Poverty (part 2) - Causes
Let's say we could magically have the wealthiest 10% of Americans instantly swap places with the poorest 10%. Everyone would keep any knowledge and skills they had, but they would not have access to any resources (people, degrees, money, etc.). They would trade living conditions, jobs situations, and all finances and possessions. And let's assume that these transplants are spread out enough that they can't band together to help each other out. Basically imagine a single person swapping placed with one other person, but having several independent experiments to get more data.
How do you think the previously "successful" people would fair? Would they have what it takes to claw their way back to the top (or at least out of poverty)?
Here's my take (maybe answer in the comments before reading on, to see how our independent thoughts compare):
I would guess that these formerly wealthy people would rise above their newfound poverty at higher rates than poor people actually do, but I certainly don't think that they all would. I don't think that all rich people got that way by their tenacity. Many were born into wealth, some got lucky, and some got there largely of their own accord. If I had to throw some numbers out (completely shooting from the hip here), if the poor have a 5% chance of overcoming poverty in their lifetime, I might put the number for these transplants at as high as 50%.
But here's the rub. Even if the rich people were able overcome poverty 100% of the time, this experiment would not be enlightening in the least about the causes of poverty. The real experiment would be to swap babies at birth. Granted the elephant in this discussion is race, so lets say that we limit our swaps to wealthy and poor people of the same race. And lets assume that no one actually knows the swaps took place to avoid issues like the parents treating the transplants differently.
How do you think the experiment would play out now?
I think it's pretty obvious that the transplanted babies would grow up indistinguishable from a non-transplanted baby. Which means any advantage that a wealthy person has in responsibility, work ethic, or other trait that the poor are often considered to be lacking, is primarily a function of environment and opportunity. Yes, yes some people overcome despite very limited opportunities and others fail despite abundant opportunities, but those are the exceptions not the rule.
Sure there are plenty of poor people that make bad choices (Evicted details many examples), but when I stop to think that I would very likely act in the same way given the same background, it gives me pause. It changes how I feel that poverty should be addressed.
Comments
The first thing to point out about the American poor is that, by historic and world standards, they are not really poor. They have shelter, food, cars, air conditioning, TV, etc. By most standards they are doing well.
But they could be doing better. And I take the root of your question to be, how much of it is their fault? With the exception of those born with disabilities, the American poor have almost always made poor decisions (apologies!) which directly contribute to their poverty, whether that's committing crime, using drugs, dropping out of high school, having kids out of wedlock, or getting divorced.
The issue posed by your second question is, are these poor decisions a result of free will or the environment surrounding the poor (or what mixture of the two)?
I think it's true that bad decisions are often more attractive to the poor because of their situations. Crime may be more attractive when you have less money, for example. Also, a lack of a middle-class upbringing with middle-class values and middle-class culture no doubt puts those born poor at a disadvantage. But I still think these choices are ultimately in the control of the poor. While I recognize the power of incentives (and I think the government often gives the poor very bad incentives) I'm still a believer in free will.
The other thing your second hypothetical does not control for is IQ. I think the market pays a premium for high IQ. I also think high IQ helps people make better long-term decisions, like avoiding the poverty traps, above. So, I would be surprised if high-IQ poor did not rise out of poverty--at least at a significantly higher rate, all other things being equal.
The one data point was eviction prevalence, and even that was dubiously one-sided in presentation. There were no numbers behind the reason for eviction, but it was told as if it were the evil landlords victimizing the poor innocent tenants. What if 99% of the time, tenants do not pay rent, and 1% of the time, landlords show ugly discrimination, and that is why landlords win in court 99% of the time? What if you were a landlord, relying on rental income to provide for your family, and all of your tenants stopped paying rent for three months? What is your correct next move as a highly considerate, empathetic, compassionate, ethical citizen with a hungry family? (I will again concede here that there may be further information in the book I didn't read and am open to being swayed by evidence)
The second thing I thought was about age. Most people in the top 10% are over 65 years old, and very few of them were in the top 10% in their 20's. Which supports the idea that wealth accumulation is a long-term strategy based around the compounding effect of individual good decisions. So it would make sense that if a wealthy 65-year-old were swapped into poverty, they might not have the necessary time horizon to work themselves back out, whereas a 20-year-old making individual sound decisions probably would. But then you moot-ilated this thought by switching the switch to at birth.
