Without making the jump from washing plates/factory work to software I don't know how I would have escaped(still haven't) considering my pay increased 4 times. Just brutal when you trade hours for money directly at a low rate, I was doing 70hrs washing plates before and it was nothing ha.
Edit: there is the thought of living within your means, personally with a roommate I could live on $10-$20K a year which you can make doing labor jobs but not a lot saving. I'm lucky being single/having no direct responsibility eg. children.
It is my opinion though that if you want to/have internet/time then you can alter your life for the better, but yeah can't just say "learn to code". But other options available. I see the point about opportunity because I had a friend to crash on his couch when I was technically homeless that is helpful/bare min opportunity.
My jump was not fast, it took at least 2 years not including the 3 years before that of self-study/personal interest. I freelanced on the side while working as a dishwasher before first in office/full time job.
This sort of perspective is very important, especially here on HN where I see plenty of ignorance on this topic. When you work these jobs, often the local cost of living is pinned to these minimum wages, where you stagnate and are unable to save. How can you possible afford to move when your rent increases? You have no savings to rent a vehicle to move your things, nothing to put down up front for a new apartment, and at no guarantee of finding a job at the end because a manager for working class work is only going to bother hiring local candidates. Throw in an unforeseen cost, and you can see how easy it is for people to end up missing payments and living in their car or a tent while still working that minimum wage job.
Easy answer: because expenses are higher for poor people.
Instead of buying a home, the lower class rent their whole life. Instead of their daddy giving them a home, the middle class pay interest on a mortgage most of their life.
Instead of buying a 20-pack of $necessary_product that costs $20 and will last for months, the lower class buy a 2-pack that costs $5 and lasts a couple weeks because they need the $15 to pay rent. And then they have to spend more money on gas (or bus fare, or a taxi, or time and energy walking, or ...) to get to the store again sooner.
Instead of the employer providing any supplies that are needed, the lower class have to buy their own uniforms or tools.
Instead of a 5% interest rate on their loan, they have a 25% interest rate.
Because they don't make enough money to set some aside as savings, they have to pay late fees or NSF fees or overdraft fees.
Slight aside: Poor people aren't trying to maximize profits. They are trying to minimize risk.
It's a small quibble, but it helps explain the different behavior of the wealthy and the poor. More importantly, it explains the mindset that changes with wealth.
Bret Devereaux of the acoup blog had a good piece on this in reference to medieval farming estates of lesser nobles and the abject poor [0]:
"I led in with all of that risk and vulnerability because without it just about nothing these farmers do makes a lot of sense; once you understand that they are managing risk, everything falls into place.
Most modern folks think in terms of profit maximization; we take for granted that we will still be alive tomorrow and instead ask how we can maximize how much money we have then (this is, admittedly, a lot less true for the least fortunate among us). We thus tend to favor efficient systems, even if they are vulnerable. From this perspective, ancient farmers – as we’ll see – look very silly, but this is a trap, albeit one that even some very august ancient scholars have fallen into. These are not irrational, unthinking people; they are poor, not stupid – those are not the same things.
But because these households wobble on the edge of disaster continually, that changes the calculus. These small subsistence farmers generally seek to minimize risk, rather than maximize profits. After all, improving yields by 5% doesn’t mean much if everyone starves to death in the third year because of a tail-risk that wasn’t mitigated. Moreover, for most of these farmers, working harder and farming more generally doesn’t offer a route out of the small farming class – these societies typically lack that kind of mobility (and also generally lack the massive wealth-creation potential of industrial power which powers that kind of mobility). Consequently, there is little gain to taking risks and much to lose. So as we’ll see, these farmers generally sacrifice efficiency for greater margins of safety, every time."
>Easy answer: because expenses are higher for poor people
As a person who mentors poor people, it's not always this..
Don't get me wrong, there are some poor people who are poor by choice. They usually don't feel like victim and aren't stressed about them being poor. They are pleasant to deal with as they understand the trade off they are making. They are very small % of poor people.
