2800 Earned Income Credit in this scenario. That tax credit is not a good reason to have a child, in my opinion, but it illustrates how our tax code is used as a wealth redistribution and social engineering tool.

So Jane is now down to living on $17,790 for the year after taking into consideration the government’s cut. Let’s look at what is normally the biggest chunk of any person’s spending: Housing.

Too many people, when looking at these scenarios, grossly overestimate the housing level required to be comfortable. To put it bluntly, Jane doesn’t need her own apartment. She might want her own apartment, but she sure as hell doesn’t need it.

Instead, let’s have her rent a room in somebody’s home. A quick look on Craigslist shows me quite a few rooms for rent in the $350 to $500 per month range. Let’s pick something for $450, in a nice home living with a married couple without kids. That’s $5400 per year to live quite comfortably by global standards.

Now, I do want to point out that living in a traditional residence is not the only option. People live full time in RVs, boats, and other situations that are quite comfortable. Sometimes you have to think outside the wood and Tyvek box.

Jane is now down to just $12,390 for the year to live on. Let’s talk about getting around town.

I just checked, and Jane can get an RTD monthly pass for $869 per year. This will allow her to get back and forth to work, go get groceries, visit friends, etc. The Denver bus system is quite good by American standards, and Denver has a growing light rail system, also.

I know what some people are saying. “Hold on partner, you expect her to take the BUS?” Yes, that’s correct.

For a city dweller in particular, owning a car is a totally unnecessary luxury. That’s a blasphemous statement in the United States, to be sure, but it’s true. In some cities, such as New York City, it’s more normal not to own a car, but in general, this would be “strange” in most cities.

Cars a tremendous expense. Even though gas prices are going down, there’s the cost of acquisition, maintenance, parking (in some places), etc. The IRS National Standards allow for a whopping $517 per month car payment and, for Denver, $236 per month in operating costs. These standards, used for calculating ability to pay back tax debts, represent a “middle class” American lifestyle.

Do you realize how much money that is? That’s over $9,000 per year in expected vehicle costs. That’s insane. For the past several years, I’ve gone just fine without owning a car (granted, I had a motorcycle, which is far cheaper to own and operate, but it mostly just sat in storage). For the types of errands that most Americans run, we do so very inefficiently. By planning ahead and clumping our trips, taking the bus is just fine.

So, Jane is now down $11,521 to live on. Let’s talk food.

As somebody that’s done, I can tell you how easy it is to spend $900 per month, as a single person, on food. This is accomplished by eating out for every meal. It’s very easy to do.

What’s also easy, also speaking from experience, is to just cook at home and make simple meals. Simple, healthy meals really aren’t that expensive. I personally believe that the slow cooker is one of the greatest inventions ever. Ten bucks worth of ingredients in the slow cooker can easily feed me for three or four days.

Taking this into account, plus a number of other articles I found online in a super simple Google search, proves my point that a single person can eat quite well on as little as $100 per month. Really, really well on $200 per month — this is about what I currently spend myself. So let’s cut the difference and give Jane a $150 per month food budget. In a future post, I might break this down to prove the point that it’s actually a lot.

Jane is now down to $9,721 per year to live on.

Let’s talk health insurance, now that it’s required by law. Jane’s situation qualifies her for a $71 per month Premium Tax Credit to help pay for health insurance. On the Colorado Healthcare Exchange, her cheapest plan is going to run $107 per month. Minus the credit, that’s only $36 per month for health insurance, or $432 per year. This brings Jane down to $9,289 to live on for the year.

What else does Jane need?

Nothing. Jane doesn’t need anything more.

I’m making an assumption here that Jane has a wardrobe already. If Jane is smart, she’ll recognize the fact that she doesn’t need to spend hundreds of dollars per month on clothes that will just sit in her closet anyway (I’ve read studies showing that, on average, Americans never wear 3/4 of the clothing they own). Maybe Jane needs to replace a worn out piece of clothing occasionally, but this will be  only a few hundred dollars per year, at most. Even less if she shops at thrift stores.

Note that I’m not going to the super-extreme here. There are other blogs, such as this one, that advocate mending your own clothing, darning socks, etc. Most people aren’t going to be willing to do that. I know I’m not.

Jane’s going to probably purchase personal care items like soap and deodorant. I’m not suggesting giving those up. But, at most, these items shouldn’t run more than a couple hundred bucks per year.

We’re also going to assume that Jane has no debt. In this scenario, Jane is in her early to late 20’s. Smart people don’t get into debt, for anything… Ever.

