The survey, which was conducted in 2016, asked respondents 10 questions, on which they were then given a score from 0 to 100.
In all, the average consumer score was 54. About a third of all adults in the U.S. have financial well-being scores of 50 or below, meaning they struggle to make ends meet or experience material hardship.
Last week was a rough week for me:
I recently bought a new house and, after some storms, we discovered water in the basement. That led to the discovery of some broken and disturbed asbestos tile, which will need to be abated before we do any finishing work in the basement.
In an act of petty vandalism, someone threw a rock through my car window. Since the amount to replace the window was less than my deductible, insurance didn’t cover it.
I broke my glasses. I have an extra pair, so I can still see (or I wouldn’t be able to write this), and I was due for an eye exam anyway. Still, it sucks.
While it was a difficult week, I’m fully aware of how fortunate I’ve been through all of this. I have savings that can help with the cost of asbestos remediation. I have savings specifically for automotive expenses that can cover the cost of a new car window. And I have vision insurance that will cover an eye exam and most of the cost of a new pair of glasses.
In other words, I have savings and slack. I can absorb a few unexpected expenses as long as they’re not too big.
Many, many people do not have that ability. For these people, asbestos, even with water in the basement, would be something they have to live with. A broken car window would mean putting up a garbage bag (or something else) and getting on with life. Broken glasses would mean living with broken glasses or trading the ability to see with the ability to pay some other bill.
All of us have bad days or bad weeks. But bad days and bad weeks don’t have the same consequences for all of us. That’s an important thing to remember.
Recently, I was talking to a colleague who told me about her need to see a financial planner. Here’s what her reasoning was. When she has money, she is disciplined about saving. When she doesn’t have as much money – when she needs to spend the money she has on other things – she’s not so disciplined. She needs someone to hold her accountable all the time and make sure she’s disciplined about saving.
And, she said, the low-income people she works with need the same thing: someone to make sure their disciplined about saving.
And that struck me as a weird way to use the word ‘discipline.’
Imagine two pieces of rich decadent chocolate cake. One piece is in front of someone who has just had a big meal: an appetizer, house salad, a 16-ounce ribeye, fried, and some asparagus. A feast. That person has eaten so much she feels a little queasy. She says no to the cake.
The other piece is in front of someone who has just been rescued after getting lost on a hiking trip. He hasn’t eaten in three days and is absolutely starving. He gobbles down the cake in what seems like a matter like seconds.
Is either of these people acting on discipline? Is the first person showing discipline? Is the second person showing a lack of discipline?
The difference between the first person and the second person isn’t discipline; it’s need. Of course we’re good at saying ‘no’ when we’re living in abundance. It’s easy to refuse some chocolate cake when we’re full or to put some money into savings when we have extra. And we’re much worse at saying ‘no’ when we’re facing scarcity. It’s hard to refuse the cake when we’re starving or to save money when almost every dollar is going to some necessity.
This is true for my colleague and the low-income families she serves. It’s easy to save when we have extra money. It’s hard to save when we don’t. It has little (if anything) to do with discipline.
What’s particularly fascinating here is the moral dimension to this. We usually understand discipline as a virtue and a sign of good character. People who are disciplined are good. Conversely, we understand a lack of discipline as a sign of poor character. People who don’t show discipline are bad. That’s problematic enough as it is, but there might be some truth in it. Some people might really be undisciplined. And they might be more virtuous if they were able to control their impulses better.
But we make it worse when we confuse discipline and need. If we think that the person who hasn’t eaten in three days is undisciplined because he eats the cake, and we think that being undisciplined is morally suspect, then we eng up saying that being hungry (even after a prolonged period of not eating) is morally wrong. Similarly, if we think that the person who has just had a feast is disciplined because she refuses the cake, and we think that being disciplined is a virtue, then we end up saying that she it virtuous because she’s had more than enough to eat.
In other words, we end up saying that having very little is a sin and having a lot is a virtue. And I don’t think that any of us want to make that claim. At least, I hope that none of us want to make that claim.
So we need to be careful not to confuse discipline with need.
And how is one to move up from the lower group to the higher one? Education is key, Temin writes, but notes that this means plotting, starting in early childhood, a successful path to, and through, college. That’s a 16-year (or longer) plan that, as Temin compellingly observes, can be easily upended. For minorities especially, this means contending with the racially fraught trends Temin identifies earlier in his book, such as mass incarceration and institutional disinvestment in students, for example. Many cities, which house a disproportionate portion of the black (and increasingly, Latino) population, lack adequate funding for schools. And decrepit infrastructure and lackluster public transit can make it difficult for residents to get out of their communities to places with better educational or work opportunities. Temin argues that these impediments exist by design.
When a person lives in poverty, a growing body of research suggests the limbic system is constantly sending fear and stress messages to the prefrontal cortex, which overloads its ability to solve problems, set goals, and complete tasks in the most efficient ways.
This happens to everyone at some point, regardless of social class. The overload can be prompted by any number of things, including an overly stressful day at work or a family emergency. People in poverty, however, have the added burden of ever-present stress. They are constantly struggling to make ends meet and often bracing themselves against class bias that adds extra strain or even trauma to their daily lives.
And the science is clear—when brain capacity is used up on these worries and fears, there simply isn’t as much bandwidth for other things.
