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How Poverty Taxes the Brain

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Re: How Poverty Taxes the Brain

#41

Post by timjahn »

angersock wrote: post #19
ritchiea wrote: post #14

I can speak to this. For a while in 2010 I was completely broke after leaving my first job out of college, which I hated, and having some other employment opportunities fall through. Having that little money changes your decision making process about absolutely everything. Obviously every financial decision is effected, even the tiniest purchases weigh into bigger questions like "will I have enough money in my bank a…

"If you're financially stable you are like someone programming in a high level language who has tedious tasks like memory management taken care of for you. " This is exactly the correct metaphor. I had to, at one point, stop using my coworking space and start working from home because I couldn't deal with the occasional overhead of "Huh, shit, I forget to bring lunch--can I afford to eat out today? Do I have enough g…

"Money is this magical barrier to all sorts of annoying daily minutiae--even a little bit is enough to let you shrug off the effects of suboptimal decisions. Being able to simply buy a lunch when you forgot to bring one can change your whole afternoon of productivity."

Exactly.

Re: How Poverty Taxes the Brain

#42

Post by venomsnake »

Being poor is a full time job. I have fasted for weeks without problems and yet on the one occasion in the last 20 years where I was unable to buy food for three days the hunger was severe and overwhelming - the experiences had nothing in common.

The cognitive load I have seen on friends struggling with poverty is immense - they are permanently mentally exhausted of all the hard decisions and complicated math needed to make the income last longer. When I was with a friend out buying groceries figuring out the correct amount of baby formula diapers and detergent to buy took half an hour (yeah I offered to helped with the bill, was rejected) and the amount saved compared to just throwing stuff from the shelf in the cart was less that 10% of the total.

Edit: Here is an idea for a product - easy to use program that balances the budget as good as possible while taking into account the unique challenges that struggling people are faced with.

Re: How Poverty Taxes the Brain

#43

Post by msandford »

Retric wrote: post #38
msandford wrote: post #31

Earlier quoted context omitted.

I agree with a lot of what you're saying but one thing that's always bugged me is how we account for sub-optimal decisions. What I mean is that if I make 60k per year and I choose to spend very little of it by driving an un-fancy car and cooking all my meals at home and living in a small apartment (perhaps with a roommate) I might be able to save half my net income. Or I could spend nearly all of that income on a big…

Your thinking at to low a level, the choices that have real impact are things like: Where should I live? (Buy? Roommates?) What kind of car should I get? (Make? Age?) Sould I learn? (To cook, draw, lisp?) What kind of Heath insurance do I get? (none?) What cellphone plan do I get. What do I do for entertainment? Should I start packing lunch? Each of these can be with 100,000+$ at retirement should I get a soda while…

I was trying to give a single example that fit within the framework of small decisions, but yes there are definitely bigger decisions too.

I would argue that the soda vs water is easily worth $100k at retirement. Two times a day a person might make that choice. That's $4 a day, 365 days a year or $1460. Or $43,800 after 30 years. Once you add in some kind of compounding interest (I know there is very little yield available these days, but that's not the norm) you can easily hit $100k.

I guess part of my thinking is that it's not even JUST the big decisions that a person makes, but ALL the decisions they make. You can come out ahead on any/all of them and the effects are cumulative.

Re: How Poverty Taxes the Brain

#44

Post by smallish »

theorique wrote: post #27

What is correlation and what is causation? Is it possible that less intelligent people are shunted (through education, etc) into lower-paying jobs? Thus, it becomes a self-fulfilling prophecy.

You are suggesting that maybe poor people just have lower IQ, but this study doesn't support that.

It shows that cognitive performance between rich and poor is the same when they're asked questions which both groups consider easy and/or non-stressful.

Re: How Poverty Taxes the Brain

#45

Post by johnfuller »

I imagine this could also be applied to startups running out of cash. Not only do you have the stress of all the implications of running out of cash, but getting more cash becomes the number one priority, over things that you would otherwise be doing if you were flush. You might have to take on cash from sources you would otherwise decline. You might have to start thinking about doing client work. Fun stuff.

Re: How Poverty Taxes the Brain

#47

Post by bobbinsIII »

smallish wrote: post #44
theorique wrote: post #27

What is correlation and what is causation? Is it possible that less intelligent people are shunted (through education, etc) into lower-paying jobs? Thus, it becomes a self-fulfilling prophecy.

You are suggesting that maybe poor people just have lower IQ, but this study doesn't support that. It shows that cognitive performance between rich and poor is the same when they're asked questions which both groups consider easy and/or non-stressful.

the cognitive performance between rich and poor was the same in the sample they looked at (using their specific test). we know that is not true in general -- richer people are smarter on average.

Re: How Poverty Taxes the Brain

#48

Post by padobson »

Now that all of these perspectives have come together, the implications for how we think about poverty – and design programs for people impacted by it – are enormous.

So you mean it might be a bad idea to endlessly complicate the tax code and setup massive, complex bureaucracies all in the name of helping the poor? There's a chance they might not have the cognitive bandwidth to traverse these boondoggles designed to help them?

Simplicity will liberate as many or more people from poverty as generosity.

Re: How Poverty Taxes the Brain

#49

Post by delluminatus »

ritchiea wrote: post #14

I can speak to this. For a while in 2010 I was completely broke after leaving my first job out of college, which I hated, and having some other employment opportunities fall through. Having that little money changes your decision making process about absolutely everything. Obviously every financial decision is effected, even the tiniest purchases weigh into bigger questions like "will I have enough money in my bank a…

I also find that poverty detrimentally affects people's self-esteem and confidence. It's hard to avoid seeing income as a societal judgement of your value or ability (even though it really isn't).

I've seen this in my family: if people are laid off or struggling financially, it is just incredibly destructive. Losing a job had more impact on my relatives' happiness than getting a divorce. When I called my family I could tell they still hadn't gotten hired without having to ask. Their voice was depressed and they were frustrated with even the littlest things. It is heartbreaking to witness the effects of poverty in people you love.

I know when I was quite poor in college, thinking about money made my chest tighten and my eyes get hot. I knew I couldn't pay for a fourth year. If the slightest thing went wrong, I was just fucked. There was terrible anxiety, and simmering fury, that wasn't alleviated for years.

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