Sandra Ray, CIRS Manager, 2-1-1 Texas/United Way HELPLINE - PowerPoint Presentation

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Sandra Ray, CIRSManager, 2-1-1 Texas/United Way HELPLINEUnited Way of Greater HoustonSlide2

ObjectivesReview various models of povertyLearn how scarcity impacts low-income persons and their ability to move out of povertyDiscuss scarcity model and its implications for helping I&R callersSlide3

“Which view of poverty we ultimate embrace will have a direct bearing on the public policies we pursue.”B.R. Schiller (1989 – Economics of Poverty and Discrimination)Slide4

Individual Theory of Poverty Poverty is individualPeople in poverty are lazy, uneducated, ignorantIndividual or family irresponsibility requires stiff penalties: Paternalistic intervention needed to “get their lives together”A county program asked schools to identify children not attending school more than 10 days/school year without medical excuses. Families receiving TANF benefits are withheld to enforce school attendanceIndividual model indicates that same people will stay in poverty year-in/year-out.Slide5

Structural Theory of PovertyPoverty is structuralHoles in economic system that provide inadequate income.Allows for fluid movement of persons in & out of povertyPerson impoverished today may be laid offPerson can be better off a year from now by obtaining a job to increase income securitySlide6

Structural Theory of Poverty (cont.)Structural theory states same persons are not in poverty year-in/year-out.3 year longitudinal Survey of Income & Program Participation 1/3 of Americans were in episodic poverty at some point in 3 year longitudinal studyOnly 3.5% were in episodic poverty all 3 years of studyOther data indicate 4 in 10 adults experienced poverty an entire year sometime between ages 25-60.Slide7

Scarcity“There is already a science of scarcity. You may have heard about it. It’s called economics.” (Mullainathan and Shafir, 2013, p. 10)Scarcity is based on individual perception of scarce resources (time, money, etc.)Not just a physical constraint – it is a mindset.“When scarcity captures our attention, it changes how we think, whether it is at the level of milliseconds, hours or days and weeks.” Slide8

How Does Scarcity Affect the Mind?HOBBES: Do you have an idea for your story yet?CALVIN: You can’t just turn on creativity like a faucet. You have to be in the right mood.HOBBES: What mood would that be?CALVIN: Last-minute panic.Scarcity affects how we focusWhen a report is due next week, we delay completing it.When a report is due this afternoon, you shut out everything else to complete the task. Closing out everything else forces us to choose between completing the report on time and other options: eating lunch, taking a break, reading email, etc.Deadlines do not increase productivitySlide9

Tunneling & ScarcityTunneling – think tunnel vision – focusing only on what is immediate instead of long-termFocus is positive – scarcity “focuses on what seems, at that moment, to matter most.”Tunneling is not positive – “scarcity leads us to tunnel and neglect other, possibly more important things.”Tunneling operates by changing what comes to mind most readily.“I took a speed reading course and read War and Peace in twenty minutes. It involved Russia.”Woody AllenSlide10

Tunneling & Scarcity (cont.)Tunneling can lead to 2 things:Multi-tasking – checking email while listening to a webinarThere’s a price to pay for multi-taskingWhat did you miss on the webinar? Did you respond appropriately to the email?Neglecting other tasks completely Missing time with family to finish a deadlineNeglecting budget to focus on bill that needs to be paidSlide11

The Bandwidth TaxBandwidth = computational capacity or ability to pay attention, to make good decisions, stick with plans and resist temptationsStudy in New Jersey of 6th graders:1 side of the school faced the train tracks with trains continually rumbling past – sound was not overly deafening – momentary disruptions6th graders on side facing tracks were a full year behind 6th graders on the quiet side of the schoolStudents appeared to get accustomed to the sounds of the trains, yet their brains never fully adjusted and focus was continually divided between classroom task and the noise on the train tracks.Slide12

