
Why Do People Stay Poor? [pdf] - zackhsi
http://sticerd.lse.ac.uk/dps/eopp/eopp67.pdf
======
jcun4128
Without making the jump from washing plates/factory work to software I don't
know how I would have escaped(still haven't) considering my pay increased 4
times. Just brutal when you trade hours for money directly at a low rate, I
was doing 70hrs washing plates before and it was nothing ha.

Edit: there is the thought of living within your means, personally with a
roommate I could live on $10-$20K a year which you can make doing labor jobs
but not a lot saving. I'm lucky being single/having no direct responsibility
eg. children.

It is my opinion though that if you want to/have internet/time then you can
alter your life for the better, but yeah can't just say "learn to code". But
other options available. I see the point about opportunity because I had a
friend to crash on his couch when I was technically homeless that is
helpful/bare min opportunity.

My jump was not fast, it took at least 2 years not including the 3 years
before that of self-study/personal interest. I freelanced on the side while
working as a dishwasher before first in office/full time job.

~~~
asdff
This sort of perspective is very important, especially here on HN where I see
plenty of ignorance on this topic. When you work these jobs, often the local
cost of living is pinned to these minimum wages, where you stagnate and are
unable to save. How can you possible afford to move when your rent increases?
You have no savings to rent a vehicle to move your things, nothing to put down
up front for a new apartment, and at no guarantee of finding a job at the end
because a manager for working class work is only going to bother hiring local
candidates. Throw in an unforeseen cost, and you can see how easy it is for
people to end up missing payments and living in their car or a tent while
still working that minimum wage job.

~~~
nicbou
People vastly underestimate how hard it is to do anything without
capital/savings.

If you are one missed paycheque from going hungry, you can't afford any risks.
No going back to school, no going freelance, no interviewing, no investing in
anything. You can't afford the means to make money, whether it's a car, a
computer or nice clothes. You can't afford them breaking down, but you also
can't afford maintaining them.

The missed opportunities add up over time.

Grapes of Wrath is an excellent book that drives this point home really well.
It hurts to read at times.

~~~
Kye
I try not to think too hard about how my recent progress toward not being
completely hopeless depended on a few inflection points that could easily have
gone another way or could have been inaccessible had a few earlier events gone
a different way. Luck is a force multiplier that can go wrong as easily as it
goes right. Circumstances determine how much you can prepare for either type.

~~~
yelloweyes
Yeah same here. Just got a close to dream job, and if I had waited maybe
another week to contact them maybe it wouldn't be available anymore.

------
jfrunyon
Easy answer: because expenses are higher for poor people.

Instead of buying a home, the lower class rent their whole life. Instead of
their daddy giving them a home, the middle class pay interest on a mortgage
most of their life.

Instead of buying a 20-pack of $necessary_product that costs $20 and will last
for months, the lower class buy a 2-pack that costs $5 and lasts a couple
weeks because they need the $15 to pay rent. And then they have to spend more
money on gas (or bus fare, or a taxi, or time and energy walking, or ...) to
get to the store again sooner.

Instead of the employer providing any supplies that are needed, the lower
class have to buy their own uniforms or tools.

Instead of a 5% interest rate on their loan, they have a 25% interest rate.

Because they don't make enough money to set some aside as savings, they have
to pay late fees or NSF fees or overdraft fees.

~~~
redorb
This is a great definition of what I consider to be the 'poor tax'..

Not to mention if they ever get un-poor they don't have the knowledge to
'build wealth' until they start slowly learning it or from a mentor.

We would better off teaching 'home finances, interest and banking' classes
instead of Algebra 3 or geometry 2 (for 99% of people)

~~~
CarbyAu
Agreed.

It is crazy that for a standard "Savings" account: \- interest earned is less
than inflation. \- I pay tax on that interest earned. "Saving" money in a
common savings bank account pisses away value.

Many people are not capable of more financial management capability.

The middle class is often locked into a mortgage - I am too! - and is barely
one step up. But it is one step up.

Ultimately, poor people don't own things that make money. They are not "rent
seekers". They don't own stocks or real estate or anything else where the
simple act of ownership makes money.

~~~
ip26
I'm not a finance guy but I suspect it's axiomatic that you can't keep up with
inflation without taking any risk. Like a law of economics.

