Polling The World’s Poorest People

All too often, the world’s poorest denizens are dealt the added blow of being invisible to their wealthier neighbors, governments, and even many of the humanitarian groups keen on helping them. Furthering worsening the plight of the poor, according to Claire Melamed of Aeon, is the shocking lack of information about what they think, feel, and experience everyday. Without these data, it is more difficult to connect to the human side of poverty, let alone to devise evidence-based solutions to alleviating it.

The World Bank recently did a brave and very revealing piece of research. They asked their own staff to what extent they imagined poorer and richer people in three countries would agree with the statement: ‘What happens to me in the future mostly depends on me’. Bank staff predicted that around 20 per cent of poor people would agree with the statement.

In fact, more than 80 per cent of poor people felt that what happened to them in the future depended on their own efforts – four times as many as the World Bank staff had predicted, and about the same proportion as richer people. It’s worth letting that sink in. Here we have staff in one of the most powerful development agencies in the world, freely assuming that the people whom they are employed to work with, and for, feel passive and helpless when in fact the opposite is the case.

If more people — from the average citizen to policy makers and development agencies — knew exactly what poor people believed and how they behaved, a lot more progress could be made towards eliminating this scourge once and for all. Continue reading

The Poor Are Neither Corruptible Nor Ill-Disciplined

To add further insult to the many injuries of poverty, those struggling to get by often face the heavy stigma of being perceived as lazy, irresponsible, and even immoral. Being poor is a less a product of bad circumstances and environmental factors, and more the result of stupidity, ill-discipline, and personal failing.

But as the New Republic reports, various studies are finding that the very nature of poverty makes seemingly irrational decisions perfectly reasonable.

The very definition of self-control is choosing behaviors that favor long-term outcomes over short-term rewards, but poverty can force people to live in a permanent now. Worrying about tomorrow can be a luxury if you don’t know how you’ll survive today.

Research supports this idea by showing that poor people understandably have an increased focus on the present. People who are among the poorest one-fifth of Americans tend to spend their money on immediate needs such as food, utilities and housing, all of which have gotten more expensive. In this situation, the traditional definition of self-control doesn’t make a lot of sense.

Working toward future rewards also requires trust that those rewards will be waiting for you when you get there. To shed light on this we can look at the the classic experiment about self-control–the “marshmallow game”. Researchers use this experiment to measure how well children can delay gratification. They put one marshmallow on a table and tell a child that she can eat the marshmallow in front of her, or wait a while and the experimenter will bring her two marshmallows.

It turns out that children don’t wait as long for a promised larger reward if they first learned that the experimenter was unreliable compared to other children who played with a reliable experimenter. And, of course, instability and unpredicability are hallmarks of life in poverty.

People who grow up in poverty quickly learn that it doesn’t pay off to save for an uncertain future if the reward they are waiting for sometimes isn’t there after the wait.

Indeed, if you don’t see a future, why bother saving or investing what little income you could spare, if any. The harsh and uncompromising demands of poverty make it so that short-term considerations are practically all that matter.

In our society, hardly anything is more adverse to survival than poverty. It would be foolish to spend precious mental resources thinking about solving a problem that won’t occur for a month when you can’t afford dinner tonight. A series of studies in 2013 on scarcity among people in the lab and farmers in the real world found that being deprived of money caused the equivalent of a 13-point drop in IQ. That kind of a handicap will make it hard for anyone to engage in the high-level thinking required for self-control.

Like any other kind of thinking, self-control can be taught. Children do better at self-control (and in school) when their parents teach them to solve problems independently and to participate in family decisions. But that kind of involved parenting takes time, and financially poor parents are often “time-poor”, too.

Family factors, like nurturing and stimulation, are directly linked to mental development and can be limited by time poverty. And parents living in poor, dangerous neighborhoods don’t give their children as much autonomy as parents who live in less dangerous neighborhoods. This doesn’t mean that poor working parents aren’t choosing to teach their kids self-control. It means they may be prevented from teaching self-control to their children.

Needless to say, poverty creates dire conditions for impressionable and developing minds. Poverty’s capacity to embed itself into the minds of young people is perhaps what is most pernicious, as perpetuates the psychological and physical consequences for generations.

A child born in the bottom fifth of the income distribution has less than a one-in-10 chance of moving to the top fifth, and even the brightest poor children are still less likely to complete college than average wealthy children. Evidence supports the commonsense conclusion that children in poverty have little reason to have high self-efficacy about self-control based on observing those around them.

