The Cognitive Cost of Poverty 459
An anonymous reader writes "It's a common trope that most poor people are poor because they're lazy or just inherently bad with money. But a new study (abstract) makes a fascinating find: being poor actually reduces your cognitive capabilities when thinking about money. 'In a series of experiments run by researchers at Princeton, Harvard, and the University of Warwick, low-income people who were primed to think about financial problems performed poorly on a series of cognition tests, saddled with a mental load that was the equivalent of losing an entire night's sleep. Put another way, the condition of poverty imposed a mental burden akin to losing 13 IQ points, or comparable to the cognitive difference that's been observed between chronic alcoholics and normal adults.' This makes the difficulty in climbing out of poverty much easier to understand. The researchers also demonstrated causality by showing that thinking about a very small expense led to no impairment, while thinking about a very large expense did. They confirmed this by looking at a group of farmers in India who tend to receive most of their income at one time — immediately following their harvest. Shortly before that payment, when the farmers had very little money, their scores dropped as well."
How is this news? (Score:0, Insightful)
"It's a common trope that most poor people are poor because they're lazy or just inherently bad with money."
They're not lazy, they're not inherently bad with money, they're just stupid. Maybe they are poor because they are stupid? I mean this is all just correlation.
Re:If you're poor (Score:3, Insightful)
If you're poor you shouldn't use a study like this as an excuse to stay poor.
Pretty much no one chooses to be or stay poor.
Re:FTFY (Score:5, Insightful)
I have seen plenty of rich people who were also pretty bad with money.
Rich people that inherit their money often manage it poorly. There is an old saying: The first generation earns a fortune, the second generation sits on it, the third generations squanders it. But rich people that got there on their own are pretty much by definition good with money.
My experience with poor people is that they don't see the connection between large and small amounts of money. They see the money they spend on a soda, and the money they need to send their kid to college as completely unrelated. They are unable to comprehend that by drinking water instead of three sodas a day, and putting the savings into a tax deferred education savings account, they can easily afford in-state tuition at a good university.
Re:If you're poor (Score:3, Insightful)
Pretty much no one chooses to be or stay poor.
You'd be surprised. A lot of people just decide that the effort to get up every day and go to work just isn't worth the effort, so they go live on the streets. Really, talk to homeless people, it will be an eye-opener for you.
Re:Strategy (Score:1, Insightful)
Statistically, there are two pieces of data that determine success in public education:
The only things needed to succeed in public education are the ability to memorize information, the ability to spew said information back on tests, and a tiny, tiny bit of motivation; that's it. Success is public education can't be called much of a success.
Re:FTFY (Score:5, Insightful)
In some cases, they're singular talent is knowing which family to be born to.
Re:FTFY (Score:5, Insightful)
Re:"Poverty makes you crazy" (Score:5, Insightful)
Re:FTFY (Score:4, Insightful)
My experience with poor people is so varied, because I've seen them all. I live around poor people all the time. I don't rag on them for being poor, but I know why they are and I know that they are also undeserving of handouts. I've seen those who are very stingy with money, and I've seen those whose pockets have a bigger hole than an opening.
They all seem to have a few things in common though: They have little incentive to pull in an income, and/or they really don't understand the concept of investment.
One thing is clear though: Handing money to poor people isn't the answer. It never will be. If what I'm saying weren't true, then lottery winners would stay rich after getting all of that money. They don't though, that money eventually runs out, and usually within only a few years.
Re:FTFY (Score:5, Insightful)
Not really, if you've met both people who've inherited wealth and made it themselves, the difference is striking.
Re:Poor people are poor because they're lazy (Score:2, Insightful)
A common trope by rich people who worked their tails off and sacrificed a lot in the beginning, who are told that "their fair share" has to go to support people who spend their money on frivolous gratifications. I'm not rich yet, but I plan to be. I went into the SS office and half of the people there had out their Androids/iPhones. I am a guy who is pretty into tech, but have gone without a smart phone because the ridiculous price for a data plan isn't worth it for the instant gratification of checking my email between work and home. I go without to get ahead a bit only to be told I now have to subsidize those things for others. My wife and I spend $240 a month total on food, and that includes a couple date nights out a month. Getting fast food or whatever everyday would be so much easier, but I want to improve my place. The lesson in this: Be irresponsible and you get it now and later.