~~~
schrodinger
Isn't a government bond basically equivalent to inflation? That would mean you
have a risk-free way to get "inflation" returns, with the caveat that you
can't access the money for a period of time. Although I guess you can argue
that "tying up" the money is a form a risk, and almost certainly a luxury some
poor people cannot afford.

~~~
econcon
>Isn't a government bond basically equivalent to inflation? That would mean
you have a risk-free way to get "inflation" returns, with the caveat that you
can't access the money for a period of time

It's not risk free, there is nothing that stops government from creating
inflation so they can pay off the debt for in inflated dollars.

Today, central bank alone doesn't have power to make create money out of thin
air. Government guaranteeing loans from banks to corporate players and
projects is creating inflation. It's good for politicians as they can pay off
their expensive mistakes in cheap money.

~~~
schrodinger
Treasury bills are considered "risk-free", although pedantically of course
nothing is actually free of risk.

[https://www.investopedia.com/terms/r/risk-
freereturn.asp](https://www.investopedia.com/terms/r/risk-freereturn.asp)

------
hprotagonist
_The reason that the rich were so rich, Vimes thought, was because they
managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus
allowances. A really good pair of leather boots cost fifty dollars. But an
affordable pair of boots, which were sort of OK for a season or two and then
leaked like hell when the cardboard gave out, cost about ten dollars. Those
were the kind of boots Vimes always bought, and wore until the soles were so
thin that he could tell where he was in Ankh-Morpork on a foggy night by the
feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could
afford fifty dollars had a pair of boots that'd still be keeping his feet dry
in ten years' time, while the poor man who could only afford cheap boots would
have spent a hundred dollars on boots in the same time and _would still have
wet feet_."

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness._

~~~
refurb
I'm not trying to generalize, because I know poor people who are poor through
no fault of their own (and we should provide public support for them), but I
also know a larger number of people who contributed to their own dire
financial situation and it wasn't because they couldn't afford quality boots,
it was because they over-extended themselves with new cars, a way too big
house, the big screen TVs and expensive trips and meals.

~~~
quickthrowman
Poor people don’t go on airplane vacations or own houses. Poor people don’t
have bank accounts. You don’t know poor people. You know people who live
beyond their means.

Poor people are in Section 8 housing or various other housing vouchers.

~~~
refurb
_You know people who live beyond their means._

Right. People who lived beyond their means and ended up poor.

Or are you saying if you once had money for these things, it's impossible to
ever be poor again?

~~~
Sohcahtoa82
> ended up poor

I think we have to establish what it means to "end up poor" in this context.

I'm barely living within my means. I have a decent house, a very nice car, a
respectable gaming PC with VR, and recently got into hobby RC cars. I take at
least one 1-2 week vacation a year out of state.

But...I have $0 in my savings account, and less than $50K in my 401(k). I'm 38
and only started contributing to a 401(k) 6 years ago after I finished my CS
degree and started working jobs that pay decently.

But I also have $0 in credit card debt. I tend to spend all my extra money,
but no further. I'm not taking on extra debt (Beyond my mortgage and car loan)
to fund my activities.

Would you consider me poor? I am after all, barely living within my means.
Because of my spending habits, I'm almost living paycheck-to-paycheck.

~~~
refurb
No, I wouldn’t consider you poor. But it probably wouldn’t take much for you
to end up poor.

I know people who make more than $100,000 per year and have a net negative net
worth and take on more debt every month. I would define them as “cash poor”.

Point being, these people end up poor when something unexpected happens,
despite having made very good money for many years prior. They could have
managed their finances better and weathered the storm.

------
roenxi
I'm not going to comment about the article without reading it carefully; but
just in case there are any aspiring data analysts online there is a chart that
is interesting even without knowing anything about the data...

On page 64 (65 as the PDF numbers it), chart (b) "Distribution of savings
rate" has an awkward little peak on the left hand side of the chart. It is
very difficult to tell from inspection whether that is a real feature of the
underlying data or if it is an artefact naive kernel density estimation.

If you ever see that pattern in your graphs, do consider trying logKDE [0]
rather than ordinary Kernel Density Estimation a la geom_density() in ggplot.
It also isn't perfect but the result is usually a bit better for things that
approximate an exponential distribution.

[0]
[https://cran.r-project.org/web/packages/logKDE/vignettes/log...](https://cran.r-project.org/web/packages/logKDE/vignettes/logKDE.pdf)

~~~
JamesBarney
I think that's a real effect.

