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How poverty changes your mindset

777 points by bryanwbh 9y ago

scandox 9y ago
> That’s the correct financial decision, according to traditional economics—to drive the extra distance no matter the original cost. Saving $50 is the same regardless of the amount of the item in question. But wealthier participants saw the savings in relative terms, noticing the percentage savings. By contrast, poorer participants thought in absolute terms. To them, $50 saved was $50 to spend on groceries or the electric bill. Then traditional economics is a fool. Rich people value their time and their headspace. I’ve seen this again and again with someone close to me: they assign the same priority to tiny financial decisions as to big ones. They do make very optimized decisions but it is within a very small context. In the meantime they don’t realise the world of opportunity they are not seeing because of their obsessive focus on small items.
- nreilly 9y ago
  It’s a lot harder to quantify and value headspace. Is there a way? I was expecting the article to quantify it in reduced IQ, but it went the other way.
  - Jedd 9y ago
    Quantifying IQ is hard enough - quantifying deltas based on subjective rates of poverty? That'd be a courageous goal. Authors set out to demonstrate qualitative cognitive differences between people suffering with scarcity (primarily cash) and those not. People suffering with scarcity have a cognitive load that the 'not' category does not -- I don't think that translates to reduced IQ, but was demonstrated to translate to 'more bad decisions' via heightened and persistent cognitive load. ADDENDA: From the outside looking in, that phenomenon may be misunderstood by an observer to indicate a causal relationship between bad decision making and poverty. TFA makes the case that causality is inverse to common (by governments, elites, etc) interpretation.
- deleted 9y ago
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- RSZC 9y ago
  You're misunderstanding the question they've posed people. In either situation, the question is "is half an hour of transit worth $50 to you." Whether it's $50 saved on a $300 item or a $1000 item has no impact on the $ saved per minute.
  - lazulicurio 9y ago
    I'd be interested to know if there was some sort of priming effect going on. With the wealthier people thinking more in percentage terms rather than absolute price, they might expect that the $1000 tablet would be discounted more in the future (if the $300 tablet can be 17% off, why not the $1000 tablet?) and decide to wait it out.
  - rdiddly 9y ago
    Right, but there's a subtlety: The dollars saved in those minutes are worth a different amount to a rich person depending on their relative impact on the sale. $50 off of $300 is a 1/6 discount, so a "good deal" that they will (somewhat recreationally) decide to go and get. But they still don't inherently care that much about $50. You could say if they make lets say ten times what I do, they probably care 1/10th as much as I do, about $50. Anyway and meanwhile, $50 off of $1000 is a 1/20 or 5% discount. Now it's still the same $50 they don't give a shit about, but it's also now an insignificant discount. Would they spend extra time on what to them is a rounding error on a $1000 purchase? They're not really getting a "deal" anymore, it's a bore, and they decide to spend the extra $50 just to buy back their half-hour. So long as the price is still "about $1000" they're OK with it.
    - tylerhou 9y ago
      The rational answer is that if you would drive 30 minutes to save $50 off a $300 tablet, then you should also drive 30 minutes to save $50 off a $1000 tablet. You've described the psychology of why a wealthy person might not drive the 30 minutes for the $1000 tablet well (but still will spend the time to save money on the $300 tablet), but that choice is still irrational.
      - 9y ago
- eftychis 9y ago
  Not really. There is the notion of opportunity cost. 30' might be worth your time, unless investing that time, either working, or even resting, paid you back e.g. > $50. If you expect yourself to make less than $50 an hour (assuming you have to drive back (?), otherwise $100) then that would be a good deal. It depends on your model of course. After some point spending 30' to get $50 off is crazy, if you are struggling to make time for your family. Either the article does a poor job describing the research, or I find it somewhat incomplete. I mean there is an inherent misconception that $1000 item/asset is much much better than a $300 equivalent. I am curious how that affects the valuation between different groups of individuals.
  - Jedd 9y ago
    > I mean there is an inherent misconception that $1000 item/asset is much much better than a $300 equivalent. That's not how I read it -- the authors were not assigning a qualitative value to the items, only a quantitative one. They did not need to be the same 'type' of asset. It was just that when comparing the savings - 50/300 vs 50/1000 - some people considered the ratio more important than the numerator.
  - Buge 9y ago
    You are misunderstanding the article. The study asked some rich people "would you spend 30 minutes to save $50 on a $300 item". Some rich people said yes. Then they asked "would you spend 30 minutes to save $50 on a $1000 item". Some of the previous "yes" answers changed to "no". That is illogical, logically no one should have changed their answer. Poor people didn't make this illogical answer change.
- deleted 9y ago
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- drpgq 9y ago
  I guess there’s a reason penny wise and pound foolish is a saying
dijit 9y ago
This is not the first time this article has come up, and as usual I'll give my 2c. What qualifies me to talk about this issue? I was raised in the UK on income support, single mother, social housing, low income city etc; Now the situation has changed somewhat in the UK; back then in the UK it was possible to get by without going into debt if you were smart about things and I believe this no longer to be the case, but I am no longer in this system and; to qualify my statement further: it was not possible to be poorer than my mother was. No family and no registered father on record. (He would have had to pay child maintenance if he was on record, the state does not supply this if there is an absence) What I found to be true is that my mother will buy the cheapest thing that will do the job, she will treat her time as unlimited in finding similar quality goods for less money. She still trawls second-hand stores and will not buy anything that needs maintenance. Her cars tend to be 1-step from the junk-yard (even though she has a steady well paying job now). For myself, I select heavily for things that require less maintenance too. I buy extremely high quality things because I assume that my job is temporary and that I will once-again be plunged into poverty, and if anything needs to be replaced in that time I may not have the financial freedom to do so. I do not have anything that requires recurring costs (no netflix, no apple music.. I will not subscribe to anything that is not a utility), I do not take long-term contracts (if there is a choice between 12months at a cheaper rate or month-to-month for 10% more I will pay the 10% more not to be tied). This is my anecdatum, of my mother who grew up working class and became poor through choice, and for me, who grew up poor and became middle-class.
- bane 9y ago
  I grew up relatively poor in the U.S. under wildly different family circumstances, but I felt myself nodding to the solutions and approaches of both your mother and yourself -- some out of recognition, some out of familiarity. I've found it almost impossible to enumerate the ways in which growing up poor wildly alters your mindset about money. It's literally mind altering and often nonsensical or hard to explain to people who haven't been through it. My wife, who grew up in a fairly wealthy household (to parents who themselves escaped crushing poverty), has tried to train me to avoid many of those instincts now that I myself am in good financial status. But I still take a weird kind of comfort at least browsing local thrift stores, figuring out what we'd absolutely need in case of a major bankruptcy or working over scenarios on how to survive and get housing if we lost everything. The industries that prey on the poor basically exist because they've managed to use these instincts against the poor rather than trying to get people out of poverty. They've always been there, but I'm afraid that they've become much more sophisticated at extracting pennies from people with mere dollars.
protomyth 9y ago
If you are poor you cannot shop sales the same what you can if you have money. Stocking up on items is not really an option.
- gscott 9y ago
  I think you mean buying in bulk. Buying in bulk is great but often not because if it is food it might go bad before you eat it and if you are poor your limited on space... so huge packs of items don't fit well in your tiny space. Plus the up front cost is a real killer since the money is saved over time. And if you have more of something you might end up using more because it's convenient. And finally if you are splitting rent with many people they will help themselves to the bulk items.
  - sparkie 9y ago
    There's a subtle difference between "buying in bulk" and "keeping a reasonable stock". I grew up in a quite poor family and my parents are terrible with money. One thing that frustrated me to no end is that they would almost never buy something ahead of time. An item would literally have to run out before they'd consider buying its replacement, which meant I'd regularly get in the shower in the morning to find there is no soap, no toothpaste, no toilet paper. You'd end up going to a local convenience store and paying 2x the price for the item because you need it now. Your grocery budget becomes hugely inflated, and you still end up buying the same necessities. Also when you work on a system of buying one item only to replace the previous, you really miss out on bargains because you have to pay the full price it is at the time you need it, instead of a week or two earlier when the same product was BOGOF. At the same time, they throw away tonnes of food which has gone off because they can't plan meals and shopping consists of "we might eat that." Food which has a long expiry date (canned foods, etc) always runs out.
    - flukus 9y ago
      > You'd end up going to a local convenience store and paying 2x the price for the item because you need it now. Your grocery budget becomes hugely inflated, and you still end up buying the same necessities. I see this at a lot at my local 7-11, many poorer people do a lot of their grocery shopping there even though an aldi is 5 minutes walk away (so it's actually closer for some of them, literally across the road) and three other supermarkets are under 15 minutes walk. I suspect there is some sort of psychological effect (possibly from advertising) that is compelling them to go to 7-11 instead of somewhere cheaper and that they aren't making a conscious financial decision.