Here is the difference I see:
1. Reasonable well off people (many of HN crowds are this) are usually willing to listen and discuss the ways some project or work can be done better.
2. I've gone to offer same suggestions to poor people, a lot of them listen to me absent minded. They complain "I am too tired", "I am losing hope" while a few of them go back to doing drugs and drinking.
3. Poor people don't want to lose their "immediate" freedom. While well off people understand it's a temporary scarifice they are making, later situation will change.
4. Optimism, all the guys who came up with ideas and plans are now doing well.
6. Ability to form relationships and acquire new friends. I consistently saw the poor people who I was mentoring would abuse their friends (without realising), they'd call them "dumb, stupid" while having all evidence like "success, wealth, education qualification" which clearly showed the person giving them advise they are asking for is just trying to help them.
7. Coming from poor household, I used to think rich people are evil and all but I really figured out that a high proportion of rich people were just more attentive and good are forging connections which often continued life long and the benefits compound when you are connected to so many good people for so long this is what most poor people do not realize.
If so, turn it into a perpetually profitable self-funding charity that fronts the poor the money to get the cheaper option in return for a cut of the savings.
It's probably not possible because there are factors other than what you described.
> Instead of buying a 20-pack of $necessary_product that costs $20 and will last for months, the lower class buy a 2-pack that costs $5 and lasts a couple weeks
Get together with your neighbors and buy a 20-pack?
> the lower class have to buy their own uniforms or tools.
Workers owning their own tools. Isn't it what Karl Marx dreamt of?
> Instead of a 5% interest rate on their loan, they have a 25% interest rate.
Don't use loans. Seriously. You either can afford something, or you can't. Buying a house is probably the only exception.
I know in US culture it sounds almost as crazy as "don't own a car" or "don't watch TV", but that's entirely possible.
The reason that the rich were so rich, Vimes thought, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and _would still have wet feet_."
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
I'm not trying to generalize, because I know poor people who are poor through no fault of their own (and we should provide public support for them), but I also know a larger number of people who contributed to their own dire financial situation and it wasn't because they couldn't afford quality boots, it was because they over-extended themselves with new cars, a way too big house, the big screen TVs and expensive trips and meals.
This might have been true back when boots routinely had cardboard in them but when it comes to necessities and near-necessities the poor people versions do 90% as well at a fraction of the cost. It's all the other stuff you spend your money on when you're poor that screws you.
I'm not going to comment about the article without reading it carefully; but just in case there are any aspiring data analysts online there is a chart that is interesting even without knowing anything about the data...
On page 64 (65 as the PDF numbers it), chart (b) "Distribution of savings rate" has an awkward little peak on the left hand side of the chart. It is very difficult to tell from inspection whether that is a real feature of the underlying data or if it is an artefact naive kernel density estimation.
If you ever see that pattern in your graphs, do consider trying logKDE [0] rather than ordinary Kernel Density Estimation a la geom_density() in ggplot. It also isn't perfect but the result is usually a bit better for things that approximate an exponential distribution.
This is something I enjoy about our jobs up in Scandinavia - the salaries are very compressed around the mean.
Engineers, Lawyers, and other similar professions tend to earn 2x-3x of what the absolute minimum wage jobs earn. That's quite the difference compared to other countries, where Engineers can earn 5x-20x.
People here are still motivated to seek higher education and better paid jobs, even though they could live normal lives off those lowest paid jobs that don't require any education.
As fortunate as I am, being a software engineer in the US. I rather live in place with a good safety net. I feel we all are one sickness away from being broke. In any case, you can't really enjoy life when everybody else living day by day.
I wonder what's the effect on emigration/immigration. It sounds like the gap between Scandinavia and other part of the world would make it tempting for high performers to leave.
Other than the obvious equality benefits, even wages also have the advantage that people are much more likely to pick careers out of intrinsic interest rather than socio-economic status.
