Living on a Reduced Income in 1868(blogs.bl.uk)
blogs.bl.uk
Living on a Reduced Income in 1868
https://blogs.bl.uk/untoldlives/2022/08/living-on-a-reduced-income-in-1868-.html
53 comments
If I'm reading this correctly, Mrs. Laing paid £17 out of her annual income of £225 to rent her home, so 7.5% of her income. That seems astonishingly low, to me. Admittedly, I'm used to NYC rental prices, which are expected to be 1/3 of income, but isn't 7.5% very low everywhere?
I think we have to consider prior background here, and look at her income.
She was a widow of one William Christie Laing, a surgeon. Her late husband had subscribed to the Bengal Military Orphan Society for 23 years. So, presumably, he was part of the military, and as a surgeon, held a rank that would have yielded a sizable stipend.
According to the article, she received a £225 widow pension from the Bengal Military Fund. So, is this a sizable pension, or mere charity pushing her into "extreme penury" per her own assertion? One could assume that rank and years served by her late husband would have propped up her pension beyond what a widow of a common soldier would have received. Or even a common laborer who didn't came from wealth at all.
In that regard, rent wasn't her particular issue. Relinquishing her former lifestyle in order to maintain her 7 children was. Sure, the reduction of her income had a serious impact. But how does it compare to actual poverty levels at the time?
Just 3 years later, she had moved out to a different place and was living with 4 of her children. So, clearly, her financial situation did improve during that period of time. A dynamic that generally wasn't - and still isn't - all that self evident for someone who already belonged to the lower social classes.
She was a widow of one William Christie Laing, a surgeon. Her late husband had subscribed to the Bengal Military Orphan Society for 23 years. So, presumably, he was part of the military, and as a surgeon, held a rank that would have yielded a sizable stipend.
According to the article, she received a £225 widow pension from the Bengal Military Fund. So, is this a sizable pension, or mere charity pushing her into "extreme penury" per her own assertion? One could assume that rank and years served by her late husband would have propped up her pension beyond what a widow of a common soldier would have received. Or even a common laborer who didn't came from wealth at all.
In that regard, rent wasn't her particular issue. Relinquishing her former lifestyle in order to maintain her 7 children was. Sure, the reduction of her income had a serious impact. But how does it compare to actual poverty levels at the time?
Just 3 years later, she had moved out to a different place and was living with 4 of her children. So, clearly, her financial situation did improve during that period of time. A dynamic that generally wasn't - and still isn't - all that self evident for someone who already belonged to the lower social classes.
yes, according to officialdata.org, 225 pounds in 1860 would be approximately 30,000 pounds today [1]. Admittedly, not enough for a family with seven children, but an annual income of 30,000 pounds is hardly "extreme penury" except for the really well-off. I agree that perhaps the real issue was the cost involved in bringing up and educating her children. Even with all this misfortune, all of them seem to have done well later.
[1] https://www.officialdata.org/1860-GBP-in-2017?amount=225
[1] https://www.officialdata.org/1860-GBP-in-2017?amount=225
Agreed. While that translates into 30k pounds today, one has to also factor in the cost of living in Bengal at the time.
While she rented in a poor area, would 17 pounds have been on the high end or low end for the kind of living quarters it got her? What were the price levels in general for food, clothes and so on? You'd have to look at rent levels in that area at the time to make an accurate assertion.
> Even with all this misfortune, all of them seem to have done well later.
They clearly did. One unanswered question is what the intentions were behind her petition to take her children on the Bengal Military Orphan Society. Was there a real hard pressure to take such a drastic measure? Or was this a desperate plea in hopes of drawing attention and financial help from elsewhere e.g. erstwhile social circles she frequented?
Ultimately, the article does mention that the petition was denied, yet doesn't answer how she made ends meet in the following three years before the family moved again.
While she rented in a poor area, would 17 pounds have been on the high end or low end for the kind of living quarters it got her? What were the price levels in general for food, clothes and so on? You'd have to look at rent levels in that area at the time to make an accurate assertion.
> Even with all this misfortune, all of them seem to have done well later.
They clearly did. One unanswered question is what the intentions were behind her petition to take her children on the Bengal Military Orphan Society. Was there a real hard pressure to take such a drastic measure? Or was this a desperate plea in hopes of drawing attention and financial help from elsewhere e.g. erstwhile social circles she frequented?
