Friday, September 17, 2010

A Poverty of Ideas

We’ve been investing tiny amounts of money through Kiva in microcredit ventures in the developing world. What began as a $25 loan a couple of years ago has grown to a couple of hundred in a half dozen small ventures in places such as Pakistan and Afghanistan and Uganda where a few dollars can make a difference.
One of our loans was just repaid this week so we began looking for another small enterprise to reinvest that $25. We found one young woman with a textiles venture in Eritrea where she is raising two children on her own. The Kiva write up says she makes $44 per week.
I am quite certain that some weeks I have spent that much in coffee shops.
On the other hand, according to, her annual income of $2,200 (I gave her two weeks off in my calculations) puts her in the richest 15 percent of the earth’s population.
The same day that we were playing McRockefeller, the United States Census Bureau released figures indicating that there are more people in the United States living below the federal poverty line than at any time in the past 50 years.
The current federal poverty line is $22,000 for a family of four, or 10 times as much as the young woman in Eritrea who is among the richest 15 percent. The U.S. poverty line puts you just outside the richest 10 percent, and translates into a hourly wage of roughly $11.00.
Comparative poverty is more art than science, although there are helpful measurements. For example, about ten years ago the average American household spent 13.5 percent of its income on food while the average family in rural India spent a bit more than 60 percent of its income to eat. You’d have to do more with numbers than I care to if you want to figure out the percentage the average poor American household spent on food.
In any case, at some point comparative poverty becomes a race to the bottom that cannot be measured in purely economic terms. I don’t have direct experience with developing world poverty, but I’ve spent a lot of time in poor corners of the U.S. in cities and in rural places, and have spent a few years living on the narrow ledge just above the poverty line.
It is almost as easy to romanticize poverty as it is to demonize the poor, but neither attitude comes close to capturing the reality of being poor. Earlier this year economist Carol Graham published a book called Happiness around the World: The Paradox of Happy Peasants and Miserable Millionaires.
Writing in the Post last January, Graham noted some key findings from a decade of studying happiness around the world:
Wherever I look, some simple patterns hold: A stable marriage, good health and enough (but not too much) income are good for happiness. Unemployment, divorce and economic instability are terrible for it. On average, happier people are also healthier, with the causal arrows probably pointing in both directions. Finally, age and happiness have a consistent U-shaped relationship, with the turning point in the mid- to late-40s, when happiness begins to increase, as long as health and domestic partnerships stay sound.
In my own experience, to be sure, there is joy among the poor, just as there is sorrow. That’s just true of life, and being poor does not change that fact. Graham’s research suggests that income level does not much change the balance of joy and sorrow, although in some cases the research actually suggests that those at the higher end of income distribution are more dissatisfied than others. Money, it seems, does not buy happiness.
Graham’s research is not alone in showing greater measures of happiness among the poor in the developing world than among the affluent of the industrial North, but it’s crucial to note that the patterns she found that make for happiness include “enough income.”
Ah, and there’s the rub.
The unsettled state American politics this fall probably has dozens of causes, but one of them is surely the anger and unrest arising from the millions of lives represented in the new poverty statistics. However relatively poor they may be on a global scale, locally speaking they are not real happy just now at least when it comes to the nation’s leadership. In the U.S., we have the November elections – and the football season – to provide a nice escape valve for some of the pressure building within the body politic.
I don’t know what the cost of living is in Eritrea (and this is a blog post not a research project), so I don’t know what percentage of my young entrepreneur’s $2200 annual income it would take to feed a family of three in her village. What I do know is that the vast majority of the world’s population gets by on much less than that, and whether or not they are happy about it will have much to do with the peace and stability of the coming years. Most of those folks don’t get to vote, and they don’t have football season, either.

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