Though, most rich people still look past it and still care enough for humanity that even beyond their higher taxes they are also the most generous and donate a much high percentage to charity. Keep blaming rich people and buying beer and cigarettes (if you are poor) or big screen TVs and new cars (if you are middle class) and the greatest chance in the history of the world for social mobility will never be yours.
Re:FTFY (Score:2, Insightful)
I agree with most of what you're saying, but as a single parent that's not doing too bad and who likes soda, this is a poor example.
3 sodas a day is half of a 2L bottle which costs me 88 cents. Drinking water means a savings of 44 cents a day. That's $160/year, split across both of my kids. $80/year/kid doesn't come even close to paying for anything school related, even for younger kids. And investing such a small amount at todays' rates which are darn close to 0% won't do anything either.
Re:Strategy (Score:2, Insightful)
Birth control in the USA is inaccessible? Where? Out of wedlock pregnancies seem to be most common in inner cities which seem to me to be awash in (largely free) birth control options.
Re:Poor people are poor because they're lazy (Score:4, Insightful)
A common trope by rich people who worked their tails off and sacrificed a lot in the beginning, who are told that "their fair share" has to go to support people who spend their money on frivolous gratifications. I'm not rich yet, but I plan to be. I went into the SS office and half of the people there had out their Androids/iPhones. I am a guy who is pretty into tech, but have gone without a smart phone because the ridiculous price for a data plan isn't worth it for the instant gratification of checking my email between work and home. I go without to get ahead a bit only to be told I now have to subsidize those things for others. My wife and I spend $240 a month total on food, and that includes a couple date nights out a month. Getting fast food or whatever everyday would be so much easier, but I want to improve my place. The lesson in this: Be irresponsible and you get it now and later.
Though, most rich people still look past it and still care enough for humanity that even beyond their higher taxes they are also the most generous and donate a much high percentage to charity. Keep blaming rich people and buying beer and cigarettes (if you are poor) or big screen TVs and new cars (if you are middle class) and the greatest chance in the history of the world for social mobility will never be yours.
Keep planning. If you are lucky, life won't get in the way of that plan.
Re:FTFY (Score:5, Insightful)
I think it's comforting to people to tell themselves that were they in that situation, they could EASILY identify the problem and fix it in a snap. That way, they don't have to feel sorry for said people, and don't have to worry themselves about what they would do if they ever end up in such a situation. "Oh, I'd just not be lazy, and bam, I'm off the street."
In reality, I doubt that many people are homeless because of one single problem like laziness. Addiction often seems to be involved. I've heard from people who know more about it than I do that most people actually on the street are there because homeless shelters refuse to allow drunk or high people in. Such people also typically must have reasons they don't stay with friends or family, either they don't have them or they burned through them already. Few places want to hire people with no home, a record, no car, no recent job. And obviously there are a lot of homeless people who need psychiatric help, but after Regan, they're never going to get it.
Re:FTFY (Score:5, Insightful)
I don't rag on them for being poor, but I know why they are and I know that they are also undeserving of handouts.
So you just don't tell them you hate them to their face. How noble of you.
They all seem to have a few things in common though: They have little incentive to pull in an income, and/or they really don't understand the concept of investment.
I don't know if you're aware of this, but public education was an idea that came from the working class. It was fought by the elite class for decades, despite popular support. Labor unions repeatedly shutting down factories and killing profits was what eventually created the federal mandate that public education be available in all states. After that, it was a fight to get blacks and minorities into schools, necessitating the national guard coming out to forcibly open the doors of schools in the South and allow them in. And now, higher education is being rapidly priced into extinction, and it is disproportionately affecting the working class.
So when you say "they don't really understand", consider the possibility that it's not because they can't understand, but lack access to resources that would allow them to.
One thing is clear though: Handing money to poor people isn't the answer. It never will be.
