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John Hoffmire: How the rich view the poor

Published: Monday, Dec. 30 2013 12:05 a.m. MST

In this Sept. 17, 2011 photo, demonstrators affiliated with the Occupy Wall Street movement gather to call for the occupation of Wall Street in New York. Monday, Oct. 17, 2011 marked the one-month anniversary of the Occupy Wall Street movement.

Frank Franklin II, Associated Press

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Editor's note: Adam Turville did the vast majority of the work on this piece.

More than two years have passed since the Occupy Wall Street movement divided the country into percentages, calling the 99 percent out against the 1 percent. A voice was raised from Zucotti Park in New York City demanding reform to close the ever-growing wealth gap in the United States.

The discussion over rising inequality in the U.S. has captured headlines and incited heated debates analyzing and criticizing the dysfunctional relationship between the rich and the poor. “Out-of-touch” and “unsympathetic” have become buzzwords used to describe the attitude of the haves toward the have-nots.

Despite this narrative unfolding in the media, the question remains whether the headlines reflect reality.

The Associated Press recently cited research saying that 1 in 5 Americans reaches affluence at one point in their lives. This 20 percent block is a far cry from the mantra of Occupy Wall Street but still provides evidence of a large disparity between the wealthy and the poor.

Some might ask how this division affects the social aspects of our society. What is the best descriptor of the relationship between those on opposite ends of the economic spectrum? The prevailing story conveyed through the media would suggest that “out-of-touch” and “unsympathetic” do accurately portray the well-off part of the country.

However, those who question this viewpoint might pose the following queries: What about the billions of dollars donated every year to poverty-focused charities? What about the wealthy investors who have recently turned their focus to social innovation and impact investing in order to address social ills through business? Doesn’t this demonstrate a stronger interest than we might otherwise think? Or does the philanthropist merely seek notoriety through her contributions, and is the socially minded investor motivated by the opportunity to gain new market share or attract new customers?

So the question remains, are the wealthy truly invested in the poor and do they care?

A recent New York Times blog by Daniel Goleman details research, performed in 2008, on social interactions between two groups of people on significantly different rungs of the social ladder. We’ll call this research “study one.”

Members of one group had a much higher income than the members of the other. Subjects of both social classes were instructed to share and communicate, with another individual, about hardships that they had experienced in their personal lives. Researchers then observed the interaction between the two individuals. The findings of the research show that the rich consistently demonstrate disinterest in the personal difficulties of the poor.

The wealthy showed less sympathy and concern as they listened to the poor recall personal trials, such as divorces and deaths in the family. Conversely, the poor tended to be as attentive to the difficulties of the rich as they were to the difficulties of their socio-economic equals.

The researchers concluded that we tend to be interested in those whom we value. Partly due to a void in material wealth, the poor tend to value social relationships. They develop “keenly attuned interpersonal attention, in all directions.” This is a trait that anyone — and everyone — could develop, regardless of financial wealth.

If the researchers are correct in their conclusions, and members of our society are only interested in those whom they value, then inattention would demonstrate that the rich undervalue the poor. Why is this? It may be that the rich judge the poor. The rich may assume the poor live a “substandard” life brought upon themselves through their own ignorant or incompetent decisions.

Wealthier members of society may assume that everyone has the same opportunities and that those whose cognitive abilities are less efficient should not receive certain advantages in society because they have not earned them. This attitude, if it exists, is undermined by research that says that many cognitive difficulties are environmentally induced. In other words, those who live in economic stress may be impaired cognitively as a result of the stress caused by consistently living in situations where their economic lives provide bitter choices.

The research, which we will label “study two,” includes an experiment performed at a New Jersey mall and is detailed in a 2013 article written by Anandi Mani, Sendhil Mullainathan, Eldar Shafir and Jiaying Zhao, all prominent university researchers. 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.

The subjects were assigned either “hard” or “easy” financial situations, with an auto repair cost of $1,500 or $150 respectively.

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. This was in line with the researchers’ original hypothesis.

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 basic needs. The researchers cite prior studies showing that the poor “use less preventative health care, fail to adhere to drug regimens, are tardier and less likely to keep appointments, are less productive workers, less attentive parents and worse managers of their finances.” According to the study, these troubling behaviors 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 study’s results provide key insights into the relationship between the rich and the poor. The occurrence of the types of problems discovered in study two 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.

If studies one and two are reflective of the reality of how the rich view poverty-stricken people, and we believe they are, it is a major misperception on the part of the rich to believe that the poor should always be able to recover from setbacks in the same ways as others. And if both of the above studies are true, then less-advantaged individuals’ traits of “keenly attuned interpersonal attention in all directions” are all the more impressive. Low-income individuals are able to allocate their attention to focus on other people, while the rich do not seem to have this same ability, often depriving the poor of sympathy and understanding.

The studies give us observations and a neurobehaviorialistic view of the relationships between rich and poor. But what else might motivate the lack of demonstrated concern of the wealthy for those less fortunate? Perhaps it is that the rich are so focused on gaining more wealth, status, and contact with other wealthy people that there is little incentive for them to get to know and care for the poor.

So the question arises, how can the rich turn their attention outward and toward those on the opposite end of the social ladder? One way would be for everyone to better understand the role of good fortune and the assistance they have received from others. Many have benefited from those who stand a few rungs up and a few rungs down.

We, of all social classes, could consistently be looking out for those who find upward mobility difficult and we could understand that trials and burdens are taxing, painful and often devastating for those at many points along the socio-economic spectrum, but are especially paralyzing for those at the bottom of the wealth pyramid. While those who are well off enjoy the comfort of ample financial resources, they could also strive to develop and use their own sense of a “keenly attuned interpersonal attention, in all directions.”

We say this not only on account of the poor. It seems that many in other social classes are missing out on a special opportunity. We notice at times in our society that many people lack a sense of purpose. 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.

One who certainly showed attention to those less fortunate was the late Nelson Mandela. Leading a nation out of apartheid also meant fighting a war against poverty. Partly due to his work, South Africa began a process of leading the way toward greater development in Africa. Mandela understood that our social interactions are key tools in combating poverty. He described our duty to do our part to help those around us and across the globe when he said:

“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.”

We could all benefit from allocating our own financial and mental resources in an outward way, paying special attention to those around us who are less fortunate than ourselves.

John Hoffmire teaches at SaÏd Business School at the University of Oxford. Adam Turville is an economic analyst at the Utah Governor’s Office of Economic Development and a graduate of Brigham Young University.

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