Comment by xyzelement | Hacker News Reader

Comment by xyzelement | Hacker News Reader

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I keep hearing this but it doesn't resonate against my experience.

My family came to the US in the early 90's with zero dollars, but now we're doing well. The difference between us and those who didn't make it out of the neighborhood was what we did with the little money and time we had.

Basic things like figuring out how to get a bank account open vs paying a check cashing fee, things add up quickly. If you don't figure that stuff out, you're screwed. I find it off for poverty-advocates to get indignant when poverty education comes up, because they don't understand how much ignorance/lack of interest/lack of skill exists in those communities, and how much of a headwind that is.

Forget things like encouraging your kids to study in school, apply for competitive courses - etc. Even if your kids are capable of that, if you don't know to push them, you perpetuate your poverty. In contrast to say Asian immigrants who drive their kids to excel and go from poverty to 1% in one generation. Any coaching that helps people recognize and take advantage of the resources and opportunities in front of them - if it actually sticks - is super valuable.

> My family came to the US in the early 90's with zero dollars, but now we're doing well.

May I ask what was the path to financial well being ?

Coming to US with zero dollars is pretty common and doesn't really tell the whole picture. You might come with things that can be converted to money later like an education, family connections ect.

I came to us with no money but I had education for in demand jobs. Lots of patels from india come to usa with zero dollars but they have family connections that get them started on a path to setting up a business. We are close to a patel family that came to usa with zero dollars but grinded for years to finally become business owners. They are insane hardworkers but having that family connection that set them up on the path was critical imo.

I was a kid. My family came with the value of education and a lot of common sense and frugality.

That's the point - it's things that can be taught and learned. The person I am responding to is acting like an attempt to teach poor people anything is evil.

The disadvantageous behaviour you describe exists at every level. There’s wealthy families who couldn’t care less about any of the things you describe — most generational wealth is lost within a few generations!

There’s also a selection bias amongst immigrants like yourself: immigrant families have already made the biggest leap, they’ve uprooted their family and gone to a new country, and so they’re already on the path towards all of the behaviours you describe — they didn’t arrive in America and then decide that education was the path forwards, they arrived in America with optimism and gusto and were ready to do whatever it takes to realise their dreams.

Many people just want to live a life, they don’t want to pursue greatness at all costs. Many of those people are in poverty, many of those people are rich. Many people are not suited to a life of intense pressure to succeed.

The problem of poverty education as the solution to poverty is that it is built on the idea that education is why people are in poverty, and that if they just knew a bit more than they’d be doing great… but that’s not really true, poverty is a trap, education cannot save you from the poverty trap.

The value of support for people in poverty is that it gives them a better chance to escape poverty and for many people, education is a part of that support, but it’s important to understand that the solution to poverty is not education about how to open a checking account, it’s the whole spectrum of support from financial to education.

Give every person in poverty a million dollars, and many will escape poverty and go on to live very prosperous lives — no education needed.

"Give every person in poverty a million dollars..." and you will kick off hyperinflation because you will need to print so much currency to make that a reality it will devalue all of the existing dollars in circulation.

it's not a policy suggestion, it's a rhetorical device. If you pick a person in poverty, and give them a million dollars, they'll probably escape poverty and probably go on to live a prosperous life because poverty is caused by money, not education. Education helps people escape poverty because education can be used to earn money, not because knowing how to open a bank account is the path to salvation. There are lots of smart and well educated and successful people who are terrible with money but never end up in poverty because they have enough money to absorb the mistakes.

The rhetorical device is worthless in my opinion, we need to implement workable policy suggestions that solve real problems.

And yet, a significantly frequent outcome of winning the lottery is bankruptcy.

// If you pick a person in poverty, and give them a million dollars, they'll probably escape poverty and probably go on to live a prosperous life

You sound like you have never been around a poor person. Most people if they get a raise, their spending magically goes up by the same amount.

And people don't understand how money works.

My in-laws provide healthcare and profit sharing for everyone who works in their business. And guess what, a big percentage of their turnover is someone gets a 50 cent an hour raise somewhere else but doesn't understand that they are missing out on much more in profit sharing and healthcare. When they leave and get paid out their profit sharing, they are like "what's this??" even though it's been explained to them a thousand times.

A million dollars is nothing. You can blow it on a few ill advised purchases and be back where you started. It takes brains to make it last, not to mention make it grow.