Ultimately, the article does mention that the petition was denied, yet doesn't answer how she made ends meet in the following three years before the family moved again.
Monetary conversions across such a broad stretch of time are nearly useless. Food, clothing, housing, etc were all under vastly different price pressures, and many modern "essentials" didn't even exist (and vice-versa).
That's slightly higher than minimum wage in the US.
The minimum wage of about $7.25 per hour, 40 hrs per week, 52 weeks comes to $15,080 which is around 12,000 GBP. So the pension is 2.5 times the minimum wage level. Please note: I am not attacking the article or the poor lady - I am just pointing out that what sounds like a paltry sum (225 pounds in 1868) is nearly lower middle class income today, and not penury.
It's true that the US minimum wage is far less than what Ms. Laing received.
Two things to keep in mind though. First, despite the Federal minimum, many states and localities have much higher minimums, for the reason that the Federal minimum is insufficient to live off of in many places. For example, San Francisco, has a minimum of $16.99/hr. or about £29,265 p.a., very close to Mrs. Laing's pension.
Second, whether it's the Federal or San Francisco minimum, it's at best barely sufficient even for a single person. Mrs. Laing had a family of eight people. The US national poverty threshold for a family of 8 is $40K (£33,249) [0], so her by those standards her family would indeed be very poor.
[0] https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...
Two things to keep in mind though. First, despite the Federal minimum, many states and localities have much higher minimums, for the reason that the Federal minimum is insufficient to live off of in many places. For example, San Francisco, has a minimum of $16.99/hr. or about £29,265 p.a., very close to Mrs. Laing's pension.
Second, whether it's the Federal or San Francisco minimum, it's at best barely sufficient even for a single person. Mrs. Laing had a family of eight people. The US national poverty threshold for a family of 8 is $40K (£33,249) [0], so her by those standards her family would indeed be very poor.
[0] https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...
Yearly salary for a skilled worker in the US was around $700/£140 in the 1860s was in England it was around £100 or even less. So in that context £225 is not that bad.
Being the minimum wage 7.25 an hour, wouldn't be yearly around half of that number?
(Foreigner here, I don't have the minimum wage in the US super clear)
(Foreigner here, I don't have the minimum wage in the US super clear)
You are right I was thinking household (2 adults working).
The fact her children are were taken out of school seems to be the biggest impact IMO.
From speaking to older family members, rent and home ownership used to be a much lower proportion of spend relative to food, clothes, furniture etc. Now many of those items are mass produced and are cheaper. There has been an inversion.
Food used to be the dominant part of a household budget, it's now essentially trivial in comparison to other items.
> Admittedly, I'm used to NYC rental prices, which are expected to be 1/3 of income
Is that 1/3 of the total gross pay or is that 1/3 of total net pay?
I presume 1/3 of the total gross pay goes in deductions. So 1/3 of total gross pay is 66% of total gross pay. But 1/3 of total net pay is more like 22% of the total gross pay. And that's a big difference. I'd appreciate clarification about which one of these are the NYC rental prices more like.
Is that 1/3 of the total gross pay or is that 1/3 of total net pay?
I presume 1/3 of the total gross pay goes in deductions. So 1/3 of total gross pay is 66% of total gross pay. But 1/3 of total net pay is more like 22% of the total gross pay. And that's a big difference. I'd appreciate clarification about which one of these are the NYC rental prices more like.
I think both the percentage of income and effective tax rate vary wildly with income so it's probably not worth trying to nail down a specific percentage
>7.5% of her income
Wouldn't it be better to use expenditure instead of income? As an example, my rent is 40% of my expenditure. Couple of years back, my income was just enough to cover my bills. Now I've more than doubled that income. But 40% of expenditure for rent is roughly the same even now.
Wouldn't it be better to use expenditure instead of income? As an example, my rent is 40% of my expenditure. Couple of years back, my income was just enough to cover my bills. Now I've more than doubled that income. But 40% of expenditure for rent is roughly the same even now.
> ... 7.5% of her income. That seems astonishingly low, to me.
You've fallen victim to presentism, the cognitive bias of assuming the past was like the present.