How many unhappy people do you know do end up stuck doing work they hate because of money? There are many, and uneven compensation is a prime cause of their misery.
To anyone interested in the topic, I recommend reading Duflo & Banerjee's 2011 book "Poor Economics". They pioneered the approach of using RCTs to test interventions in fighting poverty (for which they received the Nobel Memorial Prize together with Michael Kremer). They go into a lot of factors as to why poor people get certain economic outcomes, including but not limited to the poverty trap theory, and take a refreshingly "humane" / respectful view towards the people they are dealing with.
I second that. The RCTs get discussed most often. But what was eye-opening for me were their observations on how poor people manage the few resources they have matching the infrastructure they can access – like investing in bricks (Ch8)
I’m not qualified to judge the technical merits of the paper, but their conclusion seems plausible. They concluded that in an illiterate rural population, there did seem to be a threshold effect in asset levels above which it seemed much easier to progress economically. But it’s unclear to me how applicable this is to the poor in the US or other developed economies, particularly when we’re talking about a population where almost everyone can read and write, and many of them have cellphones and internet access. Part of the reason that many people (including my family) try to emigrate from developing countries to more developed economies is that the same person, with the same skills, can be vastly more productive in those economies, which is what allows that person to have a much better lifestyle. And much of the reason that high-productivity jobs are not available in those poor countries is because of a lack of capital. So it makes sense that giving the poor some minimal amount of capital is required, so that those same people can be more productive. But it seems unlikely to me that adding capital (increasing the assets of poor people) would have the same beneficial effect in developed economies, given the large pre-existing ‘capital stock’
This [article](https://www.forbes.com/sites/timworstall/2014/08/27/by-globa...) describes what american poverty levels would be if we used the same measure as we do in developing countries and makes the point that by those measures there are no poor people in the US, just “lower middle class”. That doesn’t mean we shouldn’t try and improve the lives of people at the lower end of the income distribution, but we should at least understand that when we use the term poverty in developing and developed economies, we’re talking about something qualitatively and quantitatively different - so the optimal solutions are likely different too.
> by those measures there are no poor people in the US
That doesn't feel like a meaningful metric when there are as many as 17% of mothers with young children experiencing food insecurity [1]. Perhaps that's due to COVID, but 11% of households were food insecure as recently as 2018 [2]. Around half a million Americans are homeless, and 35% of them are shelterless [3].
Are all of these people "not poor" and are they "middle class"? This all to say that how we think about poverty should focus more on the outcomes that people actually experience (access to food, shelter, healthcare, etc) than key economic indicators. Claims like "the War on Poverty is over" and "there are no poor people in the US" don't seem to match up with the lived experiences of many Americans.
Maybe it's just me but this seems like a fairly pedantic point. I guess if you're not familiar at all with issues of domestic and international poverty you might make the mistake of comparing these numbers but I've never had a real conversation with someone who confused the two.
I grew up well below the poverty line in the USA and it was pretty self evident that I was not leading the same kind of lifestyle as someone in poverty in a developing country.
I think your point is mostly true but I'm also just not sure how useful it is.
Studies like this boil down a hugely complex issue into variables they can control for. There are a lot more theories as to why people stay poor than the two they offer at the beginning.
Why don't we study all of the people who have definitely risen from the ranks of the poor to a higher class and see what they have in common?
Sure, it's not the norm. But it happens all the time. There is enough data to form an opinion.
I'm guessing the way people rise from the poverty is much the same as people who are average becoming wealthy. They are willing to take risks (i.e., leave your neighborhood, buck the trends in your family tree) and they work on being prepared and available for opportunities that may present themselves.
We also know there are certain behaviors that absolutely correlate to and probably perpetuate generational poverty (children out of wedlock, crime, quitting school). The people I know who have risen out of inner city poverty in the U.S. (not the same as Bangladesh I know) distanced themselves from these behaviors and from the people who considered them okay.
When you’re stressed you don’t make good decisions. You choose the fatty food, TV, booze because you want to cheer yourself up.