dbg31415 9y ago
It's not poverty. It's stress. Poverty is very stressful. Any kind of stress stops people from acting the way they normally would be inclined to act. It takes a lot of conditioning and practice to deal with stress without having it impact you and your performance. Take a little stress off your staff, and instantly everyone starts making better decisions, their work seems more focused. As a manager, the best thing I can do for my team is try and shield them from scope creep, angry clients, and unreasonable deadlines. And make sure everyone has time off when they need it. Take care of your team, team will take care of the work.
- mc32 9y ago
  It's also mental. When I was poor and finally got a "student" class credit card, i knew paying off the month's bill was the best option economically, i still could not get around the idea of giving up all my "cash" (money in the bank) to pay off the debt. Even though i could have simply paid off and then should something come up, use the zero balance credit card. No, i still wanted cash available. Knowing this was not the logical option.
  - dredmorbius 9y ago
    The value of cash liquidity seems deep within much economic activity. It's what, essentially, Adam Smith railed against in Wealth of Nations, arguing that wealth was not gold and silver (liquidity) but real produce and labour capacity. And yet much present economic theory and practice is only so much neomerchantilism. This makes me suspect a real foundation, at least psychologically, to the behaviour.
- hyperdunc 9y ago
  A little "positive stress" can increase performance in the short term. The classic example of escaping a hungry lion translates into modern-day scenarios like meeting an important deadline. It's when stress is sustained that major health problems arise.
meanmrmustard92 9y ago
Shafir and Mullainathan wrote a book called "Scarcity" that articulates an expanded version of this idea. Highly recommended.
- didsomeonesay 9y ago
  I second the recommendation! They are looking into several forms of scarcity (e.g. time scarcity of busy academics) and how this similarly affects the behaviour, creating a "focus" on the immediate scarcity that distracts from everything else, and prevents seeing the "big picture". One interesting conclusion being that poverty is a "root" scarcity that begets other forms of scarcity. Interesting was also the observation that scarcity-behaviour can have desirable outcomes and can be put to use (e.g. using budgeting as a form of artificial scarcity in personal finance).
redm 9y ago
I'm sure how people deal with stress and difficult situations varies from person to person. My personal story and 2-cents: When I was 17 I went through a period of near destitute. I was living on my own, my father had passed away, and I had dropped out of school. Yet, I found myself with some very good jobs, such as GE Capital, a big Oil and Gas companies IT department, etc. Regardless of the opportunity, my arrogance, ambivalence, or immaturity (take your pick) cost me a series of good jobs in short order. The result was I had no money, no electricity, no gas for my car, and not much to do. Eating cold beans out of a can in the dark tends to force you to re-think your priorities. In my case, I got very motivated very quickly and dug myself out of that hole after a few months. I think that's the point Orrin Hatch was trying to make. If I had a fallback, I would have, without a doubt, kept coasting along from job to job. I've never looked at work or money the same way since as I never want to find myself there again. So long story short, being poor (by my own doing) didn't necessarily motivate me, but looking into oblivion sure as hell did.
- autokad 9y ago
  i grew up poor, and it was frustrating to see the stupid mistakes my family and people around me would make over, and over, and over. then people like the researchers in this article say infuriating things like 'their bad decisions are just because they are cognitively tired, and actually many of them could be even considered shrewd!" being cognitively tired does play a role, but more so because they are cognitively lazy. their bad / lazy decisions are confounded by the fact they are trying to solve problems caused by making bad decisions in the first place. on top of that, most dont value education. i typed a long story but deleted it. in short, 4/6 of us siblings dropped out of school, those same 4 had a large life insurance policy from the airforce which they blew almost immediately. we have so many opportunities in this country, but it still does require that we go to school, work, and use our head. i am aghast on how so many people simply refuse to THINK. so many people with money problems have no idea how much money annually they spend on ANYTHING. how can you even begin to talk to someone about getting out of poverty, if they wont even calculate how much they are spending on that 5$ starbucks and 600$ phone.
  - MrLeap 9y ago
partycoder 9y ago
Some people think being poor is living paycheck to paycheck. The reality can be much worse.
bojackstorkman 9y ago
I love how when this comes up, it's people either saying "Here was my experience when I was poor in the past." or "Here is what I think about economics or the wording of this article." Don't get me wrong, I know what website I'm on. But in all seriousness, is there room for currently poor people in this discussion?
- haberman 9y ago
  How does non-poor people commenting prevent poor people from commenting? The author of the original article is probably not currently poor, and yet she is writing about it. Do you see this as a problem too?
  - tachyoff 9y ago
    Poor people can’t comment because they’re poor. It’s the survivorship bias problem. People who are currently poor probably can’t comment on HN (or have no idea what it is), so what you see, overwhelmingly, is people who were able to escape poverty. This can lead some people to believe that it’s easier than it is to get out of poverty. And since this is an article about true, abject poverty, “I pulled myself up by my bootstraps with my tech skills” doesn’t really help anyone learn anything.
  - bojackstorkman 9y ago
    Sorry if I gave that impression. I have no problem with lots of perspectives. I specifically asked if anybody had made room for, uh, the poor people. Considering my response has already gotten one "Well you're obviously not poor if you read this", and another asking for clarification of my opinions on non-poor people, I guess this wasn't the place to make that point. Sorry.
    - haberman 9y ago
      > I specifically asked if anybody had made room for, uh, the poor people. But what does this mean? Unless someone is specifically arguing that poor people should not comment, how is anyone not "making room for" the perspectives of poor people?
hendler 9y ago
“Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” - James Baldwin
blfr 9y ago
Frankly, a couple of rounds of Angry Birds doesn't seem like a great way to decide important policy. How many of the studies cited in the article were at least replicated a few times?
kraig911 9y ago
I hate seeing people's comments on stories around this topic. I grew up in poverty and food stamps from time to time. My dad was a roughneck and when the oil bust happened in the 80's there was a time we lived out of our car -- my whole family. here was literally nothing to do in the oil patch during that bust. There was literally no work. But people don't understand true hopelessness. My dad did everything he could to find a job during that time... for three months time we hardly had any food I guess because it wasn't easy to get on the program fast back then. Those that come out of a dire situation think everyone else can. The ramifications of that happening to my dad will probably last multiple generations. He went from a loving father to a loathsome troll of a creature working nights in a oil refinery (I thought at the time) finally. From that my mom and dad divorced. My wife doesn't understand why I have severe dentals problems now in life, or other health issues that doctors told me are from stress. She doesn't understand why I stress so much about money and stay up at night. I don't know why I'm saying all this the solution is simple but the problem is hard to acknowledge. The poor and destitute simply need help. We live in a society though that thinks someone else is going to take care of the problems. When we do finally give help it's so conditional and shamed that the hole of guilt someone fell in is practically inescapable.
- psyc 9y ago
  I grew up in poverty in the US as well, and I agree there’s a heartless tendency for people not to acknowledge it’s real. The tired comment I see most frequently is something like “nobody in the US is poor because everyone has plumbing, refrigerators, and TVs.” First, no, everyone does not. Many people are homeless. Second, it’s very narrow to focus on objective material factors, because that discounts the toll of the nightmarish stress the poor live with constantly, even the ones who have an apartment and a television.
  - baby 9y ago
    The most shocking place I've visited in my life was San Francisco. Super rich people surrounded by armies of homeless people.
    - 9y ago
adyavanapalli 9y ago
WNYC ran a great podcast series on busting myths about poverty. Here's a link: https://www.wnyc.org/series/busted-americas-poverty-myths https://www.wnyc.org/series/busted-americas-poverty-myths
emmelaich 9y ago
This is a large part of the culture change over the last 60 years. Those adults in the 50s grew up through the depression and war. It was hard adapting to the prosperity of the 60s. The young literally could not understand their parents attitudes.
pfarnsworth 9y ago
The first time I saw abject poverty was in high school on a family trip to Hong Kong. I saw an skinny old lady, wearing literally rags, washing herself from a puddle. I had never seen that in the other countries that we went on family trips to. The image is burned into my brain. I am lucky having grown up in a middle class family. My father also grew up in poverty and it affected me as well. He was able to provide for us bery well but the specter of being poor was burned into my psyche to an extremely unhealthy level. It lead to a decade of fear and broken relationships because I was so paranoid about losing my money and my livelihood. Now the combined income of my wife and I make us easy 1%ers and my perceptions of money have changed again. Instead of saving every penny we made smart financial decisions, like buying a house that was very affordable instead of getting as big a house as we could pay for. I’m reasonably comfortable that I will have a job until I retire and I’m very sure my wife will. This allows us the luxury of spending money on things that we never would have, like nannies and cleaners, and traveling business class instead of economy. It’s something I never, ever, would have considered 20 years ago. When I was scared about money in my 20s and early 30s (never living in poverty,though) I felt vulnerable and that I could “fail”. Going through the dotcom bust reinforced these feelings to the point where I went to the hospital several times due to anxiety attacks. I felt like this wouldn’t last and “winter was coming” so I saved every penny and even ended relationships over money. After a particularly bad breakup I realized I had a problem. My mindset now is I can always make more money if I lose my job. It might have to be something unpleasant but it can happen. I’m not wasteful with money but I don’t obsess over it anymore. I’m grateful for being in this position obviously, because all it takes is a really bad recession for things to get really bad. Aside from a couple of perks, like the cleaners and nannies, I generally save most of my money for “winter”. It’s a position that, as I said, I’m grateful having. I have friends who aren’t in the same position, and our mindsets in life are completely different.