My third, and somewhat related, thought was about the marshmallow/delayed gratification study. You are probably already familiar, but to briefly summarize, a Stanford professor in the early 70's offered children a choice between one marshmallow now, or two marshmallows say three hours later. Follow-up studies found that children who were able to wait longer for a bigger reward tended to have better outcomes in terms of future education and income levels. Which would suggest that there are better (and therefore also worse) strategies for approaching decision-making if your goal is poverty-avoidance. Which is not to discount how much more difficult it might be to think long-term for someone who finds them self in a situation where they have only one, substance-addicted parent, wondering where there next meal will come from. But assuming comparable starting points, the question then becomes, which babies grow up to make sound decisions, and which grow up to perpetually shoot themselves in the foot?
Ryan - I think you got to this question much more quickly than I did, and made good points on the link between decision-making and outcomes, the downward pressure on the poor to make good long-term-focused decisions, and how the government can provide (and has provided) incentive for poor people to make short-term-focused decisions (at the expense long-term outcomes). I do, however, see free will as an illusion that we all pretend is real out of convenience. Or, rather, out of avoidance of extreme inconvenience. So many of the factors that determine our outcomes and who we become and what we value seem to be decided by something other than our free choosing after thoughtful consideration and critical analysis. But I suppose that is a conversation killer/tangentializer better left for another day. And the same goes for IQ.
The thing that scares me at this point is putting the 'something needs to be done' in front of the 'what is the best course of action?' piece. There is a frightening trend among millennials (yep, right under the bus with ye. Inner grumpy old man strikes again!) to view activism and (increasingly violent) political protest as inherently good, without any critical analysis of different courses of action, or elaboration on clear goals, or tangible steps necessary to achieve feasible goals.
So in my mind, we need to first step back and work out answers to difficult questions, such as how should we expect outcomes to be distributed in a society that was maximally fair and meritocratic and free and equal-opportunity? Assuming potentially conflicting goals of both maximizing economic growth and minimizing poverty, what behaviors should be incentivized by the government? Given that resources are finite, and as a society we already employ a social safety net to try to raise up the lowest outcomes so everyone at least has food and shelter, what is an acceptable lowest standard of living? How should resources be properly allocated to allow for economic growth overall, and still remain compassionate to those suffering the most, so we can both ease their current situation and provide a path up to a better situation? Would secure housing make a big enough difference to the bottom 10% to justify subsidization by the top 90%, or would the mis-aligned incentive make the problem worse?
The knee-jerk emotional reactions are always popular, and allow supporters to engage in what I call pat-yourself-on-the-back-smanship, but they rarely benefit the target population. So the last question is, does an avenue exist for implementing unpopular solutions that would actually benefit people in the long run, but would take more than an election cycle to produce tangible results?
I’ve heard this claim by many (O’Reilly, Hannity, Friedman) and 1) I’m not sure how true it is and 2) I’m less convinced that absolute conditions are more important than relative conditions.
Re: 1) I don’t have hard data to cite, so I’ll rely on anecdote (sorry Aaron). Through my church calling I deal with many poor people in Fernley and I would agree that most all of them have all the amenities that you mention, but I’m not so sure that that is the case with many of the inner-city slums in America. Enough food to survive on yes, but I’m guessing that many involuntarily miss meals on a regular basis. Shelter typically yes, though often it involves multiple families under one roof with people sleeping on couches or mattresses on the kitchen floor, etc. Regarding cars, if “Evicted” is to believed, many do not have cars (which was another impediment to finding a new place to live when evicted). So, while many poor do have TV, I don’t think you could say that those in poverty live in a stable, comfortable, healthy environment.
Re: 2) This idea harder to pin down, but if you see yourself as on the bottom of the social hierarchy in your own nation does it really help to know that there are people in other parts of the world who don’t have some of the things that you do. Does the fact that you have air-conditioning and TV while medieval royalty did not make you feel that you are living like a king?