Making ‘good decisions’ is so much easier when you have an income and you’re not avoiding creditors calls. I’ve lived through it. It was exhausting.
People stay poor because all the past unfairness never goes away. It clings to them. Real survivorship bias exists to muddy the reality of how bad it truly is to have bad things happen in early life. A lot of people can simply never recover when they were kicked so unfairly in early life contrary to their peers. I believe it’s why there used to be experiments with lsd to see if memories could be erased.
Reminds me of my buddy. We were in our early 20s. He was single, lived alone, had a job and was generally doing alright. We were chatting and he told me he'd been living off ramen noodles for the past two weeks to make ends meet.
The very next day he called me up. It was payday and with excitement told me he'd just bought another TV tuner card for his PC.
Another...
He already had one he barely used. But now he could watch two channels at the same time without turning the TV on! The TV that was incidentally in the same room...
Although the two are often conflated. If you grow up in a poor area, it‘s easy to become fatalistic and drop into a victim mentality, even though you might actually have a fighting chance to get out. Likewise, you can maneuver yourself into situations (through bad habits or whatever) that you will no longer be able to get out of on your own.
>Some people are poor because of their habits and inclinations and they just don't change those habits (for one reason or another), so they stay poor.
That's true. But often the reason they have those bad habits is they were taught them by the environment that, through no choice of their own, they were born in.
I think that most people in the lower 50% wage bracket do not have a mortgage. People in the lowest 20% don't even have a credit card, probably.
The answer is still likely: Debt. When we take out sovereign debt it increases cost of living, and usually the way that sovereigns typically use that debt is via payouts to contractors, which does not go to the bottom 50%, except perversely via trickle-down effects. If you look at the "socialist" countries that have low poverty rates, typically they also have low rates of sovereign borrowing (think Norway, Sweden, and Denmark).
It has a simple stochastic model and some statistics for verifying if the real world agrees with it. You are deluding yourself if you think one can study economics without advanced statistics.
Here's a better question: how do people become rich?
Being poor is table stakes for being a human animal. The miracle of modern society is that billions of people aren't poor (as high as 90% according to Hans Rosling[1]). How did we make that happen? How do we make it happen for everyone?
>> The threshold above which people no longer regress into poverty is 9,309 BDT (504 USD PPP)
Am I understanding PPP correctly--this is a value equivalent to what $500 buys in the US?
That's surprising because the paper states this is above the amount available for conventional microfinance; I didn't realize it was indeed that "micro".
> Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated at baseline and that the gains arising from eliminating misallocation would far exceed the costs. Our findings imply that large one-off transfers that enable people to take on more productive occupations can help alleviate persistent poverty.
Balboni, C, Bandiera, O, Burgess, R, Ghatak, M and Heil, A. 2020. 'Why do people stay poor?'. London, Centre for Economic Policy Research.
[+] [-] jcun4128|5 years ago|reply
Edit: there is the thought of living within your means, personally with a roommate I could live on $10-$20K a year which you can make doing labor jobs but not a lot saving. I'm lucky being single/having no direct responsibility eg. children.
It is my opinion though that if you want to/have internet/time then you can alter your life for the better, but yeah can't just say "learn to code". But other options available. I see the point about opportunity because I had a friend to crash on his couch when I was technically homeless that is helpful/bare min opportunity.
My jump was not fast, it took at least 2 years not including the 3 years before that of self-study/personal interest. I freelanced on the side while working as a dishwasher before first in office/full time job.
[+] [-] asdff|5 years ago|reply
[+] [-] jfrunyon|5 years ago|reply
Instead of buying a home, the lower class rent their whole life. Instead of their daddy giving them a home, the middle class pay interest on a mortgage most of their life.
Instead of buying a 20-pack of $necessary_product that costs $20 and will last for months, the lower class buy a 2-pack that costs $5 and lasts a couple weeks because they need the $15 to pay rent. And then they have to spend more money on gas (or bus fare, or a taxi, or time and energy walking, or ...) to get to the store again sooner.
