The central task of good governance is to
optimize the total social and economic efficiency of civilization over the
total lifetime of each member. It is
blindingly obvious that failure to ensure the optimal education of youth
eliminates optimal tax revenues over the taxpayer’s lifespan. Just as blindingly obvious failure to ensure
minimal employment at effective wage naturally depletes both wealth and
biological vigor and as surely taxable revenues.
The starving never paid taxes. Yet governments
print cash and fail to correctly underwrite the majority of potential taxpayers
creating the distortion of poverty. It
need not be.
We have paid a horrible price over many
centuries for economic ignorance in lost and destroyed wealth and human
output. We must optimize both and
poverty will evaporate like snow in the midday sun.
This Is Your Brain on Poverty: What Science
Tells Us About Poverty
Saturday, 22 February 2014
09:19
Poverty has been identified as a causal factor in lower IQ and
psychiatric disorders. What can this tell us about public policy and the
minimum wage?
Talking about poverty
and inequality is all the rage these days. President Obama wants to raise the
minimum wage to $10.10 an hour. Rep. Cathy McMorris Rodgers, who delivered the
official response to the State of the Union address,said that
the problem isn't "income inequality, but the real gap we face today is
one of opportunity inequality." Rand Paul has offered that
we need to stop giving money to unwed mothers, and David Brooks has recently
written two columns about inequality, the first saying
that poverty and inequality have nothing to do with each other and will you
please stop talking, please; the second brushed
Brooks' solutions with the thin veneer of science - mentioning "prefrontal
cortexes" and "cortisol levels" - and offered a litany of
solutions to treat the symptoms of child poverty ("students can't control
their impulses, can't form attachments, don't possess resilience and lack
social and emotional skills") without ever quite understanding that
instead of treating the symptoms, it might be easier to just cure the disease.
Research has only
recently been able to identify poverty as a causal factor (rather than merely
correlational) in debilitating medical conditions that leave people sick,
unable to work and unable to think - all factors that then perpetuate poverty,
leaving the poor trapped in a vicious biological cycle.
So what can actual
science (not Brooks' buzzword-laden version of it) tell us about poverty? What
are its effects and how is it perpetuated? And if we did decide to end poverty,
what would it look like, and what are the potential gains for our
society?
If you're a child born
into a poor household, you're more likely to exhibit psychological symptoms
than if you were born to a non-poor household - symptoms that are a direct
result of being born poor. (That's the impulse control, attachment and
resilience that Brooks was talking about.) How do we know this? In 1993, a
group of researchers started an eight-year longitudinal study of
children in the Great Smoky Mountains, a range of peaks along the North
Carolina-Tennessee border. One thousand four hundred twenty children were
recruited - 25 percent Native American, 7.5 percent black and the rest white -
and given psychiatric exams annually. Unsurprisingly, the children from poor
families were found to have problems, about 60 percent more than their
middle-class counterparts.
Then something
interesting happened. The Eastern Band of Cherokee who live in the region
opened a casino and in 1996 - exactly halfway through the study - every member
of the tribe started receiving income. It wasn't much - the annual payout
increased each year, hitting an apex of $6,000 before taxes in 2001, with
children's money going straight to a trust fund - but it made a big difference.
The rate of conduct and oppositional defiant disorders in (now formerly) poor
children dropped to that of children who had never experienced poverty. Those
children were less likelyto
commit a crime and more likely to graduate high school. And by age 21, they had
almost an additional year of schooling - all strong markers of upward economic
mobility.
When a single behavioral
condition in a child, like ADHD (which is almost twice as likely to
appear in poor children as in the general population), is estimated to cost(for
treatment, educational adjustments, parents missing work and juvenile justice)
$14,576 per child per year, doesn't $6,000 seem like a bargain? A recent New York Times article noted
that amphetamines often are given to poor children who don't meet the
diagnostic criteria for psychiatric disorder, with almost 20 percent of doctors
nationwide not following the guidelines set by the American Academy of
Pediatrics. But these children aren't sick - they're merely poor - and are
exposed to the side effects of amphetamines - stunted growth and stimulant-induced psychosis -
as an unlucky consequence of social position.