Intuitively I would imagine a lot more people save 0% (or close to 0%) of
their income than save 50% of their income, I would also expect a lot more
people to save or overspend 3% of their income than overspend or save 25% of
their income.

------
TrackerFF
This is something I enjoy about our jobs up in Scandinavia - the salaries are
very compressed around the mean.

Engineers, Lawyers, and other similar professions tend to earn 2x-3x of what
the absolute minimum wage jobs earn. That's quite the difference compared to
other countries, where Engineers can earn 5x-20x.

People here are still motivated to seek higher education and better paid jobs,
even though they could live normal lives off those lowest paid jobs that don't
require any education.

~~~
Kiro
I agree but considering the minimum wage is 0 I don't understand how you came
up with the 2x-3x number.

~~~
djrobstep
Nordic countries have minimum wages defined by collective bargaining
agreements rather than the law - because unionization is so strong and the
agreed minimums are relatively good, they don't really need national legal
ones.

~~~
Kiro
Yes, but it's still optional. Only 39% of small companies have signed a
collective agreement in Sweden. Companies refusing unionization and paying way
below the union rates is a real problem:
[https://www.breakit.se/artikel/7599/i-spent-two-weeks-
delive...](https://www.breakit.se/artikel/7599/i-spent-two-weeks-delivering-
for-uber-eats-and-made-4-4-per-hour)

Even most people in Sweden think there is a legal minimum wage and are
surprised to hear it's 0 and that you can legally pay someone 0.01 an hour.

------
bschne
To anyone interested in the topic, I recommend reading Duflo & Banerjee's 2011
book "Poor Economics". They pioneered the approach of using RCTs to test
interventions in fighting poverty (for which they received the Nobel Memorial
Prize together with Michael Kremer). They go into a lot of factors as to why
poor people get certain economic outcomes, including but not limited to the
poverty trap theory, and take a refreshingly "humane" / respectful view
towards the people they are dealing with.

~~~
simulo
I second that. The RCTs get discussed most often. But what was eye-opening for
me were their observations on how poor people manage the few resources they
have matching the infrastructure they can access – like investing in bricks
(Ch8)

------
ghufran_syed
I’m not qualified to judge the technical merits of the paper, but their
conclusion seems plausible. They concluded that in an illiterate rural
population, there did seem to be a threshold effect in asset levels above
which it seemed much easier to progress economically. But it’s unclear to me
how applicable this is to the poor in the US or other developed economies,
particularly when we’re talking about a population where almost everyone can
read and write, and many of them have cellphones and internet access. Part of
the reason that many people (including my family) try to emigrate from
developing countries to more developed economies is that the same person, with
the same skills, can be _vastly_ more productive in those economies, which is
what allows that person to have a much better lifestyle. And much of the
reason that high-productivity jobs are not available in those poor countries
is _because_ of a lack of capital. So it makes sense that giving the poor some
minimal amount of capital is required, so that those same people can be more
productive. But it seems unlikely to me that adding capital (increasing the
assets of poor people) would have the same beneficial effect in developed
economies, given the large pre-existing ‘capital stock’

This [article]([https://www.forbes.com/sites/timworstall/2014/08/27/by-
globa...](https://www.forbes.com/sites/timworstall/2014/08/27/by-global-
standards-there-are-no-american-poor-all-in-the-us-are-middle-class-or-
better/#1c00d8035cb5)) describes what american poverty levels would be if we
used the same measure as we do in developing countries and makes the point
that by those measures there _are_ no poor people in the US, just “lower
middle class”. That doesn’t mean we shouldn’t try and improve the lives of
people at the lower end of the income distribution, but we should at least
understand that when we use the term _poverty_ in developing and developed
economies, we’re talking about something qualitatively and quantitatively
_different_ \- so the optimal solutions are likely different too.

~~~
badRNG
> by those measures there are no poor people in the US

That doesn't feel like a meaningful metric when there are as many as 17% of
mothers with young children experiencing food insecurity [1]. Perhaps that's
due to COVID, but 11% of households were food insecure as recently as 2018
[2]. Around half a million Americans are homeless, and 35% of them are
shelterless [3].

Are all of these people "not poor" and are they "middle class"? This all to
say that how we think about poverty should focus more on the outcomes that
people actually experience (access to food, shelter, healthcare, etc) than key
economic indicators. Claims like "the War on Poverty is over" and "there are
no poor people in the US" don't seem to match up with the lived experiences of
many Americans.

[1] [https://www.brookings.edu/blog/up-front/2020/05/06/the-
covid...](https://www.brookings.edu/blog/up-front/2020/05/06/the-
covid-19-crisis-has-already-left-too-many-children-hungry-in-america/)

[2] [https://www.ers.usda.gov/topics/food-nutrition-
assistance/fo...](https://www.ers.usda.gov/topics/food-nutrition-
assistance/food-security-in-the-us/key-statistics-graphics.aspx)

[3] [https://endhomelessness.org/homelessness-in-
america/homeless...](https://endhomelessness.org/homelessness-in-
america/homelessness-statistics/state-of-homelessness-2020/)