I used to be a total moron in this regards. Absolute idiot. Dumbest person on the planet. To the point of bankruptcy. I’m not proud to admit it, but filing for Chapter 7 bankruptcy is one of the smartest financial moves I ever made, because now I’m debt free.

We’re going to assume that Jane is smart, and doesn’t have any debt. Not even student loans, because she didn’t think she could afford college, and her parents didn’t have the money to send her, either.

So look at what we just laid out. Jane is making $10.10 per hour, the new minimum wage for federal employees. I even made her pay for her own health insurance, just in case she’s just a federal contractor and doesn’t get health insurance at work. Jane lives in a room in a nice house in suburban Denver, and pays her own way in life. She earns about $9,000 per year more than she actually needs to live on.

You’ll notice that there are some things Jane doesn’t have. For example, a cell phone. With many cell phone plans breaking the $100 per month mark, this service is yet another example of the extravagance of Western life, and it’s a needless expense.

Blaspheme, yes. But really, it’s true. Jane doesn’t need to be reached at a moment’s notice. She doesn’t need to check Facebook every two seconds. Jane can spend time with her friends face to face. Heck, she can buy the first round of beer because she’s not paying for a cell phone. Ya’ know, the way life was 20 years ago, when hardly anybody had a cell phone.

Does this mean she doesn’t have one? No, it doesn’t. Jane likes the security of being able to call a cab if her friends ditch her at the bar, or to quickly check the bus schedule if she’s on an unfamiliar route. She also calls her mom once a week for half an hour.

Well, guess what? That level of realistic talk and data can be had with a $20 phone and about $20 per quarter in pre-paid cell phone cards. I’m a tax consultant and marketing consultant, for crying out loud — you know, somebody that spends a fair amount of time on the phone — and this is the type of cell phone service I use.

With all this said, and even some cash here and there for entertainment or a round of drinks, and the math clearly shows that Jane has well over $8,000 per year extra to do with as she pleases.

The point of all this math was to counter Sen. Rubio’s comment that a person can’t get ahead on $10.10 per hour. Well, using this calculator I was able to determine that full-time attendance at Front Range Community College in Colorado will cost Jane $5,024 in tuition and books. Interestingly, the same calendar states that, since she’s low-income, she’ll receive $6,450 in grant aid (NOT LOANS). This covers her full cost of college.

This handy calculator from the college shows something else pretty awesome. It says that Jane’s room and board cost is only $8,982, plus gives her an allowance of over $4,800 for transportation and miscellaneous expenses. Jeesh, those numbers look familiar, don’t they?

FRCC

The reality here is that Jane can pay her own way through college at FRCC while working her $10.10 per hour job, even without grant money. She has the cash from her job to do this.

Is her schedule going to be hectic? Yes, it is. Is she going to be tired, and have to sacrifice having an iPhone 6 and a daily latte? Yes on all counts.

But come on, those aren’t sacrifices. They’re luxuries. And since Jane wants to get ahead in life, she’s going to spend her nights and weekends going to class and studying. She’s going to apply herself, and avoid wasting money on needless spending. If necessary, she’ll make two trips to work each day in order to accommodate a class she needs for her academic program that is only offered mid-day.

When she finishes her certificate program, Jane will earn $15 to $20 per hour as a welder, LPN, computer technician, etc. These are one year or less certificate programs. After her career change and significant salary increase, Jane may decide to pursue her Bachelor’s degree in her spare time. Or maybe not, because now she has a valuable skill and a career.

This is how Jane gets ahead on $10.10 per hour, Sen. Rubio. In fact, based on these numbers, and using financial aid, Jane can actually get ahead in life on pure minimum wage.

Oh, but what if Jane is a single parent? Doesn’t that change the equation? Yes, of course it does. Maybe Jane is going to have to suffer the indignity of living at home with her parents for a couple more years (which many 20-somethings are doing already anyway). Maybe she’ll have to work a swing shift job while her father watches her child in the evening, and she can only take two or three classes at a time. Regardless, Jane can still get ahead in life by making the right choices — even on minimum wage.

Sen. Rubio, I like you. Heck, I’d probably vote for you in 2016 if you ran for the White House. But your assertion that somebody can’t get ahead on a low income is just plain wrong.

Travel Hacking for the Credit Challenged

DSCN3045Once you start traveling a bit, it doesn’t take very long to realize that there is an entire universe of blogs, books, and membership sites dedicated to the concept of saving as much money as possible on travel. This process is affectionately referred to as travel hacking.

