Speaker by Various Artists


Poverty, and mistaking symptoms for causes

by Dr Jess Berentson-Shaw

What happens when you don't spend enough time understanding good research is this: you take facts which are true and mould them to an explanation that suits, and a solution that suits your ideology even better.

The NZ Initiative report on welfare contains many truths, for example that adults on a benefit are more likely to have a parent on a benefit. Poverty does, we know, cause intergenerational symptoms like the one they highlight. Experiencing poverty as a child increases your risk of experiencing it as an adult.

Why does it though? The highest-quality multidisciplinary research shows us that children in resource poor families are affected by the stress involved in not having enough. Their brain development and their immune systems are impacted by this stress. When they start school they are already disadvantaged and remain so.

Such disadvantage makes it incredibly hard to make use of the education system and what it offers in the same way that other children can. We call it the compounding effect of poverty, just like capital attracts more capital over time, so does a debt build. Stress eats away at families, their relationships and their wellbeing when you don't have enough [PDF].

In Chapter 1 (Special Topic: Intergenerational Poverty), we discussed how, like any asset, skill and human capital accumulates across a lifetime and across generations. The initial presence of a skill allows a child to much better take advantage of opportunity and investments that are made in them than a child who starts with fewer skills. We also explained that in the same vein we see capital and skill trickle away from a family over time, the effects compounding and, and leading to intergenerational disadvantage.

Pennies from Heaven (2017) Berentson-Shaw.

There are some excellent studies showing that financial stress has the same effect on our "cognitive bandwidth", our ability to do higher-order tasks of living in a complex world, in the same way extreme sleep deprivation does. Nothing is simple where poverty is concerned.

So taking a fact like “poverty creates more poverty” and suggesting that welfare dependency, poor parenting, schooling, is both the problem and the solution ignores the "wickedness" of the issue. It mistakes symptoms for causes. It ignores the multiple systems that need addressing:

“Seriously disadvantaged young people lack basic work skills and many don’t even understand what paid work entails. This is more a failure of upbringing and schooling than lack of money.”

“Governments must do a better job of finding out what programmes really work to break the cycle and help people overcome their predicaments.”

Dr Bryce Wilkinson , New Zealand Initiative

But it also ignores the straight up obvious that "money works". And money works for the reasons I explained that not enough money extracts so much from families and their wellbeing.

So sure, let's talk about supporting families who don't have enough to find their freedom, their independence, their self determination, but let's not pretend that a think tank with a pre-established position on the role of government, its size, and the welfare state has a good grip on the best quality research. Of course business is part of this solution, just not in the way it is being proposed here.

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