“Also, a lack of a middle-class upbringing with middle-class values and middle-class culture no doubt puts those born poor at a disadvantage. But I still think these choices are ultimately in the control of the poor” (Harris, R., 2017).
On some level my opinion on this differs depending on whether I’m considering the poor individually or collectively. On an individual level, I would say that choices matter and have consequences. Individuals should do all they can to make the best of whatever situation in which they find themselves. But on the collective level, to look at the poor and say that they have as much opportunity as anyone else in America is ridiculous.
Actually, I feel like the greater disparity between the haves and the have-nots is not so much in opportunity but in consequences. Yes people in all walks of life make bad decisions from time to time, but for the poor the results of the mistakes often have much more harsh and lasting consequences. Compare a teenage pregnancy for example: someone in poverty is much less likely to recover from that choice and still graduate high school and go to college than someone from a middle-class family. They just wouldn’t have the support structure. Or consider the impact from the loss of a job (something that may or may not be a result on any choice of the person who lost the job). A poor person would be much more likely to lose their home and car (if they have one) and would thus have a harder time finding new employment.
Guilty as charged. I’ll take some time to look up some stats to have a more grounded discussion…but not right now. In the meantime I’ll just say that Desmond has a website where someone with the interest and time could do plenty of data analysis: https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/BLUU3U
“The thing that scares me at this point is putting the 'something needs to be done' in front of the 'what is the best course of action?' piece” (Guisti, A., 2017).
If this is directed at Desmond, I would say that he dedicates the last chapter or two to his course of action recommendations (his preferred approach is housing vouchers). If it’s directed at me, I would say that I was planning on making Poverty Blog Post #3 about possible solutions, but I thought that a discussion of causes of and/or responsibilities for poverty might be good to have first. If the poor are solely responsible for their situation and if the only reason they are there is because of their bad choices, that would likely shape any prescription on what (if anything) should be done to address poverty.
“The knee-jerk emotional reactions are always popular, and allow supporters to engage in what I call pat-yourself-on-the-back-smanship, but they rarely benefit the target population. So the last question is, does an avenue exist for implementing unpopular solutions that would actually benefit people in the long run, but would take more than an election cycle to produce tangible results?” (Guisti, A., 2017).
I completely agree, and that’s where I want to go next. But the starting point for any solution would likely differ depending on whether one feels that the most salient problem is the poor being irresponsible, unintelligent, short sighted, etc. or that the heart of the issue is a system that is inherently stacked against the poor, granting them fewer opportunities and more severe consequences for their mistakes.
Landlords provide an important perspective.The book effectively conveys just how much they have to deal with on a day to day basis. And obviously if they always let it slide when people get behind on their rent they would quickly go bankrupt.
One story related in the book that is pretty typical of the landlord/renter relationship:
A lady's sister dies and because of missed work and helping with funeral expenses, the lady is not able to pay all of her rent. The landlord is understanding and gives the renter a few months to catch up. The renter later complains about getting a broken window fixed and the landlord figures that she's not going to bother fixing anything for someone who is not caught up on their rent. The renter's mother finally gets fed up with the broken window and calls the city to come inspect the apartment to see if it is up to code. The landlord is then angry and evicts the renter.
Calling the city is basically the only leverage that the renter has over the landlord, but it's pretty much a nuclear option that doesn't end well for renter or landlord. The landlords typically get cited for numerous code violations that cost thousand of dollars to remedy. Then the angry landlords invariably evict the renter as they have almost always breached their contract in one way or another (late rent, extra people living in the rental, etc.).
There are two landlords that Desmond discusses in most detail and he doesn't hold back in pointing out their weaknesses. When one property catches fire resulting in the death of a child, the landlord is portrayed as being primarily concerned about whether or not she will have to return her rent money to the tenants since it was near the beginning of the month and they had just payed. Later he juxtaposes an expensive vacation the landlord takes (a cruise or trip to the Bahamas or something) with the plight of those who have been evicted and are struggling to find a new place to live.