The primary concept discussed in the travel hacking world has to do with maximizing frequent flyer miles and other “points” you earn when obtaining and using particular credit cards. Dedicated travel hackers have more credit cards than they need, and they obtain them in order to get the introductory bonus miles and additional points for hitting certain usage levels.

Miles/points aren’t just used to get free or cheap airfare, but can also be used for free or discounted cruises, hotels, rental cars, tours, and other travel items.

All of these programs are well and good, unless you’re credit challenged. Even though my credit score is finally emerging from the scourge of my bankruptcy, I still have a long ways to go before I can qualify for most of the offers that the travel hacking world relies on.

So where does that leave the frequent traveler that happens to be credit challenged?

Since I’m basically a permanent traveler at this point (I have not had a fixed, year-round home for several years), I’ve learned as much as I can about saving money while traveling, without having access to all the awesome credit card bonus mile deals and other perks that are out there.

Here are the basics for stretching your travel dollars.

Airfare

Your flight is typically the most expensive part of getting somewhere. You may have heard in the past that traveling slower means traveling cheaper, but that simply isn’t the case in all situations. In North America, Europe, Australia, and Japan, I’ve found that flying is often far cheaper than taking trains or buses within the same country.

How I find cheap flights:

  1. Do a flexible date search on SkyScanner.com, Kayak.com, and the Kayak iPhone/iPad app.
  2. Check the boxes to do comparison searches on other sites (CheapOAir, Travelocity, etc). They’ll pop up in separate windows.
  3. Strangely, the Kayak iOS app returns more complicated route searches, and appears to search airlines not on the web site.
  4. For complex, overseas, multi-city trips, also check AirTreks.com.
  5. For domestic/short flights in a region, check local budget carriers directly, as they often don’t show up in major site searches. Examples:
    • United States: Frontier, Southwest
    • Europe: RyanAir, AirBaltic
    • Japan: Peach
    • Southeast Asia: Tiger
  6. If the fare difference between the cheapest flight (which I usually just find via SkyScanner.com) and your preferred carrier (the one you’re accumulating miles with) isn’t that much, book directly with your favorite carrier. For me, this means less than $20 or so domestically and $100 or so for a long haul transoceanic flight, at which point I’ll just fly Frontier or United, since I’m kind of “locked in” to their mileage programs since I used to fly out of Denver all the time (Frontier and United are Denver-based).

For U.S. domestic flights, I will end up on Frontier, even if it’s a few dollars more, just so I can get my miles towards future free flights. Same with United, unless I find a far cheaper flight on SkyScanner, which is becoming more and more common.

Bear in mind that flights in the middle of the week are usually cheaper than weekend flights, and that booking at least 14 days in advance is usually required to get the best deal.

As an example, I just booked a flight from New Orleans to New York City yesterday, and I ended up paying nearly double what I would have paid if I had booked it last week when I was first looking. I should have booked it last week — it’s literally the same flight number I first looked it, but I basically forgot, and it cost me. I also paid a slight premium (15% or so) for taking a Sunday flight instead of a Monday flight.

Rental Cars

Because they are ALWAYS so much cheaper, I’ve reached the point where the only place I check for rental cars anymore is Hotwire.com. It’s not uncommon for them to give me a better rate for an Enterprise car (my preferred car company) than I get by booking directly with Enterprise. Hotwire will give you a popup to compare rates with CarRentals.com, which I probably end up using half the time.

I’m not picky about rental cars, and tend to just get the cheapest thing I can. I like Enterprise because they have a nice $9.95 per day deal on the weekends, and have good full week rates, too. I also have a good history with them and get their frequent renter deals with points I accrue through them.

I’ll also briefly mention car share programs. These are awesome, both domestically and internationally. I belong to two car share programs, and will probably join more.

Hertz On Demand (now called Hertz 24/7), for example, allows me to pay $6 to $8 per hour for a car in many cities across the U.S., when I need one for just short errands. My electronic access card for the cars, however, also works in France, Spain, Germany, and several other European countries (at higher hourly rates, due to higher fuel cost). The rates include all insurance and gas up to a certain limit.

IMG_0283Lodging

If I’m not camping, which I do less and less as I get older, then my first preference is to stay in a hostel, even domestically. Hostels are rare in America, but more exist than you might think. I’ve even stayed at hostels in places like Boulder, CO and Salt Lake City, UT.

Since I’m a member, I start with Hosteling International (hihostels.com) to see if they have a member hostel where I’m going. I also like HostelBookers.com and Hostels.com, since they don’t have booking fees. HostelWorld.com has more properties, including B&B’s, but has booking fees and usually higher rates listed for the same properties.