princeb 9y ago
not only do the poor make affected decisions we also know that the poor (1) have a restricted set of feasible solutions (2) face higher uncertainty in outcomes due to the impaired ability to execute solutions (3) have limited ability to mitigate the consequences of a failed solution. in addition, public policy tends to strip the poor of their agency, not to mention dignity: (1) their choices are dictated without the context of their situation (2) the actual risks they face are ignored or treated as if a wealthier person were to face these risks (3) their actual utility curve is discarded in place of the utility curve of the policymaker or the general public... and then should the poor continue to fail to make full use of these programs that are not only difficult for the target group to take up, but also humiliating and undermining confidence in helping themselves, they are chided for continuing to make poor decisions. the article offers a few examples that overcame some problems affecting these people. but the story is very different between communities in which members are equally affected by limited resources and unequal communities. the separation of classes of people within a community with elevated inequality blinds the group to the myriad problems the poor face and leads to a caricature of the poor as incompetent - and it is this warped public perception and conversation that is holding back effective poverty programs.
Lazare 9y ago
> US lawmakers have expressed frustration when investments such as welfare programs don’t pull people out of poverty. Most US welfare spending is explicitly excluded from measures of poverty; if you're measuring "the values of X excluding Y", increasing Y isn't going to move the needle. "The U.S. Census Bureau determines poverty status by comparing pre-tax cash income against a threshold..." American anti-poverty measures overwhelmingly take the form of tax credits (eg, the EITC program), food stamps (SNAP), housing vouchers (section 8 vouchers), and health care (eg, Medicaid). All four are excluded when looking at pre-tax cash incomes. For good or ill, we don't give the poor cash. I know that's not really the point of the article, but it was a bit jarring.
memorymappings 9y ago
I grew up on welfare well into elementary school and my mom married my stepdad who was delivering oil to gas stations up driving all night on trucks. Before that I spent my first years in a trailer park where my mom had my older brother and I in her teens, living in a single wide with my biological father and his mother. My dad's mother and both of my parents were addicts and alcoholics. I was taken out of custody and lived with family members until I was about 5 before I could live with my mom again on food stamps when she was single. She found a job as a medical transcriptionist and living in a two bedroom sharing a bunk bed with my brother. She met my stepfather at a church when he was a trucker. Noone in my family including my older brother graduated high school. I made straight A's was bored as public schools in the south are notorously bad mine was no different with the exception of overcrowding, riots etc, and after my parents foreclosed on their house we moved into yet another tiny apartment but this one was closed to a bookstore. I walked to Barnes and nobles everyday after school and one day after reading the alchemist in one sitting I picked up a teen vogue (I'm a girl) in the 9th grade in highschool, and read a fashion edition on boarding school fashion ($350 Tori Birch flats) and I thought hmm boarding school sounds like it might be challenging.... I went home and applied to every boarding school in the northeast, got accepted into three and a scholarship to 2. I went to one and cried for three weeks when I made an unweighted 3.96gpa because I wanted a 4.0 and needed to get a good scholarship to afford college. I went to an engineering school and got a degree in Electrical Engineering, I have worked my ass off and dealt with all of the nonsense of going to school with spoiled rich white boys who did engineering because their dad did engineering and spent their weekends on expensive getaway trips, binge drinking at frat houses with jobs waiting for them at their dads big engineering firm. Luckily for me I met alot of great kids in college as well who were genuinely geeky and there for the experience, but it has not been fun being a girl in engineering and dealing with the nonsense with that plus all of the ignirnace associated with how easy some people have it relative to me and many people who have it way worse than me. I consider myself lucky to be curious and enjoy hard work, and grateful for all the rich people in my life who have donated literally hundreds of thousands of dollars so people like me could afford to have a good education. I am not slighted or bitter in any regard when it comes to understanding how lucky I am (I could have been a girl trying to go to school in a third world country with no rights money etc) in the grand scheme of things and I truly believe gratitude is a healthy attitude to have in life. That being said, I genuinely think so many people, particularly young white males whose mother's baby them to not end through their 20s have never struggled a day in their life and cannot understand what it's like to have to budget for a vacation, or food for that matter, buy their own first car and not be able to afford.to fly home on the holidays in college. When I interned in Manhattan in college I actually met guys who tried to impress me by saying they came from nothing because their dad "only gave me $10,000 to invest when they were 18 and wouldn't give me anything else after that" (accept.of course all the luxuries in their life up to that point, including a good education, summer camps at ivy leagues, a brand new car and a fully paid for $200k tuition with no loans, but I digress...). I sat next to a kid at orientation at the company I was working for complaining about his stock options being limited for 10 weeks due to conflict of interest for the company we were working for. Stock? Wow, I was excited to get my first paycheck so I could pay rent. But these kids swear they "came from nothing". And many girls I went out with I ended up not being able to hang out with because they would go shopping for Jimmy choose ($600 heels) and to clubs where shots are $50 a pop. I couldn't afford to socialize with them and it never occurred to any of them an $80 sushimi dinner with cocktails could be an affordability issue. They were living in Soho, I was in the Bronx living paycheck to paycheck. It was the first income I had ever had. I genuinely think there is a level of non intentional ignorance about what it really means to come from nothing and it's a big deal considering politics plays into inner city education, taxes etc. I'd honestly love to see some of these guys I worked with walk a day in my shoes and try to show up in Manhattan at the age of 21 with $300k to liquidate, no debt and a sports car with my background, and try to lecture me about how I'm not "confident" enough and that's my issue when it comes to advocating for myself in the business world..... I will cry them a river
throwaway76025 9y ago
Homeless for nine months and about to be officially destitute tomorrow. At least I’ve had a vehicle to have shelter and live in a warm area. Combo of Homelessness and poverty is a cycle that is quite difficult to get out of. I took on programming work from nice folks while still homeless, which absolutely backfired. Lack of a normal safe routine and attempting to work from public when under such stress can be an effort in futility. Thus couldn’t work and couldn’t get back on my feet. It’s a vicious cycle The other consequences are deteriorated mental state from isolation, paranoia, and depressive symptoms all of which serve to make digging out of any hole seemingly impossible. Constant never ending stress, concerns about basic survival, concerns about physical safety change your mentality. Idgaf attitude prevails, to the point where crime including violence seem less unjustified. I could go on, and obviously this is just an anectode
- throwaway76025 9y ago
  Bye bye!!!!!
ilaksh 9y ago
Poverty is caused by low or no wages. Not a mindset or lack of education or any other BS. I am technically below the poverty line working as a software engineer on a startup and I work hard. If we made some money or got funded then I would be less poor. The structural issue is unequal distribution of resources. It's not a personal mental health problem or weakness or other BS used to cover for racism. Also since I have had less money I have made better decisions not worse. Because I have to.
123jay7 9y ago
How does lonliness change your mindset? Saddness? Depression?
madez 9y ago
Trade is not a zero-sum game, in sum we gain. Cooperation leads to synergy. The sick and poor cost money. Having that in mind, I cannot understand why a country wouldn't give food and money and shelter to the poor. Without shelter, you get sick and can barely work. Without money, you are stressed and get sick. Without food, you get sick and can't work. It's obvious that even the hard working people have a better life when society helps the less fortunates ones. So, why on earth wouldn't a country do it? That would be unethical, irrational and economical madness.
Tasboo 9y ago
