How the rich differ from the poor - 2
From a blog by Adam Turville
Following on from a previous blog about how the division between the wealthy and the poor affects the social aspects of our society, here is another piece of research, this time by professors at University of Warwick, Harvard University, Princeton University, University of British Columbia.
In an experiment, they chose 400 people randomly at a New Jersey, USA mall whose income varied from $20,000 (£15,500) to $70,000 (£54,000). The subjects of the study were confronted with a scenario. They were told that they faced a common financial problem, such as paying for a car repair. This problem was meant to activate real financial concerns that existed in the participants’ own lives. After thinking about how to come up with the money to make the payment, the subjects were asked to answer common IQ test questions. This research included a component that tested the respondents’ ability to answer questions correctly and quickly while under pressure. After providing a solution to paying for the auto repair, the subjects were asked to disclose their income.
When contemplating “easy” situations of $150 auto repairs, the poor and the rich answered the IQ test questions correctly at a very similar rate. When the auto repair cost was raised to a “hard” situation of $1,500, the rich performed about the same on the IQ test as they had during the “easy” situation. However, when faced with “hard” situations, the poor experienced a significant drop in the number of questions they answered correctly.
The experiment was then adjusted to include a financial reward of 25 cents for every correct response. Although the poor have a presumably greater need for the money, they still performed worse during “hard” situations than the rich, and earned roughly 18 percent less.
This seems relatively reflective of reality. The researchers go on to explain that the poor earn less not out of incompetency, but because they must allocate mental capacity to problems that are more pressing to them than to the rich.
Remember that the poor performed just as well as the rich when the stakes were low. The difficulty for the poor arose when the payment increased to $1,500, even when they had the ability to make money by answering correctly. Many expenses, which the rich consider minor, become major obstacles for the poor, requiring a significant amount of attention to address. This allocation of attention to pressing concerns may in turn prevent the poor from taking advantage of opportunities (such as earning extra cash in the above study).
Additionally, solving these problems comes at the expense of other activities e.g. preventative health care, attention at work, time spent with children, accomplishing tasks that will help them get out of poverty, forgetting to pay bills, etc. According to the study, these behaviours are caused neither by laziness nor incompetence but by decreased capacity brought on by the situations the poor face. This is due to the overwhelming nature of stressful situations, many of which are not nearly as difficult for the rich.
The occurrence of these types of problems should not elicit negative judgments from the rich but rather understanding. The wealthy could be much more interested in the poor, knowing that the personal difficulties in the lives of the poor may have more serious repercussions than situations in their own lives. The resources of the poor, financial and mental, are often already stretched to their limits.
Dedication to the poor and a willingness to act on their behalf can bring great value to the life of someone who is willing to serve.
“Overcoming poverty is not a task of charity, it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. You can be that great generation. Let your greatness blossom.” Nelson Mandela
Helping the poor to help themselves in little steps to get out of poverty may be one such way - see Building Bridges Out of Poverty.
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From a blog by Adam Turville, 19/09/2017