Sunday, January 29, 2012

Fear of poverty, part 2

There are lots of ways to measure poverty. In the US the poverty line is $10,890 for one person. The global figure often used is $2 a day. There are a host of other ways to measure it, either in absolute terms or compared to other people.

Numbers can help us approximate what people's experiences are like, but ultimately what matters is the experiences themselves and not the numbers.

Jeff and I together spend about $20,000 a year. If we actually earned that much, we would be below the United States poverty line and would have more spending money because we'd get free health insurance and food stamps. On paper, then, our spending makes us look like poor people.

So how does our subjective experience compare to actual poverty?

The World Bank did an interesting study on the experiences of poor people around the world. Their findings:
"Experiences of illbeing include material lack and want (of food, housing and shelter, livelihood, assets and money); hunger, pain and discomfort; exhaustion and poverty of time; exclusion, rejection, isolation and loneliness; bad relations with others, including bad relations within the family; insecurity, vulnerability, worry, fear and low self-confidence; and powerlessness, helplessness, frustration and anger. . . . Illbeing includes mental distress, breakdown, depression and madness, often described by participants to be impacts of poverty."
If that's what poor people experience, what about us? Does spending like poor people carry the same effects as actual poverty?

No. Jeff and I experience a few of the inconveniences of a small budget (mostly related to not owning a car). But we have most of the benefits of the money we earn without actually spending it all. We always have plenty of good food. We never worry about whether we can make our rent. We enjoy good relationships with family and friends. We have savings. We got good educations and have similar social status to what we would have if we kept all our money.

Some people are afraid to give because they're afraid of being poor. Which is a reasonable fear – real poverty is an exhausting, humiliating, painful experience. But it is not what you will experience as a result of giving away a lot of your money.

Real poverty is not a choice. Living frugally is a choice Jeff and I make freely, and one we find worthwhile.

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