How Scarcity Affects the Working Poor
All too often, the working poor are unfairly put down as miscreants, reprobates, and degenerates that impede our otherwise thriving Western society. The poor are first marginalized as defective, inadequate and flawed consumers, and then stigmatized for not participating in socially relevant consumer practices. Recent global economic downturns serve as a key source to a greater diversity in the poverty experience. Research suggests that these plights have precipitated the advent of the nouveaux pauvres (middle-class consumers whose social and cultural capital has decreased) and the working poor (consumers that work yet fail to pull above the poverty line or make ends meet) (Hamilton, Piacentini, Banister, et al., 2014).
This article aims to dissuade readers from typecasting the working poor as apathetic and incapable. Specifically, insights from behavioral economics are used to explain why the poor are not poor simply by virtue of their bad decisions. Instead, it is suggested that people make bad decisions because they are poor. Together, capitalistic structures at the macro-level and impaired decision-making at the micro-level render the working poor’s consumer behavior all the more faulty and unstable.
References
Bertrand, M., Mullainathan, S., & Shafir, E. (2006). Behavioral economics and marketing in aid of decision making among the poor. Journal of Public Policy & Marketing, 25(1), 8-23.
Hamilton, K., Piacentini, M. G., Banister, E., Barrios, A., Blocker, C. P., Coleman, C. A., & Saatcioglu, B. (2014). Poverty in consumer culture: Towards a transformative social representation. Journal of Marketing Management, 30(17-18), 1833-1857.
Shipler, D. K. (2004). The working poor: Invisible in America. New York: Knopf.
Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much. New York: NY.
About the Authors
Arash Sharma
Arash is a Behavioural Scientist at the Government of Canada.
About us
We are the leading applied research & innovation consultancy
Our insights are leveraged by the most ambitious organizations
“
I was blown away with their application and translation of behavioral science into practice. They took a very complex ecosystem and created a series of interventions using an innovative mix of the latest research and creative client co-creation. I was so impressed at the final product they created, which was hugely comprehensive despite the large scope of the client being of the world's most far-reaching and best known consumer brands. I'm excited to see what we can create together in the future.
Heather McKee
BEHAVIORAL SCIENTIST
GLOBAL COFFEEHOUSE CHAIN PROJECT
OUR CLIENT SUCCESS
$0M
Annual Revenue Increase
By launching a behavioral science practice at the core of the organization, we helped one of the largest insurers in North America realize $30M increase in annual revenue.
0%
Increase in Monthly Users
By redesigning North America's first national digital platform for mental health, we achieved a 52% lift in monthly users and an 83% improvement on clinical assessment.
0%
Reduction In Design Time
By designing a new process and getting buy-in from the C-Suite team, we helped one of the largest smartphone manufacturers in the world reduce software design time by 75%.
0%
Reduction in Client Drop-Off
By implementing targeted nudges based on proactive interventions, we reduced drop-off rates for 450,000 clients belonging to USA's oldest debt consolidation organizations by 46%