Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How poverty changes your mindset

review.chicagobooth.edu

Post reply on HN
Print view View original

171–180 of 559 posts

Re: How poverty changes your mindset

#171

Post by ntsplnkv2 »

jjeaff wrote: post #158
MrLeap wrote: post #73

Earlier quoted context omitted.

Also grew up poor, and seen people of all income levels be cognitively lazy. I felt like I really started to get the way success works when I saw successful people waste money. I saw individuals make flippant decisions to throw away 50,000$ on software that their organization will never use. MSDN licenses for 100 people that can't and never will code. I've seen a salary man whose job it was to install software on tab…

But there's a difference. That company wasting $50k is the equivalent of a poor person buying the brand name bread instead of store brand. Not a life altering decision. Make that a $5m purchase and the higher ups in the company will probably spend a great deal of time weighing the pros and cons. I have seen people in fire situations get a one time windfall of $8,000 dollars and spend all of it for a down payment on a…

Simply isn't true-if that were the case companies that make millions would never go bankrupt-yet they do. Why? According to you, they'd spend a great deal of time weighing pros and cons...

The fact is you can't always weigh pros and cons and always get a positive outcome. There are many poor people that will always be poor-but entire industries have spent decades making decisions weighing pros and cons and completely collapsed because of things outside of their control. Why can this principle not apply to a portion of the poor?

Re: How poverty changes your mindset

#172

Post by ashelmire »

losteric wrote: post #91
ashelmire wrote: post #74

Earlier quoted context omitted.

We're not going to have humans flipping burgers in a few years. A lot of these low-wage, low-skill jobs are finally on the brink of being automated. There will be new opportunities to replace them, as there always are. I'm pretty optimistic about the future of the economy - we have a huge number of skill-demanding fields that are growing, and many of them are facing real difficulty, which is exactly what creates dema…

How many people will be employed by the companies that replace all these low-wage low-skilled jobs? What will those formerly low-wage low-skilled laborers do after they are replaced? Buy a college education? Learn robotics? As those jobs are automated, who will patronize those businesses? eg what fraction of McDonalds customers are high-income high-skill laborers vs lower-wage low-skill?

Few, study and get news jobs, maybe, maybe. There are always more jobs and opportunity for growth (even in a bad economy).

The companies will evolve or die as they always have if their customer base disappears.

Re: How poverty changes your mindset

#173

Post by jjeaff »

megy wrote: post #128
kccqzy wrote: post #86

Earlier quoted context omitted.

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…

> Minimum wage only really encourages No, it also means those people are paid a liveable wage, as opposed to a pittance.

You could call it corporate welfare. Or you could consider the 3 to 4% profit margins these companies have and assume that they might not sustain that number of employees at a higher wage.

Re: How poverty changes your mindset

#174

Post by tensor_rank_0 »

kraig911 wrote: post #123
tensor_rank_0 wrote: post #107

Earlier quoted context omitted.

> Poverty is easy to fix. It's the giving up personal wealth to prevent it that's the hard part. how does giving up personal wealth fix poverty?

It's hard to get people out of poverty than enrich people before that happens. It's easier to bring the extremely wealthy down to a certain level to accommodate for those that don't have the ability to get unlimited tries. See perspective:: http://www.templetons.com/brad/billg.html Wealth and safety nets give families chances where those in poverty can't afford to take. "Move across the country and change jobs or ris…

you listed a bunch of advantages of wealth that I dont think anyone would dispute. and you talk about taking that away. how is this supposed to help people who are already impoverished? it seems like you want there to be more people in poverty, not fewer.

> http://www.templetons.com/brad/billg.html

riddled with fallacies and calculated to produce envy. totally irrelevant to our discussion.

Re: How poverty changes your mindset

#175

Post by skookumchuck »

aswanson wrote: post #152
kraig911 wrote: post #69

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…

Sentiments like these are why I can't Fuck with libertarians. Even though I never experienced as much, I know there but through the grace of God go I. And I don't believe in god.

Libertarianism is not about not helping others. Not even remotely. Libertarianism means you can help others as much as you want to.

Re: How poverty changes your mindset

#176

Post by jjeaff »

maxxxxx wrote: post #115
sparkie wrote: post #76

Earlier quoted context omitted.

Because when you raise minimum wage, that means employers of the minimum wage earners need to push up their prices so that they're still making the same profits. (Actually, the same is not good enough, the profits need to exceed the previous years). The price of everything ends up inflating and minimum wage earners end up getting less for their money, despite having "more of it".

That would only be true if the goods minimum wage workers produce are being bought only by minimum wage workers. In reality the price also goes up for incomes above minimum wage so in a sense raising the minimum wage is a transfer of money from higher earners to lower earners.