~~~
charwalker
You're agreeing with their point with good evidence. Whatever set of metrics
or filters are used to identify 'poor' needs to vary based on the context of
the conversation. I think most metrics have been left as is for decades to
have consistent reporting like how we can say 'Poverty has fallen X% in
[COUNTRY] since [20 years ago]'

But that doesn't give a fair view for all nations. Food insecurity is a metric
that would quickly show poor improvement over decades, at least compared to
current metrics. Maybe access to affordable housing, water, power, and other
items on the first 2 level of Maslow's Hierarchy would work better.

In the end, we may learn a lot about 'first world' economies like the US and
the areas failed by capitalism. I think many of the metrics pulled out could
be used to argue either way Numbers on food insecurity could be spun as "We
need to fund and support our citizens and make this better" or "Look how far
ahead we are so do nothing or cut programs to save money!"

------
frogpelt
Studies like this boil down a hugely complex issue into variables they can
control for. There are a lot more theories as to why people stay poor than the
two they offer at the beginning.

Why don't we study all of the people who have definitely risen from the ranks
of the poor to a higher class and see what they have in common?

Sure, it's not the norm. But it happens all the time. There is enough data to
form an opinion.

I'm guessing the way people rise from the poverty is much the same as people
who are average becoming wealthy. They are willing to take risks (i.e., leave
your neighborhood, buck the trends in your family tree) and they work on being
prepared and available for opportunities that may present themselves.

We also know there are certain behaviors that absolutely correlate to and
probably perpetuate generational poverty (children out of wedlock, crime,
quitting school). The people I know who have risen out of inner city poverty
in the U.S. (not the same as Bangladesh I know) distanced themselves from
these behaviors and from the people who considered them okay.

------
wayanon
When you’re stressed you don’t make good decisions. You choose the fatty food,
TV, booze because you want to cheer yourself up. Making ‘good decisions’ is so
much easier when you have an income and you’re not avoiding creditors calls.
I’ve lived through it. It was exhausting.

------
abellerose
People stay poor because all the past unfairness never goes away. It clings to
them. Real survivorship bias exists to muddy the reality of how bad it truly
is to have bad things happen in early life. A lot of people can simply never
recover when they were kicked so unfairly in early life contrary to their
peers. I believe it’s why there used to be experiments with lsd to see if
memories could be erased.

------
drbojingle
off the top of my head I think it depends on the type of poor you are.

Some people are poor because of their situation and some situations are more
difficult to escape than others.

Some people are poor because of their habits and inclinations and they just
don't change those habits (for one reason or another), so they stay poor.

~~~
woodandsteel
>Some people are poor because of their habits and inclinations and they just
don't change those habits (for one reason or another), so they stay poor.

That's true. But often the reason they have those bad habits is they were
taught them by the environment that, through no choice of their own, they were
born in.

~~~
quickthrowman
Absolutely. It’s not only bad habits they were taught, but the huge amount of
things they _weren’t_ taught.

I was taught how to budget, how compound interest works, and so on by family
members.

I used to do rental property maintenance in places where people didn’t know to
use a dish strainer to prevent sink clogs, nobody ever taught them. Now,
spread that out over hundreds or thousands of other things they’re not aware
of. There’s tons of useful knowledge that middle/upper class people pass down
t their kids that poor people have no clue about.

~~~
mythrwy
Agreed. And knowing is not enough, you have to have enough discipline or
environmental training to act at the appropriate junctures.

------
feralimal
For the individual, the answer is Debt. And servicing repayments of debt. Eg,
that on the typical mortgage you repay ~3 times what you borrowed.

