Understanding Why the Poor STAY Poor

Saturday, we had a meeting at the paper office (I currently work as a "media distribution specialist", or, "paper carrier" for the non-PC among you). We were discussing updates in our pay rates. One of the main changes is that the paper plans to eliminate the gas adjustment that many of us rural carriers get for delivering the paper out along the county roads to the farmhouses that dot the countryside.

Now, to be frank, I NEED that gas adjustment to make any profit on two of my eight routes, which are rural. The news was not at ALL good to me, and I had to try to do something or find myself with great difficulty making ends meet.

In times past I might have stormed off and left the job entirely. I have a good work history and could find other menial work without a whole lot of difficulty. I also might have railed on about the injustice, how "the man", in this case, the paper, was trying to oppress the workers and made my little Che Guevara rant my cause celebre.

But I didn't do either. What I DID do, I believe, illustrated how my understanding of how the world works has changed and how that change stands to benefit myself and my family for generations to come.

See, I grabbed a sheet of paper and listed the number of customers on my two routes. I then calculated my daily pay rate and subtracted the gas needed to run the routes. When I was finished, the numbers spoke clearly, and they were grim. I would be making $1.80 for 70 minutes' work on one route, after gas was figured in but before other operating costs. I would be making $1.17 on the other route for 20 minute's work, again after gas but before other operating costs. To drive my point home further, I listed 7 MAJOR advertisers on the route that the paper might stand to lose if they affected the service to those customers. By 2:00 yesterday afternoon, my gas adjustment was restored.

See, I have a lot to learn, but I have learned that in order to improve your status, you need to speak the LANGUAGE of the businesspeople you serve. To them, the bottom line is vitally important, as it should be; they are paid to run a business. If you can show them how a decision can affect their bottom line positively or negatively, they can often be enticed to change their outlook.

The problem is, most of the poor aren't taught that. And that, I believe, is the chief cause of generational poverty. The poor have lived the past 100+ years awaiting the glorious socialist revolution that many believe will liberate them from the chains of poverty, and believing that the principal causes for their misfortunes are the "evil capitalists".

The problem is, the ones who have taught this to their children haven't seen their children liberated from the shackles of poverty. The children continue on in the same misguided mindset and learn to hope for a "saviour" (usually in the form of the government) to rescue them from the mire.

I don't ever expect to be abundantly rich. Frankly, it isn't one of my major life's goals. But because I have slowly begun to come to understand WHY my family has spent so much time in poverty, and WHAT I can do to change it, I believe I have a MUCH better chance of equipping my children to achieve to the fullest of their dreams.

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Reply #1 Top
This is an excellent example of economics in real life!  And much better than a book explanation I could give.  I just wish more would read stories like this and educate themselves.  You do not need a college degree to understand economics, and the understanding is critical to how you live your life.
Reply #2 Top

Dr.

Frankly, that's why I'm such an ardent admirer of Walter E. Williams. He has repeatedly expressed these principles in a way that I can grasp, and has helped change my own outlook. I'm hoping that I, in turn, can change the outlook of more than a few others in return.

Reply #3 Top
Sometimes it's really hard to keep your head and not let emotions take over. That's where I struggle at work sometimes because my boss is so all over the place which frustrates me. But the times I can and I present a calm and reasonable argument, he almost always agrees with me and goes with my recommendations!

Taking that deep breath isn't the hard part, it's thinking fast and keeping your cool.

Nice anecdote Gideon.
Reply #4 Top
Great article, and as DG mentions above, understanding of economics can have a dramatic effect on how you approach problems, and how you view both worldly and everyday affairs. The great thing about it too is that although it is very mathematical, if you can understand a graph, much of the knowledge can be easily attained.

(I currently work as a "media distribution specialist", or, "paper carrier" for the non-PC among you).


Hehe, this reminded me of the line at the beginning of Half-Baked.

I, myself, am a master of the custodial arts. Or, a janitor; if you wanna be a d**k about it.

Reply #5 Top
Yes, the old Montgomery Ward and Sears catalogues were well aware of the revenue of advertising and that it was important to reach sparsely populated rural areas. You're right about some of the poor trapped in their entitlement mentality. For instance, poor high school kids being let off for two weeks during Wilma could have made a small fortune cleaning up debris, instead they took to the basketball courts and football fields.
Reply #6 Top

Great article, and as DG mentions above, understanding of economics can have a dramatic effect on how you approach problems, and how you view both worldly and everyday affairs.

You did it again!  Gave me an idea for another article!  Thanks!  You are becoming a muse!

Reply #7 Top
Frankly, that's why I'm such an ardent admirer of Walter E. Williams. He has repeatedly expressed these principles in a way that I can grasp, and has helped change my own outlook. I'm hoping that I, in turn, can change the outlook of more than a few others in return.


Ah! The inestimable Mr. Williams. He's a smart one, alright. I was duly impressed when I had him for a professor in my undergraduate Macroeconomics class. Made it easy enough for geeks like me to understand him.