Historically, the distribution of benefits was about flat. Richer people received more Social Security benefits, but that was offset by higher Medicaid and disability insurance payouts to lower-income people. But for younger cohorts, the affluent get about $130,000 more in lifetime benefits than the poor. And they find that the most simplistic forms of program cuts that involve raising the age at which you can first claim benefits exacerbates the situation.
I don’t know how I missed On the Media’s powerful multi-part series on myths about poverty, but I did. Busted: America’s Poverty Myths draws on some of the same research that I use in my critiques of the case against charity. This series is both a powerful indictment of how poverty is portrayed in the media and a helpful corrective. If you don’t have time to read book after book about the reality, psychology, and economics of poverty, I highly recommend listening to this series… repeatedly.
I also recommend downloading, printing, and using the consumer’s handbook that On the Media has produced.
A lot of popular writers on poverty make a distinction between situational poverty and generational poverty. According to these writers, situational poverty is poverty caused by a particular chance in their circumstances: a lost job, an unexpected medical bill, and so on. Generational poverty, meanwhile, is the poverty that exists when a single family has lived in (or been born into) poverty for at least two generations.
But, while this distinction between situational and generational poverty is popular, is it useful?
I don’t know the answer to that. But as I’ve thought about it more, I’ve grown skeptical. Here are three reasons why.
These Categories Leave People Out
If we took everyone who is living in situational poverty and everyone who is living in generational poverty, we would still have some people living in poverty who aren’t included in either group. For example, someone who has lived in poverty for twenty years doesn’t strike me as ‘situationally’ poor; but if they aren’t in the second generation of their family’s poverty, they aren’t generationally poor. Similarly, someone who is in the first generation of longterm familial poverty isn’t considered generationally poor. There is a gap here that this distinction doesn’t account for.
That wouldn’t be a problem if these were two categories in a larger and more comprehensive system. But they are asked to stand on their own, leaving some people in poverty unaccounted for. One problem with this is that it keeps us from accounting for a family becoming generationally poor. Without looking at people who aren’t situationally poor, but who aren’t yet part of families that are generationally poor, we can’t look at the transition into generational poverty.
These Categories Have Too Much Internal Variety
Related to the first, point, there is a lot of internal variety within situational and generational poverty. Someone who has lived in poverty for three months and someone who has lived in poverty for two years might both be situationally poor, but their circumstances are obviously different. Why don’t we account for differences that might exist between these subgroups.
Similarly, there are families where exactly two generations have lived in poverty and families who have lived in poverty for all of living memory. There are also families who have been poor as far into history as we can follow them. Again, these seem like substantial distinctions. There may be differences between the experience of poverty when someone’s grandparents were not poor (and, therefore, other family members might have wealth) and that experience when no known ancestor has had wealth.
When we divide poverty into these two broad categories, we miss those potentially revealing distinctions. Again, this might be solved by having a larger system in which these were just two super-categories, but that isn’t the case here. Instead, we’re asked to believe that diverse situations and experiences can be accounted for by just two categories.
These Categories Explain Too Much
This is the biggest problem I have: situational and generational poverty as asked to explain too much. A page at Portland State University – which adds ‘working class poverty’ to the mix, makes claims like:
- People living in generational poverty “never knew anyone who benefited from education,” and
- People living in generational poverty “never knew anyone who moved up or was respected in a job.”
Those are what we might call ‘bold claims’. Someone living in generational poverty might not have anyone in their family or neighborhood who has benefitted from education, but the idea that they would know no one who has seems unlikely: the people teaching their children, the physician at the urgent care clinic, and so on have benefitted from their education.
Of course, the most famous person who makes bold use of the distinction between situational and generational poverty is Ruby Payne, who manages to ascribe different cultures and linguistic traditions to the two groups. In fact, one of the key differences for her is that “the attitude in generational poverty is that society owes one a living,” while “in situational poverty the attitude is often one of pride and a refusal to accept charity.”1Ruby Payne et al, Bridges Out of Poverty, Kindle Edition (Highlands: aha! Process Inc., 1999), Kindle Locations 699-700 These are all huge differences, especially considering that no differences within situational or generational poverty are noted.
As I said at the beginning, I don’t know whether situational and generational poverty are useful categories or not. I’m skeptical for the reasons I listed, but I’m also not ready to just cast them aside.
Perhaps they would be useful as part of a bigger system, or as categories with sub-categories, or as part of a multi-axis system of considering poverty. As they stand however, they strike me as arbitrary categories that let people make quick, value-laden judgements (as Payne does).
There has to be something better.
Footnotes [ + ]
|1.||↑||Ruby Payne et al, Bridges Out of Poverty, Kindle Edition (Highlands: aha! Process Inc., 1999), Kindle Locations 699-700|
Third — and conveniently, perhaps, for people like Chaffetz or House Speaker Paul D. Ryan (R-Wis.) — this stubborn insistence that people could have more money or more health care if only they wanted them more absolves the government of having to intervene and use its power on their behalf. In this way of thinking, reducing access to subsidized health insurance isn’t cruel, it’s responsible, a form of tough love in which people are forced to make good choices instead of bad ones. This is both patronizing and, of course, a gross misreading of the actual outcome of laws like these.
But what if someone uses the money for, say, a glass of wine? (A perfectly Milanese question.) His answer: If “a glass of wine is the only happiness he has in life, that’s O.K. Instead, ask yourself, what do you do on the sly? What ‘happiness’ do you seek in secret?” Another way to look at it, he said, is to recognize how you are the “luckier” one, with a home, a spouse and children, and then ask why your responsibility to help should be pushed onto someone else.