I grew up in poverty. My dad is fortunately able to get tuition assistance through the Native American tribe he is a member of. With that assistance, he was able to graduate law school and become a lawyer. As soon as he did that and got his first job as an attorney, our lives changed dramatically. My fondest memory of that time was buying brand new clothes. That never happened before, at least not that I can remember. I was so amazing to wear clothes that weren't hand me downs that were initially purchased used from a thrift store. The thing is, even with the tuition assistance, both of my parents had to work double shifts almost constantly to keep food on the table. I have many memories of my siblings and I coming home to an empty house in elementary school because my parents would be out working their ass off for us. Most weeks I wouldn't see them until the weekend. Now, as adults, my siblings and I are now living well enough in middle class. Government programs and assistance for the poor can fail and can be taken advantage of by people who would rather squander that assistance, no doubt, but that doesn't mean all people are like that. It can and does work, but even with assistance, it is not enough. My dad was very fortunate to have a tuition free ride through law school, and we as a family were fortunate enough not to run into anything that derailed his desire or ability to finish law school. Without that tuition assistance, I doubt he could have secured the loans that were needed. Simply cutting assistance programs will not make poor people to 'get back to work' and dig themselves out of poverty. It was next to impossible to do so when I was growing up and it is even worse now. Can those programs be better? Yes. Should we cut them because they aren't the best? Absolutely not. Please.
abbiya 9y ago
Or how money changes your mindset ?
AceJohnny2 9y ago
See also Scalzi's "Being Poor" (2005): https://whatever.scalzi.com/2005/09/03/being-poor/ https://whatever.scalzi.com/2005/09/03/being-poor/ An essay to drive home some aspects of living in poverty. Sample: "Being poor is a heater in only one room of the house. Being poor is knowing you can’t leave $5 on the coffee table when your friends are around. Being poor is hoping your kids don’t have a growth spurt."
MarkMc 9y ago
The proportion of the global population living on less than $1.90 per person per day has fallen—from 18 percent in 2008 to 11 percent in 2013, according to the World Bank. In the United States, however, the poverty rate has been more stubborn—41 million people lived below the country’s poverty line in 2016, about 13 percent of the population, nearly the same rate as in 2007. Is this a fair comparison? I thought that the poverty line in the US was defined relative to median income. If the definition is changed to $X per day after inflation then maybe the US doesn't look so bad? Also I would like to see some kind of adjustment for immigration. Imagine that the US lifts 10 million citizens out of poverty and at the same time accepts 10 million poor immigrants. Is it fair to say the US has made no progress on poverty?
rajarsheem 9y ago
One thing that looks paradoxical to me: In the first half it says people going through financially stressful situations suffers from deficit in IQ level and drop in cognitive performance. But at the same time, they can take smart and wise decisions as the experiments suggested.
cpv 9y ago
John Scalzi: Being Poor (2005) https://news.ycombinator.com/item?id=15041758 https://news.ycombinator.com/item?id=15041758
IkmoIkmo 9y ago
A lot of great stories in this thread, a lot of them are quite disheartening US stories of poverty. Mine was the opposite, really. Grew up as a welfare-kid in Western-Europe with a disabled dad and a sibling. The state provided for us, the three of us made do with about $1200 (roughly the $7.50 minimum wage in the US at a 40h 52w work schedule) or so in today's money, living in the capital city so rent and insurance ate up quite a bit of our budget. Still, we had a great childhood, went to university, always did sports, vacations, had books and computers at home. Everything was always a few generations old, everything was second hand, I still have clothes that are 15 years old. I always worked to buy my own clothes, phone, trips etc, such that my dad was 'only' paying rent/food from age 14, and eventually we chipped in there as well. I feel tremendously grateful for having been born here, socio-economic mobility is a lot higher here than elsewhere (the American dream irony). I've got a postgrad degree, steady job, traveled the world etc. I never wanted for anything, honestly. The government helped us out with tuition fees, insurance, rent, and I happily pay my fair share back in taxes. Most importantly perhaps, I never felt the damage of stress of being poor, we were never scared for our future, if anything, it looked bright. I don't feel any less than others, not ashamed or fearful. I owe a lot of this to the state and my fellow citizens.
- muxator 9y ago
  Can I ask you which European state are you talking about?
  - jacobush 9y ago
    I also want to know. Sounds like it could be Germany, Netherlands, (maybe not UK?), France, Belgium, Sweden/Denmark/Norway/Finland, a few others?
  - IkmoIkmo 9y ago
    Netherlands
- kpennell 9y ago
  thanks for sharing your story. the state is great
lalp1 9y ago
I grew up "spoiled" but my grand-parents lived the WWII in France, they weren't poor but they still live in frugality even if they are comfortable since many decades - ex: they do not eat lots of meat. I inherited this frugality and do not like to buy useless stuff. My girlfriend, a russian who lived in USSR, is the complete opposite. She rely heavily on consumption to be "happy" and to fill an insecurity. It might be genetically cultural, but the communism sadness/deprivation has created generations of Russians who love consumption and luxury lifestyle.
lotsofcows 9y ago
Dickens taught us to look at the poor and think, "There but for the grace of God, goes John Bradford." At some point this transformed into looking at the poor and thinking, "Loser." Governments should lean on our media to mediate this message.
- le-mark 9y ago
  Interesting, took me a while to discern your meaning here[1]. I had never heard of John Bradford, but basically, it's in the spirit of "There but for the grace of God, goe I". [1] https://en.wikipedia.org/wiki/John_Bradford https://en.wikipedia.org/wiki/John_Bradford
bencollier49 9y ago
"The proportion of the global population living on less than $1.90 per person per day has fallen—from 18 percent in 2008 to 11 percent in 2013, according to the World Bank." Is this because $1.90 is 2008 money is equivalent to $2.50 now?
zubairlk 9y ago
I had a time in my life where I constantly used the calculator app on my phone. salary - rent - transport - food * 30 < 0 is stressful. And this doesn't account for any incidental expenses. I was blessed enough to have education, a social support circle, a safety net from parents, and some growth to look forward to. Despite that, the stress caused almost daily headaches. Its a vicious cycle.
whiteraven96 9y ago
I.could tell you a story about how my broken family made it all happen, how a family of 6 boys never made it better, a city or circumstance made the option to be wealthy almost impossible or how generations of economic destruction made me this way. But this all matters not, for what I think , I become. The only 3 books you will ever need to break out of the cycle are these. ·THINK AND GROW RICH ·GRIT ·A PURPOSE DRIVEN LIFE They are all fundamentally written for you to find the answer on the first page, on the front cover, in every chapter, and of course within YOURSELF. Go now, Be rich. "Let others lead small lives, but not you. Let others argue over small things, but not you. Let others cry over small hurts, but not you. Let others leave their future in someone else's hands, but not you." - Jim Rohn, http://www.bquot.es/s/1023 http://www.bquot.es/s/1023
whiteraven96 9y ago
Wanna change your mindset? Ill keep it simple to save us all time to START reading. Read these 3 books, even if its just one chapter of each book in any order, but READ them! They will change your mind more than any money ever can. ·THINK AND GROW RICH - Napoleon Hill · GRIT - Angela Duckworth · THE PURPOSE DRIVEN LIFE - Rick Warren
- Jotra7 9y ago
  Quit spamming this silly self help stuff. It doesnt help anyone.
jaclaz 9y ago
I wonder how relevant is the question asked in the original article, or - maybe better said - to whom the question has been asked. >The researchers asked real people of various socioeconomic strata if they were willing to travel an extra 30 minutes to save $50 on a $300 tablet. Some said they were. But when asked if they’d drive that far to save the same amount on a $1,000 tablet, some of the respondents changed their minds. Their answer depended on their income. I wouldn't even think to ask such a question about buying a $300 (let alone $ 1,000) tablet to someone who clearly cannot afford it (the actual poor people). I mean, when you are dealing with someone who is homeless or that is on foodstamps (or similar assistance for the very basic needs) are you really going to ask them about the $50 savings on a completely voluptuary item such as a tablet, particularly a $ 1,000 one? And the question is about "driving" (implying that the "poor" has a car).
shoulderfake 9y ago
You guys should really read this related piece : http://nautil.us/issue/47/consciousness/why-poverty-is-like-a-disease http://nautil.us/issue/47/consciousness/why-poverty-is-like-...
tboyd47 9y ago
Very interesting findings. The study seems to indicate that poverty is correlated with better economic decisions, unless the option to borrow is present, in which case, poverty correlates with poorer decisions.
- lerpa 9y ago
  That's also why giving money is a lot of time not a solution. Despite being easy, lazy and making people feel good about it.
sherlockgopher 9y ago
I might not belong to "poor" because my parents had money, but the thing was that they were extra ordinarily stingy when it came to spending it on me. This resulted in me going to school in torn pants etc So now that I have money, I don't spend a dime of it. I use the same clothes, same cycle, the only thing I spend money on is books: I buy lots of it.
ythn 9y ago
The question I have is: in the ideal society, should anyone have to live with the consequences of their actions without a government safety net to save them? It seems that the liberal answer is "no" and that "nobody is ever at fault for a bad circumstance, and the government should always provide a free solution to get people out of any trouble they are in" - Examples: health, abortion, addiction, debt, bad money management, etc.
sifoo 9y ago
I've gone back and forth between having a lot of money and not having any money at all several times by now. It's getting to the point where I don't want any money as long as basic needs are covered. Money is a seriously addictive and destructive drug; and like all such addictions, it's impossible to get a perspective from the inside; you don't see what it's doing to you until you're out. And the fact that it's everywhere makes quitting really tricky.
known 9y ago
This is why I endorse https://www.economist.com/news/leaders/21731626-case-taxing-inherited-assets-strong-hated-tax-fair-one https://www.economist.com/news/leaders/21731626-case-taxing-...
- jbboehr 9y ago
  We already have an issue with business consolidation in the US and the decline of small businesses, I would be wary about anything that might contribute to it, as an inheritance tax might.