For some info on what he's up to, take a look at Link
Reply #8 Top
I agree completely! By using the appeal to the bottom line, I've loaded my work computer with a new monitor, a CDRW/DVD combo drive, and a video card, of all things. And a new desk. It's like the Dresden Dolls say: "it's amazing what they'll give you when you just learn how to ask."

Dan
Reply #9 Top

Ah! The inestimable Mr. Williams. He's a smart one, alright. I was duly impressed when I had him for a professor in my undergraduate Macroeconomics class.

DAMN!  I only got to see him debate a Union Economist!  I am jealous! {pout}

Reply #10 Top
Great Article Gideon!! You didn't whine, complain or storm out. You didn't even bore your supervisor with all the reasons YOU need them to reconsider. You sat down, figured out what it meant in your own life, then showed them how it would affect the "bottom line".

The example I use for "poor staying poor" is the Earned Income Credit. Every year the "working poor" get upwards of $3000 in a lump sum payment.

As soon as the money is deposited in their accounts, it belongs to them and they are free to do with it whatever they want. Will they use it to pay off bills? Invest? or maybe just stick it in the bank? Or will they go out and spend it on TVs, Home Entertainment Centers, A car???

It would be interesting to see how much of the Earned Income Credit goes to increasing a standard of living and how much of it donated to Reparations for the Tribes by means of the local Indian Casino. ;~D
Reply #11 Top
I have never been poor.

I have been out of a job for times (I never collected welfare or insurance or some such thing), but I always found a new job. Moving from Berlin to Dublin helped a lot. I actually get job offers that I don't need occasionally!

I don't understand how anybody in my situation could be poor.

I am in my late twenties, have neither wife nor kids, I live with a flat mate in the centre of Dublin, and I don't have a car. But I do well at the moment. I'm a system engineer for a large multinational software company. I don't have a degree. I am now studying at night to maybe get one.

I spend most of my free time watching DVDs, learning some Hebrew, and learning about what I need to know for work and for future jobs. I am happy. And I have a dream now. I never had a dream before.

The point is, I am incredibly lazy. I could do much better. But I enjoy being comfortable and doing what I like more than I enjoy hard work. This means I could be richer.

And that's what I don't understand about poverty in rich countries. Could not anybody do better than I unless there is something that holds them back? What is it?
Reply #12 Top
And that's what I don't understand about poverty in rich countries. Could not anybody do better than I unless there is something that holds them back? What is it?


Please understand my point in sharing some background is not to brag. But, for others to know success can be had even when brown bag welfare dinners are on the table. My Hungarian immigrant family was on and off poor. One time mid-western trailer trash, the next hard working farmers and later dad was blue collar auto worker. I began working at twelve years old. Started paying room and board at 14, and put my way completely through school leaving abruptly to face the unknown in a big city.

In retrospect working on the farm as a kid taught me a great deal. I just didn't know it at the time. So much so, today I wish my son could experience my childhood. Unfortunately, my success is having an opposite affect on him.

Work ethics combined with creative thinking, a bit of a gamble and good old fashion luck, four years later I purchase 49% interest in small company with potential. Built it up through the 70's as I traveled and sold out in 81. With in months after writing a detailed business plan, I founded another organization which I run today, twenty-four years later.

Opportunity is at every corner in the US as far as I am concerned. Fortunately I never lacked self-confidence. Every day right up to this morning I wake with astonishment and a subtle nagging fear I may loose it all to a dream. I have to give thanks to peripheral vision which allowed me to see what others couldn't. Hard work milking cows before and after school made for long days, even though I complained incessantly. Those days paid big dividends in giving me the strength to look at a mountain and turn it into an obstacle of adventure.

As I said, America is the land of opportunity, regardless of what many say. All it takes is some fertilizer and elbow grease, desire and what I gained was a life of pride and accomplishment.
Reply #13 Top

Please understand my point in sharing some background is not to brag.

It aint bragging if it is fact!  You have a lot to be proud of!  Congratulations.

Reply #14 Top
fact


It's true... The public attraction to me has been mostly due to being a poor Midwestern yet "resourceful" farm kid that's made really good. And, that I still choose to see myself through naive sunglasses to some extent. Which relates to the subtle fear of loosing it all.

With the advent of sand box mediums such as JU people from different walks of life are intermingling sharing thoughts, ideas and in some cases developing friendships. It's great for me, since I have never been in favor of segregating myself based on professional title and wealth. Unfortuantley, with all the healthy social differences bantered about petty jealously's, insecurities and poor social skills also surface, which was backing my "bragging" comment.

Proud, that I am... and Thank You.



Reply #15 Top

The example I use for "poor staying poor" is the Earned Income Credit. Every year the "working poor" get upwards of $3000 in a lump sum payment.

As soon as the money is deposited in their accounts, it belongs to them and they are free to do with it whatever they want. Will they use it to pay off bills? Invest? or maybe just stick it in the bank? Or will they go out and spend it on TVs, Home Entertainment Centers, A car???

It would be interesting to see how much of the Earned Income Credit goes to increasing a standard of living and how much of it donated to Reparations for the Tribes by means of the local Indian Casino. ;~D

lol...great example.