~~~
nicbou
3 times? How so?

~~~
feralimal
Sorry - my mistake. I was going off memory.

2 times, including the principle.

Looking here: [https://finance.icalculator.info/mortgage-
calculator.html](https://finance.icalculator.info/mortgage-calculator.html)

I enter, Mortgage Amount: 100000 Annual Interest Rate: 5% Term of Mortgage:
30years

The interest paid is 93255.20

~~~
benibela
But that is still cheaper than paying rent for 30 years

~~~
ultrarunner
In our area average rent has now overtaken our mortgage payment. So glad we
got off that treadmill.

~~~
jlokier
It's cyclic.

Where I live, when I was too young to buy, mortgage was cheaper.

When I was old enough to buy, rent was cheaper and prices had already risen
enormously, so I stuck with rent, and hoped prices would stabilise or fall. In
retrospect this was a mistake, as prices continued to rise.

Now mortgages are cheaper than rent again.

~~~
ultrarunner
That is interesting. I have only owned a house for ~7 years, so I likely
haven't experienced this cycle. Thanks for the insight.

------
paulpauper
Why does every econ paper these days read like a high-energy physics paper? I
feel like I am reading about field theory, not econ.

~~~
marcosdumay
Hum... What exactly did you expect?

It has a simple stochastic model and some statistics for verifying if the real
world agrees with it. You are deluding yourself if you think one can study
economics without advanced statistics.

~~~
JamesBarney
Are these study's preregistered? It seems like there is so many degrees of
freedom the researcher could easily take a stroll through the garden of
forking paths.

~~~
marcosdumay
> Are these study's preregistered?

No idea. I like this study, it doesn't have as many degrees of freedom as is
usual, the theory is kept to a minimum, and the data is kept to the maximum
available. But you are right, there is still a lot to go wrong.

Anyway, I haven't seen many empiric studies of poverty traps. The real test
is, given many of those if they will agree with the theory, not what any
single one says.

------
bmmayer1
Here's a better question: how do people become rich?

Being poor is table stakes for being a human animal. The miracle of modern
society is that billions of people aren't poor (as high as 90% according to
Hans Rosling[1]). How did we make that happen? How do we make it happen for
everyone?

[1][https://ourworldindata.org/grapher/distribution-of-
populatio...](https://ourworldindata.org/grapher/distribution-of-population-
poverty-thresholds?stackMode=relative)

~~~
ellis-bell
correct, 90% of people make more than $1.90 ppp according to the data. but
only 35% make more than $10 a day.

the poverty line is defined generously at ~$2 / day by most oecd countries,
but making above the poverty line does not make you not poor.

all of that said, the field of development economics has been very rich in
research these days, particular from the likes of duflo and banerjee

~~~
bmmayer1
The chart measurement is in constant PPP dollars and clearly shows a downtrend
in all poverty worldwide over time. Obviously the line of what constitutes
"poor" is debatable, but what's far more interesting is the continuing growth
in people who are rich.

------
pmiller2
Off topic, but I would recognize \documentclass{article} anywhere.

------
jokit
This reminds me of the study of how long people tend to hold onto a FRN.

[https://moneymaven.io/blackwealthchannel/community-
building/...](https://moneymaven.io/blackwealthchannel/community-
building/asians-keep-a-dollar-in-their-community-120-times-longer-than-
african-americans-2ZvNTGNxpkClloXlXK_wMQ)

------
mNovak
>> The threshold above which people no longer regress into poverty is 9,309
BDT (504 USD PPP)

Am I understanding PPP correctly--this is a value equivalent to what $500 buys
in the US?

That's surprising because the paper states this is above the amount available
for conventional microfinance; I didn't realize it was indeed that "micro".

~~~
accurrent
Yes. You'll be surprised by how much $100 can get you in a developing country
and how few people actually have access to even that amount of money.

~~~
La1n
But that doesn't matter here, read the previous comment again

>this is a value equivalent to what $500 buys in the US?

------
aspenmayer
> Structural estimation of an occupational choice model reveals that almost
> all beneficiaries are misallocated at baseline and that the gains arising
> from eliminating misallocation would far exceed the costs. Our findings
> imply that large one-off transfers that enable people to take on more
> productive occupations can help alleviate persistent poverty.