Instead of the employer providing any supplies that are needed, the lower class have to buy their own uniforms or tools.
Instead of a 5% interest rate on their loan, they have a 25% interest rate.
Because they don't make enough money to set some aside as savings, they have to pay late fees or NSF fees or overdraft fees.
[+] [-] Balgair|5 years ago|reply
It's a small quibble, but it helps explain the different behavior of the wealthy and the poor. More importantly, it explains the mindset that changes with wealth.
Bret Devereaux of the acoup blog had a good piece on this in reference to medieval farming estates of lesser nobles and the abject poor [0]:
"I led in with all of that risk and vulnerability because without it just about nothing these farmers do makes a lot of sense; once you understand that they are managing risk, everything falls into place.
Most modern folks think in terms of profit maximization; we take for granted that we will still be alive tomorrow and instead ask how we can maximize how much money we have then (this is, admittedly, a lot less true for the least fortunate among us). We thus tend to favor efficient systems, even if they are vulnerable. From this perspective, ancient farmers – as we’ll see – look very silly, but this is a trap, albeit one that even some very august ancient scholars have fallen into. These are not irrational, unthinking people; they are poor, not stupid – those are not the same things.
But because these households wobble on the edge of disaster continually, that changes the calculus. These small subsistence farmers generally seek to minimize risk, rather than maximize profits. After all, improving yields by 5% doesn’t mean much if everyone starves to death in the third year because of a tail-risk that wasn’t mitigated. Moreover, for most of these farmers, working harder and farming more generally doesn’t offer a route out of the small farming class – these societies typically lack that kind of mobility (and also generally lack the massive wealth-creation potential of industrial power which powers that kind of mobility). Consequently, there is little gain to taking risks and much to lose. So as we’ll see, these farmers generally sacrifice efficiency for greater margins of safety, every time."
[0] https://acoup.blog/2020/07/24/collections-bread-how-did-they...
[+] [-] redorb|5 years ago|reply
Not to mention if they ever get un-poor they don't have the knowledge to 'build wealth' until they start slowly learning it or from a mentor.
We would better off teaching 'home finances, interest and banking' classes instead of Algebra 3 or geometry 2 (for 99% of people)
[+] [-] jollofricepeas|5 years ago|reply
Don’t forget that local government also taxes the poor with predatory fees and fines for minor infractions.
- parking tickets - car insurance fines - cash bail
Sources: https://www.latimes.com/archives/la-xpm-1996-04-20-me-60640-... https://theappeal.org/fines-and-fees-explained-bf4e05d188bf/
https://www.prisonpolicy.org/reports/incomejails.html
[+] [-] mythrwy|5 years ago|reply
[+] [-] econcon|5 years ago|reply
As a person who mentors poor people, it's not always this..
Don't get me wrong, there are some poor people who are poor by choice. They usually don't feel like victim and aren't stressed about them being poor. They are pleasant to deal with as they understand the trade off they are making. They are very small % of poor people.
Here is the difference I see:
1. Reasonable well off people (many of HN crowds are this) are usually willing to listen and discuss the ways some project or work can be done better.
2. I've gone to offer same suggestions to poor people, a lot of them listen to me absent minded. They complain "I am too tired", "I am losing hope" while a few of them go back to doing drugs and drinking.
3. Poor people don't want to lose their "immediate" freedom. While well off people understand it's a temporary scarifice they are making, later situation will change.
4. Optimism, all the guys who came up with ideas and plans are now doing well.
6. Ability to form relationships and acquire new friends. I consistently saw the poor people who I was mentoring would abuse their friends (without realising), they'd call them "dumb, stupid" while having all evidence like "success, wealth, education qualification" which clearly showed the person giving them advise they are asking for is just trying to help them.
7. Coming from poor household, I used to think rich people are evil and all but I really figured out that a high proportion of rich people were just more attentive and good are forging connections which often continued life long and the benefits compound when you are connected to so many good people for so long this is what most poor people do not realize.
