How Scarcity Affects the Poor

Citizen Wealth Financial Justice

17286670New Orleans   As Congress gets ready to come back to work, there are top-of-the-list items involving lower income families, including extension of unemployment benefits, protecting food stamp appropriations, and of course the ongoing fight for enrollment in Obamacare.  Once again the nasty subtext in the debate will continue to be the ongoing theme that the poor don’t work, are unworthy and immoral, and need more pressure and push to find non-existent jobs and so forth. 

            It’s worth reading a recent book called Scarcity:  Why Having Too Little Means so Much, by Sendhil Mullainathan, a Harvard economist, and Eldar Shafir, a Princeton physiologist, which looks analytically and behaviorally at how people, especially the poor, respond to the real life problems of not having enough money, enough food, and so forth.  The bottom line isn’t surprising though they come at the conclusion in novel and important ways, but essentially, the biggest problem about being poor is being poor, and scarcity exacerbates poverty for poor people.

            And, if you’re not going to read it, which is likely, you’ll just have to take my word for it since I’ve been going through the book over the last week and can recommend it, so here’s some quick takeaways from the professors’ work and studies in both the USA and India, which I also appreciated.

            They argue that the poor – and the rich – react similarly to scarcity, whether when confronting starvation or dieting, despite how different those problems are in the real world.  The fight to endure with insufficient resources, whether time in the day, food on the table, or money in your pocket, concentrates the mind both for better and for worse.  Better in that the poor and others facing scarcity are laser sharp on short term problems, compared to others, but in the words of the authors, their “bandwidth,” or ability to deal with multiple areas, especially long term impacts and consequences is much reduced.  For the poor that shows up everywhere from the recurrence of payday loans in America to the interest rates and borrowing practices of small farmers and rag collectors in India.  Making it that day or month is the test, the devil take the hindmost.

            Scarcity in essence reduces the mental bandwidth that might be accessible for what people not involved in such stressful or survival contests might see as higher priorities or rational choices like planning ahead, using self-control, or solving other life problems, which all lead to trade-offs, crises, and other problems.  The authors cite studies that compare the issues of the poor and others facing scarcity with the same loss of mental computing power or IQ points as losing a night without sleep.  If the problems faced by the poor then are permanent, then so is the loss of ability to deal with anything but survival, creating a perpetual cycle of defeat.

            What policy makers, organizers, and others need to understand from Scarcity is that these problems do not flow from personal failings or immoral lifestyles or careless living, but involuntary psychic disabilities that could befall anyone facing scarcity as permanent, chronic life experiences.  In other words, have a heart, this could – and does – happen to all of you, too, when you are faced with not enough time, money, and other resources, whether or not you realize it, not just the poor.  When looking down your nose, be careful, you might see someone just like yourself.