It is easy to blame people who live in poverty for not living up to middle class standards, but it is unfair. The stresses of poverty are pervasive and debilitating.
Many employers of minimum-wage staff are frustrated by difficulties recruiting employees and high rates of turnover. Employers in the "helping professions" of elder and disability care are especially hard hit as they are dependent on Medicaid funding which has not kept up with operational expenses. Many landlords are juggling cash flow to account for renters protected by the eviction moratorium.
Is the unemployment supplement to blame, or are there other factors?
We will soon find out, as the supplemental federal Unemployment and the Eviction moratorium are set to expire.
There has been some talk about providing Universal Basic Income, popularized by Andrew Yang, the unsuccessful but charming candidate for President and NYC Mayor.
This report from MIT gives us some perspective: universal basic income.
I am a huge fan of the book Scarcity by Sendhil Mullainathan & Eldar Shafir. I think their conclusions explain a lot of the behavior we see while providing service.
Basic Premise: Scarcity “captures the mind”
Focusing
In the face of extreme scarcity, the mind focuses more and more on that which is insufficient. In the World War II starvation experiment, the men focused on food, cookbooks and restaurants.
- As the deadline approaches, we become more productive to complete the task. This is called the focus dividend – the positive outcome of scarcity capturing the mind.
Tunneling
As we increase focus on thing A, we may fail to notice thing B. Tunneling is a narrowing of the visual field. The objects within the tunnel have greater focus while we neglect everything peripheral. Tunneling changes the way we choose.
- Goal Inhibition: Focusing on something that matters to you makes you less able to think about other things you care about. This is the underlying mechanism behind tunneling. Dealing with pressing needs inhibits other goals and considerations (e.g. immediate work trumps long term benefits of going to the gym).
- The Tunneling Tax: When scarcity captures our minds we do not make trade-offs using cost-benefit calculus. We tunnel on scarcity both to our benefit and to our detriment.
Bandwidth
Because the focus on scarcity is involuntary, and because it captures our attention, it impedes our ability to focus on other things. Scarcity in one part of life means we have less attention, "less mind", in the rest of life.
- Bandwidth measures our computational capacity, our ability to pay attention, to make good decisions, to stick with our plans and to resist temptations. By constantly drawing us back into the tunnel, scarcity taxes our bandwidth and, as a result, inhibits our most fundamental capacities.
- Several studies have documented the profound effect of internal disruption. One common distinction is between "top-down" processing where the mind is directed by conscious choice and "bottom-up" processing where attention is captured by one stimulus or another in ways we find hard to control.
- Bandwidth includes Executive Control which is closely related to self-control. Executive Control helps direct attention and control impulses. The same farmer scored better on Executive Control after receiving payment (flush) than before the harvest (scarcity). Dieters perform worse than non-dieters on cognitive tests.
Packing and Slack
The big suitcase is packed carelessly, with room to spare. The small suitcase is packed carefully and tightly.
- Trade-off thinking: If I do/buy/spend/pack this, what am I not going to do/buy/spend/pack?
- Slack permits excess/impulsive purchases.
- Slack offers "room to fail".
Borrowing and Myopia
Scarcity increases focus on the present and decreases focus on the future. This is called hyperbolic discounting or present bias.
- Pay-day loans and similar short-term high-cost "solutions" that aren’t.
- We borrow because we tunnel.
- When we borrow (time or money) we dig ourselves deeper; creating more scarcity in the future.
- Family Feud study: The "poor" were more focused and scored better at first, but they borrowed more time initially and then ran out of time. Both rich and poor borrowed when they were being productive, and the extra time held value. "Scarcity leads to borrowing."
- Neglecting the Future
- Failing to fully recognize important needs/tasks that are not urgent.
- Putting off is similar to borrowing.
- Failing to Plan
- Stepping back, detaching from the moment and thinking ahead requires wider perspective and some cognitive resources.
- "Tunnels limit vision."
- Juggling: the constant move from one pressing task to the next.
- Predictable events become surprises because of tunneling. We are so focused on the immediate need/task/crisis/week that we do not anticipate the assignments/demands of the next.
- The legacy of previous choices makes each new one more challenging. The messy balance sheet of the scarcity trap increases the complexity and challenge of making ends meet.
- Juggling is not about being harried for time; it is about having a lot on your mind. Much of one’s bandwidth is devoted to the balls in the air. People show less fluid intelligence and diminished executive control.
The Scarcity Trap
The Scarcity Trap is defined by "being one step behind" and "juggling." Life in the scarcity trap is having even less than you could have. It is always playing catch-up; dealing with each ball just before it hits the ground and the messy patchwork that emerges as a result.
Getting Out
- Getting out requires formulating a Plan. This is very hard due to the bandwidth tax and tunneling. To make matters worse, the plan needed is quite complicated. Finally, even if a good plan is formulated, implementation can prove difficult. Juggling makes getting out harder. All this is complicated by the lack of "slack."
- In a study involving food truck owners, even when all old debts were paid off, the vendors returned to debt by one year later. The "slack" provided by the one-time grant was gradually used up.
- Scarcity is not merely the gap between resources and desires on average. It is important to have enough resources to handle the shocks, emergencies and bumps in the road (medical bills, family emergencies, weddings, college, natural disasters, etc.)
Feast & Famine
- During periods of relative abundance, we waste time and money. During periods of relative wealth and/or time we are prone to procrastination, focus on the present and think with fuzzy optimism. We squander money that should be saved and put off tasks that should be done. We do not adequately "self-insure" for downturns that may occur in the future.
- Other examples: lonely people do poorly in social situations because they are trying "too hard"; basketball players miss free throws because they think "too much" and dieters eat sweets because preoccupation with food "focuses us on that which we are trying to avoid."
Parenting
- Good parenting requires "bandwidth." Good parenting is much harder for people dealing with scarcity of time and/or money. "Good parenting requires freedom of mind."
If you have read this far you are interested in issues of equity.
Please contact SWB Consulting Services to help you design your advocacy plan. Sara Wall Bollinger has been an activist since she was 10 years old.
Thank you.
