Why the Poor are Poor

If you don’t already know about the NPR program planet money, I recommend that you listen to it if you want to be informed about economic and financial issues. The program is unusually bold in tackling normally taboo subjects in the traditional media. They have talked about how the Social Security trust fund does not exist, the problems that have developed due to patent law, and other worms that lurk just below the rock. If I want complain of the program is that it does not go far enough in investigating controversial topics. Still, in general it does a much better job than the vast majority of other similar programs.

I was recently listening to an episode of planet money and they came across this snippet.


“Job training.

When economist James Heckman was studying the effects of job training programs on unskilled young workers, he found a mystery.

He was comparing a group of workers that had gone through a job training program with a group that hadn’t. And he found that, at best, the training program did nothing to help the workers get better jobs. In some cases, the training program even made the workers worse off.


The problem was that the students in the training program couldn’t learn what they were being taught. They lacked an important set of skills which would enable them to learn new things. Heckman, a Nobel-Prize-winning economist, calls these soft skills.

You might not think of soft skills as skills at all. They involve things like being able to pay attention and focus, being curious and open to new experiences, and being able to control your temper and not get frustrated.

All these soft skills are very important in getting a job…”

Essentially what the studies have shown is that job training for the poor has achieved almost nothing, because too many of the very poor lack even the most basic skills to be able to get and keep the job.  Before they can learn how to be a carpenter, they have to learn basic concepts like arriving to work every time, being responsible, having decent judgment, being able to get along with others, treating customers with courtesy, and showing a reasonable amount of dedication to one’s job.

Unfortunately far too many of the very poor lack even the most basic habits and skills that are necessary to find and keep employment. Employers are simply not interested in hiring people that are incompetent. The left would like everyone to believe that the very poor are poor due to discrimination or a lack of opportunity. The argument goes that if only society the government could give them a chance, then everything would turn out okay. But, what the studies show is that, for most of the very poor, it is not a lack of opportunity that keeps people down, but their own ineptitude and bad habits. Even humble jobs require people to be responsible and to show decent judgment. Those who lack the skills will have a very hard time finding any kind of stable work.  I don’t want to say that everyone who is at the very bottom of the economic scale is necessarily an incompetent worker, the studies show that a strong majority are.  This is why immigrant Hispanics, who are very often poorly educated and may not even speak the language, but often are frequently eager to find and keep work are routinely hired instead of poor blacks.  So many poor blacks are such poor employees, that most employers would prefer to hire an illegal immigrant instead. For example I saw a construction site in Detroit, and the people working on it were Hispanics. One would think that in a city with such poverty as Detroit would have a huge pool of very eager workers to choose from. However, that does not appear to be the case, since many employers prefer to hire uneducated illegal Hispanics instead.  In many markets whites are too well-educated, and blacks consider it beneath their dignity to do menial labor, so Hispanics provide a group of people who are willing to take such jobs. I remember being in Washington DC, where most of the retail workforce is black, and what struck me when I went into stores was how poor the service was by so many of the black employees.

Before go on I just want to clarify one thing. In the previous paragraphs I am referring to the essentially unemployable poor, who lack the basic ability or desire to get and keep a steady job. I do not necessarily want to confuse these people with the working poor. Many people in America do modest jobs and work very hard, and are responsible employees. They don’t make a lot of money often times, so they are frequently considered to be part of the poor, but they are different from the anthologized underclass. The working poor generally tend to be responsible and contribute to society. The nonworking poor are much more likely to get into trouble, and to be a drain on society.

Despite the fact that getting ahead in the job market is not easy, the reality is that the American economy tends to reward those who work well, and to exclude those who are incompetent. Even people that may not have much education, if they’re reasonably hard-working and responsible and stick to their profession, in the long run they should do okay. Maybe not great, but they should be able to have reasonably steady work. The fact is that most employers reward good employees most of the time. There are always examples of bad management, but well-run companies in a competitive environment to better when they recognize their best employees and reward them.

Another facet of the planet money podcast, is the comment that the recession is affecting groups of people very differently. Those that are the hardest hits tend to be the less educated, while college graduates, and especially those with technical and higher than degrees, are doing much better. What this shows is that the economy demands high-quality workers, but has a surplus of low-quality workers. A biotech engineer can basically name his job and make a very good salary, while a construction worker struggles to find any work for poor pay.