Working out of poverty is an uphill struggle. The extra work required of people at the bottom to move up takes its toll on health. Poor children who succeed in school and life, particularly members of minority groups, often have worse health than those who fail, showing at least a 20 percent increase in a biological measure of heart disease risk.

A recent study found that adolescents from poor backgrounds with higher self-control did better psychologically but actually aged faster at the molecular level than those with lower self-control. Self-control and achievement require poor people to overcome a number of structural barriers and obstacles. This is stressful, and stress takes a toll on health. Navigating this difficult terrain causes wear and tear on key parts of the body such as the immune system and ultimately deteriorates health.

With all this mind, the article rightly points out the need to change how we frame the issue of self-discipline in the context of poverty.

We tend to think that focusing on long-term goals is always a good thing and satisfying short-term needs is always a bad thing; we say that “self-control failure” is equivalent to focusing on the near term. This definition works well for people who have the luxury of time and money to meet their basic needs and have resources left over to plan for the future. But self-control as currently defined might not even apply to people living in the permanent now.

Meanwhile, an article in the New York Times tackles the equally pervasive myth that the poor, being so weak-willed and negligent, are susceptible to further laziness and degradation when given assistance. So not only do the poor face ostracization and shame for their condition, but they are deprived of any help for reasons of weak character.

Abhijit Banerjee, a director of the Poverty Action Lab at the Massachusetts Institute of Technology, released a paper with three colleagues last week that carefully assessed the effects of seven cash-transfer programs in Mexico, Morocco, Honduras, Nicaragua, the Philippines and Indonesia. It found “no systematic evidence that cash transfer programs discourage work”.

A World Bank report from 2014 examined cash assistance programs in Africa, Asia and Latin America and found, contrary to popular stereotype, the money was not typically squandered on things like alcohol and tobacco.

So across widely distinct cultures and societies, handouts generally have no ill effect on work ethic or financial responsibility. Nevertheless, the myth of the corruptible poor remains widespread, if not intensifying. The culprit?

Professor Banerjee suggests the spread of welfare aversion around the world might be an American confection. “Many governments have economic advisers with degrees from the United States who share the same ideology”, he said. “Ideology is much more pervasive than the facts”.

Some would argue that the U.S. is a different story, because we host certain ethnic, social, and cultural groups that are more prone to laziness than other societies. But decades of evidence from domestic welfare programs do not justify this hypothesis.

Already in 1995, an analysis of rates of birth to unwed mothers by Hilary Hoynes of the University of California, Berkeley, found that welfare payments did not increase single motherhood. And the experience over the next 20 years suggested that ending welfare did not reduce it.

The charge that welfare will become a way of life reproducing itself down the generations is also dubious. Before welfare reform in 1996, some four in 10 Americans on welfare were on it for only one or two years. Only about a third were on it for five years or more.

And what about jobs? There is little doubt that welfare can discourage employment, particularly when recipients lose benefits quickly as their earnings from work rise.

Still, the effects are muted. For instance, in 1983 Robert Moffitt, then at Rutgers University, estimated that welfare reduced work by some four hours a week out of a total of 25.

“There is some disincentive effect consistent with theory, but the economic magnitude is not large”, said James P. Ziliak, head of the Center for Poverty Research at the University of Kentucky. “Oftentimes these disincentive effects are overstated in the policy discourse”.

Yet still these negative impressions of the poor — and the subsequent disapproval and gutting of aid — persists to punishing effect. Even when economic circumstances plummeted and people found themselves unemployed and financially unstable through no fault of their own, this already-baseless line of thinking persisted.

When the Great Recession struck, many of the poorest Americans found there was no safety net for them. “Extreme poverty was more affected by the shock to the labor market than in prior experience”, said Professor Hoynes at Berkeley.

Why is this debate still relevant today? The evidence has not caught up with the popular belief that welfare reform was a huge success.

The old welfare strategy … blamed for so many social ills died long ago. Its replacement is tiny by comparison, providing cash to only about a quarter of poor families and typically only enough to take them a quarter of the way out of poverty.

As long as we fail to accept the external and structural causes of poverty, in favor of blaming and shaming the poor themselves, the scourge of poverty, and its subsequent sociopolitical consequences, will continue for generations, squandering millions of lives in the process.

What are your thoughts?

The Great Expense of Being Poor

Over at The Atlantic, Barbara Ehrenreich reminds us of just how burdensome poverty can be. One would think this is obvious, but far too many Americans prescribe to the notion that poverty is a product of bad behavior and character, rather than the natural outcome of bad circumstances, such as a dearth of well-paying jobs.