777 points by bryanwbh 9y ago

> That’s the correct financial decision, according to traditional economics—to drive the extra distance no matter the original cost. Saving $50 is the same regardless of the amount of the item in question. But wealthier participants saw the savings in relative terms, noticing the percentage savings. By contrast, poorer participants thought in absolute terms. To them, $50 saved was $50 to spend on groceries or the electric bill. Then traditional economics is a fool. Rich people value their time and their headspace. I’ve seen this again and again with someone close to me: they assign the same priority to tiny financial decisions as to big ones. They do make very optimized decisions but it is within a very small context. In the meantime they don’t realise the world of opportunity they are not seeing because of their obsessive focus on small items.

nreilly 9y ago
It’s a lot harder to quantify and value headspace. Is there a way? I was expecting the article to quantify it in reduced IQ, but it went the other way.
- Jedd 9y ago
  Quantifying IQ is hard enough - quantifying deltas based on subjective rates of poverty? That'd be a courageous goal. Authors set out to demonstrate qualitative cognitive differences between people suffering with scarcity (primarily cash) and those not. People suffering with scarcity have a cognitive load that the 'not' category does not -- I don't think that translates to reduced IQ, but was demonstrated to translate to 'more bad decisions' via heightened and persistent cognitive load. ADDENDA: From the outside looking in, that phenomenon may be misunderstood by an observer to indicate a causal relationship between bad decision making and poverty. TFA makes the case that causality is inverse to common (by governments, elites, etc) interpretation.
deleted 9y ago
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RSZC 9y ago
You're misunderstanding the question they've posed people. In either situation, the question is "is half an hour of transit worth $50 to you." Whether it's $50 saved on a $300 item or a $1000 item has no impact on the $ saved per minute.
- lazulicurio 9y ago
  I'd be interested to know if there was some sort of priming effect going on. With the wealthier people thinking more in percentage terms rather than absolute price, they might expect that the $1000 tablet would be discounted more in the future (if the $300 tablet can be 17% off, why not the $1000 tablet?) and decide to wait it out.
- rdiddly 9y ago
  Right, but there's a subtlety: The dollars saved in those minutes are worth a different amount to a rich person depending on their relative impact on the sale. $50 off of $300 is a 1/6 discount, so a "good deal" that they will (somewhat recreationally) decide to go and get. But they still don't inherently care that much about $50. You could say if they make lets say ten times what I do, they probably care 1/10th as much as I do, about $50. Anyway and meanwhile, $50 off of $1000 is a 1/20 or 5% discount. Now it's still the same $50 they don't give a shit about, but it's also now an insignificant discount. Would they spend extra time on what to them is a rounding error on a $1000 purchase? They're not really getting a "deal" anymore, it's a bore, and they decide to spend the extra $50 just to buy back their half-hour. So long as the price is still "about $1000" they're OK with it.
  - tylerhou 9y ago
    The rational answer is that if you would drive 30 minutes to save $50 off a $300 tablet, then you should also drive 30 minutes to save $50 off a $1000 tablet. You've described the psychology of why a wealthy person might not drive the 30 minutes for the $1000 tablet well (but still will spend the time to save money on the $300 tablet), but that choice is still irrational.
    - 9y ago
eftychis 9y ago
Not really. There is the notion of opportunity cost. 30' might be worth your time, unless investing that time, either working, or even resting, paid you back e.g. > $50. If you expect yourself to make less than $50 an hour (assuming you have to drive back (?), otherwise $100) then that would be a good deal. It depends on your model of course. After some point spending 30' to get $50 off is crazy, if you are struggling to make time for your family. Either the article does a poor job describing the research, or I find it somewhat incomplete. I mean there is an inherent misconception that $1000 item/asset is much much better than a $300 equivalent. I am curious how that affects the valuation between different groups of individuals.
- Jedd 9y ago
  > I mean there is an inherent misconception that $1000 item/asset is much much better than a $300 equivalent. That's not how I read it -- the authors were not assigning a qualitative value to the items, only a quantitative one. They did not need to be the same 'type' of asset. It was just that when comparing the savings - 50/300 vs 50/1000 - some people considered the ratio more important than the numerator.
- Buge 9y ago
  You are misunderstanding the article. The study asked some rich people "would you spend 30 minutes to save $50 on a $300 item". Some rich people said yes. Then they asked "would you spend 30 minutes to save $50 on a $1000 item". Some of the previous "yes" answers changed to "no". That is illogical, logically no one should have changed their answer. Poor people didn't make this illogical answer change.
deleted 9y ago
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drpgq 9y ago
I guess there’s a reason penny wise and pound foolish is a saying

dijit 9y ago

This is not the first time this article has come up, and as usual I'll give my 2c. What qualifies me to talk about this issue? I was raised in the UK on income support, single mother, social housing, low income city etc; Now the situation has changed somewhat in the UK; back then in the UK it was possible to get by without going into debt if you were smart about things and I believe this no longer to be the case, but I am no longer in this system and; to qualify my statement further: it was not possible to be poorer than my mother was. No family and no registered father on record. (He would have had to pay child maintenance if he was on record, the state does not supply this if there is an absence) What I found to be true is that my mother will buy the cheapest thing that will do the job, she will treat her time as unlimited in finding similar quality goods for less money. She still trawls second-hand stores and will not buy anything that needs maintenance. Her cars tend to be 1-step from the junk-yard (even though she has a steady well paying job now). For myself, I select heavily for things that require less maintenance too. I buy extremely high quality things because I assume that my job is temporary and that I will once-again be plunged into poverty, and if anything needs to be replaced in that time I may not have the financial freedom to do so. I do not have anything that requires recurring costs (no netflix, no apple music.. I will not subscribe to anything that is not a utility), I do not take long-term contracts (if there is a choice between 12months at a cheaper rate or month-to-month for 10% more I will pay the 10% more not to be tied). This is my anecdatum, of my mother who grew up working class and became poor through choice, and for me, who grew up poor and became middle-class.

bane 9y ago
I grew up relatively poor in the U.S. under wildly different family circumstances, but I felt myself nodding to the solutions and approaches of both your mother and yourself -- some out of recognition, some out of familiarity. I've found it almost impossible to enumerate the ways in which growing up poor wildly alters your mindset about money. It's literally mind altering and often nonsensical or hard to explain to people who haven't been through it. My wife, who grew up in a fairly wealthy household (to parents who themselves escaped crushing poverty), has tried to train me to avoid many of those instincts now that I myself am in good financial status. But I still take a weird kind of comfort at least browsing local thrift stores, figuring out what we'd absolutely need in case of a major bankruptcy or working over scenarios on how to survive and get housing if we lost everything. The industries that prey on the poor basically exist because they've managed to use these instincts against the poor rather than trying to get people out of poverty. They've always been there, but I'm afraid that they've become much more sophisticated at extracting pennies from people with mere dollars.

protomyth 9y ago

If you are poor you cannot shop sales the same what you can if you have money. Stocking up on items is not really an option.

gscott 9y ago
I think you mean buying in bulk. Buying in bulk is great but often not because if it is food it might go bad before you eat it and if you are poor your limited on space... so huge packs of items don't fit well in your tiny space. Plus the up front cost is a real killer since the money is saved over time. And if you have more of something you might end up using more because it's convenient. And finally if you are splitting rent with many people they will help themselves to the bulk items.
- sparkie 9y ago
  There's a subtle difference between "buying in bulk" and "keeping a reasonable stock". I grew up in a quite poor family and my parents are terrible with money. One thing that frustrated me to no end is that they would almost never buy something ahead of time. An item would literally have to run out before they'd consider buying its replacement, which meant I'd regularly get in the shower in the morning to find there is no soap, no toothpaste, no toilet paper. You'd end up going to a local convenience store and paying 2x the price for the item because you need it now. Your grocery budget becomes hugely inflated, and you still end up buying the same necessities. Also when you work on a system of buying one item only to replace the previous, you really miss out on bargains because you have to pay the full price it is at the time you need it, instead of a week or two earlier when the same product was BOGOF. At the same time, they throw away tonnes of food which has gone off because they can't plan meals and shopping consists of "we might eat that." Food which has a long expiry date (canned foods, etc) always runs out.
  - flukus 9y ago
    > You'd end up going to a local convenience store and paying 2x the price for the item because you need it now. Your grocery budget becomes hugely inflated, and you still end up buying the same necessities. I see this at a lot at my local 7-11, many poorer people do a lot of their grocery shopping there even though an aldi is 5 minutes walk away (so it's actually closer for some of them, literally across the road) and three other supermarkets are under 15 minutes walk. I suspect there is some sort of psychological effect (possibly from advertising) that is compelling them to go to 7-11 instead of somewhere cheaper and that they aren't making a conscious financial decision.