If you’re really adventurous, try CouchSurfing.com, and literally crash on a stranger’s couch in their home. I’ve done it, and it’s a fun way to meet new people, but it can challenge your comfort level.

In the United States, I basically live in motels. I’ll generally check Hotels.com and Hotwire.com, looking for the best rate. Both these sites are generally cheaper than what I find on Kayak, Priceline, Expedia, and Travelocity, so I basically quit looking elsewhere.

I’m a big fan of the “Hotwire Hot Rate”, where they sell last minute unsold rooms, but don’t tell you exactly which hotel it is until you book. I’ve always ended up somewhere acceptable by doing this.

Hotels.com has a decent rewards program, where you book 10 nights and then get 1 free somewhere. It’s available at limited hotels, but enough that I use it.

If you travel to the same places a lot, you’ll obviously find favorite spots. Check travel blogs for other people’s favorites, also. For example, in Sapporo, Japan, there’s only one hostel to consider staying at: Jimmyz Backpackers. In Maui, I was referred to Banana Bungalow in Wailuku by several travel writers, and my stay there was quite epic.

If you’re going to be staying in a place for an extended period of time (several months), it may be cheaper to rent a furnished flat (apartment). Look on Google to find short-term apartment rental agencies in foreign cities. In the US, check Craigslist. AirBnB.com is growing popular for this, too, but I’ve yet to use it.

Conclusion

Sticking with certain companies, and using their rewards programs, can help overcome what is lost by not getting the credit card bonus deals. As I discover new tips/tricks, I’ll update this blog post to list them.

Why Georgia?

As a Wanderer, I can’t always explain the places I feel drawn to.

Every place has it’s own unique draw. People, events, history, language, culture, adventure.

More powerful than any other factor, however, is simply the need to go. There’s something about me that’s wired differently than most people. I like to think that it’s the same short circuit that drove men like Columbus, Cook, Shackleton, and others. It’s the need to go somewhere simply because it’s there.

Georgia falls into that category, but it’s also so much more.batumi by sea

Georgia has really only been on my radar for a couple months. And in that time, my desire to go has grown from just a pit stop on an around the world trip, to wanting to move there. The more I learned about this amazing country, the more I yearned to go for rational reasons, not just a yearning to travel.

A former Soviet republic, sandwiched between Russia and Turkey, Georgia is one of the most unique places on Earth, in many ways.

The weather is perfect. From a standard Mediterranean climate along the Black Sea, seasonal snowfall up in the Caucasus Mountains, and basically nice weather all year. Perfect sailing weather every day? Kind of hard to beat that.

In Bat’umi, a coastal town just north of the Turkish border, a brand new year-round indoor ice rink was recently built. Even better, it’s immediately adjacent to the public marina.

Georgia also has an incredibly fascinating history. It’s location has made it a critical connecting point for trade and transit from Europe to Asia. This location also makes it a vitally strategic military location, especially with it’s access to the Black Sea and the Med.

Georgia is also a religious crossroad. It was one of the earliest regions to be converted to Orthodox Christianity, and is literally THE transition point geographically between the predominantly Muslim and Christian parts of the modern world.

Then there are the Georgian people. I have yet to read a single blog post or news article in any way talking negatively about the Georgians as a populace. Many consider them to be the most hospitable group of people on the planet.

Georgia makes sense economically. With a cost of living about 1/10th of the United States, it’s only slightly more expensive to live than Thailand, but with far better weather (I severely dislike heat and humidity). Foreigners from a number of industrialized nations are given visa-free entry for up to a year at a time. That includes starting businesses, working a regular job, buying property… All with no visa necessary. I’m sure this is to encourage private investment in the country, and thousands are doing so, and I plan to join them.

georgianLet’s talk language. Georgian is one of the oldest continuously spoken and written languages on the planet, and it unlike any other language still spoken. It has no resemblance to Russian or Arabic, as might be expected. The script shown here, which is still used today, dates to the 13th century, and is an evolved version of an earlier script from the 5th century. The spoken language became distinct roughly 1000 BC. Yes, we’re talking about a distinct spoken language, still in use, that is nearly 3,000 years old.

An incredible history, proud culture, fascinating language, abundant economic opportunity, perfect sailing weather, low cost of living, beautiful scenery, stable government, developing infrastructure, stable non-euro currency, well funded banking system, 360-day visa free entry, beautiful women…I could go on and on. What is there not to love about such a place?

It’s odd for me to me to still be this excited about a destination after two months. That tells me my logical reasons for going are in sync with my natural, inner Wanderer reason for wanting to go.