What I discovered is that in many ways, these [low paying] jobs are a trap: They pay so little that you cannot accumulate even a couple of hundred dollars to help you make the transition to a better-paying job. They often give you no control over your work schedule, making it impossible to arrange for child care or take a second job. And in many of these jobs, even young women soon begin to experience the physical deterioration—especially knee and back problems—that can bring a painful end to their work life.

I was also dismayed to find that in some ways, it is actually more expensive to be poor than not poor. If you can’t afford the first month’s rent and security deposit you need in order to rent an apartment, you may get stuck in an overpriced residential motel. If you don’t have a kitchen or even a refrigerator and microwave, you will find yourself falling back on convenience store food, which—in addition to its nutritional deficits—is also alarmingly overpriced. If you need a loan, as most poor people eventually do, you will end up paying an interest rate many times more than what a more affluent borrower would be charged. To be poor—especially with children to support and care for—is a perpetual high-wire act.

Most private-sector employers offer no sick days, and many will fire a person who misses a day of work, even to stay home with a sick child. A nonfunctioning car can also mean lost pay and sudden expenses. A broken headlight invites a ticket, plus a fine greater than the cost of a new headlight, and possible court costs. If a creditor decides to get nasty, a court summons may be issued, often leading to an arrest warrant. No amount of training in financial literacy can prepare someone for such exigencies—or make up for an income that is impossibly low to start with. Instead of treating low-wage mothers as the struggling heroines they are, our political culture still tends to view them as miscreants and contributors to the “cycle of poverty”.

Continue reading

Global Inequality Widens Further Still

In an inauspicious start to the new year, one of the world’s most prominent charities issued a new report finding that, as of 2015, a little over sixty individuals own more wealth than 3.5 billion people — half the world’s population. According to The Guardian:

Oxfam said that the wealth of the poorest 50% dropped by 41% between 2010 and 2015, despite an increase in the global population of 400m. In the same period, the wealth of the richest 62 people increased by $500bn (£350bn) to $1.76tn.

The charity said that, in 2010, the 388 richest people owned the same wealth as the poorest 50%. This dropped to 80 in 2014 before falling again in 2015.

Mark Goldring, the Oxfam GB chief executive, said: “It is simply unacceptable that the poorest half of the world population owns no more than a small group of the global super-rich – so few, you could fit them all on a single coach”.

I concur. In a world where millions still die annually from easily treatable and preventable causes, and where hundreds of millions struggle just to get by each day, it is unfathomable that a mere busload of people could control so much wealth (and with it, power). Continue reading

By All Accounts, 2015 Was The Best Year In Human History

This might seem like an audacious statement to make in light of the numerous tragedies and disasters that have churned out with shocking regularity (to say nothing of the persistent and shockingly normalized prevalence of poverty, hunger, disease, and political oppression).

But as The Atlantic points out in great detail, by almost every measure — from crime rates to income levels — 2015 was the best year in human history for the average person. Beginning with what was arguably the most high profile problem of 2015, violence, one finds that from gun crime to terrorism, humans are harming one another far less than they historically have.  Continue reading

Brazil’s Difficult Gamble With the Amazon

With most of the world’s largest rainforest located within its borders, Brazil is center stage in global debates and efforts regarding environmental preservation. As an in-depth and visually stimulating NPR photo essay shows Continue reading

The Deteriorating American Middle Class

Citing a recent report from the U.S. Social Security Administration, Michael Snyder at Washington’s Blog finds a host of grim statistics that confirm what most Americans already know: that the financial stability and comfort of middle class life is increasingly elusive.

-38 percent of all American workers made less than $20,000 last year.

-51 percent of all American workers made less than $30,000 last year.

-62 percent of all American workers made less than $40,000 last year.

-71 percent of all American workers made less than $50,000 last year.

That first number is truly staggering.  The federal poverty level for a family of five is $28,410, and yet almost 40 percent of all American workers do not even bring in $20,000 a year.

If you worked a full-time job at $10 an hour all year long with two weeks off, you would make approximately $20,000. This should tell you something about the quality of the jobs that our economy is producing at this point.

Granted, given how much cost of living varies by city or state, a seemingly low salary might afford a middle class existence depending on where one lives (e.g., $50,000 is a lot more money in a place like Little Rock, Arkansas than New York City, New York). Even so, there is no justification for so many workers, across a variety of industries, professions, and areas, making so little — especially with productivity and profits alike continuing to rise. When will the average American get their fair share?