I’ve been around rich people, I’ve been around poor people. I am fortunate enough to be well off today but that’s not where I come from, I grew up around people in poverty.

There are rich people who are bad with money, there are poor people who are bad with money. The only difference is that rich people have a much greater ability to tolerate financial mistakes. I can burn $10k and absorb the consequences, a person in poverty cannot.

Poor people are no less equipped to make use of money than rich people: credit card debt is a huge problem _amongst the middle-class_. For every poor person who can’t afford to feed their family, there’s a middle-class person who can only afford to feed their family because they make so much more money and would be even worse off if they didn’t have such a high income.

There’s no evidence that poor people are any more “bad with money” than rich people.

> Give every person in poverty a million dollars, and many will escape poverty and go on to live very prosperous lives — no education needed.

If this were true many lottery winners would have their lives and their children's lives changed forever after winning. As it stands almost every person who wins the lottery ends up in the same place they were before within 10 years.

The skills required to get out of poverty are often the skills required to stay out of poverty.

The "all lottery winners end up broke" meme is just that, a meme. Likewise, the idea that the lottery is a tax on those who are stupid or in poverty is a meme. There's lots of people who participate in (and win) lotteries who are living very comfortable lives, certainly not in poverty. Yes, many people who end up with money will go on to lose it (whether inherited or from a lottery or a lawsuit or some other means) but that's not unique to those in poverty. As I said, generational wealth is the perfect example of this: many rich and successful families will lose their wealth within a few generations. Losing money is an activity enjoyed by rich and poor alike.

GP: Basic things like figuring out how to get a bank account open vs paying a check cashing fee, things add up quickly.

You: Many people just want to live a life, they don’t want to pursue greatness at all costs.

These things are incongruous.

Separately, in the US you only need two factors to predict poverty: did you graduate high school and did you wait for marriage to have children. For the vast majority of people, it's their culture that determines if those are valued. You need to change culture to change those, and people are suspect of having the government do that because of past and ongoing mistakes.

The GP suggested that the reason immigrants have succeeded is because they knew to learn to open a bank account, ergo, if people in poverty wanted to learn to open a bank account then they would escape poverty. My point is that is not the reason immigrants are so often successful: rather, immigrants succeed because their entire life is built around seeking out something better for themselves and their family, and they're taking risks and making sacrifices to get it. Education is a means to an end for immigrants looking to build a better life for themselves, it's not the reason they've succeeded. Many immigrants succeed without education!

What predicts high school graduation? The framing of your comment ("did you graduate..." "did you wait for marriage...") suggests that these are choices made by people which determine whether they'll go on to live in poverty and if they just stayed in school and just didn't have kids then their lives would be great. The problem is, poverty does not start with the individual, in fact, it can be traced to before the person was born. High school graduation rates can be predicted based on the circumstance the child was born into.

> if they just stayed in school and just didn't have kids then their lives would be great

Yes, that's literally what they need to do. If we want to change that, then changing their culture to value education is the only way to do it. No culture which denigrates education is going to equip the majority of its adherents for the modern world.

Edit: I feel you're saying the same thing. Said poor immigrants succeed because they value succeeding. That's culture.

Very often if you diff "poor successful immigrant" stories to the stories of poor people who grew up in the same city, the key difference was they relied on bonds of trust between them and other immigrants from their country that helped give them a leg up.

I was pretty shocked to discover that one of my friends (2nd gen asian immigrant in amsterdam) had parents who even tapped large interest free loans, and that the community largely expected this kind of help to be given freely.

>I find it off for poverty-advocates to get indignant when poverty education comes up

Yeah, coz it's well known to be ineffective (by design, pretty much), and is almost universally used by banks and politicians fronting for banks to try and get the heat off their backs and let them keep raking in profits unimpeded.

Stuff like interest rate caps and banning payday lending, on the other hand, is very effective but impedes profits. The goal of corporate lobbyists is to present solutions (usually faux) that appear genuine but don't impede profits.

// Yeah, coz it's well known to be ineffective

Hmm, the argument I always hear is "the poor don't need to be taught, they need (some short term thing that won't scale)"

If you want to argue the effectiveness of various education methods, I am not down to that level of nuance. Obviously if the education is ineffective, that's a problem, it's still necessary.