Balboni, C, Bandiera, O, Burgess, R, Ghatak, M and Heil, A. 2020. 'Why do
people stay poor?'. London, Centre for Economic Policy Research.

[https://cepr.org/active/publications/discussion_papers/dp.ph...](https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14534)

------
sul_tasto
Wealth, in it’s most fundamental form, is a mindset.

------
Toine
TLDR;

"We have shown that poverty traps exist. People are poor because of a lack of
opportunity. It is not their intrinsic characteristics that trap people in
poverty but rather their circumstances. Poverty is not an innate condition.
This has implications for how we think of development policy and for the value
of eliminating global poverty."

~~~
lazyjones
Based on data from the Third World and destined to be used to argue for policy
changes (towards wealth redistribution) in the First World.

~~~
jyounker
This is anecdotal, but having grown up poor, I can tell you that the research
is perfectly applicable in the first world.

~~~
lazyjones
And I grew up poor and can tell you it's not. In the First World, you have
other opportunities to earn wealth than having more than enough livestock. Go
to school, study something worthwhile, start a company and prosper.

------
perfmode
does anyone read Piketty?

------
noch
The paper says:

> The question is whether the bimodality is symptomatic of a poverty trap,
> namely whether poor people do casual jobs and hold nearly no productive
> assets because they do not have the talent to do anything else or whether
> the fact that they are poor prevents them from acquiring the assets needed
> to climb the occupational ladder.

The cause/effect inversion, of talent/ability => asset acquisition, is always
worrying. We might benefit, as a society, if we confront the IQ problem
honestly and head-on, in order to have a more complete/accurate policy picture
especially because it seems reasonable that wealth transfers should be
optimised to enable higher productivity.

Consider: "The Bell Curve Review:IQ Best Indicates Poverty"(Benjamin, 2018),
in which:

> I find that IQ is more correlated with poverty than socio-economic-status in
> every regression, regardless of what is included in the regression, by a
> factor of 3.

Also: Hsu(2015) [https://infoproc.blogspot.com/2015/04/income-weath-and-
iq.ht...](https://infoproc.blogspot.com/2015/04/income-weath-and-iq.html)

> Income mobility is strongly affected by IQ. In fact, IQ is a much stronger
> predictor variable than race for escaping the bottom quintile of income.

~~~
drbojingle
Being intelligent certainly sounds helpful. I think that falls under my first
point if intelligence is primarily situation (as the life you're born into is
a situation and thus so is your genetics).

It certainly does make sense that intelligence has an effect on social-
economic status, since intelligence is valuable.

How do you suppose we confront "the IQ problem"?

~~~
noch
> How do you suppose we confront "the IQ problem"?

\- A "Manhattan project" to discover protocols, tools, medications,
cybernetics, new modes of education, anything really, that can enhance general
human intelligence.[0]

\- A rethinking of social welfare policies to take into account what we're
learning about evolutionary biology and genetics. If certain heritable/genetic
factors have a disproportionate impact on outcomes, we need to consider the
hypothesis that certain well-meaning policies might not have a significant
impact on permanently liberating people from poverty, given game theoretic
constraints. We would need to find a way to make our economies positive sum,
rather than zero sum games.

[0]: [https://www.gwern.net/Embryo-selection](https://www.gwern.net/Embryo-
selection)

[1]: Converting Moloch from Sith to Jedi
[https://youtu.be/hKvVdGNzCQk](https://youtu.be/hKvVdGNzCQk)

------
frank_bb
Simply, because of banksters, rotten owners of manipulated 'financial system'
\- the rothschilds & their bitch€s, institutions, and so on. Killuminati. That
system is very easy to manipulate (for them, not for us)... They've created
the most powerful currency ever. No, not USD, but the DEBT. With this, they
can do everything today, as they owe also governments and the rest. They can
create 'crisis' just like that, usually to rob working people of valuable
assets (that comes from real work, not from usury), to cover their worthless
(melting since '71) "money". And tell the people that's their fault. Again and
again. Decade by decade. The sad thing is that so many people still believes
in that whole rotten, satanic system; only some people have their minds open
enough to understand this, to know that's our sad reality (it's not about what
we believe in, but what we SEE); the others are blind, 'too busy' or 'too
lazy' even to think, so it's easier to call it 'conspiracy, theories, etc'.
Today, if mainstream f __ __ng media call something as 'conspiracy', you
should think about that twice and analyze why. Same about pseudo "law", that
concerns us, but doesn't apply to them... Which promotes deviation, but
banishes almost everything that is actually good for us.

That why people do stay poor - because of corrupt puppet governments owned by
these 'elites'... The humanity should have much bigger, much better, beautiful
achievements so far! But that's impossible in this system, which makes the
people focusing mainly on bullshit, instead of things, that really matters!
What people can do? Well, nothing special, just WAKE UP and start to think!
The more the better. This is what the system fears: awake, thinking people.
People who have the potential to be free... The system needs slaves! That's
why the world looks what it looks like, that's why people suffer - needlessly!
Thank you & good luck (we all need it).

------
nimbius
A sterling argument could be made that Capitalism as a concept requires a
permanent underclass of low income workers. for example, Guardiola-Rivera
believes that poverty and inequality are political issues that can only be
solved when the poor organise and come up with a solution to liberate
themselves.

Rising income inequality is breeding more inequality in educational
opportunity, which results in greater inequality in educational attainment.
That, in turn, undermines the intergenerational mobility upon which Americans
have always prided themselves and perpetuates income inequality from
generation to generation. This dynamic all but guarantees a permanent
underclass.

------
theodric
I also know some people who have a poor mentality. That is, they consistently
refuse to seek out better-paying opportunities despite abundant mental ability
in the name of "happiness," complain that their series of low-paying roles
deserve more money, and advocate for hard socialism to enable redistribution
to make that possible. The problem, you see, is all the other people.