The U.S. Government Programs Keeping Millions Out of Poverty

Americans across the political spectrum are conditioned to believe that the government safety net, broadly called “welfare”, is woefully inefficient. While it is no doubt true that public sector solutions are inadequate in many respects –something both major political wings agree on, albeit for different reasons — as the Economic Policy Institute (EPI) reminds us, these programs are the only thing keeping tens of millions of Americans out of poverty.

More analysis from EPI:

Social Security was by far the most powerful anti-poverty program in the United States last year, keeping 25.9 million people out of poverty. Refundable tax credits, such as the Earned Income Tax Credit (EITC) and the Child Tax Credit, kept 9.8 million people out of poverty. The Supplemental Nutrition Assistance Program (SNAP), aka food stamps, kept 4.7 million people out of poverty, while other targeted programs (such as housing subsidies, unemployment insurance, and school lunch programs) made it possible for millions more to keep their heads above water.

In 2014, 48.4 million people (or 15.3 percent of the U.S. population) were in poverty, as measured by the Supplemental Poverty Measure (SPM)—a more sophisticated approach for measuring economic well-being than the official federal poverty line. However, that number would have been significantly higher were it not for programs like the ones listed above. In the absence of stronger wage growth for low and middle-income workers, these safety-net programs play an increasingly important role in helping struggling families afford their basic needs.

Note the last sentence, which I have bolded for emphasis. The ever-more contentious debate about government expenditure on welfare would be a moot point if the private sector paid workers better and/or provided benefits, thereby precluding the need to turn to state programs. Simply put, most people would not turn to the government if there was more stable and liveable employment available. Until then, these flawed, threatened, and still vital programs are all that millions of Americans have.

Poor People and Fast Food

Among the many ways that poor people are shamed and ostracized in American society is the pervasive myth that they are recklessly indulgent consumers of fast food. But as The Atlantic reports, bad eating habits, and subsequently high rates of obesity, are hardly the purview of low income people.

Back in 2011, a national study by a team at UC Davis concluded that as American salaries grow into the upper echelons of middle income, so does fast-food intake. “Low prices, convenience and free toys target the middle class— especially budget-conscious, hurried parents— very well,” wrote professor J. Paul Leigh, the senior author of the study. He adds that fast food is most popular among the people who are less likely to be obese.

But could that possibly be true? According to a 2013 Gallup study, the fries don’t lie:

“[F]ast food is hardly the province solely of those with lower incomes; in fact, wealthier Americans—those earning $75,000 a year or more—are more likely to eat it at least weekly (51%) than are lower-income groups. Those earning the least actually are the least likely to eat fast food weekly—39% of Americans earning less than $20,000 a year do so.”

Now a new study, this time by the Centers for Disease Control and Prevention, weighs in on the matter. While the national survey did show that on a given day, roughly one-third of American children will eat fast food, the breakdown among income levels is pretty even.

Another article in The Washington Post by Roberto Ferdman points out that it is “the poorest kids that tend to get the smallest share of their daily energy intake from Big Macs, Whoppers, Chicken McNuggets, and french fries”. Indeed, well-meaning yet flawed attempts to ban fast-food venues in areas with high rates of obesity and poverty alike have done little to curb the issue — indeed, in the case of South Los Angeles, it sped up the problem.  Continue reading

U.S. Workers Need — and Deserve — a Raise

From the New York Times:

Flat or falling pay is self-reinforcing because it dampens demand and, by extension, economic growth. In the current recovery, median wages have fallen by 3 percent, after adjusting for inflation, while annual economic growth has peaked at around 2.5 percent. At that pace, growth isn’t able to fully repair the damage from the recession that preceded the recovery. The result is a continuation of the pre-recession dynamic where income flows to the top of the economic ladder, while languishing for everyone else …

… In a healthy economy with upward mobility and a thriving middle class, hourly compensation (wages plus benefits) rises in line with labor productivity. But for the vast majority of workers, pay increases have lagged behind productivity in recent decades. Since the early 1970s, median pay has risen by only 8.7 percent, after adjusting for inflation, while productivity has grown by 72 percent. Since 2000, the gap has become even bigger, with pay up only 1.8 percent, despite productivity growth of 22 percent.

Why has worker pay withered? The answer, in large part, is that rising productivity has increasingly boosted corporate profits, executive compensation and shareholder returns rather than worker pay. Chief executives, for example, now make about 300 times more than typical workers, compared with 30 times more in 1980, according to the Economic Policy Institute. Other research shows far greater discrepancies at some companies.

In most companies, there is plenty of money to go around, thanks in no small part to the contributions of hardworking Americans. Isn’t it about time they get their money’s worth? Shouldn’t they, too, get a cut of the profits they helped produce? Or at least a better and more stable working environment?