But what would raising
the minimum wage do for adults? A recent study of
Indian sugar cane farmers might suggest the answer. Economist Anandi Mani and
her co-authors gave a range of cognitive tests to Indian sugar cane farmers
pre- and post-harvest. The crucial distinction comes from a point of sugar cane
farming. Just before the harvest, the farmers are largely waiting for their
crops to ripen, having little work to do. Thus, while they aren't necessarily
working harder, they are much poorer than in the days after the harvest. The
scholars found that the cognitive losses produced by pre-harvest poverty were equivalent
to 13 IQ points, the same loss as losing a full night of sleep or being a
chronic alcoholic.
Two of the co-authors of
the piece, Sendhil Mullainathan and Eldar Shafir, have, in their book-length examination of
their research, proposed a metaphor for the effect - bandwidth. The human brain
has a finite amount of bandwidth. If one is forced to spend that worrying about
poverty, it will necessarily have less capacity to spend on other tasks.
Indeed, as other studies have shown, the poor often fail to take prescribed
medications, fail to use preventative health care less and are less productive
workers than their more-comfortable counterparts.
The Fair Minimum Wage Act of
2013, which proposes raising the minimum wage from
$7.25 to $10.10 an hour, would leave a full-time minimum-wage worker with
(accounting for two weeks vacation a year) an extra $5,700 per annum - almost
the exact amount seen in the Great Smoky Mountains study.
The minimum wage raise
is expected to affect 27.8 million people.
If the bill passes, we can expect to see high-school graduation rates rise and
youth crime rates drop, giving us all a safer society and a more productive
economy.
But let's think a little
larger for moment. There are 49.7 million Americans
currently living below the poverty line. Going back to the sugar cane study,
we can expect each of them to gain 13 IQ points if the gap between their needs
and their means to meet them were somehow bridged. If each of them were to have
their situation somehow ameliorated - say, by giving them $4,000 per year -
we would collectively gain 646,100,000 IQ points. That's the equivalent of
4,038,125 Einsteins. The Congressional Budget Office recently estimated that
the Fair Minimum Wage Act of 2013 will lift 900,000 people above the poverty
threshold. If the findings from the sugar cane study hold true, that's a
collective gain of 11,700,000 IQ points. What could we do with that much extra
brain power? Maybe we could cure cancer; we could make inroads against
diabetes. Heck, maybe we could even end poverty.
Knowing this, whose
policy proposals do these findings favor - the liberals who argue that social
structures perpetuate poverty and that government must alter those structures?
Or the conservatives, who argue that the attributes of the poor - their
indolence and ignorance - make and keep them poor? Is it circumstances, or
personal deficiencies that cause poverty? Both are implicated, but the
circumstances come first - poverty causes deficiency and illness, which may
then play a role in perpetuating poverty.
Understanding what's
cause and what's effect also makes the policy implications clear: The causal
chain begins with indigence, so start there. Extend those unemployment
benefits, raise that minimum wage, maintain those SNAP payments. If you'd
rather teach a man to fish than give him one, then by all means allow him the
capacity to learn.
1 comment:
This thesis makes no connection between the governments interventions and the levels of poverty. If the government takes resources from other productive sectors to raise these wage limits the resultant unemployment ameliorates the effect of the raised affluency level. An employer will pay what a job is worth, and if he has to pay an employee more than what its utility should be, then he will want more qualifications, and will effectively limit the employment options of those on the lower end of the scale, and as marginal utility decreases, he will in all likelihood reduce his work force since his income is finite, and the employees have to be paid increased amounts for the same output. This is just more left leaning gobbledygook which denies economic realities, and misdirects the real source of the problem which is the government interference in a free market. This is way too simplistic an explanation for the problem.
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