dbg31415 9y ago

It's not poverty. It's stress. Poverty is very stressful. Any kind of stress stops people from acting the way they normally would be inclined to act. It takes a lot of conditioning and practice to deal with stress without having it impact you and your performance. Take a little stress off your staff, and instantly everyone starts making better decisions, their work seems more focused. As a manager, the best thing I can do for my team is try and shield them from scope creep, angry clients, and unreasonable deadlines. And make sure everyone has time off when they need it. Take care of your team, team will take care of the work.

mc32 9y ago
It's also mental. When I was poor and finally got a "student" class credit card, i knew paying off the month's bill was the best option economically, i still could not get around the idea of giving up all my "cash" (money in the bank) to pay off the debt. Even though i could have simply paid off and then should something come up, use the zero balance credit card. No, i still wanted cash available. Knowing this was not the logical option.
- dredmorbius 9y ago
  The value of cash liquidity seems deep within much economic activity. It's what, essentially, Adam Smith railed against in Wealth of Nations, arguing that wealth was not gold and silver (liquidity) but real produce and labour capacity. And yet much present economic theory and practice is only so much neomerchantilism. This makes me suspect a real foundation, at least psychologically, to the behaviour.
hyperdunc 9y ago
A little "positive stress" can increase performance in the short term. The classic example of escaping a hungry lion translates into modern-day scenarios like meeting an important deadline. It's when stress is sustained that major health problems arise.

meanmrmustard92 9y ago

Shafir and Mullainathan wrote a book called "Scarcity" that articulates an expanded version of this idea. Highly recommended.

didsomeonesay 9y ago
I second the recommendation! They are looking into several forms of scarcity (e.g. time scarcity of busy academics) and how this similarly affects the behaviour, creating a "focus" on the immediate scarcity that distracts from everything else, and prevents seeing the "big picture". One interesting conclusion being that poverty is a "root" scarcity that begets other forms of scarcity. Interesting was also the observation that scarcity-behaviour can have desirable outcomes and can be put to use (e.g. using budgeting as a form of artificial scarcity in personal finance).

redm 9y ago

I'm sure how people deal with stress and difficult situations varies from person to person. My personal story and 2-cents: When I was 17 I went through a period of near destitute. I was living on my own, my father had passed away, and I had dropped out of school. Yet, I found myself with some very good jobs, such as GE Capital, a big Oil and Gas companies IT department, etc. Regardless of the opportunity, my arrogance, ambivalence, or immaturity (take your pick) cost me a series of good jobs in short order. The result was I had no money, no electricity, no gas for my car, and not much to do. Eating cold beans out of a can in the dark tends to force you to re-think your priorities. In my case, I got very motivated very quickly and dug myself out of that hole after a few months. I think that's the point Orrin Hatch was trying to make. If I had a fallback, I would have, without a doubt, kept coasting along from job to job. I've never looked at work or money the same way since as I never want to find myself there again. So long story short, being poor (by my own doing) didn't necessarily motivate me, but looking into oblivion sure as hell did.

autokad 9y ago
i grew up poor, and it was frustrating to see the stupid mistakes my family and people around me would make over, and over, and over. then people like the researchers in this article say infuriating things like 'their bad decisions are just because they are cognitively tired, and actually many of them could be even considered shrewd!" being cognitively tired does play a role, but more so because they are cognitively lazy. their bad / lazy decisions are confounded by the fact they are trying to solve problems caused by making bad decisions in the first place. on top of that, most dont value education. i typed a long story but deleted it. in short, 4/6 of us siblings dropped out of school, those same 4 had a large life insurance policy from the airforce which they blew almost immediately. we have so many opportunities in this country, but it still does require that we go to school, work, and use our head. i am aghast on how so many people simply refuse to THINK. so many people with money problems have no idea how much money annually they spend on ANYTHING. how can you even begin to talk to someone about getting out of poverty, if they wont even calculate how much they are spending on that 5$ starbucks and 600$ phone.
- MrLeap 9y ago

partycoder 9y ago

Some people think being poor is living paycheck to paycheck. The reality can be much worse.

bojackstorkman 9y ago

I love how when this comes up, it's people either saying "Here was my experience when I was poor in the past." or "Here is what I think about economics or the wording of this article." Don't get me wrong, I know what website I'm on. But in all seriousness, is there room for currently poor people in this discussion?

haberman 9y ago
How does non-poor people commenting prevent poor people from commenting? The author of the original article is probably not currently poor, and yet she is writing about it. Do you see this as a problem too?
- tachyoff 9y ago
  Poor people can’t comment because they’re poor. It’s the survivorship bias problem. People who are currently poor probably can’t comment on HN (or have no idea what it is), so what you see, overwhelmingly, is people who were able to escape poverty. This can lead some people to believe that it’s easier than it is to get out of poverty. And since this is an article about true, abject poverty, “I pulled myself up by my bootstraps with my tech skills” doesn’t really help anyone learn anything.
- bojackstorkman 9y ago
  Sorry if I gave that impression. I have no problem with lots of perspectives. I specifically asked if anybody had made room for, uh, the poor people. Considering my response has already gotten one "Well you're obviously not poor if you read this", and another asking for clarification of my opinions on non-poor people, I guess this wasn't the place to make that point. Sorry.
  - haberman 9y ago
    > I specifically asked if anybody had made room for, uh, the poor people. But what does this mean? Unless someone is specifically arguing that poor people should not comment, how is anyone not "making room for" the perspectives of poor people?

hendler 9y ago

“Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” - James Baldwin

blfr 9y ago

Frankly, a couple of rounds of Angry Birds doesn't seem like a great way to decide important policy. How many of the studies cited in the article were at least replicated a few times?

kraig911 9y ago

I hate seeing people's comments on stories around this topic. I grew up in poverty and food stamps from time to time. My dad was a roughneck and when the oil bust happened in the 80's there was a time we lived out of our car -- my whole family. here was literally nothing to do in the oil patch during that bust. There was literally no work. But people don't understand true hopelessness. My dad did everything he could to find a job during that time... for three months time we hardly had any food I guess because it wasn't easy to get on the program fast back then. Those that come out of a dire situation think everyone else can. The ramifications of that happening to my dad will probably last multiple generations. He went from a loving father to a loathsome troll of a creature working nights in a oil refinery (I thought at the time) finally. From that my mom and dad divorced. My wife doesn't understand why I have severe dentals problems now in life, or other health issues that doctors told me are from stress. She doesn't understand why I stress so much about money and stay up at night. I don't know why I'm saying all this the solution is simple but the problem is hard to acknowledge. The poor and destitute simply need help. We live in a society though that thinks someone else is going to take care of the problems. When we do finally give help it's so conditional and shamed that the hole of guilt someone fell in is practically inescapable.

psyc 9y ago
I grew up in poverty in the US as well, and I agree there’s a heartless tendency for people not to acknowledge it’s real. The tired comment I see most frequently is something like “nobody in the US is poor because everyone has plumbing, refrigerators, and TVs.” First, no, everyone does not. Many people are homeless. Second, it’s very narrow to focus on objective material factors, because that discounts the toll of the nightmarish stress the poor live with constantly, even the ones who have an apartment and a television.
- baby 9y ago
  The most shocking place I've visited in my life was San Francisco. Super rich people surrounded by armies of homeless people.
  - 9y ago

adyavanapalli 9y ago

WNYC ran a great podcast series on busting myths about poverty. Here's a link: https://www.wnyc.org/series/busted-americas-poverty-myths https://www.wnyc.org/series/busted-americas-poverty-myths

emmelaich 9y ago

This is a large part of the culture change over the last 60 years. Those adults in the 50s grew up through the depression and war. It was hard adapting to the prosperity of the 60s. The young literally could not understand their parents attitudes.

pfarnsworth 9y ago

The first time I saw abject poverty was in high school on a family trip to Hong Kong. I saw an skinny old lady, wearing literally rags, washing herself from a puddle. I had never seen that in the other countries that we went on family trips to. The image is burned into my brain. I am lucky having grown up in a middle class family. My father also grew up in poverty and it affected me as well. He was able to provide for us bery well but the specter of being poor was burned into my psyche to an extremely unhealthy level. It lead to a decade of fear and broken relationships because I was so paranoid about losing my money and my livelihood. Now the combined income of my wife and I make us easy 1%ers and my perceptions of money have changed again. Instead of saving every penny we made smart financial decisions, like buying a house that was very affordable instead of getting as big a house as we could pay for. I’m reasonably comfortable that I will have a job until I retire and I’m very sure my wife will. This allows us the luxury of spending money on things that we never would have, like nannies and cleaners, and traveling business class instead of economy. It’s something I never, ever, would have considered 20 years ago. When I was scared about money in my 20s and early 30s (never living in poverty,though) I felt vulnerable and that I could “fail”. Going through the dotcom bust reinforced these feelings to the point where I went to the hospital several times due to anxiety attacks. I felt like this wouldn’t last and “winter was coming” so I saved every penny and even ended relationships over money. After a particularly bad breakup I realized I had a problem. My mindset now is I can always make more money if I lose my job. It might have to be something unpleasant but it can happen. I’m not wasteful with money but I don’t obsess over it anymore. I’m grateful for being in this position obviously, because all it takes is a really bad recession for things to get really bad. Aside from a couple of perks, like the cleaners and nannies, I generally save most of my money for “winter”. It’s a position that, as I said, I’m grateful having. I have friends who aren’t in the same position, and our mindsets in life are completely different.