~~~
kergonath
Them, and those straw men.

------
globular-toast
This seems to be "Why do people stay in poverty?" "Poor" has a different
meaning depending on who you ask. For example, students are popularly
considered "poor". Some people would consider themselves "poor" if they can't
afford a car. Some people consider themselves "poor" because they are not
millionaires.

~~~
woodandsteel
I have not read the article, but assume that their use of the term "poor" was
carefully defined.

~~~
globular-toast
Yeah but my comment was more about the fact people here are talking about
mortgages and things. Not really the same kind of poor.

~~~
woodandsteel
Oh, ok.

------
rayiner
This is why Booker/West-style baby bonds could have a significant chance to
alleviate structural poverty. Beyond a certain threshold (and I think we’re
past that in the US) equality of opportunity (better education, etc.) won’t
make up for starting out poor. What people need is seed capital.

For a fraction of the cost of universal healthcare, we could endow each child
born in the US with a $250,000 trust fund at birth. That would be game
changing.

~~~
twblalock
I'd bet a significant number of people, upon turning 18, would learn that
their trust fund had been emptied out by their parents.

~~~
tptacek
Assume that happens, and that no effective countermeasures are derived. How
are poor families worse off for having the option in the first place? It's not
like Booker is proposing to take the money from some other service offered to
the poor: Booker proposed paying for it by increasing taxes on capital gains,
which poor people weren't paying to begin with.

~~~
twblalock
That's not really the point.

Who do you think would be more likely, and more in need, to raid their
children's trust funds? This would be yet another program where the poor don't
get what was promised to them and the rich do just fine. Rich kids would get
their $250k, and poor kids would find out exactly how their parents were able
to pay the rent the whole time they were growing up.

If you want to help poor kids you need to make sure nobody else can take the
money you give them, even though everyone around them has a very strong
incentive to take that money. Otherwise you aren’t actually helping who you
intend to help.

~~~
akerl_
Even the worst case you’re describing sounds like a win to me, relative to the
present. If gaming the system looks like “the child doesn’t have to worry
about stable housing while growing up”, that seems like an upside.

But I’d caution against the idea that lower-income parents are so predisposed
to both gaming the system and stealing money from their children, which seems
like an unintentional undertone of your comment.

~~~
twblalock
> If gaming the system looks like “the child doesn’t have to worry about
> stable housing while growing up”, that seems like an upside.

To be clear, you are talking about children's trust funds being raided as a
good outcome.

How would you feel if that violation of your rights happened to you, and it
didn't happen to other children, and then some adult told you that it was ok
that it happened?

~~~
akerl_
Probably about the same as I’d feel if I had no chance of affording college
because my family was below the poverty line and I spent my teenage years
working part time to help pay the rent, all the while knowing that other
children lived lives of relative luxury.