While I'm not a fan of it, we do file for our EIC. How WE uae our EIC; however, is for "big ticket" purchases we couldn't afford during the year (last year, for instance, a vehicle upgrade and a couple of home repair items), or budget it out over the year to "add to" our monthly budget. We allow ourselves an indulgence or two (last year, for instance, a combo DVD/VCR drive and a few movies to go with), and usually one or two meals out.

But I have seen enough poor folks in my life to know we're the exception, NOT the rule, among those we've encountered.

Reply #16 Top
But I have seen enough poor folks in my life to know we're the exception, NOT the rule, among those
Good for you; but "the rule" could, you know, be the exception and that most do what you do.

Reply #17 Top
Good for you; but "the rule" could, you know, be the exception and that most do what you do.


I can't think of a single response to that comment that's not smartassed, so I'll acknowledge it and leave it at that.
Reply #18 Top
See, I have a lot to learn, but I have learned that in order to improve your status, you need to speak the LANGUAGE of the businesspeople you serve. To them, the bottom line is vitally important, as it should be; they are paid to run a business. If you can show them how a decision can affect their bottom line positively or negatively, they can often be enticed to change their outlook.


EXACTLY!!! I knew of this indirectly, but many of the places I worked really didn't care for my opinion requardless of what language I spoke (that is when you know it is a dead end job and you need to get out). I really learned economics in grad school. From marginal perencity to spend to what the term under-employeed means, I know what businesses want (other than an employee who is trustworthy of which leads to my next point)

The problem is, most of the poor aren't taught that. And that, I believe, is the chief cause of generational poverty. The poor have lived the past 100+ years awaiting the glorious socialist revolution that many believe will liberate them from the chains of poverty, and believing that the principal causes for their misfortunes are the "evil capitalists".

The problem is, the ones who have taught this to their children haven't seen their children liberated from the shackles of poverty. The children continue on in the same misguided mindset and learn to hope for a "saviour" (usually in the form of the government) to rescue them from the mire.


This is what I was tying to say many times over, but I guess I didn't use the right words. Poor people can work very hard, try very hard and so forth, but thinking like a business person sees to always be lacking. Knowing what your employer wants even if it griefs you to do it means that you can have a wealtheir future (either there or somewhere else). Coming to work early, everyday and being trustworthy gets you epople who will sponcer you for higher positions, and even a reference for better jobs.

How many poor people try to get references from co-workers and managers? Many think it is kissing up (especially doing what your told to do for some reason... I don't get that one) and that doing good work so that you can get something in return is some sort of suck up practice.

The bottom line is the bottom line. If you get them there (the bottom line IE making money) through good work practices, that is not kissing up (its not like your washing the mans clothes for crying out loud).





Poor people generally can do the work (and are smart enough to do it dispite IQ tests), but it is lack of education, peer pressure, environment, and most importantly mythes and rumors about 'the man' and 'the system'.
Reply #19 Top
Oh and another thing...

Some people, but seemingly more poor people, get frustruated at the learning proccess and getting things right.

In other words, if it takes too long to learn, self doubt comes into play (as well as laziness). Knowing that it might take you longer than someone else shouldn't be a sour note in learning it. Once you learn it, be the best at it.

Hear in America, being called dumb seems to be a problem so looking like it will take you longer to understand something (another myth) means your stupid and that you won't get it right ever.

See what I mean about mythes?
Reply #20 Top
In other words, if it takes too long to learn, self doubt comes into play (as well as laziness). Knowing that it might take you longer than someone else shouldn't be a sour note in learning it. Once you learn it, be the best at it.


The above statement is so true. From my experience, self-doubt and the learning process starts in JRHS. Not sure why other then a sub-social issues of acceptance come to light during this period. The discouraging element is it keeps evolving until it's ingrained in some personalities, while not in others. I remember kids making fun of me when raising my hand to asking a question. The teasing really grew if I asked for "further" clarification. At that point, everybody knew I wasn't understanding. Sometimes I wouldn't ask just because. Yet, many others didn't understand either and didn't want to ask out of social fear.

That all changed for me after HS... Early on in business I would ask so many questions, it was annoying to my first boss. I would remind him that my questions were his insurance. Knowing as much as possible made him look good. I am still that way to day...but back in my 30's I learned I had a low level of ADD. You wouldn't believe how learning that answered so many other questions for me on different levels.

Hear in America, being called dumb seems to be a problem so looking like it will take you longer to understand something (another myth) means your stupid and that you won't get it right ever.


I don't equate learning to being "poor", especially since I was poor. Furthermore, poor comprehension relates to the "amount of information feed during a time period, there by causing frustration for many. White collar professionals have the same obstacle, just referenced differently. Back in the 70's we learned the hierarchy of "every" employee rises to his level of "incompetence". We could say otherwise, he's reached his a information limit. We referred to it as the "Peter Principle".

True... Asking questions = learning... To many questions = not learning quick enough. Which leads to a rather common statement we use in measuring talent. We know "everybody" is capable of learning any given subject. The more important variable and subjective question is "how long" (since time is money) will it take a person to comprehend the subject matter.

18 holes of golf is a great measure of man's learning process and historically known to be a microcosm of his life. I agree with this statement and use it as often as possible when interviewing talent.