A country’s economic performance does not always reflect its abundance in natural resources, excellent policies (in theory), or even strategic location. In most ocassions, economic success boils down to people’s attitude and the society’s overall culture. Policy Options shares more insights:
In the analysis of poverty and income inequality, attitudes, culture and family can affect people’s situations as much as economic factors do.
In Hillbilly Elegy, his spectacularly successful book about growing up in a wretchedly dysfunctional and poor community in Ohio with cultural roots in the Appalachian mountains, the Yale-trained lawyer J.D. Vance identifies the reason why he could eventually rise out of poverty — the people closest to him: his mother, his distant father and his grandparents, among others.
Vance details the various challenges facing what he characterizes as distinct traits in hillbilly culture: “From low social mobility to poverty to divorce and drug addiction,” and many other problems including suspicion of outsiders, he writes, “my home is a hub of misery.” His parents divorced early and his mother circled through men and then drugs; his father was mostly absent until later. Vance thus came to rely on his grandparents, who, while quirky, were nevertheless an anchor of stability at key points in his adolescent life.
Vance’s story struck me because he also describes one remedy often prescribed to fix social ills: economic opportunity.
There is something to that. Take away jobs and money, or never have either in the first place, and the insecurity can ravage families. But the problem is that this formulation, in isolation, misses how attitudes, culture and family can affect people’s economic situation just as much as they are affected by it. Vance offers the example of a young couple he knew who desperately needed work and health benefits (the 19-year-old girlfriend was pregnant). But their attitudes and a lousy work ethic ended up getting both fired.
This dynamic — call it the “family and culture affects potential prosperity” relationship — is seldom recognized in Canadian policy analysis, journalism and politics. I examine it in Missing Family Dynamics, my recent report for the think tank Cardus. But too many analyze and prescribe policy remedies as if only material factors (money, employment, interest rates) matter to social outcomes.
Thus, one policy analyst might recommend a particular government action to alleviate poverty; another will demonstrate how a better economy can help the poor. Both approaches, depending on their specifics, are valid and necessary. But often overlooked is how addictions and attitudes can contribute to prosperity or poverty. A chronic gambler may have a decent job but lose everything because of bad bets; an employee with a poor attitude may get fired and fall into poverty.
This matters to the statistics: consider how the breakup of a family creates poverty. When a one-income household with $50,000 in income splits into two, with $25,000 incomes, the increased total costs of supporting two households can drop both into poverty. When the trend is widespread, breakups will make the poverty statistics look worse, even if nothing else has changed in the wider economy.
Similarly, the changing composition of families can affect inequality statistics. In 1976 and 2011 (two of the years examined in my study), married couples without children had the second-highest median after-tax income among all family types. A slightly different data set, family composition (comparing 1976 and 2014) shows that the proportion of such couples rose from 12.1 percent (1976) to 18.3 percent (2014) of all family types.
When a higher proportion of families is of the dual-income, no-children type — the ones with the second-highest median earnings — that social trend alone could increase observed inequality. It doesn’t mean there is anything to panic about. But it does mean that a social development, a voluntary change in family structure, will have impacted the statistics. By the same token, a drop in the proportion of two-parent families, who have the highest after-tax income, could affect inequality statistics too, but in the opposite direction.
Clearly the individual choice to marry or to have children, or not, among other social and cultural trends, can impact poverty and inequality; it is not only economic factors that matter. But the primacy of economics is, in my view, often the default assumption of many, who seem to analyze and write as if only more tax dollars and well-intentioned smart people collected together in a room will magically yield a useful and efficacious government policy to solve much of what ails us. That wrongly assumes a material remedy for a nonmaterial development that has its origins elsewhere: a decline in faith, changing morality or other passions of the heart that are quantifiable not at their start but only in their observable effects much later; to address such matters, policy tinkering may be ineffective.
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