I have no delusions of finding eternal love and happiness in Georgia. And perhaps I’ll only be there for six months, I have no idea. But by all measures, it’s a place worth checking out, for numerous reasons. If I discover when I get there that it truly is all that it’s cracked up to be, I’m going to be hard pressed to not just stay and call it home.

The easiest way to make a living at home yet live abroad

For me, running a business while traveling the world is the ultimate lifestyle design goal. Trying to create a business that will run itself and let me be disconnected is another story entirely.

If you have similar objectives in your life and career, then you’ve probably read various books and blogs that address the subject. The vast majority of the advice out there about becoming a globe trotting expat will tell you to do one of the following:

  1. Start a local business where you can be an absentee owner.
  2. Create an automated online business.
  3. Move your professional services business into a virtual environment.

If you’ve followed my story at all, you’ll know that I went with #3, then started creating #2, which is largely automated now and requires only a few hours each business day for me to manage, which is fine by me.

There is one thing that all the books and blogs miss, however. And in reality, it’s the one thing that provides the EASIEST method for living the dream of being abroad, yet still making your money from your home country, which is usually the objective for many people. As the saying goes, “earn dollars or euros, spend baht or pesos”. It’s called currency arbitrage.

For many of us, the real dream is to either be filthy rich and not have to work at all, or to have a business that is so heavily automated that is just prints money for us and we only have to work a couple hours per week. This idea, popularized in pop culture by Tim Ferriss and his book, The Four Hour Workweek, is fairly grandiose, and beyond the reach of most of us mere mortals.

However, living abroad, in someplace awesome, and still working is a fairly achievable dream. Over 4 million Americans live and work abroad, and hundreds of thousands do so working online part-time. I’ve reached a point where I can actually do that, and have made the trips overseas to test it, and it works.

But what if you don’t have passive income sources set up yet? What if you lack the tech skills to run something online? Is there another option?

Well, yes there is. There is one incredibly overlooked profession that lends itself very, very well to the expat/permanent traveler lifestyle. It requires working full time, 40 hours per week, and staying in one spot during the work week, if not weeks or months on end. For an American, Canadien, Australian, or anybody else from a country that has 90-day visa-free tourist stay privileges in many countries, this is a great way to use that 3 months, and just bounce from country to country.

What’s this magic profession that I’m talking about? Sales.

Yep, good ol’ fashioned professional selling. Selling what? Doesn’t really matter. Anything that is traditionally sold for commission, over the phone, and has either a high transaction value (to earn large commissions) or a high repeat order frequency (to generate repeat commissions).

Professional salespeople (and sales support staff) that work entirely by telephone exist in numerous industries. While some products are traditionally sold face to face (such as cars), there are numerous products that are not necessarily sold face to face (such as manufacturer’s OEM parts that go into those cars). I’m not going to try making an exhaustive list of products and services that can be sold over the phone, but here are just a few random examples:

  • Insurance
  • Investments
  • Consulting
  • Computer systems
  • Advertising
  • Web design, programming, and SEO
  • Graphic design
  • Communications services (telephone, cable, internet)
  • Print & mail services
  • Industrial equipment and services
  • Commodities (oil, grain, metals, etc).
  • Accounting, tax, bookkeeping services
  • Network marketing programs (lotions, potions, & pills!)

I’m sure there are a billion more. The point is that if your job is to cold call all day, make appointments for face to face salespeople, answer pre- or post-sales questions for customers, close sales yourself over the phone and by email…then there is absolutely no reason for your job to be constrained at one location.

Even if you work for another company full time, if your job is literally to sit at the same desk all day and never leave it, doing sales related activities of any sort, then there is no reason you can’t do the same job sitting in a chair at a desk 10,000 miles away. Technology: It loves you, so love it.

Negotiating a remote work arrangement with your employer may sound hard, but it’s actually not. Simply come up with an excuse to work from home one day a week, then after a while make it two days, then five. Your boss can put somebody else in your desk, saving money on having to rent more office space or buy new furniture when expanding. Once you’re working from home, you can just take off, with or without anybody knowing. If you work from home in the U.S., try running off to Toronto, Montreal, or Vancouver Canada for a week and work from a hotel room.

With powerful laptops, good quality VOIP phones, and high speed internet pretty much everywhere, if you have a phone-based sales or sales support type job, you can literally work from anywhere. If your income is derived from closing sales over the phone, or you’re a professional services provider where most of your clients are people you never meet face to face, you can do this, too.

