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Conclusions on Poverty

Posted on February 26, 2016

My journey towards understanding poverty has taken me through a dozen books, almost 100 podcasts, and more articles that I can remember. My goal was to identify effective approaches, and learn how to end poverty in such a wealthy and resourced country. I’m not sure I met this goal, but I wanted to share my conclusions with you in this post.

EpigeneticsHomeostasis and Epigenetics. Epigenetics, how a person’s genes are expressed due to conditions in the environment, produces traits and brain structures, creating a homeostasis with their environment. There are certain traits needed to survive poverty that are often different from those needed to thrive in middle and upper classes in society. I believe this is what Ruby Payne is seeing when she discussed class rules in Bridges out of Poverty. Paynes writes that, in order to be “successful,” someone in poverty must be taught the rules of the middle class, and for helpers to be successful in working with clients in poverty, they must understand the rules of poverty.

Unfortunately, I believe Payne’s approach to teaching and understanding “rules” misses the epigenetic brain changes one needs to go through in order to succeed in a different setting. As long as someone is living in extreme poverty, their genetics and brain must continue to prioritize survival, and will have trouble with the short-term adjustments often needed to succeed in traditional academic and employment settings. As long as our society allows homelessness, violence, and extreme poverty to exist, we can’t place the blame on the person who is working to survive a reality they are often born into, through no fault of their own. As income inequality grows, and high-paying manufacturing jobs are replaced by service jobs that don’t pay a livable wage, finding a road out of poverty and into the middle class will be difficult at best, and impossible for many.

Behavioral Economics Might Provide Hope! As we have seen on this journey, economists have greatly failed to understand the person who is experiencing poverty. By viewing humans as rational decision makers, economists create policies and programs that would be perfect…for Spock, or some other alien lifeform. In reality, all humans are irrational when it comes to personal economic decisions (at least the majority of the time). When the policies that are based on the rational theory fail, the person is blamed, when really, the policy’s underlying philosophy is totally misguided and unscientific.

I have great hope that behavioral economics will transform our thinking about human behavior and poverty. It’s findings that humans are far from rational even under the best situations, help to destigmatize those in poverty. We also know that people who are experiencing the stress and trauma of poverty are relying more on their emotional/reactive brain, and may often have more difficulty accessing their logical pre-frontal cortex. Between behavioral economics and neurobiology, we have new paradigms in which to view certain behaviors and also how to help people move out of poverty.

Behavioral economics is not only showing the huge shortcomings of traditional economics; it is also giving us a better picture of who we are as human beings. I have been a fan of behavioral economics ever since I read Freakonomics by Stephen J. Dubner and Steven Levitt. They have written several other books, all of which I recommend, and have a great podcast that I strongly recommend as well. Richard Thaler has also written some great books, including Misbehaving and Nudge. Several nations are working with Thaler to integrate behavioral economics into government policy and practice. Daniel Kahneman’s Thinking Fast and Slow is another great behavioral economics book, and is quickly becoming a modern classic. The podcasts Hidden Brain and Planet Money have been very useful, and entertaining, in my journey.

I HIGHLY encourage you to start a learning curve in behavioral economics. The podcasts and books will change the way you see yourself, your clients, and your community. This evolving science is one of the most important developments in our lifetime, and provides a growing foundation in which issues like poverty can be addressed. I promise you will not regret the journey!

Poverty is Local and Individual I was hoping to come to some grand conclusion here that would change the world! Unfortunately, after months of study and contemplation, I am left with the sobering conclusion that we fail to address poverty because we often see it as only one problem and try to implement grand solutions. This approach has mostly failed because poverty is so diverse and so dependent on a number of factors.

Poverty in eastern Kentucky looks different than poverty in Detroit; poverty on Skid Row in Los Angeles is a whole different experience than poverty in Orange County, just a few miles away; even in Colorado, we have a starkly different poverty realities facing those living on the plains, in urban Denver, and in the mountains, and even these experiences have variations within them. The African-American experience of poverty mixed with the historical racism in the south is very different from the experience of white southern poverty just across the same small town. In the last few years, I have seen a growing gap in the experience of poverty for those in Medicaid Expansion states versus those states have not expanded. To say “U.S. Poverty” is one problem misses the incredible diversity of problems and struggles inherent in location, race, and history.

It is nearly impossible to solve the issues of all of those living in poverty through one grand policy. Some policies work well across all populations, such as Medicaid Expansion and Housing First – although it did take us a long time to realize health care is a human right, and that a great way to address homelessness is to provide homes! With these exceptions in mind, the vast majority of public policies fail because they are too broad, based on outdated economic policies, and don’t offer enough flexibility at the local or individual level.

We know how people grow, heal, and thrive – through a combination of relationships and resources. Relationships with teachers, social workers, nurses, case managers, etc., provide the support necessary to consider changing one’s reality. Within the context of these relationships, having a menu of resources (housing, meaningful employment, counseling, food stability, health care, educational opportunities, etc.) to customize around the specific communities or individuals can help create a pathway out of poverty.

Unfortunately, we live in a society that generally believes the individual in poverty is lazy, and that if they could just find the motivation, poverty would go away. This belief leads to a devaluing of the importance of support, and often sacrifices the number one drives of outcomes: the relationship with a helper. Instead, we are left with mountains of paperwork justifying every dollar that is spent making sure no one is gaming the system.