In reality what happens, is those jobs go away (jobs like retail) and they are replaced with slightly higher paying jobs (like Amazon warehouse worker) except at a rate of about 1 new job for every 10 previous jobs.

Re: How poverty changes your mindset

#177

Post by alehul »

Buge wrote: post #110
gowld wrote: post #58

Earlier quoted context omitted.

When behavioral economists do these studies and brag about counterintuitive results, they usually ignore that more expensive items usually have a longer lifespan, so the cost per unit time isn't as different as the sticker price suggests.

I think you're misunderstanding. The question had nothing to do with whether the more expensive tablet is better or not, or which one someone would rather buy.

The parent's comment point was that it may logically be assumed that you'd be doing such an action once every 1 year vs once every 3 years, for example.

Edit: Upon realizing that you'd save the $50 every time you go / every 30 minutes spent regardless of how often, me (and presumably the parent) are wrong, and I'm going to bed. :)

Re: How poverty changes your mindset

#178

Post by kraig911 »

52-6F-62 wrote: post #149
kraig911 wrote: post #69

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…

We have a little in common, though the events of my own life occurred a little differently. We moved to a small rural town when I was young out of fears that my father’s work for an oil company’s union (refinery construction and maintenance) would place him out of jurisdiction where we were. He is and was a very talented fitter/welder and has even taught courses in college. He did however spend most of the best years…

The hardest argument that I hate about the article in question. I will never stop living like tomorrow I could lose everything. I will forever keep some cash stashed a way. I will always keep canned chili in the cupboard. Every thunderstorm or inclement weather event I fill the bathtub up. Some may say "oh that's good that you do that" but to my wife it's border line paranoia.

Re: How poverty changes your mindset

#179

Post by MrLeap »

jjeaff wrote: post #158
MrLeap wrote: post #73

Earlier quoted context omitted.

Also grew up poor, and seen people of all income levels be cognitively lazy. I felt like I really started to get the way success works when I saw successful people waste money. I saw individuals make flippant decisions to throw away 50,000$ on software that their organization will never use. MSDN licenses for 100 people that can't and never will code. I've seen a salary man whose job it was to install software on tab…

But there's a difference. That company wasting $50k is the equivalent of a poor person buying the brand name bread instead of store brand. Not a life altering decision. Make that a $5m purchase and the higher ups in the company will probably spend a great deal of time weighing the pros and cons. I have seen people in fire situations get a one time windfall of $8,000 dollars and spend all of it for a down payment on a…

As income inequality increases, relative percentage comparisons like this become more infuriating than comforting.

The more money you have, the dumber you can be with it and still be guaranteed survival. At a certain level of poverty, you have to operate at peak financial efficiency to live a mean lifespan.

50,000$ properly spent could change the course of human history. It could supply the nearby treatment center for children with behavioral/emotional problems for years!

I could buy a few mig welders, some angle grinders, associated PPE, several hundred pounds of scrap metal, and still have enough left over to pay two unemployed people in rural Missouri to make tiny metal sculptures for model towns for 6-12 months.

The above is my goofballs, no thought business plan for 50k. I'm not even trying and the ROI on that hairbrained stupid plan is better than atleast 10 different decisions I've seen made over 50k.

I'm not even being creative or thoughtful. For someone like me to see someone be told "We don't need this." and them respond "eh fuck it, it's just 50k" is...

It's astounding. It's mind altering. It's the name brand bread vs. human lives metaphor in your face and on fire.

So yeah there is a difference.

Re: How poverty changes your mindset

#180

Post by alehul »

RSZC wrote: post #9
scandox wrote: post #2

> 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 ele…

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.

I completely understand the parent comment and I don't think it's a misunderstanding. The idea is that a rich person doesn't care to think through that situation using all their reasoning capabilities, as they're more focused on the long-term; they spend their time thinking about how to get that promotion to prepare for their children's college funds, or something of that sort.

An example: I was raised by a single mother in poverty, where she would try to scrape by and live on welfare without working, year after year after year. She would only think about tomorrow's expenses, and she'd do a great job budgeting to make sure we had enough food to eat and so forth. As a child, I would show her job listings, explain the value of utilizing her assets as well as she could (she had her inheritance invested terribly), and all that. She would never be able to understand it, as she couldn't think that far ahead with all her mental capacity being devoted to making the best decision to save $50, as mentioned in the other comment.

In conclusion, optimizing those tiny financial decisions often leads you to neglect the ones further out. That's the issue the parent comment was highlighting.

Also, traditional economics isn't a fool if you account for the limited economic reasoning capability, and consider that reasoning capability as a scarce resource to be allocated.

Post reply on HN