
How poverty changes your mindset - bryanwbh
http://review.chicagobooth.edu/behavioral-science/2018/article/how-poverty-changes-your-mind-set
======
kraig911
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.

~~~
dizzystar
I grew up in poverty as well and my reaction to money is the total opposite. I
never felt connected to it all. I want to be a good saver, but my
understanding of the green stuff is nearly nil. It's just sort of there and I
try not to think about it.

I think it's just the opposite problem. I simply don't know what to spend
money on. I feel like I spend a lot of money, but somehow everyone is in
deeper debt than I am. I just don't want to have all those expensive things. I
grew up living out of a duffel bag and lost everything I owned in that
multiple times in my life. I just don't want anything.

Buying furniture for the first time was the most stressful thing I ever went
through. When I bought my first bed, I just laid on a bed in the shop and just
stayed there having a mental breakdown. I walked out nearly in tears and slept
on my floor for a full week before I finally called and ordered the bed. It
was $700 and felt like I took a nose dive off a cliff.

The biggest effect is my appetite. No one understands why I'm so underweight.
If you ever go a week without eating, believe me, your desire to eat food goes
out the window. Those first bites of food makes you incredibly ill. I eat
everyday now, but three meals is overkill.

~~~
RandomCSGeek
During my childhood, my father's most of the income went into repaying loans.
Luckily, we had our own house, so we didn't need to worry about getting
homeless. But I remember I rarely got to spend money on any kind of "luxury".
By luxury, I mean simple stuff like a icecream cone or a baloon.

The effect it had on me is quite wierd. On one hand, I always wish to earn
more so as to not have to go through that phase again, while on the other
hand, I never care about spending money. Even now that we have more money, I
rarely spend on clothes, fancy food, gadgets or whatever that is not
necessity. That phase of borderline poverty has made me frugal for life.

~~~
dizzystar
Yeah, I totally get this. I have no idea why people want stuff. I have one
computer, one phone, one guitar, and so on. If I could own just one set of
clothing, I'd be happy with that.

It isn't frugality for me, it's just that I can't stand clutter and really,
what I consider. I think I missed whatever the definition of having things
means.

~~~
pm90
I guess it depends on you knowing what you want. I wouldn't drop money on a
spanking new car even though I can afford to and all my peers drive Audis or
whatever, but I feel just OK with my over 100k Civic just because I like not
having a loan on my head. I didn't get the latest iPhone (still on the 5s)
because a beautiful new phone means nothing to me; I'm just fine with a less
expensive, smaller and slower model.

OTOH, If I see nice clothes or shoes I definitely do consider getting them if
I don't have something similar already, or different enough from existing
clothes to give a different look. I won't say no to a road trip, or a weekend
trip with my gf/friends. Or to eating at a fancy restaurant occasionally.

~~~
woliveirajr
:) and, to some extent, this is kind of funny, because where I live having a
Civic is a sign that you do have a expensive car, and people treat it like
"just more 10k bucks and you could be in an Audi".

~~~
tudelo
Do you live somewhere where a car is not necessary/totally unaffordable? I
think the OP is probably living in the US, and navigating most areas is almost
impossible without a car. Wonder what the alternative to a cheap civic is
other than no car :)

~~~
emodendroket
Maybe like a Chevy Spark or something? I actually just got one of those for my
wife and it was only $7k with 50k miles on it.

~~~
tudelo
Hah, I will not deny that it's probably very cost efficient, but 7k is only a
cheap car relative to a new car. A cheap early 2000's late 1990's civic that
runs is somewhere around 5 times less than that.

~~~
emodendroket
Yeah but this car was three years old and was certified pre-owned, with low
mileage. You're suggesting one that is pushing two decades of service. We
looked at those kind of cars too and it was obviously a worse choice unless
you love rust and frequent repairs.