But handing money to CEOs "too big to fail" and banks so corrupt they put the entire economy in the drink for over a decade is? Why do you feel that it is more likely that hundreds of millions of Americans are lazy than that a few thousand of them are greedy?
Re:FTFY (Score:5, Insightful)
ey are not making a choice. A thought pops into their head and
... and then what? If you asked them "Did you want to buy that soda?" will they say no? This is a choice. It may not be a good choice. It may not be a rational choice. But it is a choice. The article doesn't say they have no choice; I'm going to have to insist on a direct quote.
The 3 sodas a day example was not meant to be a tuition fund on its own - it is illustrating the lack of connection people make
I think you illustrated the lack of connection almost everyone has to statistics and probability. These are common cognitive distortions. Everybody has them. We value our own personal experience over direct observation. We are more afraid of what we don't know than what we do know. We are absolute and utter shit at estimating risk. This is the human condition, and I don't mean to single you out here; But being aware of these cognitive blindspots is the first step to managing them. I didn't say eliminate; I said manage. Everyone makes mistakes.
That said, you wrote what you wrote, and I'm holding you to it. You can apologize and say that wasn't what you meant, and that's fine -- but I'm not letting you change the goal posts here. You made an argument. It was a shit argument, and it died in place. Abandon it like a man and come up with a new one.
There is absolutely no basis for your conclusion. People can't think their way out...
Okay, I'm gonna stop you right here. You're moving the goal posts again. I said poor people deal with prejudice. That's it. That's all. And it may be an even bigger problem than the one under discussion. If you want to reply, reply to that statement directly. Provide factual and supporting evidence that poor people don't deal with prejudice, or at least that prejudice is less of a threat to them than this cognitive haze the researchers are asserting exists.
Consider that, and consider than soda is not the only extra people can do without if they really want to be financially better off. Consider the role of grants and scholarships, and do your math again. I'm sure you will realize it's not so flippant of a comment.
It remains a flippant comment. It may not be what you meant, but there it is, two lines up, staring you in the face and saying "I was a total dick back there, and someone called me on it." Man up to it. You can very probably come up with a better argument, possibly even one that is defensible, and supports your implicit belief that we shouldn't help poor people, with the followup being they need to help themselves first. I won't argue that belief. It's yours. Keep it. Honest. But I will argue with your faulty logic, cognitive mistakes, and apparent lack of empathy towards others whom you seem to implicitly feel are beneath you and morally inferior in some fashion.
Re:FTFY (Score:4, Insightful)
Re:FTFY (Score:5, Insightful)
Fair means to me your days labour pays for a day's life, not a day of suffering.
That day's life should include savings for later, including savings for the future of your kids.
If your income cannot support this your job is not only useless for you but to society as a whole, your boss/employer might seem to make money over your back but at the end of the day/week/month/year/life we as a society are stuck with a family that needs support to survive, forget about advancing the pool of society.
A fair and sufficient minimum wage might initially look like a burden for the company or employer but in the long term it helps us all.
A day's work that cannot pay for a workers life and future is by definition inefficient and in the longer term will cost us all.
Re:FTFY (Score:5, Insightful)
I think it's rare that someone is driven to the streets due to a single fault as well. People often assume that homeless people are lazy and that's how they ended up on the street, and if they would just care enough to get off the street and get a job, they would be off in no time.
Numerous studies have been done and the overwelming majority are mentally ill or veterans. For some reason, watching people get blown apart by cluster bombs repeatedly has an effect on people's mental stability. It's the same thing with the prisons -- something like 86% of people in prison are suffering from severe mental illness.
But the Just World Hypothesis is what causes most people to reach a different conclusion than "We should help these people," -- and it's because if they admitted to themselves that they're very similar to these people and could experience the same misfortune, then it would also mean they are not, due to some intrinsic value in themselves, more deserving of success than the other guy is. It is, at its core, nothing more than a form of ego-protection. One that, unfortunately, has the side effect of condemning millions to destitute poverty, suicide, and illness.