~~~
twblalock
Your answer ignores the hypothetical trust fund you were supposed to get,
which would be enough to pay for college (if your parents hadn’t stolen the
money from it).

This is actually a pretty good example of how bad it would be if parents
raided their children’s trust funds, which is something that would
_definitely_ happen. Kids who had their money stolen wouldn’t be able to go to
college.

~~~
akerl_
It’s worth restating that I don’t agree that a significant percentage of lower
income families would raid their child’s trust funds. I think that perpetuates
an inaccurate stereotype that people with lower income are somehow more
inclined to unethical behavior, or more willing to steal from their own
children.

But I directly addressed the impact of both the hypothetical trust fund and
the hypothetical theft: if my hypothetical parents stole my shiny trust fund
money to pay rent, I’d not need to spend my own part time earnings on it, and
all of us would be way more likely to be able to set aside money for college,
what with us not having to use our incomes for rent.

~~~
twblalock
> and all of us would be way more likely to be able to set aside money for
> college, what with us not having to use our incomes for rent.

Savings from a child's part-time job would not come anywhere close to the
hypothetical $250k proposed for the trust fund. This is a completely
unconvincing argument. And you are still defending theft rather than
condemning it!

Do you honestly believe it is acceptable for parents to steal money from their
children? If not, why are you arguing that children should work to make up for
the stolen money?

------
centimeter
Wealth is mean-reverting along genetic lines. I.e if your removed ancestors
were poor, but your immediate ancestors were rich, chances are you or your
descendants will revert to being poor. Together with available data
conditioned on factors like geography and ethnic background, by far the most
likely hypothesis is that expected wealth is mediated by factors like
intelligence and time preference, which are strongly genetically heritable.

------
tehjoker
Because we decided to place as many things in the market as possible, so
necessities of life like housing and food can only be got via labor for the
employer class who underpay (that's where profit comes from) and if they don't
like you you can't even access that low pay and become homeless and either
starve, live off charity, or eat extremely unhealthily which reduces your
capacity to be useful to the employer class over time.

Redefining basic necessities as human rights and placing them outside the
market will do so much to reduce poverty it will blow peoples' minds. However,
this will of course come at the expense of the privileges of the powerful so
such things are opposed.

It's helpful to think of this as a design question. Do we design a UI that
many users fail at or is the problem the system design?

------
oblio
I'll probably read the whole thing at some point, but I'd say that it's due to
the
[https://en.wikipedia.org/wiki/Mediocrity_principle](https://en.wikipedia.org/wiki/Mediocrity_principle),
basically "don't assume you're special". Or "don't assume any one sample of a
thing is special", from the start.

And since the natural state of humanity is poverty (after all we all started
as hunter-gatherers), breaking out of it on your own is extraordinary. I
wouldn't be surprised that the first communities to break out of poverty had 1
extraordinary individual that lifted their entire family/clan/tribe. Then
through social osmosis more people in their vicinity were lifted, provided
they cooperated/were open enough to the new thing that made their neighbors
rich/were not discriminated for a million reasons/...).

Look at the Industrial Revolution. It basically spread geographically from the
UK and is also spread socially to UK off-shoots, first.

~~~
La1n
>And since the natural state of humanity is poverty (after all we all started
as hunter-gatherers), breaking out of it on your own is extraordinary.

The natural state was sharing resources and taking care of a small group of
people. Not working for a boss.

~~~
oblio
What does that have to do with anything I'm saying?

~~~
La1n
I don't agree humanities natural state was poverty. Yes, they were poor
compared to now, but resources were shared and no one was "breaking out on
their own". If you had a good hunt this was shared with the community, unlike
the world we live in now were wealth is hoarded by a small few, so your
comparison makes little sense.

~~~
oblio
Ah, the noble savage myth. Go read up just how friendly relations were between
those noble savages were and how high the incidence of violence was.

If you think we're more violent now, in the age of plenty...

~~~
La1n
>If you think we're more violent now,

Don't strawman me, I didn't say that, or anything about violence. All I was
talking about was distribution of income.

~~~
oblio
Ok, let me rephrase this, because we now have inequality and some people still
live like back in the Stone Age, things are worse now?

Keep in mind all people back in the Stone Age lived... like people in the
Stone Age :-)