~~~
tudelo
I'm not suggesting either. I drive a car from 2001 that has spent most of its
life in the US north-east. Rust can be an issue but you would be surprised how
many cars don't have major rust problems. However, if I had an option of
getting a more expensive car (7k was out of my budget) when I was looking for
one, I would have gone with something more like what you mentioned. I'm just
throwing out the idea that 7k isn't necessarily in the same price range as an
old civic. It's definitely rolling the dice with an old car but I have only
had to pay for one battery and one alternator (notice I said pay for... in all
actuality I received a free battery and had to have an extra alternator
replaced as the shop I went to was garbage but owned up to it).

~~~
emodendroket
Yeah, the competitors were about the same price but in sorry shape.

Anyway, the prices kind of scale together. If you bought a twenty-year-old
Spark/Matiz it would be cheaper than the comparable Civic. Also, I don't know
where the OP lives, but the US has pretty lax regulations that let people
drive around old cars for longer than many countries.

------
IkmoIkmo
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
Can I ask you which European state are you talking about?

~~~
jacobush
I also want to know. Sounds like it could be Germany, Netherlands, (maybe not
UK?), France, Belgium, Sweden/Denmark/Norway/Finland, a few others?

------
redm
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.

~~~
adrr
100% of society can't be brought out of poverty. Here's an example: If we
motivated everyone to get a college education, we would have people flipping
burgers who are college educated making min wage and living in poverty while
struggling to put food on the table.

~~~
NegativeLatency
Not everyone needs college, there are trade schools and the like that can help
you get a better job.

Why can’t minimum wage be raised to provide a better standard of living?

~~~
kccqzy
Minimum wage only really encourages businesses to hire fewer people and train
those fewer people to do more and be more productive, if not to raise prices.
There are many small bookstores and mom-and-pop stores that are going to be
closed when the minimum wage is raised because they literally can’t raise
prices any more or hire fewer people.

That’s why in some other countries, instead of a minimum wage, which is the
government forcing businesses to pay a certain wage, the government itself
makes up the difference between the actual wage and a desired wage. So if the
government decides that everyone should earn at least $15/h but the market
price for flipping burgers is only $10/h, the government itself will provide
the additional $5/h. This effectively raises the standard of living without
pressuring businesses and also without the adverse effects like pushing up
prices or creating more unemployment.

~~~
megy
> Minimum wage only really encourages

No, it also means those people are paid a liveable wage, as opposed to a
pittance.

~~~
ams6110
Depends on one's definition of "livable wage." Minimum wage and "decent
standard of living" are often conflated but minimum wage was not imposed and
has never been intended to provide that. It's always been a wage that was at
or slightly above the federal poverty line.

The lowest minimum wage I remember hearing about as a kid was $1.50/hr. I
thought that sounded like a lot of money at the time, but I probably was not
even 10 years old.

That would have been in the first half of the 1970's when the federal poverty
line was around $2,500. So working full time, you'd make $3,000 or about 120%
of the poverty level.

Today, the federal minimum wage is $7.25 an hour and the poverty level (2016)
is $12,200. So still, a full-time minimum wage worker earns nearly 120% of the
poverty level.

Source: Table 1, [https://www.census.gov/data/tables/time-
series/demo/income-p...](https://www.census.gov/data/tables/time-
series/demo/income-p..).

~~~
coolaliasbro
True, but minimum wage work typically isn't full-time. That link didn't work
for me, but are those numbers inflation-adjusted?