Lower socioeconomic class stay in the neighborhood that they grew up in and are much more likely to be close to parents and siblings. This is a much stronger network than some immigrant community of strangers based on country of origin.

And if the benefits of networks based on country of origin were so powerful you'd expect places with a large percent of South American or Caribbean countries to be wealthy. But if you look at small Haitian or Dominican you don't see the same kind of upward mobility compared to asian neighborhoods.

>Lower socioeconomic class stay in the neighborhood that they grew up in and are much more likely to be close to parents and siblings. This is a much stronger network than some immigrant community of strangers based on country of origin.

Are you equating the economic potential of being able to tap a large interest free loan from your community and having an equally poor sibling?

I'm an immigrant to the US. My parents had a network of people from the same country (European). It was a good resource of friends and babysitting for my parents, but i never heard of anyone giving large interest free loans to a poor stranger just because they came from the same country. But maybe that's the norm for asian communities.

Btw i wouldn't discount free childcare and is honestly worth more than an interest free loan. If you can help share childcare you can work many more hours

Forget the name for it, but there is community based loan concept where everyone pitches in a little money to give one individual a loan based on luck of the draw with the pretext that in future prior past contributors have better odds of winning.

Needless to say, frequently is a scam.

EDIT: Here are examples:

https://www.google.com/search?q=site:wikipedia.org+informal+...

In the case of the Netherlands, interest rate caps are already in place and payday loans don't exist. Furthermore, it's relatively easy to get help (but not fun) when you're bankrupt and to get out of this bankruptcy with a clean sheet after 5 years. Currently there is a law in the works vetted by the House of Representative to reduce this period.

Perhaps not but the Netherlands has ridiculous levels of wealth inequality. On paper it's worse than the US.

You have never been to the Netherlands, have you? Because those statistics you hint at are misleading at best.

Well it's sorta true, but the important difference is that the bottom poverty line is higher than in the US, and we do have better social security. Still, the gap is growing. Though recent changes in real-estate legislation are putting a stop to that. Yes, there are the mega rich, entrepreneurs and whatnot. Like it or not, they do participate in society in a way that moves the needle.

Means for the slightly-better-off middle class to exploit the lower class through rent are being thwarted, thankfully. They just allow one half of the population to exploit the other half without providing any tangible benefit in return.

Source: I'm born in, and living in, the Netherlands.

No, the statement is mostly false. The famous Economics Explained video is debunked. Of course, there is inequality and maybe it is too much but is not of a ridiculous level compared to the rest of the world.

> You have never been to the Netherlands, have you?

How does merely visiting Netherlands tell a person that inequality stats are misleading ?

You walk around and see how people live and that the difference between the worst neighborhoods is much smaller than the US or even France. Another data point is that you will also see relatively little homeless people (compared to San Francisco for example).

I alluded to the figure not being the whole story by saying "on paper". Perhaps you skimmed that part. Nonetheless not the whole story is miles away from "not a problem". It IS a problem.

I actually lived there for a period, not that it's relevant.

By omitting the rest of the story what remained 'on paper' became false. That was my point.

All the same I would much, much, MUCH rather be poor in the Netherlands than the US. Just not having to operate a car would save tons.

Also, not sure but this comment may be a reference to:

How The Dutch Economy Shows We Can't Reduce Wealth Inequality With Taxes | Economics Explained

https://www.youtube.com/watch?v=Ot4qdCs54ZE

and if you watch that it's well worth watching this Dutch economist's rebuttal

The Dutch Economy is NOT the Most Unequal

https://www.youtube.com/watch?v=tW_kw6OPXc0

As a single counter experience, I have repeatedly witnessed established immigrants exploit new immigrants from the same cultural backgrounds. Yes, some people get lucky and find meaningfully help, but others don’t.

Of course. Rags to riches and "pulling oneself up by one's bootstraps" anecdotes are mired in survivorship bias almost by definition.

Some of the organizations I've seen in the US to provide "life coaching" for people in poverty are trying to create those types of relationships. Their logic is that the culture surrounding people in poverty tends to make it harder to do the types of things that would help them get out of poverty.

Banks don’t conduct payday loans and make very little from the poor. The payday loan industry != banking industry.

That's good to hear. I didn't mean to be indignant, I just don't have a nuanced understanding of this. So thanks for the insights.

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