Another landlord owns a dilapidated trailer park and makes something like $500K a year. He is willing to cut deals with those who are behind on rent, but does so inconsistently, playing favorites with people he likes and being harsh with those he doesn't. He also has a rather shady practice of often deeding the trailer over to the renter and then just charging them to rent the lot. This way he's not responsible for any repairs or upkeep of the trailer. He charges those who own their trailers the same rent he charges those who don't. He can still evict the renters, and since they don't have the money to move the trailer he just reclaims it as abandoned property.
These tensions make me wonder where the balance between free markets and consumer protection lies.
Some of the statistics about the American poor:
80 percent of poor households have air conditioning. In 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
92 percent of poor households have a microwave.
Nearly three-fourths have a car or truck, and 31 percent have two or more cars or trucks.
Nearly two-thirds have cable or satellite TV.
Two-thirds have at least one DVD player, and 70 percent have a VCR.
Half have a personal computer, and one in seven have two or more computers.
More than half of poor families with children have a video game system, such as an Xbox or PlayStation.
43 percent have Internet access.
One-third have a wide-screen plasma or LCD TV.
One-fourth have a digital video recorder system, such as a TiVo.
What about food?
96 percent of poor parents stated that their children were never hungry at any time during the year because they could not afford food.
83 percent of poor families reported having enough food to eat.
82 percent of poor adults reported never being hungry at any time in the prior year due to lack of money for food.
Housing:
Over the course of a year, 4 percent of poor persons become temporarily homeless.
Only 9.5 percent of the poor live in mobile homes or trailers, 49.5 percent live in separate single-family houses or townhouses, and 40 percent live in apartments.
42 percent of poor households actually own their own homes.
Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
The average poor American has more living space than the typical non-poor person in Sweden, France, or the United Kingdom.
The vast majority of the homes or apartments of the poor are in good repair.
I totally disagree. The only thing that matters to me when discussing poverty is absolute poverty. If everyone in the U.S. lived the lifestyle of a person currently making 100K a year (obviously rich by any world or historic standard) that would be great. And I don't care if to make the poor richer, we have to multiply the top 1%'s wealth by a 1000. Bill Gates's increase in wealth does not decrease my wealth. We all have insecurities, but I don't think the desire to keeping up with the Joneses is a feeling we should indulge.
But I would like to talk more about the idea of absolute vs. relative wealth. Just the other day I heard an interview with a lady (in Texas I think) who was opposed to measures to promote housing vouchers in her neighborhood. The lady described herself as upper-middle-class. She pointed out that she is not asking anyone for assistance to live a more lavish lifestyle than she currently does, so poor people shouldn't be given support to live like her. She also admitted that she wouldn't want lower-class people ruining her neighborhood. Which made me wonder, "Is there a difference between the middle-class wanting to be rich and the poor wanting to be middle-class?"
I don't know the answer for sure, but it would seem to me that there is. A poor person will likely interact with middle-class people on a daily basis, from teachers to social workers to employees at retail stores. They'll likely see middle-class cars, homes, shopping malls, etc. But they will largely see them as an outsider. While middle-class people can certainly see and even experience luxury from time to time, it's not as likely to be a common encounter in their daily-life.
Now there are surely some middle-class people who are obsessed with getting a larger home or a fancier car, but it seems less psychological damaging to aspire to join the few rich elite than to seek to join the majority of your society that enjoys significant stability in their lodging, food, and employment status.
Is seeking to escape poverty really tantamount to trying to keep up with the Joneses?
"Few of the 46.2 million people identified by the Census Bureau as being “in poverty” are what most Americans would consider poor—lacking nutritious food, adequate warm housing, or clothing."
To me this quote would seem to be arguing the latter. 46.2 million people is something like 15% of the country, which I'm guessing is described as the poverty line. Maybe the poverty line needs to be adjusted to only include the poorest 5% to make sure any aid is going to where it is most needed. But the stats quoted in the article don't convince me that there aren't people whose lives are shockingly challenging. While 83% of the poor have enough to eat, 17% do not.
I also agree that the poor not having food is a problem, but again, that would seem to me a problem with absolute poverty, not relative poverty. I think that what that article shows is most of those we consider poor in the U.S. do have life's necessities. This contrast with other countries where poor people struggle to eat and cloth themselves.