------
bojackstorkman
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?

~~~
DoreenMichele
I was homeless for nearly 6 years. I got off the street last September. I am
still quite poor. In fact, my bank account currently has zero in it and I
don't get paid again until the 1st.

I fairly frequently give my opinions on HN about poverty, homelessness,
housing, women's issues and the negative impact being female has on my earned
income.

I try to be judicious and not do it too often. Testifying from firsthand
experience often turns into a pile on of people pretending to care and
pretending to want to help while mostly virtue signaling, doing nothing for me
and dragging my name through the mud by insinuating that I somehow must have
made poor choices and it must be all my fault, never mind the larger societal
forces under discussion.

I often worry that if I speak up too much, I will eventually be banned for
disruptive behavior, never mind that I feel that a lot of the problem
behaviors are due to how other people choose to react to me. When enough
people pile on with problematic replies I can eventually get frustrated and
lose my cool and then I feel like that will all be blamed on me and an excuse
to say I am just badly behaved. I get a lot of downvotes and flags when I
finally lose my cool. This tends to not happen to people talking at me like I
am not really a victim of circumstances, I just am stupid, incompetent and not
trying hard enough.

I try to then give it a rest for a while and avoid such topics because I would
prefer to not wind up rate limited, banned or otherwise penalized for daring
to be the token poor person giving my two cents. Privileged people tend to
have no idea how to help me. They tend to say really shitty things to me. They
often want me to shut up because I make them uncomfortable.

I am pretty thick skinned, well educated and come from a much more privileged
background than I realized for most of my life. Most poor people are not going
to stick their neck out like that. They are too vulnerable and can't afford
more trouble and are very well aware that expecting rich people to be
genuinely respectful and caring towards them is simply a bridge too far.

It generally works better overall for the formerly poor to try to cast a
little light on such subjects. It is much less of a shitshow.

~~~
NotQuantum
Thank you for sharing your views on poverty. While HN is primarily about
programming / tech, there is room for talk about society, etc. I don't agree
with your points about being rate limited / banned, all views are valued here
if they're inherently non-inflamatory.

Edit: Your Karma given your account is only 3 days old is quite contradicting
of your views of HN

~~~
DoreenMichele
It's 3 months old, not 3 days.

I have been here 8.5 years. I just recently changed my name cuz reasons.

Overall, I get pretty well received. That doesn't mean I don't stress about
it, etc. I am at times characterized by commenters as just having a chip on my
shoulder about one thing or another and simply harping on it. So it isn't just
me being paranoid. My concerns are based on observations of how others
perceive me at times.

To be clear, it is not a criticism of the mods. They have been incredible. But
I have been thrown off (or run off) of other sites. It would just be easier to
remove me than to tell everyone else they need to figure out how to behave
better towards me.

------
scandox
> 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.

~~~
RSZC
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.

~~~
charlesdm
Most people think about a dollar as a dollar.

They don't realise it's not worth focusing on saving a dollar here and there,
if they then move ahead and overpay for a house or a car (e.g. by not
negotiating).

Half the battle is getting a good (or great) deal on expensive, one off
purchases, if possible (say everything above $2k). Don't worry about the rest.
As with everything: 20% of the "work" gets you 80% of the way there.

You can then not worry about the smaller expenses -- the ones that are
generally time consuming and annoying to track -- that tend to make your life
miserable.

Yes, Starbucks is expensive, but you're not going to go bankrupt drinking
their coffee. You're also not going to get rich by not drinking it.

~~~
autokad
> "Yes, Starbucks is expensive, but you're not going to go bankrupt drinking
> their coffee."

I observed people spending 5$ both morning and lunch/day, but for arguments
sake stick to 1/day. thats roughly 1300$/year. now imagine living paycheck to
paycheck and spending that (very common). they end up taking on dept @20%
interest.

in a 5 year window, just that spending on starbucks is effectively costing
them nearly 10,000$.

edit: keep in mind, i heard the average 401k savings is ~5k

~~~
sjg007
Starbucks could offer a 401k that comes with a free daily cup of coffee.

------
princeb
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.

------
dbg31415
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
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
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.

------
AceJohnny2
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."

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

------
madez
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.

------
throwaway76025
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
Bye bye!!!!!

------
pfarnsworth
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.

------
protomyth
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
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
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
> 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.

~~~
snvzz
Maybe that's why they're poor: Because they make poor financial decisions.

If they keep going to 7-11, they will not get any richer.

------
emmelaich
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.

------
Tasboo
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.

