I think you are right that at very low levels, the same sum of money becomes much less useful, but I think you are wrong about the level at which that happens.
A few years ago, I met a beggar at a bus stop, who said that the store across the street had a sleeping bag for 50% off until the end of the week, and he was hoping that he would be able to buy it for the winter. I didn't have much money on me myself (basically just the bus fare), but I gave him what I had and walked home instead. To him, those five-ish euros meant not freezing in his sleep, while to me, they only meant a bit of unplanned exercise.
If you have nothing at all, every little bit of money gives you access to some tangible improvement of your situation. But if you have much less than nothing, and every cent of additional income just serves to lower a gigantic debt, there isn't really much incentive to earn more when it makes no significant difference in the end. This is probably one of the reasons bankruptcy law allows discharging unpayable debts, because otherwise debtors might not be motivated to do something about the debts they could repay.
A few years ago, I met a beggar at a bus stop, who said that the store across the street had a sleeping bag for 50% off until the end of the week, and he was hoping that he would be able to buy it for the winter. I didn't have much money on me myself (basically just the bus fare), but I gave him what I had and walked home instead. To him, those five-ish euros meant not freezing in his sleep, while to me, they only meant a bit of unplanned exercise.
If you have nothing at all, every little bit of money gives you access to some tangible improvement of your situation. But if you have much less than nothing, and every cent of additional income just serves to lower a gigantic debt, there isn't really much incentive to earn more when it makes no significant difference in the end. This is probably one of the reasons bankruptcy law allows discharging unpayable debts, because otherwise debtors might not be motivated to do something about the debts they could repay.