Does poverty make people stupid?

Today I read a fascinating article that should completely change how we think about poverty.  Recent research has found strong evidence that poverty impairs cognitive function.  Researchers cited in the article (found here) describe it as something of a limited resource that poverty consumes very quickly.  Evidently the human brain has a limited capacity for difficult decision making.  Once that capacity is used up, it takes time to recharge, and during that time, the ability to make wise decisions can be dramatically reduced.  It happens that people in poverty have to make these difficult decisions (which bill should I pay, or how will I get to work without a car) a lot more than well off people.  In reality, poverty does not make people stupid, but it does tax their decision making abilities to a point where they are reduced considerably.

Several years ago, I read about a study that found that black people have a slightly lower average IQ than white people (in the U.S.).  Before going off, this study was not racist, and in fact the researchers went to great lengths to explain that the most likely cause was not racial.  Their final conclusion was that intellectual blacks tend to have less children than those who are less intellectual.  The result, according to the researchers, was that this process was a process of natural selection, selecting for lower IQ.  This more recent study offers a much more likely explanation.  In any kind of research, there is a thing called a confounding factor.  Confounding factors are things which might taint the data, but which cannot be controlled.  If they have a large impact, they can entirely invalidate the conclusions of a study.  In studies of psychology (IQ falls into this category), confounding factors are often not all known.  It turns out that the recent studies on poverty bring up a major confounding factor to the IQ study, which was not known when the IQ study was conducted.  In the U.S., a larger percentage of the black population is in poverty than the white population.  If the sample for the IQ study was selected with accurate diversity, this would have been reflected in the results.  Since we now know that cognitive function can be diminished by poverty, there is a much better explanation for the results of the IQ study: Black people do not actually have a lower average IQ than white people.  Because a larger percentage of the black population is in poverty, black people score lower on IQ tests than white people.  The poverty study gives reasonable evidence that the lower scores are a result of the poverty, not of lower IQ.  Ultimately, the IQ study is really worthless, because the confounding factor was not accounted for, thus the data is tainted.  That said, the point of this is not to discuss how poverty affects IQ scores.  This is just an example of how poverty can affect critical thinking.

One problem the article points out is that the diminished decision making skills leads to a problem.  People who are in poverty have a diminished capacity to escape poverty because the poverty reduces their decision making skills.  In other words, poverty is a self perpetuating trap.  It gets worse though.  Our welfare system, which is supposedly designed to help people get out of poverty, adds even more decisions.  To get on food stamps, you have to do a bunch of complex paperwork, which further consumes cognitive capacity.  If you don't get to your appointment exactly on time, you have to reschedule, even if the government workers have time free, and you were late because of an emergency.  Many government run employment centers have similar policies.  One of the results is that people in poverty tend to have poor time management skills, which makes them more likely to be late to an appointment, which adds more difficult decision making, which further reduces their time management skills...  This keeps going.  It results in poor diet decisions, poor time management, poor relationship decisions, and all sorts of other poor decisions that help maintain the downward spiral.  There is another problem though, which is not mentioned in the article.

The U.S. economy is having a lot of problems (if you were not aware).  Ironically, most of the problems are related to poor decision making.  Now, one thing I have to note.  The U.S. government has set the official, legal poverty level at something around $20,000 a year for a family of 3 or 4 (I forget the exact number, so don't be too surprised if you find they are a bit different).  External organizations, who do real research on cost of living and such estimate that it is closer to $40,000 a year, with a lot of fluctuations depending on where in the U.S. you live.  This means that the entire lower middle class and a good portion of the middle class are technically in poverty.  This lower and center middle class is the same demographic that went into the excessive debt that helped facilitate the recent economic crash.  Poverty is bad for the economy.

Now that I have mentioned that much of the middle class is in the poverty category that is affected by the decision making problem, I want to look at some of the bigger implications.  Our education system is pretty poor, but maybe part of the problem is the poverty of many of the students (even without that, our education system is terrible; this might be yet another contributing factor though).  Also, most grunt laborers and lower management are technically in or near poverty.  To get straight to the point, maybe the problem with Americans being less than ideally educated and acting pretty stupid a lot of the time is that most Americans fit into some level of poverty that is affecting their decision making skills.  Consider the typical store manager.  He (yes, more males are store managers than females, which makes the typical store manager male) is probably making $40,000 a year or less.  If he has more than one child (and a wife), he is probably in the upper levels or poverty (depending on local cost of living).  Now, in addition to having to make difficult money decisions for his family, he also has to make more difficult decisions daily for his job.  No wonder a lot of store managers frequently make poor decisions.  Even without the poverty, it is likely that the average CEO is way out of his league in difficult decision making, not because he has some problem, but because humans have limited capacity for making difficult decisions.  Unfortunately, in many ways, this is just a problem we have to live with.  Even the richest guy in the world is subject to the limitation, and further, with all of the responsibilities that typically come with being rich (or rather, that are an inherent part of being rich, because the process of getting and maintaining riches typically requires a lot of hard decisions), he probably is more subject to it than middle upper class people who are not in management positions.

Anyhow, the point is that redistributing wealth to minimize poverty is very likely to result in a far more robust economy, better relationships, better society, and a smarter America.  Getting people out of poverty is no longer just a nice humanitarian thing that we should do because it is the right thing to do.  It is a means of raising the standard of living of even the most rich people in the U.S.  Imagine if we could take all of the people currently in poverty and have them becoming intellectuals working to advance science and improve technology.  Imagine if we could get all of the lower class workers and lower management to a point where they consistently make decisions that are better for their employers and themselves.  Imagine if we could get most of the middle class to use more wisdom in making decisions about debt.  Businesses would run more efficiently, fewer costly divorces would happen, fewer violent crimes would happen, technology and science would advance more quickly, and the U.S. economy would reestablish itself as the leader of the world economy.  So maybe the results would not be quite that dramatic, but even if we managed to make small improvements, the end result would be worth it.  There are plenty of other reasons to seriously consider aggressive redistribution of wealth, including the fact that, barring unforeseen disasters that set back our technology dramatically, it will eventually become necessary to maintain any kind of economy in the U.S.  The sooner we take action, the sooner we can benefit from an average increase in cognitive capacity in the U.S.  Video games are already slowly raising the average IQ in the U.S. (it is true), eliminating poverty promises to give this process a major boost.