Before the 20th century, households spent a far higher proportion on their income on food and on fuel (for space heating, cooking, lighting) than we do today. Clothing and footwear also loomed large in the budget. Housing used to be a relatively smaller cost than these.
7.5% is possibly on the low side for the time, but not astonishingly so.
You've fallen victim to presentism, the cognitive bias of assuming the past was like the present.
Before the 20th century, households spent a far higher proportion on their income on food and on fuel (for space heating, cooking, lighting) than we do today. Clothing and footwear also loomed large in the budget. Housing used to be a relatively smaller cost than these.
7.5% is possibly on the low side for the time, but not astonishingly so.
> You've fallen victim to presentism, the cognitive bias of assuming the past was like the present.
Is pointing out something in the past as not like my experience "assuming the past was like the present"?
Is pointing out something in the past as not like my experience "assuming the past was like the present"?
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I would pay around this number if I would be renting my current apartments. My salary is significantly higher than average though.
That's still achievable if you earn well (like a software developer), have two incomes and pay a low rent (e.g. in Europe).
the demographics are very different: if all you're looking at is the cost of construction, with no scarcity factors, then one third looks astronomical: once built, the building stays built, maintenance + profit cant be that high...
> She had been reduced from affluence to ‘extreme penury’ when the failure of the Bank of Bombay took away her income from a holding of 180 shares.
I was curious about this bank failure and looked it up. Some backstory here
https://www.qdl.qa/en/bombay-banking-crisis https://www.cnbctv18.com/finance/backstory-the-collapse-of-p...
Interesting how connected the global economy was back then too:
In the early 1860s, the American Civil War caused cotton supplies, which had traditionally supported the western cotton trade, to be cut off. In England, this resulted in a depression known as the Lancashire Cotton Famine, however, in India it led to a period of great prosperity and wealth as cotton supplies in the East and Orient were suddenly in great demand. The situation in India was exacerbated by a famine in 1866, which led to many cotton farmers turning to growing foodgrains. Overnight, many companies that had sprung up in Bombay faced extreme financial distress and their shares tanked. Many of them went into liquidation leaving their lenders including banks, holding dud paper. Speculation on Indian cotton, followed by failed harvests left Bombay’s banks in crisis and customers struggling to access funds.
I was curious about this bank failure and looked it up. Some backstory here
https://www.qdl.qa/en/bombay-banking-crisis https://www.cnbctv18.com/finance/backstory-the-collapse-of-p...
Interesting how connected the global economy was back then too:
In the early 1860s, the American Civil War caused cotton supplies, which had traditionally supported the western cotton trade, to be cut off. In England, this resulted in a depression known as the Lancashire Cotton Famine, however, in India it led to a period of great prosperity and wealth as cotton supplies in the East and Orient were suddenly in great demand. The situation in India was exacerbated by a famine in 1866, which led to many cotton farmers turning to growing foodgrains. Overnight, many companies that had sprung up in Bombay faced extreme financial distress and their shares tanked. Many of them went into liquidation leaving their lenders including banks, holding dud paper. Speculation on Indian cotton, followed by failed harvests left Bombay’s banks in crisis and customers struggling to access funds.
It is always interesting to read about how in the 19th century (and I'm sure some commenters from the developing world will say that this is still the case in some places) the defining feature of the middle and upper classes was the ability to employ servants -- note that that even when reduced to (at least to a British person) abject poverty, the woman is still able to retain one servant, albeit a child.
It's also worth remember that a lot of things we take for granted were very time intensive back in those days, so you genuinely needed those servants if you had a family and wanted to send the children to school. Consider clothing: washing them involved scrubbing against a board by hand, old clothes were mended extensively by hand (factory cloth existed, but was still expensive), non-wrinkle fabrics didn't exist so everything had to be ironed with hot coal irons, etc. No refrigeration or ready meals, so food had to be prepared from scratch all the time.
Of course, the poor had to deal with all this and scratch out a living, which is a major reason why their children were enlisted to help around the house as soon as practical.
Of course, the poor had to deal with all this and scratch out a living, which is a major reason why their children were enlisted to help around the house as soon as practical.