[+] [-] SilasX|5 years ago|reply
It's probably not possible because there are factors other than what you described.
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] missedthecue|5 years ago|reply
[+] [-] AlexTWithBeard|5 years ago|reply
Get together with your neighbors and buy a 20-pack?
> the lower class have to buy their own uniforms or tools.
Workers owning their own tools. Isn't it what Karl Marx dreamt of?
> Instead of a 5% interest rate on their loan, they have a 25% interest rate.
Don't use loans. Seriously. You either can afford something, or you can't. Buying a house is probably the only exception. I know in US culture it sounds almost as crazy as "don't own a car" or "don't watch TV", but that's entirely possible.
[+] [-] hprotagonist|5 years ago|reply
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and _would still have wet feet_."
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
[+] [-] refurb|5 years ago|reply
[+] [-] throwaway0a5e|5 years ago|reply
[+] [-] AaronLasseigne|5 years ago|reply
[+] [-] roenxi|5 years ago|reply
On page 64 (65 as the PDF numbers it), chart (b) "Distribution of savings rate" has an awkward little peak on the left hand side of the chart. It is very difficult to tell from inspection whether that is a real feature of the underlying data or if it is an artefact naive kernel density estimation.
If you ever see that pattern in your graphs, do consider trying logKDE [0] rather than ordinary Kernel Density Estimation a la geom_density() in ggplot. It also isn't perfect but the result is usually a bit better for things that approximate an exponential distribution.
[0] https://cran.r-project.org/web/packages/logKDE/vignettes/log...
[+] [-] TrackerFF|5 years ago|reply
Engineers, Lawyers, and other similar professions tend to earn 2x-3x of what the absolute minimum wage jobs earn. That's quite the difference compared to other countries, where Engineers can earn 5x-20x.
People here are still motivated to seek higher education and better paid jobs, even though they could live normal lives off those lowest paid jobs that don't require any education.
[+] [-] corpMaverick|5 years ago|reply
[+] [-] 908B64B197|5 years ago|reply
[+] [-] djrobstep|5 years ago|reply
How many unhappy people do you know do end up stuck doing work they hate because of money? There are many, and uneven compensation is a prime cause of their misery.
[+] [-] Kiro|5 years ago|reply
[+] [-] bschne|5 years ago|reply
[+] [-] simulo|5 years ago|reply
[+] [-] ghufran_syed|5 years ago|reply
This [article](https://www.forbes.com/sites/timworstall/2014/08/27/by-globa...) describes what american poverty levels would be if we used the same measure as we do in developing countries and makes the point that by those measures there are no poor people in the US, just “lower middle class”. That doesn’t mean we shouldn’t try and improve the lives of people at the lower end of the income distribution, but we should at least understand that when we use the term poverty in developing and developed economies, we’re talking about something qualitatively and quantitatively different - so the optimal solutions are likely different too.
[+] [-] badRNG|5 years ago|reply
That doesn't feel like a meaningful metric when there are as many as 17% of mothers with young children experiencing food insecurity [1]. Perhaps that's due to COVID, but 11% of households were food insecure as recently as 2018 [2]. Around half a million Americans are homeless, and 35% of them are shelterless [3].
Are all of these people "not poor" and are they "middle class"? This all to say that how we think about poverty should focus more on the outcomes that people actually experience (access to food, shelter, healthcare, etc) than key economic indicators. Claims like "the War on Poverty is over" and "there are no poor people in the US" don't seem to match up with the lived experiences of many Americans.
[1] https://www.brookings.edu/blog/up-front/2020/05/06/the-covid...
[2] https://www.ers.usda.gov/topics/food-nutrition-assistance/fo...
[3] https://endhomelessness.org/homelessness-in-america/homeless...
[+] [-] DubiousPusher|5 years ago|reply
I grew up well below the poverty line in the USA and it was pretty self evident that I was not leading the same kind of lifestyle as someone in poverty in a developing country.