Add this to resources based on the rational person theory of economics, and you are often left with ineffective and cumbersome programs that prevent us from customizing a plan to help an individual rise up and live the life they want. When these programs are shown to be ineffective, the person in poverty gets blamed and cuts happen on the backs of the poor. Needless to say, we have work to do!

I want to thank you for taking this journey with me over the last several months. I hope it has been helpful in your work. I would love to hear any of your thoughts or conclusions in the comment section.

10 responses to “Conclusions on Poverty”

  1. Matthew Parkhouse (Colorado Springs) says:

    I wonder how one fits in the data that if resources are equally distributed among all members of a population, the resources; within a generation or two, start to end up concentrated with a portion of the population. Happens under ALL forms of government. That said, we here in the U.S. Can do MUCH better. We really are the only industrialised nation that lives with fear of serious illness bankrupting their families. MY family came damn close!
    Thanks

    • Anonymous says:

      Thanks Matthew, my hope is that we find pathways to help people realize their motivation and desire for the life they want. My struggle comes with the realization that, due solely to the class one is borne into so often becomes a barrier or a unfair benefit to a better life. Some people will get lucky and others will work their butts off but everyone should have an opportunity to realize their genetic potential. To me this starts with equal education for everyone along with a basic level of safety and stability in housing and health care. In my experience Denmark come very close to this reality and other European Countries also value this reality. It is doable, the question is do we really value and care for all our brothers and sisters…in the US, this does not seem like the case.

  2. Matthew Parkhouse (Colorado Springs) says:

    I wonder how one fits in the data that if resources are equally distributed among all members of a population, the resources; within a generation or two, start to end up concentrated with a portion of the population. Happens under ALL forms of government. That said, we here in the U.S. Can do MUCH better. We really are the only industrialised nation that lives with fear of serious illness bankrupting their families. MY family came damn close!
    Thanks

    • Anonymous says:

      Thanks Matthew, my hope is that we find pathways to help people realize their motivation and desire for the life they want. My struggle comes with the realization that, due solely to the class one is borne into so often becomes a barrier or a unfair benefit to a better life. Some people will get lucky and others will work their butts off but everyone should have an opportunity to realize their genetic potential. To me this starts with equal education for everyone along with a basic level of safety and stability in housing and health care. In my experience Denmark come very close to this reality and other European Countries also value this reality. It is doable, the question is do we really value and care for all our brothers and sisters…in the US, this does not seem like the case.

  3. Tarin says:

    Hi Matt,
    Which podcasts do you enjoy listening to? I am always looking for suggestions.
    Thank you!

    • Anonymous says:

      Besides the ones mentioned in the post I love Radiolab, This American Life, and I’m addicted to Serial right now! Let me know if you have any suggestions.

  4. Tarin says:

    Hi Matt,
    Which podcasts do you enjoy listening to? I am always looking for suggestions.
    Thank you!

    • Anonymous says:

      Besides the ones mentioned in the post I love Radiolab, This American Life, and I’m addicted to Serial right now! Let me know if you have any suggestions.

  5. Melody says:

    “As long as our society allows homelessness, violence, and extreme poverty to exist, we can’t place the blame on the person who is working to survive a reality they are often born into, through no fault of their own.”

    Yes! I can’t agree more with this statement!

    Also, I have a fair amount of exposure to behavioral economics through my father who got his PhD in Personal Financial Planning and has particular interest in the subject, but until your blog I never thought about using that information to shape how we look at poverty and working to shape policies. I had always just looked at it from more of a micro perspective at an individual level, so thank you for expanding that for me.

    I also completely agree with the major gap in experiences of those in states where Medicaid was expanded and those where it wasn’t. I know so many people that still don’t have health insurance because they can’t afford it, even with tax credits, because if their state would have expanded Medicaid they would be covered under that. Yes, there are forms they can fill out so they aren’t penalized for not having insurance under the ACA due to their income, but that does not help them when they have health care needs, especially with regard to mental health. It is so frustrating to see them struggle when there is a solution that is not available to them just because of politics.

    Thank you as always for your words and thoughts and for working to make the world a better place.

  6. Melody says:

    “As long as our society allows homelessness, violence, and extreme poverty to exist, we can’t place the blame on the person who is working to survive a reality they are often born into, through no fault of their own.”

    Yes! I can’t agree more with this statement!

    Also, I have a fair amount of exposure to behavioral economics through my father who got his PhD in Personal Financial Planning and has particular interest in the subject, but until your blog I never thought about using that information to shape how we look at poverty and working to shape policies. I had always just looked at it from more of a micro perspective at an individual level, so thank you for expanding that for me.

    I also completely agree with the major gap in experiences of those in states where Medicaid was expanded and those where it wasn’t. I know so many people that still don’t have health insurance because they can’t afford it, even with tax credits, because if their state would have expanded Medicaid they would be covered under that. Yes, there are forms they can fill out so they aren’t penalized for not having insurance under the ACA due to their income, but that does not help them when they have health care needs, especially with regard to mental health. It is so frustrating to see them struggle when there is a solution that is not available to them just because of politics.

    Thank you as always for your words and thoughts and for working to make the world a better place.

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