Some of it still applies to me. I pay a maid for washing clothes and house cleaning, I go to a tailor for mending clothers, don't iron the clothes though (and they are not wrinkle free), don't have a refrigerator, etc.
Don’t have a refrigerator? How is this possible? I can’t imagine that. That and having a stove are almost as essential in my mind as having a bed.
Do you buy food daily?
Do you buy food daily?
I do have an induction stove (for heating milk, cooking rice, etc). I get lunch delivered and rest of the time I cook and sometimes eat out. Plenty of grocery shops here within 5-min walking radius. Refrigerator for me alone would be a huge waste.
Not just 19th century; this persisted well into the 20th as well.
Agatha Christie wrote in her autobiography about in post Great War Britain a servant being a necessity but that she wasn’t likely ever going to be rich enough to afford a car.
https://fullstackeconomics.com/why-agatha-christie-could-aff...
Agatha Christie wrote in her autobiography about in post Great War Britain a servant being a necessity but that she wasn’t likely ever going to be rich enough to afford a car.
https://fullstackeconomics.com/why-agatha-christie-could-aff...
>They rented a fourth-floor walk-up apartment in London with four bedrooms, two sitting rooms, and a “nice outlook on green.”
The space afforded seem pretty substantial. Even if it was fourth floor. That is still 6+ rooms.
The space afforded seem pretty substantial. Even if it was fourth floor. That is still 6+ rooms.
Makes it all the more notable she thought they would never afford a car and how much of an inversion we’ve had between the price of manufactured goods and labour in under a century.
My understanding is this is still true in India, where live-in domestic servants remain relatively common:
https://www.forbes.com/sites/leezamangaldas/2017/07/28/a-con...
I'm sure others on HN have more firsthand knowledge.
https://www.forbes.com/sites/leezamangaldas/2017/07/28/a-con...
I'm sure others on HN have more firsthand knowledge.
Live-in servants are very uncommon and maybe only the ultra rich have them. What is common is to have someone come everyday for an hour or so to do chores like cleaning, cooking.
In Singapore, approximately 20% of households have a live-in maid ("helper"). Often this is not really a "luxury", simply the most cost-efficient way of providing childcare or eldercare if both parents are working, since the maids are imported from much poorer countries and paid far less than minimum wage ($600/mo, basic meals and a mat on the kitchen floor is typical).
I recall reading somewhere that American expats in central and south america usually employ many household servants (even paying somebody to do their grocery shopping) as it's part of the "deal" of being allowed to live in a low cost-of-living country: you can live there, but you have to spread the wealth around by employing some of the natives.
Just me or the use of the word "natives" there just a little too reminiscent of how the term was often used in centuries past where there was no ambiguity as to the view that indigenous peoples were inferior to settlers?
Just you.
Humans are pretty good at seeing in the world whatever is on their mind or that they have fears or insecurities about. Sometimes that's the face of Jesus on a piece of toast, sometimes that's a scary figure that turns out to be a shadow, sometimes it's interpreting an innocuous word as reminiscent of injustices centuries in the past.
Humans are pretty good at seeing in the world whatever is on their mind or that they have fears or insecurities about. Sometimes that's the face of Jesus on a piece of toast, sometimes that's a scary figure that turns out to be a shadow, sometimes it's interpreting an innocuous word as reminiscent of injustices centuries in the past.
Still, I'd avoid probably avoid using "natives", even if it was meant purely as a neutral label. "Locals" would be better - if it really was important to mention their cultural/ethnic background, I'd use whatever term they prefer for themselves.
"Locals" would mean anyone living there, though, including immigrants. "Natives" implies people who were at least born there, and possibly the long-term traditional inhabitants of a place. "Native" is not a bad word.
Why's it important to distinguish though? It may not be an inherently bad word but given its use historically I'd still be wary of using it in the wrong context.
If child labor wasn’t illegal I imagine a lot of people would be able to retain a child as a servant.
My labor was extremely cheap until I turned 18 and had to be given minimum wage.
14 year old me could be had for €500/month. Come to think of it, I’m not quite sure why that’s fine in a supermarket. Maybe you can actually have a servant?
My labor was extremely cheap until I turned 18 and had to be given minimum wage.
14 year old me could be had for €500/month. Come to think of it, I’m not quite sure why that’s fine in a supermarket. Maybe you can actually have a servant?