princeb 9y ago

not only do the poor make affected decisions we also know that the poor (1) have a restricted set of feasible solutions (2) face higher uncertainty in outcomes due to the impaired ability to execute solutions (3) have limited ability to mitigate the consequences of a failed solution. in addition, public policy tends to strip the poor of their agency, not to mention dignity: (1) their choices are dictated without the context of their situation (2) the actual risks they face are ignored or treated as if a wealthier person were to face these risks (3) their actual utility curve is discarded in place of the utility curve of the policymaker or the general public... and then should the poor continue to fail to make full use of these programs that are not only difficult for the target group to take up, but also humiliating and undermining confidence in helping themselves, they are chided for continuing to make poor decisions. the article offers a few examples that overcame some problems affecting these people. but the story is very different between communities in which members are equally affected by limited resources and unequal communities. the separation of classes of people within a community with elevated inequality blinds the group to the myriad problems the poor face and leads to a caricature of the poor as incompetent - and it is this warped public perception and conversation that is holding back effective poverty programs.

Lazare 9y ago

> US lawmakers have expressed frustration when investments such as welfare programs don’t pull people out of poverty. Most US welfare spending is explicitly excluded from measures of poverty; if you're measuring "the values of X excluding Y", increasing Y isn't going to move the needle. "The U.S. Census Bureau determines poverty status by comparing pre-tax cash income against a threshold..." American anti-poverty measures overwhelmingly take the form of tax credits (eg, the EITC program), food stamps (SNAP), housing vouchers (section 8 vouchers), and health care (eg, Medicaid). All four are excluded when looking at pre-tax cash incomes. For good or ill, we don't give the poor cash. I know that's not really the point of the article, but it was a bit jarring.

memorymappings 9y ago

I grew up on welfare well into elementary school and my mom married my stepdad who was delivering oil to gas stations up driving all night on trucks. Before that I spent my first years in a trailer park where my mom had my older brother and I in her teens, living in a single wide with my biological father and his mother. My dad's mother and both of my parents were addicts and alcoholics. I was taken out of custody and lived with family members until I was about 5 before I could live with my mom again on food stamps when she was single. She found a job as a medical transcriptionist and living in a two bedroom sharing a bunk bed with my brother. She met my stepfather at a church when he was a trucker. Noone in my family including my older brother graduated high school. I made straight A's was bored as public schools in the south are notorously bad mine was no different with the exception of overcrowding, riots etc, and after my parents foreclosed on their house we moved into yet another tiny apartment but this one was closed to a bookstore. I walked to Barnes and nobles everyday after school and one day after reading the alchemist in one sitting I picked up a teen vogue (I'm a girl) in the 9th grade in highschool, and read a fashion edition on boarding school fashion ($350 Tori Birch flats) and I thought hmm boarding school sounds like it might be challenging.... I went home and applied to every boarding school in the northeast, got accepted into three and a scholarship to 2. I went to one and cried for three weeks when I made an unweighted 3.96gpa because I wanted a 4.0 and needed to get a good scholarship to afford college. I went to an engineering school and got a degree in Electrical Engineering, I have worked my ass off and dealt with all of the nonsense of going to school with spoiled rich white boys who did engineering because their dad did engineering and spent their weekends on expensive getaway trips, binge drinking at frat houses with jobs waiting for them at their dads big engineering firm. Luckily for me I met alot of great kids in college as well who were genuinely geeky and there for the experience, but it has not been fun being a girl in engineering and dealing with the nonsense with that plus all of the ignirnace associated with how easy some people have it relative to me and many people who have it way worse than me. I consider myself lucky to be curious and enjoy hard work, and grateful for all the rich people in my life who have donated literally hundreds of thousands of dollars so people like me could afford to have a good education. I am not slighted or bitter in any regard when it comes to understanding how lucky I am (I could have been a girl trying to go to school in a third world country with no rights money etc) in the grand scheme of things and I truly believe gratitude is a healthy attitude to have in life. That being said, I genuinely think so many people, particularly young white males whose mother's baby them to not end through their 20s have never struggled a day in their life and cannot understand what it's like to have to budget for a vacation, or food for that matter, buy their own first car and not be able to afford.to fly home on the holidays in college. When I interned in Manhattan in college I actually met guys who tried to impress me by saying they came from nothing because their dad "only gave me $10,000 to invest when they were 18 and wouldn't give me anything else after that" (accept.of course all the luxuries in their life up to that point, including a good education, summer camps at ivy leagues, a brand new car and a fully paid for $200k tuition with no loans, but I digress...). I sat next to a kid at orientation at the company I was working for complaining about his stock options being limited for 10 weeks due to conflict of interest for the company we were working for. Stock? Wow, I was excited to get my first paycheck so I could pay rent. But these kids swear they "came from nothing". And many girls I went out with I ended up not being able to hang out with because they would go shopping for Jimmy choose ($600 heels) and to clubs where shots are $50 a pop. I couldn't afford to socialize with them and it never occurred to any of them an $80 sushimi dinner with cocktails could be an affordability issue. They were living in Soho, I was in the Bronx living paycheck to paycheck. It was the first income I had ever had. I genuinely think there is a level of non intentional ignorance about what it really means to come from nothing and it's a big deal considering politics plays into inner city education, taxes etc. I'd honestly love to see some of these guys I worked with walk a day in my shoes and try to show up in Manhattan at the age of 21 with $300k to liquidate, no debt and a sports car with my background, and try to lecture me about how I'm not "confident" enough and that's my issue when it comes to advocating for myself in the business world..... I will cry them a river

throwaway76025 9y ago

Homeless for nine months and about to be officially destitute tomorrow. At least I’ve had a vehicle to have shelter and live in a warm area. Combo of Homelessness and poverty is a cycle that is quite difficult to get out of. I took on programming work from nice folks while still homeless, which absolutely backfired. Lack of a normal safe routine and attempting to work from public when under such stress can be an effort in futility. Thus couldn’t work and couldn’t get back on my feet. It’s a vicious cycle The other consequences are deteriorated mental state from isolation, paranoia, and depressive symptoms all of which serve to make digging out of any hole seemingly impossible. Constant never ending stress, concerns about basic survival, concerns about physical safety change your mentality. Idgaf attitude prevails, to the point where crime including violence seem less unjustified. I could go on, and obviously this is just an anectode

throwaway76025 9y ago
Bye bye!!!!!

ilaksh 9y ago

Poverty is caused by low or no wages. Not a mindset or lack of education or any other BS. I am technically below the poverty line working as a software engineer on a startup and I work hard. If we made some money or got funded then I would be less poor. The structural issue is unequal distribution of resources. It's not a personal mental health problem or weakness or other BS used to cover for racism. Also since I have had less money I have made better decisions not worse. Because I have to.

123jay7 9y ago

How does lonliness change your mindset? Saddness? Depression?

madez 9y ago

Trade is not a zero-sum game, in sum we gain. Cooperation leads to synergy. The sick and poor cost money. Having that in mind, I cannot understand why a country wouldn't give food and money and shelter to the poor. Without shelter, you get sick and can barely work. Without money, you are stressed and get sick. Without food, you get sick and can't work. It's obvious that even the hard working people have a better life when society helps the less fortunates ones. So, why on earth wouldn't a country do it? That would be unethical, irrational and economical madness.

Tasboo 9y ago

I grew up in poverty. My dad is fortunately able to get tuition assistance through the Native American tribe he is a member of. With that assistance, he was able to graduate law school and become a lawyer. As soon as he did that and got his first job as an attorney, our lives changed dramatically. My fondest memory of that time was buying brand new clothes. That never happened before, at least not that I can remember. I was so amazing to wear clothes that weren't hand me downs that were initially purchased used from a thrift store. The thing is, even with the tuition assistance, both of my parents had to work double shifts almost constantly to keep food on the table. I have many memories of my siblings and I coming home to an empty house in elementary school because my parents would be out working their ass off for us. Most weeks I wouldn't see them until the weekend. Now, as adults, my siblings and I are now living well enough in middle class. Government programs and assistance for the poor can fail and can be taken advantage of by people who would rather squander that assistance, no doubt, but that doesn't mean all people are like that. It can and does work, but even with assistance, it is not enough. My dad was very fortunate to have a tuition free ride through law school, and we as a family were fortunate enough not to run into anything that derailed his desire or ability to finish law school. Without that tuition assistance, I doubt he could have secured the loans that were needed. Simply cutting assistance programs will not make poor people to 'get back to work' and dig themselves out of poverty. It was next to impossible to do so when I was growing up and it is even worse now. Can those programs be better? Yes. Should we cut them because they aren't the best? Absolutely not. Please.

abbiya 9y ago

Or how money changes your mindset ?

