A recent article in the NY Times details research on how children can rise out of poverty by making friends with rich people (not paywall – available with a free NYT account).
In particular, they cite three things:
Education is always important. That includes all the way back in pre-K and continued through college. While the article didn’t call it out specifically, I thought it was worth noting that education counts, even at the Pre-K level.
It seems like money is a great way to get out of poverty. Wait, that’s a sentence that is so common sense that it doesn’t make any sense. The article says, “Longer, deeper bouts of poverty can affect children for decades.” Now that makes sense. It also pointed out that avoiding adverse life events like eviction and having good health care is important. As you might imagine, two parents raising a child is much better than one. I don’t truly know what it’s like to be a single parent, but sometimes my wife is deployed for 4-6 weeks, and I get a glimpse of what it is like. It is not good.
3. Friendships and Social Capital
A study in published in Nature (a very respected journal) found that friendships with wealthy people tends to lift lower-income people up the income ladder. This makes sense because I’ve read for years that you are likely to have an income around the average of your five closest friends (generally credited to Jim Rohn).
Here’s how friendships are generally grouped:
The NY Times article suggests three ways that friendships can help boost someone out of poverty. The first is motivation or ambition. You see a friend with money and think, “Hey, I can do that.” The second way is simply basic information, such as sharing money tips (buying a house, applying for college). Lastly, there’s general networking which can lead to increased job opportunities. When I was a kid, I was able to get a high-paying job* as a pharmacy technician at a local hospital because my mother was a nurse there. When we needed more people, I asked a friend, who came on board.
The article ends with a path forward. If we can increase the amount of cross-class interactions, we can lift more people out of poverty. That’s certainly a big part of the puzzle.
If you low-income and are here and reading this, you are also more likely to move up a class. You’ve shown an interest in education and specifically the kinds of basic information that you might get from rich friends. You know how compound interest works and how kids can make money.
* The pharmacy technician job paid $8.41/hr, which was tremendous for a 16-year-old in 1993.