Why poor people make poor decisions • Hacker News Board

Re: Why poor people make poor decisions

#121

Post by celticmusic » Wed, Feb 12, 2020, 8:58 AM UTC

seneca wrote: post #36

andonisus wrote: post #3

I've always thought it was unintended apathy. Making a (relatively) better choice will seemingly have no effect on lifting them out of poverty any time soon, so why bother? Do the thing that maximizes their pleasure, comfort, hope, etc. in the short term, because things are never going to change in the long term. This article seems to hint at this perspective when talking about not being able to take a break from pov…

That's a lot of it. Having grown up poor myself, and having family and old connections that are still poor, I can tell you that there's another element to it as well. A lot of poor people resent society due to their poverty. There's a constant meme that their poverty is some one else's fault ("the man", "the rich", "white people", "government", "minorities", "foreigners" are all common ones, depending who you're talk…

I grew up poor with some bouts of homelessness, and this isn't my experience at all.

Re: Why poor people make poor decisions

#122

Post by tsimionescu » Wed, Feb 12, 2020, 12:13 PM UTC

umvi wrote: post #11

> Poverty is not a lack of character – it’s a lack of cash. No. Poverty is a lack of education and, more importantly, mentorship. I am battling this right now with my next door neighbors, who use HOC, a Maryland social service that basically puts poor people in middle class neighborhoods by subsidizing rent. My neighbors have money. They spend it extremely poorly. It's a single mom with 2 kids. Both kids have iPhones…

> No. Poverty is a lack of education and, more importantly, mentorship.

This is beyond insulting, at least in the way it is worded. Your example of the single mom who squanders charity money on expensive toys sounds exactly like right-wing propaganda, even if I am absolutely certain it does happen.

The reality is that the vast majority of poor people just don't have the money to squander. Sure, some of them may squander the money even if they had them, but the reality is that only a minuscule percentage do. Financial education would help these people, and can't hurt. But minimum income of some kind (I'm not necessarily convinced UBI is a good idea) will help all poor people.

A much more common story of poverty is families who can't afford to get their children through school, who live paycheck to paycheck and get forced into predatory lending when they hit financial difficulties (e.g. plumbing problems).

Re: Why poor people make poor decisions

#123

Post by tsimionescu » Wed, Feb 12, 2020, 12:22 PM UTC

Reedx wrote: post #23

umvi wrote: post #11

> Poverty is not a lack of character – it’s a lack of cash. No. Poverty is a lack of education and, more importantly, mentorship. I am battling this right now with my next door neighbors, who use HOC, a Maryland social service that basically puts poor people in middle class neighborhoods by subsidizing rent. My neighbors have money. They spend it extremely poorly. It's a single mom with 2 kids. Both kids have iPhones…

Even if it was an insane amount of cash, it'd quickly disappear and end up in the same position or worse. Look at the outcomes of lottery winners and others who come into a sudden windfall. Even when it's not sudden, you have clogs to clogs in 3 generations. I think one of the biggest impacts we could make is to teach financial literacy in school, to everyone. Form and reinforce good habits early on. Demonstrate the…

If we had UBI or something equivalent, financial literacy would probably help. But found it the other way around is simply insulting. Most poor people do not have any money to 'manage', they can only try to keep up with all expenses and hope no unexpected expenses happen. If unexpected expenses do happen, there is simply nothing good they can do about it - they must choose where to go into debt, and hope they will happen to find some way to repay that debt from an unexpected windfall.

Sure, there is a minority of cases where people squander a windfall, like in GP's example. It is such a small minority that it's barely worth mentioning.

I'd also note that people who have been toiling away for years on minimum wage may be forgiven and understood if they decide to use a small windfall on buying a small luxury like a pretty dress or trip to Disneyland for their children, instead of investing it in some stock or whatever would be the 'rational' thing to do. Humans beings are not robots, and we need more than food and a roof to live even a half-way acceptable life.

Re: Why poor people make poor decisions

#124

Post by zozbot234 » Wed, Feb 12, 2020, 12:23 PM UTC

tsimionescu wrote: post #122

umvi wrote: post #11

> Poverty is not a lack of character – it’s a lack of cash. No. Poverty is a lack of education and, more importantly, mentorship. I am battling this right now with my next door neighbors, who use HOC, a Maryland social service that basically puts poor people in middle class neighborhoods by subsidizing rent. My neighbors have money. They spend it extremely poorly. It's a single mom with 2 kids. Both kids have iPhones…

> No. Poverty is a lack of education and, more importantly, mentorship. This is beyond insulting, at least in the way it is worded. Your example of the single mom who squanders charity money on expensive toys sounds exactly like right-wing propaganda, even if I am absolutely certain it does happen. The reality is that the vast majority of poor people just don't have the money to squander. Sure, some of them may squan…

'Education' is not limited to financial education, surely. Mentorship could be a good starting point for the social support that many poor folks seem to lack, and that might make it hard for them to earn money in the first place. Not sure what's 'insulting' about parent's claims, they seem quite sensible and supportive to me.

Re: Why poor people make poor decisions

#125

Post by zozbot234 » Wed, Feb 12, 2020, 12:32 PM UTC

tsimionescu wrote: post #123

Reedx wrote: post #23

Earlier quoted context omitted.

Even if it was an insane amount of cash, it'd quickly disappear and end up in the same position or worse. Look at the outcomes of lottery winners and others who come into a sudden windfall. Even when it's not sudden, you have clogs to clogs in 3 generations. I think one of the biggest impacts we could make is to teach financial literacy in school, to everyone. Form and reinforce good habits early on. Demonstrate the…

If we had UBI or something equivalent, financial literacy would probably help. But found it the other way around is simply insulting. Most poor people do not have any money to 'manage', they can only try to keep up with all expenses and hope no unexpected expenses happen. If unexpected expenses do happen, there is simply nothing good they can do about it - they must choose where to go into debt, and hope they will ha…

> use a small windfall on buying a small luxury like a pretty dress or trip to Disneyland

It's still a pretty bad idea if they have literally zero precautionary savings and are one unexpected expense away from disaster. Keeping that windfall in the piggy bank would make them a lot happier and less stressed out in the long term than reminiscing about that crazy trip to Disneyland. But I can see where being severely socially marginalized all the time might make it really hard to think properly about these things. That's often a way bigger issue than the actual money problems, really.

Re: Why poor people make poor decisions

#126

Post by tsimionescu » Wed, Feb 12, 2020, 2:13 PM UTC

zozbot234 wrote: post #124

tsimionescu wrote: post #122

Earlier quoted context omitted.

> No. Poverty is a lack of education and, more importantly, mentorship. This is beyond insulting, at least in the way it is worded. Your example of the single mom who squanders charity money on expensive toys sounds exactly like right-wing propaganda, even if I am absolutely certain it does happen. The reality is that the vast majority of poor people just don't have the money to squander. Sure, some of them may squan…

'Education' is not limited to financial education, surely. Mentorship could be a good starting point for the social support that many poor folks seem to lack, and that might make it hard for them to earn money in the first place. Not sure what's 'insulting' about parent's claims, they seem quite sensible and supportive to me.

Perhaps I read it badly, but to me GP's claims sounded like they believe people wouldn't be poor if only they were more educated, that with a little mentorship everyone could learn how to stop being poor. The example of the neighbor squandering her money and not educating her children seemed to reinforce this idea - she has the money not to be poor, she just doesn't know how to do it. This is probably true in her particular case, based on GP's recording, but it is insulting to generalize it to the vast majority of poor people who would know very well how to save 1500 dollars and not to spend it on same gaming system, if they only ever saw that amount of money all at one time.