Re:5 years and compound interest = college (Score:5, Insightful)
My dad grew up dirt poor, as in the floor of his parents. By making decisions like the soda decision, he ended up flying us on private jets when he was 40.
Unlikely. Anyone who's made it big in finances will, if they're being honest with themselves, say that it came down to hard work, smart decisions, and luck. Your dad may have all of those qualities you admire, but that's not why he's rich. He's rich because he had those qualities and was in the right place at the right time when an opportunity presented. Some people win this lottery early. Some win it late in life. Very many though never get a winning ticket, and so for them, it doesn't matter.
The cognitive distortion you have just used is what is called the Just World Hypothesis.
Pitiful anti-capitalism bullshit (Score:2, Insightful)
I counter with the fact that capitalism requires the opposite. In the search for profit, a corporation does not care who or what it exploits.
This is totally false.
Companies produce products, they do not exploit anyone. It is up to the consumer if they buy a product or not. Any "exploitation" is purely in the head of the buyer.
The companies also take on the risk that they will make a lot of something and no-one will buy it, or after a while of making something no-one will buy it, or over time they are not able to keep up with other companies in producing something anyone wants to buy. You obviously think of every dime of profit as "exploitation" when it's really overhead just to exist.
Re:FTFY (Score:3, Insightful)
So you just don't tell them you hate them to their face. How noble of you.
No, he said they are undeserving of handouts, not that he hates them. There are other reasons to think someone is undeserving of a handout than hating them. For example, you can observe that when a particular person in a rough financial situation comes into some unexpected money, they immediately spend it instead of saving it and investing it. You might even like the person. But that would be a good reason to think that giving them a hand out would not help them.
I don't know if you're aware of this, but public education was an idea that came from the working class. It was fought by the elite class for decades, despite popular support. Labor unions repeatedly shutting down factories and killing profits was what eventually created the federal mandate that public education be available in all states. After that, it was a fight to get blacks and minorities into schools, necessitating the national guard coming out to forcibly open the doors of schools in the South and allow them in. And now, higher education is being rapidly priced into extinction, and it is disproportionately affecting the working class.
So when you say "they don't really understand", consider the possibility that it's not because they can't understand, but lack access to resources that would allow them to.
Hah. You've actually proven why public education has failed in this respect. Public education has been around for a long time. If poor people today can't understand the concept of investment, and they are the ones that have been going to public schools, then clearly public education has failed in teaching the value of investment. I went to public schools and I didn't learn shit about investment the entire time there.
But handing money to CEOs "too big to fail" and banks so corrupt they put the entire economy in the drink for over a decade is? Why do you feel that it is more likely that hundreds of millions of Americans are lazy than that a few thousand of them are greedy?
Similar to the first point, he never said that handing money to CEOs "too big to fail" is the answer. You are attacking a point he did not make. You are talking to yourself. This does not make you look sensible. It makes you look like you have something to prove about your own preconceived notions and are not willing to be reasonable.
Re:FTFY (Score:4, Insightful)
your parent or parents should be putting away something regularly.
Well there you go. Poor people are clearly to blame for not having parents who save money for their education. Possibly for not even having parents at all. Stinking poor people!
Re:5 years and compound interest = college (Score:4, Insightful)
My baby will be born soon. If I drop the soda money into a Roth for five years, that's one year of tuition. I then stop saving. In seven years, the investment doubles. In another seven, it doubles again
So you'll be getting greater than 10% interest consistently over the course of decades. If you want to be realistic about inflation, you'd actually have to be doing better than about 13% interest. Then there's the fact that college costs are rising faster than inflation... Just doesn't sound realistic.
Re:FTFY (Score:4, Insightful)
Jobs for which the employer can't afford to pay a fair wage are by definition a burden on society as a whole, you will be paying for the survival of those slaves, even if it is through increased unrest, crime etc.
In the mean time this slave driver employer laughs all the way to the bank.
B.t.w, as a European I fail to see a link between unionisation of fast food workers and doubling salaries.
Over here we have the freedom to unionise and no-one can either stop us or force us to join a union of our choice, meaning McDonald's workers could and do join a say (if it existed) a brick layers or white collar union.