Monday, September 19, 2005

Bad Decisions and Poverty

In a thoughtful post, Megan McArdle writes about how most people are poor because of the bad decisions that they make in their lives:


1) Finish high school
2) Get married before having children
3) Have no more than two children
4) Work full time


For example, people with a GED do not experience significant earnings improvement over people who have not graduated from high school. In this credential-mad world, this simply should not be. And it is true even though people with a GED are apparently substantially more intelligent than people without a GED.

How can this be? Even if the GED were totally worthless, available evidence seems to indicate that intelligence carries a premium in the labour market.

The best explanation seems to be that people with a GED (as a group) are smart people with poor impulse control. What intelligence giveth, a tendency to make bad decisions taketh away. Anyone who has spent any time mentoring or working with poor families is familar with the maddening sensation of watching someone you care about make a devastating decision that no middle class person in their right mind would ever assent to.

But, as McArdle says, it is important not to simply dismiss the poor as stupid people who deserve what they get:


Sure, I go to work every day, pay my bills on time, don't run a credit card balance and don't have kids out of wedlock because I am planning for my future. But I also do these things because my parents spent twenty or so years drumming a fear of debt, unemployment, and illegitimacy into my head. And if I announce to my friends that I've just decided not to go to work because it's a drag, they will look at me funny--and if I do it repeatedly, they may well shun me as a loser. If I can't get a house because I've screwed up my credit, middle class society will look upon me with pity, which is painful to endure. If I have a baby with no father in sight, my grandmother will cry, my mother will yell, and my colleagues will act a little odd at the sight of my swelling belly.

In other words, middle class culture is such that bad long-term decision making also has painful short-term consequences. This does not, obviously, stop many middle class people from becoming addicted to drugs, flagrantly screwing up at work, having children they can't take care of, and so forth. But on the margin, it prevents a lot of people from taking steps that might lead to bankruptcy and deprivation. We like to think that it's just us being the intrinsically worthy humans that we are, but honestly, how many of my nice middle class readers had the courage to drop out of high school and steal cars for a living?

I'm not really kidding. I mean, I don't know about the rest of you, but when I was eighteen, if my peer group had taken up swallowing razor blades I would have been happily killed myself trying to set a world record. And if they had thought school was for losers and the cool thing to do was to hang out all day listening to music and running dime bags for the local narcotics emporium, I would have been right there with them. Lucky for me, my peer group thought that the most important thing in the entire world was to get an ivy league diploma, so I went to Penn and ended up shilling for drug companies on my blog.



Emphasis added. The Christian response, of course, is to be compassionate -- to give second and third chances. It is to love those who have fallen down, and those, who by the society of their birth, never had the opportunity to stand up in the first place. None of this requires any sort of government action, but it does mandate that Christians extend a willing and charitable hand. We must look at the homeless person or the prisoner and say "There, but for the grace of God go I." And it is wise to be compassionate, for as Jesus said, "Who among us is without stupidity?"*

Full disclosure: I might be advocating compassion for the foolish for purely selfish reasons.


Richard H said...

If peer groups make such a big difference, than part of the Christian response will be to create alternative peer groups for people. I believe this is part of what was going on in early Methodism. Instead of using their non-work time getting drunk, the Methodists met in their societies and built each other up. This led in turn to economic improvement for the Methodists - and the people around them.

John said...

Good observation! In A Plain Account of the People Called Methodists, Wesley wrote:

But as soon as any of these were so convinced of the truth, as to forsake sin and seek the gospel salvation, they immediately joined them together, took an account of their names, advised them to watch over each other, and met these kathcoumenoi , “catechumens,” (as they were then called,) apart from the great congregation, that they might instruct, rebuke, exhort, and pray with them, and for them, according to their several necessities.

Stephen said...

I hate to throw a wrench into her arguement, but I have met everyone of her qualifications. Graduated from HS, College, and currently finishing seminary. Waited to marry until after I finished college. We have no children and we both work full time. That being said, we are about two paychecks away from being homeless and without a vehicle. So how well does her arguement hold up for the working poor? Or even the lower middle class? We rarely hang out with "peer groups" of any sort so I am not sure how this has any bearing on our income level. Too frequently I find that those who write about money have never had to live paycheck to paycheck. (Or pay tuition costs at seminary for that matter. :))

Richard H said...

Stephen, this kind of study depends on two features: (1) Statistical generalities, and (2) longer term picture.

As to the first: Yes, being part of the right social group, getting the right education and having the right habits do not guarantee that you will do ok. Studies show, however, that your chances of doing ok are significantly improved by doing these things.

As to the second: I have some experience of poverty. At various times in my ministry we've qualified for food stamps & free food. When I moved to California to go back to school I was homeless and jobless for a couple of months (fortunately my unlce lived in the state so I could leave my wife and kids with him while I hunted a job). I've never bought a new car in my life (I'm 43), don't own a house or any other real estate. I'm not wealthy. But I'm doing better than when I first got out of seminary (although when I started my first church - at minimum salary - I felt rich compared to when I was in seminary).

The short of it? Economic development - whether of an individual, a family, a community or a nation - takes time. Some practices, habits and disciplines make development more likely to happen, others work to its detriment.

Lorna said...

This of course is written with the US poor in mind.

In Kenya for example most families cannot afford to send their children to high school at all. It isn't free.
If they can afford to send one child, they send the oldest son (usually)

Our school here sponsors two girls to attend high school in rural Kenya. Their head teacher just wrote to say that thanks to another donation the school had just bought two dairy animals so there is now milk for the students' and teachers' tea.

so while I don't disagree with this post I do want to say it's written from a US /western perspective. at least in part.

jockeystreet said...

Sadly, I followed the link and read the original post; it was "thoughtful," sure, but numbingly simplistic, and most of the comments that praised it were just plain scary.

It's a sliver of truth, a small piece of the puzzle. A no-brainer, though. Yeah, other things being equal, bad choices will make your life worse. But other things aren't equal.