Here (NL) it is legal to work from 13 years old (non industrial work). There are also no minimum wages for certain ages
Depending on how liberally we want to define "employing a servant", it is still a sign of social status today in the developed world.
Anyone who has hired a professional to do something for them can tell you the bill was quite tall, certainly not something someone living paycheck-to-paycheck could afford.
Anyone who has hired a professional to do something for them can tell you the bill was quite tall, certainly not something someone living paycheck-to-paycheck could afford.
> even when reduced to (at least to a British person) abject poverty
I think there's a lot more to this one than meets the eye. The £225 pension she was apparently entitled to was a lower middle class salary at the time, and if her rent was £17 a year then some of that money is going on something other than feeding kids and a servant girl animal food on alternate days...
I think there's a lot more to this one than meets the eye. The £225 pension she was apparently entitled to was a lower middle class salary at the time, and if her rent was £17 a year then some of that money is going on something other than feeding kids and a servant girl animal food on alternate days...
Keep in mind that food as a percentage of one's budget was considerably higher 150 years ago. For that family size she probably paid at least 1/3 and maybe up to 1/2 of her income on food, plus clothing for growing children and school. Seems unlikely she'd be able to afford significant vices of any kind, if that is your implication.
Here are some family budgets from the 1880's, just to get a general idea of the type of expenses she might've incurred:
http://historymatters.gmu.edu/d/5754/
Here are some family budgets from the 1880's, just to get a general idea of the type of expenses she might've incurred:
http://historymatters.gmu.edu/d/5754/
I'm also keeping in mind her husband's pension gave her income equivalent to a fairly typical lower middle class salary in Britain at the time, when families of seven children were not uncommon, and most families lived on a quarter of that income. Most people spent up to half their income on food, but most people didn't have a combination of well above average income and claimed inability to afford more than intermittent consumption of animal food even after cutting back on all other areas of expenditure and supplementing income by selling off old valuables.
"Vice" is one reason why somebody receiving well above average family incomes for the time could have a well below average ability to feed her family, indebtedness a more likely one, not actually receiving her pension [consistently] is a third. But the most logical reason for her reporting conditions of extreme poverty (in between gripes at loss of middle-class privilege) despite being entitled to a pension worth 4-5x the average wage of the time is that she is exaggerating the hardships in a letter which is essentially begging for help.
"Vice" is one reason why somebody receiving well above average family incomes for the time could have a well below average ability to feed her family, indebtedness a more likely one, not actually receiving her pension [consistently] is a third. But the most logical reason for her reporting conditions of extreme poverty (in between gripes at loss of middle-class privilege) despite being entitled to a pension worth 4-5x the average wage of the time is that she is exaggerating the hardships in a letter which is essentially begging for help.
It is simply because class divide used to be a lot wider. We perceive things as going down only by comparison with unhealthily equal 1960s society brought about by 91% top marginal tax rate of the day. Pre-WWI world was extremely unequal and it was seen as normal. Anyone from the middle class could hire a servant.
In fact, even in the Soviet Union, engineers and even highly qualified workers (!) had full-time domestic servants in 1930s. Not after the war though.
In fact, even in the Soviet Union, engineers and even highly qualified workers (!) had full-time domestic servants in 1930s. Not after the war though.
> We perceive things as going down only by comparison with unhealthily equal 1960s society brought about by 91% top marginal tax rate of the day.
Interesting. You feel that the 1960s were too egalitarian?
Interesting. You feel that the 1960s were too egalitarian?
Read the guy’s past comments…
>91% top marginal tax rate of the day
it's worth noting that even though the top marginal rate today is only 37%, tax as % of GDP stayed mostly the same since the 1960s. The difference can be explained by the fact that the 91% tax rate was accompanied by a plethora of deductions, which reduced the effective tax rate.
https://fred.stlouisfed.org/series/FYFRGDA188S
it's worth noting that even though the top marginal rate today is only 37%, tax as % of GDP stayed mostly the same since the 1960s. The difference can be explained by the fact that the 91% tax rate was accompanied by a plethora of deductions, which reduced the effective tax rate.
https://fred.stlouisfed.org/series/FYFRGDA188S
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