The Bandwidth Tax (cont.)2-1-1 caller example:Caller has minimum wage job, family of 4 and husband laid off 2 months ago.Money is especially tight.Employee begins to perform poorly at work, despite being on time for work every day, performing basic tasks and meeting most expectationsWhy? Preoccupied by thoughts of “How do I pay rent next month?” or “Should I skip paying the electric bill to buy food?”The things that distract us occupy our minds and need not come from external factors (i.e. the train noise)Slide13

Helpful DefinitionsCognitive capacity - “our ability to solve problems, retain information, engage in logical reasoning, and so on.” Central feature of cognitive capacity is fluid intelligence (capacity to think logically, analyze and solve novel problems, independent of background knowledge)Executive Control – “ability to manage our cognitive activities, including planning, attention, initiating actions and controlling impulses”Slide14

Scarcity’s Effect on Cognitive ControlExecutive Control –relies heavily on self-controlSelf-Control – ability to weigh the futureDo I eat cake now?If I eat the cake, what will happen to my diet, blood sugar, etc.“We use executive control to direct attention, initiate an action, inhibit an intuitive response, or resist an impulse.” We appear to weigh the future inconsistent – why?Slide15

Scarcity Taxes BandwidthAttacks on bandwidth makes it harder for us to control our impulses.If you are stressed over a deadline, more likely to want the cakeExperiment asked volunteers to remember a 2 digit or an 8 digit number & recite it 30 minutes laterWhile waiting, volunteers given an 8 digit number were more likely to eat a cupcake vs. fruitAnd, because scarcity taxes bandwidth, this suggests that scarcity not only can lower fluid intelligence, but can also reduce self-control. Slide16

SO WHAT? Prove to me that this happens IRL (In real life – for those of you who don’t Twitter or have Teenagers)Slide17

Scarcity in the Real WorldStudy looked at sugar cane farmers in IndiaFarmers received 1 annual payment when sugar cane crop is soldExpected to find some degree of scarcity among poorest farmersInteresting feature: surrounding neighbors all harvested at varying times of the yearIn months before harvest:78% had pawned something in months before99% had taken a loanVS4% pawned in months after harvestOnly 13% had taken a loan in months after harvestSlide18

Scarcity in the Real World (cont.)Measured farmer’s bandwidth in month prior to harvest & month post harvestRegardless of economic status year-round, farmers exhibited worse on fluid intelligence and executive control pre-harvest (poor) than post-harvest (rich)Pre-Harvest farmers scored 9-10 IQ points lower (fluid intelligence) and were 11% slower in responding with 15% more errors (executive control) In other words, the farmers appeared less intelligent, less able to make good decisions and exhibited poorer response capabilitiesSlide19

What does this mean for I&R?Friday afternoon callers for food, rent, electric assistanceWhy do callers procrastinate?Using scarcity model: These callers are preoccupied with multiple issues during the week Only when food, rent and electric assistance are pressing concerns does person decide to seek helpIncreases frustration when resources aren’t available later in week By Monday, these callers may be even more “taxed” and less able to focus on next issue – still focusing on the last week’s issue.Slide20

What does this mean for I&R?Using this model, it makes it easier to understand why callers seem to have the same issues throughout the year.Are they less intelligent? Almost always answer is noThe answer is likely that scarce resources tax their mind’s ability to process and think long-term.Slide21

After Studying Scarcity: Sandra’s Theories of Impact for I&R Callers Consider: if callers who are poor year-round receive a large income tax return, do they perform better on cognitive tests in the weeks after the return is received? Research suggests the answer would be yes.Tax time, for example is generally best time to discuss savings and plan for future since callers may be more likely to make positive decisions about budgeting/money management that affect future financial issues.Slide22

Add Scarcity to Your I&R’s Training LibraryAmazon – hardcover, paperback, Kindle, Audible, audio CDBarnes & Noble – hardcover, paperback, audiobook & NookiTunes – iBooks & AudiobookMacMillanwww.indiebound.org (may have some retail outlets near you)Disclaimer: I am not affiliated with authors, nor am I receiving compensation for reviewing book or developing training from it. Slide23

Questions?Sandra Ray, CIRSManager, Training & Quality Assurance2-1-1 Texas/United Way HelplineHouston, TXsray@unitedwayhouston.org