------
dijit
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.

~~~
jeffmould
_she will treat her time as unlimited in finding similar quality goods for
less money_

It is interesting you say this. I have a friend who struggles to get by.
Single mom, two kids, a father who does the absolute bare minimum to provide
support to his kids, and she is unemployed.

She does get support from the state (rent assistance, energy assistance,
SNAP), but it is barely enough to squeak by and what little money is left over
is quickly consumed with unexpected expenses.

With that said, I find she spends an exorbitant amount of time searching for
"deals". It is not far-fetched for her to spend 2-3 hours to save a $1 on
something. While apps like ebates, ibotta, etc.. have made these quick deals
better, they still don't cut down on the time she spends. With the apps she
spends just as much time searching through the deals or trying to find the
best store to get something.

While it can be frustrating at times as a third-party sitting back watching
her do this, I can somewhat sympathize. The most frustrating part to me is
that she will sometimes say that there is not enough time in the day to get
things done. I try to convey to her that at some point time is money. Meaning
that she needs to evaluate the opportunity cost of saving a dollar versus
spending 2-3 hours to save that dollar.

~~~
jancsika
> It is not far-fetched for her to spend 2-3 hours to save a $1 on something.

That's not a far-fetched thing for a poor person to do. $1 can buy a can of
beans and add nutrition to an otherwise hungry day.

> Meaning that she needs to evaluate the opportunity cost of saving a dollar
> versus spending 2-3 hours to save that dollar.

Opportunities aren't unlimited, and the closer to poverty one is the shorter
their term.

So she needs _short term_ opportunities that beat $1 savings for the 2-3 hour
period. Short term here means the amount of time it would take her to spend
the saved $1-- let's be optimistic and say two days.

What do you have for her that beats the $1 savings and beats it with the same
(or better)predictability of success as searching for deals?

edit: clarification

~~~
lighttower
Your comment is good. The relevant question is what can I do _right now_ to
make money? Maybe Mechanical Turk? (can you make $1 in 2 hours?). The
abundance of human potential sitting idle agonizes me.

~~~
jancsika
Yes, I think you're right-- MT might be a better use of that time. But then,
how many other opportunities look _very_ similar to MT but turn out to be
scams? What damage can be done by taking out a payday loan?

I think another way to put what I wrote is that opportunity costs are a luxury
one can afford once one has saved enough to move on from focusing solely on
_catastrophic costs_ like losing food, shelter, electricity, etc.

OP's friend probably started searching for deals because it returned
predictable savings and-- _most importantly_ \-- carried very little risk. The
fact that she's filling lots of idle time with the same behavior is evidence
of her poverty as she is probably not able to take on any greater risk for
fear of catastrophic failure.

Thus it is suspicious when the OP analyzes only in terms of opportunity costs.
It would be more persuasive to convey ideas in terms of catastrophic risk. But
that's a more difficult problem to address and an area where the OP-- like
most people-- has little expertise.

------
meanmrmustard92
Shafir and Mullainathan wrote a book called "Scarcity" that articulates an
expanded version of this idea. Highly recommended.

~~~
didsomeonesay
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).

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

------
blfr
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?

------
rajarsheem
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.

------
adyavanapalli
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)

------
jaclaz
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).

------
whiteraven96
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)

------
MarkMc
_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?

------
Lazare
> 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.

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

~~~
jbboehr
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.

------
lalp1
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.

------
tboyd47
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
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.

------
ilaksh
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.

------
cpv
John Scalzi: Being Poor (2005)

[https://news.ycombinator.com/item?id=15041758](https://news.ycombinator.com/item?id=15041758)

------
sherlockgopher
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.

------
zubairlk
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.

------
memorymappings
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

~~~
mixmastamyk
Reminds me of the recent comic about privilege.

Most young people are quite sheltered, and many old ones as well. Ignorance is
rampant. Wouldn’t take it personally.

Despite a lack of resources at least you got some brains, some in the same
situation aren’t so lucky.

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

------
bencollier49
"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?

------
lotsofcows
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
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)

------
whiteraven96
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

------
abbiya
Or how money changes your mindset ?

------
ythn
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.