AceJohnny2 9y ago

See also Scalzi's "Being Poor" (2005): https://whatever.scalzi.com/2005/09/03/being-poor/ https://whatever.scalzi.com/2005/09/03/being-poor/ An essay to drive home some aspects of living in poverty. Sample: "Being poor is a heater in only one room of the house. Being poor is knowing you can’t leave $5 on the coffee table when your friends are around. Being poor is hoping your kids don’t have a growth spurt."

MarkMc 9y ago

The proportion of the global population living on less than $1.90 per person per day has fallen—from 18 percent in 2008 to 11 percent in 2013, according to the World Bank. In the United States, however, the poverty rate has been more stubborn—41 million people lived below the country’s poverty line in 2016, about 13 percent of the population, nearly the same rate as in 2007. Is this a fair comparison? I thought that the poverty line in the US was defined relative to median income. If the definition is changed to $X per day after inflation then maybe the US doesn't look so bad? Also I would like to see some kind of adjustment for immigration. Imagine that the US lifts 10 million citizens out of poverty and at the same time accepts 10 million poor immigrants. Is it fair to say the US has made no progress on poverty?

rajarsheem 9y ago

One thing that looks paradoxical to me: In the first half it says people going through financially stressful situations suffers from deficit in IQ level and drop in cognitive performance. But at the same time, they can take smart and wise decisions as the experiments suggested.

cpv 9y ago

John Scalzi: Being Poor (2005) https://news.ycombinator.com/item?id=15041758 https://news.ycombinator.com/item?id=15041758

IkmoIkmo 9y ago

A lot of great stories in this thread, a lot of them are quite disheartening US stories of poverty. Mine was the opposite, really. Grew up as a welfare-kid in Western-Europe with a disabled dad and a sibling. The state provided for us, the three of us made do with about $1200 (roughly the $7.50 minimum wage in the US at a 40h 52w work schedule) or so in today's money, living in the capital city so rent and insurance ate up quite a bit of our budget. Still, we had a great childhood, went to university, always did sports, vacations, had books and computers at home. Everything was always a few generations old, everything was second hand, I still have clothes that are 15 years old. I always worked to buy my own clothes, phone, trips etc, such that my dad was 'only' paying rent/food from age 14, and eventually we chipped in there as well. I feel tremendously grateful for having been born here, socio-economic mobility is a lot higher here than elsewhere (the American dream irony). I've got a postgrad degree, steady job, traveled the world etc. I never wanted for anything, honestly. The government helped us out with tuition fees, insurance, rent, and I happily pay my fair share back in taxes. Most importantly perhaps, I never felt the damage of stress of being poor, we were never scared for our future, if anything, it looked bright. I don't feel any less than others, not ashamed or fearful. I owe a lot of this to the state and my fellow citizens.

muxator 9y ago
Can I ask you which European state are you talking about?
- jacobush 9y ago
  I also want to know. Sounds like it could be Germany, Netherlands, (maybe not UK?), France, Belgium, Sweden/Denmark/Norway/Finland, a few others?
- IkmoIkmo 9y ago
  Netherlands
kpennell 9y ago
thanks for sharing your story. the state is great

lalp1 9y ago

I grew up "spoiled" but my grand-parents lived the WWII in France, they weren't poor but they still live in frugality even if they are comfortable since many decades - ex: they do not eat lots of meat. I inherited this frugality and do not like to buy useless stuff. My girlfriend, a russian who lived in USSR, is the complete opposite. She rely heavily on consumption to be "happy" and to fill an insecurity. It might be genetically cultural, but the communism sadness/deprivation has created generations of Russians who love consumption and luxury lifestyle.

lotsofcows 9y ago

Dickens taught us to look at the poor and think, "There but for the grace of God, goes John Bradford." At some point this transformed into looking at the poor and thinking, "Loser." Governments should lean on our media to mediate this message.

le-mark 9y ago
Interesting, took me a while to discern your meaning here[1]. I had never heard of John Bradford, but basically, it's in the spirit of "There but for the grace of God, goe I". [1] https://en.wikipedia.org/wiki/John_Bradford https://en.wikipedia.org/wiki/John_Bradford

bencollier49 9y ago

"The proportion of the global population living on less than $1.90 per person per day has fallen—from 18 percent in 2008 to 11 percent in 2013, according to the World Bank." Is this because $1.90 is 2008 money is equivalent to $2.50 now?

zubairlk 9y ago

I had a time in my life where I constantly used the calculator app on my phone. salary - rent - transport - food * 30 < 0 is stressful. And this doesn't account for any incidental expenses. I was blessed enough to have education, a social support circle, a safety net from parents, and some growth to look forward to. Despite that, the stress caused almost daily headaches. Its a vicious cycle.

whiteraven96 9y ago

I.could tell you a story about how my broken family made it all happen, how a family of 6 boys never made it better, a city or circumstance made the option to be wealthy almost impossible or how generations of economic destruction made me this way. But this all matters not, for what I think , I become. The only 3 books you will ever need to break out of the cycle are these. ·THINK AND GROW RICH ·GRIT ·A PURPOSE DRIVEN LIFE They are all fundamentally written for you to find the answer on the first page, on the front cover, in every chapter, and of course within YOURSELF. Go now, Be rich. "Let others lead small lives, but not you. Let others argue over small things, but not you. Let others cry over small hurts, but not you. Let others leave their future in someone else's hands, but not you." - Jim Rohn, http://www.bquot.es/s/1023 http://www.bquot.es/s/1023

whiteraven96 9y ago

Wanna change your mindset? Ill keep it simple to save us all time to START reading. Read these 3 books, even if its just one chapter of each book in any order, but READ them! They will change your mind more than any money ever can. ·THINK AND GROW RICH - Napoleon Hill · GRIT - Angela Duckworth · THE PURPOSE DRIVEN LIFE - Rick Warren

Jotra7 9y ago
Quit spamming this silly self help stuff. It doesnt help anyone.

jaclaz 9y ago

I wonder how relevant is the question asked in the original article, or - maybe better said - to whom the question has been asked. >The researchers asked real people of various socioeconomic strata if they were willing to travel an extra 30 minutes to save $50 on a $300 tablet. Some said they were. But when asked if they’d drive that far to save the same amount on a $1,000 tablet, some of the respondents changed their minds. Their answer depended on their income. I wouldn't even think to ask such a question about buying a $300 (let alone $ 1,000) tablet to someone who clearly cannot afford it (the actual poor people). I mean, when you are dealing with someone who is homeless or that is on foodstamps (or similar assistance for the very basic needs) are you really going to ask them about the $50 savings on a completely voluptuary item such as a tablet, particularly a $ 1,000 one? And the question is about "driving" (implying that the "poor" has a car).

shoulderfake 9y ago

You guys should really read this related piece : http://nautil.us/issue/47/consciousness/why-poverty-is-like-a-disease http://nautil.us/issue/47/consciousness/why-poverty-is-like-...

tboyd47 9y ago

Very interesting findings. The study seems to indicate that poverty is correlated with better economic decisions, unless the option to borrow is present, in which case, poverty correlates with poorer decisions.

lerpa 9y ago
That's also why giving money is a lot of time not a solution. Despite being easy, lazy and making people feel good about it.

sherlockgopher 9y ago

I might not belong to "poor" because my parents had money, but the thing was that they were extra ordinarily stingy when it came to spending it on me. This resulted in me going to school in torn pants etc So now that I have money, I don't spend a dime of it. I use the same clothes, same cycle, the only thing I spend money on is books: I buy lots of it.

ythn 9y ago

The question I have is: in the ideal society, should anyone have to live with the consequences of their actions without a government safety net to save them? It seems that the liberal answer is "no" and that "nobody is ever at fault for a bad circumstance, and the government should always provide a free solution to get people out of any trouble they are in" - Examples: health, abortion, addiction, debt, bad money management, etc.

sifoo 9y ago

I've gone back and forth between having a lot of money and not having any money at all several times by now. It's getting to the point where I don't want any money as long as basic needs are covered. Money is a seriously addictive and destructive drug; and like all such addictions, it's impossible to get a perspective from the inside; you don't see what it's doing to you until you're out. And the fact that it's everywhere makes quitting really tricky.

known 9y ago

This is why I endorse https://www.economist.com/news/leaders/21731626-case-taxing-inherited-assets-strong-hated-tax-fair-one https://www.economist.com/news/leaders/21731626-case-taxing-...

jbboehr 9y ago
We already have an issue with business consolidation in the US and the decline of small businesses, I would be wary about anything that might contribute to it, as an inheritance tax might.