Issue Analysis: Gun Control

The recent shootings at Clackamas Mall in Portland, OR (where I shop occasionally), at Sandy Hook Elementary School in Newtown, CT, and other events have reignited a national debate in the United States over the issue of gun control.

Without a doubt, the United States is the most heavily armed nation in the world, with an estimated 45% of American homes possessing at least one firearm. An estimated 270 million firearms are privately owned by American citizens. Private firearm ownership as an individual right is unique to the United States, and is guaranteed by the 2nd Amendment to US Constitution.

While many anti-gun lobbyists have attempted to convince the masses that the 2nd amendment applies only to military use of firearms, even a most rudimentary reading of the letters, debate minutes, and other writings created during the drafting of the Constitution and Bill of Rights clearly indicates that the 2nd amendment was intended to permit armed citizens to revolt against any government tyranny.

While today this is an uncomfortable thing for most citizens to consider, the historical record is quite clear that this was the purpose for the inclusion of this particular amendment. The Anti-Federalists insisted on it’s inclusion in the Bill of Rights as a counter to their concession of the inclusion of the provision for a standing Army in Article I, Section 8 of the Constitution. This individual right to firearm ownership has, for the most part, been interpreted as intended by the Founding Fathers since it was right, with only occasional and glaring exceptions. One of these exceptions, the Washington, D.C. handgun ban, lead to the Supreme Court decision in 2008 in the District of Columbia v. Heller case. The text of the decision is worth reading for a historical review of the crafting of the amendment. In this decision, the Supreme Court upheld that the right to keep and bear arms, including handguns for personal protection, is an individual right.

Almost all gun control arguments in the United States center around the issue of reducing crime. Despite the fact that violent crime rate in the U.S. has been on a steady decline since 1980, according to the Department of Justice, the United States still has a fairly high overall violent crime rate among developed nations.

Some gun control advocates claim that the United States has one of the highest homicide rates in the world, but statistical evidence clearly demonstrates otherwise. Most of Central and South America, Africa, and much of Eastern Europe have homicide rates that are substantial multiples higher than the United States. It should be noted that almost all of these countries with incredibly high murder rates all have very restrictive gun control laws, demonstrating that gun restrictions in and of themselves do not keep crime in check.

Studies conducted to compare pre- and post-gun control crime rates are difficult to do. In every study I’ve ever seen trying to create a correlation between crime reduction and gun control, there is no direct correlation that gun control was responsible for crime reduction. Professor Gary Kleck, from Florida State University’s College of Criminology and Criminal Justice, conducted what he referred as an “elaborate before-and-after study” of Baltimore and Washington crime rates following the Washington, D.C. handgun ban that was at issue in the Heller decision. He claims that Baltimore is a good parallel city to examine Washington by, due to their similar makeup and proximity. “The law itself had no effect one way or the other,” Professor Kleck said (info from this New York Times article).

In reality, gun control laws in the United States have no effect on crime. According to the Department of Justice, gun crime in the United States did, in fact, go down overall during the most recent Assault Weapons Ban (1994-2004), which banned many semi-automatic rifles and limited magazines to 10 rounds. However, the DoJ openly admits that the ban itself had no impact on casualty rates in attacks (you just have to reload more frequently), nor was there any significant reduction in crimes in which a banned weapon was used. Violent crime went down during this period simply because crime rates overall were going down.

The above referenced NY Times article also points out another interesting fact: In Europe, countries with fewer guns per capita actually have higher murder rates than countries with lower numbers of firearms per capita. This data table from the Harvard Journal of Law and Public Policy, Vol. 30, No. 2 shows the relevant figures:

While each country obviously has it’s own unique culture and history, modern Western Europe is much more similar culturally than most similar-sized regions of the world. This data shows no clear correlation between murder rates and gun ownership by the citizenry, but does demonstrate that some countries with lower gun ownership do have higher murder rates.

According to the FBI, the drop in the U.S. crime rate actually accelerated following the expiration of the assault weapons ban in 2004. Following the expiration of the ban, gun sales in America skyrocketed, starting in 2005, according to BATFE statistics (based on NICS background checks, which have increased by double digit percentages year over year since 2006). If more guns in civilian hands actually meant that crime rates go up, we should be in the middle of a massive crime wave. However, FBI data clearly indicates that the rate of decrease in U.S. violent crime has been accelerating since the end of 2006. In 2011 alone, violent crime across America dropped by 4%. The FBI counts all murders, forcible rapes, assaults, and robberies in this total. This data does NOT prove a correlation between more guns = less crime, but it DOES prove that more guns does not equal more crime.