Planet money goes with the conventional wisdom that a college education makes all the difference in terms of success in life. I believe, that while this may be true in certain technical fields, it is not a college education that makes people successful generally, but the fact that a college degree self-selects for those who tend to have higher IQs and to be academically inclined.  In other words being able to get into a selective university and do well academically, is a good indicator of whether one also has the ability to do well in office type jobs.

The conventional wisdom is that if the typical poor kid from Harlem could only get into Harvard, the university experience would transform him, and he would leave after four years with all the innate abilities needed to compete for high-end jobs. Conversely if the upper income Jewish kid never manages to go to college, he will probably end up with some menial job, and a spotty employment record.  Common held belief that college is a great transformer, should be said to Michael Dell, Bill Gates, Steven Spielberg, and a whole host of other incredibly successful people who have done very well in life without the benefit of higher education.

I believe that in most cases a poor black kid from Harlem would not be trans-formed by going to Harvard, and that smart talented and hard-working and ambitious people, will generally do well, whether they get a higher education degree or not.  If prestigious universities are able to skim off, or cherry pick the smartest and the most ambitious members and society, then it’s not surprising that that select few will tend to do well in life. But, their success has little to do with the education that they received, and much more to do with the fact that they have always been more talented from the beginning. In the early 1970s a very limited number of extremely talented students had the opportunity to study at University. This group of elites has gone on to be extremely influential and successful in Chinese society. The graduates from that period have done well in life, not because the education that they received at university was so wonderful (and it probably was not), but because the competitive nature of the selection process was able to distill a group of the smartest and most ambitious people in the country.  A similar process goes on with Harvard graduates, who tend to be water walkers before they even enter. It is not surprising that so many of them tend to do well in life, but their success has little to do with the actual education that they receive, and everything to do with the selection process that only lets in the very best.

In the past, when generally only the best students went on to college, getting a degree was a strong indicator of being part of a cognitive elite. That’s why college degree really meant something, and that is why an Ivy League degree still means something.  However, over the last few decades as college education has been transformed from a small elite, to something that most young people participate in, the value of a generic college degree has steadily gone down. In an age when more than half of young people study at University, the idea that college graduates represent a competency elite has been greatly undermined.

The reality is that in America the curriculum is extremely similar among our thousands of institutions of higher learning. The quality of teaching also tends to be fairly similar. So, what distinguishes the success rate of Harvard graduates, over graduates from slippery rock State College, is not the actual quality of education, but the quality of students who are allowed into the institution.

After many years of teaching, I can tell you that the single greatest factor influencing whether a class will learn not, depends upon the quality of the students. Yes, teaching does matter, but the quality of students is even more important. Bright, eager and interested students practically teach themselves. Progress is quick, teachers feel appreciated, and generally there’s a good atmosphere in the classroom. On the other hand, students who are unmotivated, have discipline problems, or simply don’t have the facility to learn well, tend to be very hard to teach.  Progress is slow, and teachers can burn out quickly from all the frustration. I believe that most of the poor quality teaching that occurs in low income schools, has less to do with the fact that teachers are not able to teach, but that too many of them burn out from so many years of stress and frustration. Having students who learn slowly can be frustrating, but having students who have open disdain for their teachers and classes, is a good way to create teachers who eventually stop trying.  After all, teachers are giving of themselves to help the students. If it is made very clear that the students could care less about learning or their teachers, this sends a strong signal to the teachers to stop trying so hard.  Teachers feel most motivated and satisfied when the students are progressing, and are appreciative and responsive to the efforts made by the teacher in the classroom.

When people refer to “bad schools” they like to suggest that poor schools are that way, because of a lack of funding or because the teaching staff is incompetent. The reality is that many low income schools are actually well funded, and have well-qualified teachers who want to do a good job.  Despite this they almost all do poorly. The reason why the schools do poorly is principally because the students themselves are poor. They tend to have low IQs, behavioral problems, attention deficit disorder, they can be antisocial, unmotivated, etc.  I classroom full of these students is going to be very difficult to turn around. Despite isolated success stories, no one has been able to find a winning formula to turn around failing schools. Every reform imaginable has been tried, but no one has found a way to consistently turn around underperforming schools.

In sum I just want to make the point that our innate abilities hugely influence how well we tend to do in life. Politically correct America does not want to admit this, because they want to continue with the pretense that we are all equal, and that any differences in success are entirely due to opportunities, or discrimination, or other external factors beyond the control of the individual in question.



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