I think your point is mostly true but I'm also just not sure how useful it is.
[+] [-] nitrogen|5 years ago|reply
Maybe most can read and write at the most basic level, but there are enough who cannot do so at a high enough level to function as a productive adult.
[+] [-] frogpelt|5 years ago|reply
Why don't we study all of the people who have definitely risen from the ranks of the poor to a higher class and see what they have in common?
Sure, it's not the norm. But it happens all the time. There is enough data to form an opinion.
I'm guessing the way people rise from the poverty is much the same as people who are average becoming wealthy. They are willing to take risks (i.e., leave your neighborhood, buck the trends in your family tree) and they work on being prepared and available for opportunities that may present themselves.
We also know there are certain behaviors that absolutely correlate to and probably perpetuate generational poverty (children out of wedlock, crime, quitting school). The people I know who have risen out of inner city poverty in the U.S. (not the same as Bangladesh I know) distanced themselves from these behaviors and from the people who considered them okay.
[+] [-] wayanon|5 years ago|reply
[+] [-] abellerose|5 years ago|reply
[+] [-] drbojingle|5 years ago|reply
Some people are poor because of their situation and some situations are more difficult to escape than others.
Some people are poor because of their habits and inclinations and they just don't change those habits (for one reason or another), so they stay poor.
[+] [-] magicalhippo|5 years ago|reply
The very next day he called me up. It was payday and with excitement told me he'd just bought another TV tuner card for his PC.
Another...
He already had one he barely used. But now he could watch two channels at the same time without turning the TV on! The TV that was incidentally in the same room...
And so he ate ramen noodles for another month...
[+] [-] veddox|5 years ago|reply
[+] [-] woodandsteel|5 years ago|reply
That's true. But often the reason they have those bad habits is they were taught them by the environment that, through no choice of their own, they were born in.
[+] [-] feralimal|5 years ago|reply
[+] [-] dnautics|5 years ago|reply
The answer is still likely: Debt. When we take out sovereign debt it increases cost of living, and usually the way that sovereigns typically use that debt is via payouts to contractors, which does not go to the bottom 50%, except perversely via trickle-down effects. If you look at the "socialist" countries that have low poverty rates, typically they also have low rates of sovereign borrowing (think Norway, Sweden, and Denmark).
[+] [-] nicbou|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] paulpauper|5 years ago|reply
[+] [-] marcosdumay|5 years ago|reply
It has a simple stochastic model and some statistics for verifying if the real world agrees with it. You are deluding yourself if you think one can study economics without advanced statistics.
[+] [-] barrenko|5 years ago|reply
[+] [-] bmmayer1|5 years ago|reply
Being poor is table stakes for being a human animal. The miracle of modern society is that billions of people aren't poor (as high as 90% according to Hans Rosling[1]). How did we make that happen? How do we make it happen for everyone?
[1]https://ourworldindata.org/grapher/distribution-of-populatio...
[+] [-] ellis-bell|5 years ago|reply
the poverty line is defined generously at ~$2 / day by most oecd countries, but making above the poverty line does not make you not poor.
all of that said, the field of development economics has been very rich in research these days, particular from the likes of duflo and banerjee
[+] [-] pmiller2|5 years ago|reply
[+] [-] mNovak|5 years ago|reply
Am I understanding PPP correctly--this is a value equivalent to what $500 buys in the US?
That's surprising because the paper states this is above the amount available for conventional microfinance; I didn't realize it was indeed that "micro".
[+] [-] accurrent|5 years ago|reply
[+] [-] aspenmayer|5 years ago|reply
Balboni, C, Bandiera, O, Burgess, R, Ghatak, M and Heil, A. 2020. 'Why do people stay poor?'. London, Centre for Economic Policy Research.
https://cepr.org/active/publications/discussion_papers/dp.ph...
[+] [-] unknown|5 years ago|reply
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[+] [-] sul_tasto|5 years ago|reply