There are very few modern examples to examine in order to try and correlate crime rate with gun control, due to the fact that most nations with tight restrictions on firearm ownership have had such restrictions for 50 to 300 years. What is known, however, is that even in cuontries with very strict gun laws, criminals still possess firearms.

In China, for example, there are an estimated 40 million firearms in private ownership, despite the fact that civilian arms ownership is punishable by a minimum of two years in prison, and is actually punishable by death at the choice of the government. It is also estimated that at least 10 million unregistered weapons roam the streets of India, despite a 1958 ban. Mexico is an interesting example, because it’s Constitution provides for the right to keep arms, but other laws make it all but illegal to possess a weapon at all. Due to this, the black market for weapons is rampant in Mexico, and gun ownership is actually quite common amongst regular households (not just drug lords).

In the search for statistical examples of the effect of gun control following massive restriction in private arms ownership, there is really only one modern example: Australia.

As a country with wide open range, a history as a British penal colony, and a fight to quarantine or kill the native people, Australia adopted a gun culture that was probably more similar to America’s than just about any other place on Earth, despite occasional and varying gun restrictions throughout the 19th and 20th centuries. In general, however, firearm ownership was much more common, and legally easier, than in most other world countries except the U.S.

This all changed on April 28, 1996, when Martin Bryant killed 35 people and wounded 23 in Port Arthur, Tasmania. This is still one of the deadliest one-man mass murders in recorded human history. Following the attacks, the Australian government consolidated numerous state laws and created the 1996 National Agreement on Firearms. This effectively ended mass civilian ownership of firearms in Australia, and expressly prohibited somebody from obtaining a firearm license for the stated purpose of self-defense.

Almost overnight, semi-automatic rifles, shotguns, and handguns evaporated from civilian homes. The laws were confiscatory in nature, and a nationwide gun buyback program resulted in the meltdown of over 630,000 firearms.

Now let’s look at crime rates before and after this sweeping legislation. If you want to skip straight to the conclusion, there has been no appreciable drop in violent crime in Australia as a result of gun control. Australia has always had fairly low crime levels in comparison to other countries. Overall violent crimes rates have not changed in Australia in many decades, and the rate of firearms use in these crimes started decreasing in the early 1980’s. Between 1991 and 2001, firearms related deaths dropped by 47% in Australia. Note that this time period includes the Port Arthur shootings, and the gun ban took place halfway through this period. In other words, causation cannot be declared because of gun control — the trend did not accelerate after 1996.

Between 1997 and 2003, over 80% of all firearms confiscated by law enforcement officials in Australia were never properly imported and registered into the country. In other words, because of gun control laws, criminals simply smuggled weapons into the country, which is relatively simple given the massive coastline to bring boats in and expansive open areas with no people in which to land aircraft undetected.

Since 51% of all U.S. firearm deaths are actually suicides, it’s worth looking at such statistics following the gun buyback in Australia. In 1997 and 1998, immediately following the gun buyback and gun control implementation, firearm suicides did, in fact, drop by 10%. However, suicide rates by all other methods increased by 20%,resulting in a net 10% increase in suicide rates for those two years. Extensive public suicide prevention efforts in Australia since 1999 have been successful in reducing the suicide rate each year since.

In 2005, the head of the New South Wales Bureau of Crime Statistics and Research, Don Weatherburn, noted that the level of legal gun ownership in New South Wales increased in recent years, and that the 1996 legislation had had little to no effect on violence within his state. Weatherburn stated, “The fact is that the introduction of those laws did not result in any acceleration of the [already existing] downward trend in gun homicide. They may have reduced the risk of mass shootings but we cannot be sure because no one has done the rigorous statistical work required to verify this possibility. It is always unpleasant to acknowledge facts that are inconsistent with your own point of view. But I thought that was what distinguished science from popular prejudice.”

Numerous studies across the Australian continent attempted to demonstrate that violent crime had gone down because of the gun control laws, but these results were never demonstrated. Because of this, the British Journal of Criminology decided to conduct an exhaustive review of all available statistical data spanning the period from 1996-2006, and published what is currently considered the most scientific analysis of Australian crime statistics to compare pre and post ban. The full paper can be purchased here.

The paper concludes that the only measurable impact on firearms use may have been the suicide numbers cited above, and that the observed drop in homicide rates in the ten years following the ban and gun buyback were identical to the predicted homicide drop calculated by extending the existing decline that started in the early 1980’s. The study postulates that, based on available data, people who choose to legally acquire a firearm are not pre-disposed towards homicide. This data is backed up by studies in the United States, several of which are cited in the BJC paper. The study also concluded that legally acquired firearms are involved in less than 3% of firearms-related crimes in Australia. This 3% includes firearms that are stolen from their rightful owners.

Current Australian crime data is also interesting to consider. According to the Australian Bureau of Statistics, only 2/3 of Australian murders in 2010 used a weapon (e.g., 1/3 of murders were committed WITHOUT a weapon — chew on that one). In murders where a weapon was used, one third used a knife, and only 17% used a firearm. Interestingly, 98% of sexual assaults, 89% of abductions, and a whopping 61% of robberies did NOT involve a weapon at all in 2010.

What about the general crime trend, not just involving firearms?

According to Australia’s Bureau of Crime Statistics and Research, Australia’s murder rate declined 31.9% between 1995 and 2007 (America’s declined by 31.7% in the same time frame), a trend which we’ve already discussed. But what about other violent crimes? Unfortunately, not so rosy. Also between 1995 and 2007, rape increased 29.9%, assault increased 49.2%, and robbery increased 6.2%. From 1995 to 2007, Australia’s overall violent crime rate increased 42.2% on a per capita basis. At the same time, U.S. violent crime dropped by 31.8%.

As already mentioned, Australia provides the only real laboratory for evaluating the modern impact of gun control and confiscation on crime rates. Statistical evidence shows that, despite the elimination of 630,000 semi-automatic weapons from Australian homes and extensive gun control laws nationwide, no correlation can be found between the ban and the drop in the murder rate, as the murder rate was already going down, and continues to do so. At the same, other violent crime in Australia has increased substantially since the weapons ban, obviously indicating that the ban had no effect on preventing violent crime. Lastly, over 80% of gun-related crimes involve a weapon that was brought into Australia illegally (smuggled).

In conclusion:

1). There is no statistical proof that gun control reduces crime anywhere in the world. In fact, some studies conclude that gun control laws are followed by crime increases (causality not correlated).

2). Criminals, by definition, don’t respect the law, and therefore acquire firearms illegally as they need them for their other illegal activities.

3). Firearms are mechanically simple devices, and no law will prevent somebody from setting up a desktop CNC mill, lathe, and 3-D printer (total equipment cost: about $5,000) in his basement to manufacture semi-automatic weapons and high capacity magazines.

4). In the United States only, this discussion is completely moot anyway, as our Constitution guarantees the individual the right to keep and bear arms for the purpose of armed revolt against a Federal government turned tyrannical, and this individual right has been upheld by the U.S. Supreme Court, to include handguns for self-defence purposes.

5). The data is old, and no recent studies have updated the figures, but even with statistically-adjusted estimates of old FBI data from 1980-1995, civilian firearms stop/prevent approximately 100,000 crimes each year in the U.S., simply by the presence of the weapon. That’s home invaders scared off by a gun-toting resident protecting her family, CCW holders pulling their weapon when confronted, etc.


Additional Information

1. Very well written article (by a leftist, FYI), explaining precisely why the 1994-2004 Assault Weapons Ban was a waste of legislation, and why mass murders such as Columbine, VA Tech, and Sandy Hook, while tragic, aren’t worth reacting to the way that people do: Why Not Renew The Assault Weapons Ban? Well, I’ll Tell You…

2. Wikipedia entry, list of countries by firearm related death rate. Compare this to the per capita gun ownership rate by country, and it’s quite obvious that there is no statistical correlation between rates of private gun ownership and rates of gun deaths.

3. Homicide rate by country, also good for comparison and demonstrating that gun ownership and homicide are globally decoupled.

4. The table by country of gun violence is fascinating, because it shows both the firearm and non-firearm home rates per capita, and indicates whether *any* level of firearm ownership is considered a right in that country. The data clearly indicates no correlation between the right of gun ownership and homicide rates. There are plenty of countries with extensive gun control laws that have extensive gun crime problems, as well as countries with a lot of guns that have low murder rates.

5. The above referenced Wikipedia entry also states that 60% of global homicides come from gunfire. However, if you read the U.N. report that is the source of that statistic, it is readily apparent that the countries and regions of the world where the vast majority of homicides occur (Southern Africa, Central America, South America) would have their massive murder problem regardless of whether or not firearms even existed, due to other cultural and societal issues at play in those regions. Due to poverty, strife, and cultural factors, the vast majority of people murdered in these countries would still be dead even if guns did not exist. Recorded human history going back over 6,000 years clearly demonstrates this behavior, using whatever weapons are most common at the time.