Could Poverty Become a Mental Disorder?

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It’s no surprise that being foolish about money makes you poor, but new research suggests that being poor can make you foolish. Could this negative feedback loop constitute a mental disorder?

The Chronic Condition of Poverty

In the Bible, Jesus said “The poor you will always have with you.” Long before and ever since, poverty has been a problem with which we’ve struggled, some of us individually and all of us at a societal level.

We’ve taken stabs at the problem from all different directions. Politicians attack poverty with policies. Self-help gurus promote their books, seminars and latest strategies for financial success. In the U.S., we see a rise in the “prosperity gospel” which proposes that God wants us to be rich and a careful reading of scripture points the right way. What about Psychologists, Social Workers and Counsellors? What if poverty is caused by, at least in part, a pervasive, harmful, systematic thought process that keeps the afflicted from gaining and keeping wealth?

The Hoarder Disorder

Financial mismanagement may seem a poor candidate for mental disorder, but a look at the new Diagnostic and Statistical Manual, Fifth Edition (DSM-5) reveals a strikingly similar diagnosis: Compulsive Hoarding. Compulsive Hoarding is classified as a subtype of Obsessive-Compulsive Disorder (OCD). People who suffer from Compulsive Hoarding find themselves unable to part with a torrent of possessions that everyone around them classifies as junk. In order to qualify as a disorder proper, the hoarding must cause serious problems with social, occupational or other areas of life.

If being unable to get rid of junk is a disorder, why wouldn’t being unable to keep money be one? If a person mismanaging their money loses their house, how is that different than a hoarder losing a house because it has become a fire or health hazard?

Field Report

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I first formulated the idea of poverty as mental illness as I was reading Linda Tirado’s post “Why I Make Terrible Decisions, or, poverty thoughts.” In it, she describes the mindset that she evokes when she makes her self-admittedly “terrible” decisions that keep her in poverty. There’s a lot to read and I encourage you to read it, but let me offer a rough outline of the thinking that keeps her poor.

For the poor, argues Tirado, self-care simply does not and cannot happen given the need for multiple, part-time, minimum-wage McJobs and the often lengthy commutes. Not surprisingly, being this exhausted leads to bone-headed thinking again and again.

Being poor also pushes a now-first mentality that “cuts off your long-term brain.” Rather than buy cheap and healthy food to cook at home, more expensive, less healthy convenience food becomes the norm.

All through her piece are references to what she “must” do because she is poor. She “must” smoke because, although it is expensive and ruins her health, it is a stimulant and she believes “It is the only thing I have found that keeps me from collapsing or exploding.”

Another thread winding through Tirado’s piece is a sense of fatalism and identification with poverty. When thinking about the choice to have children she could not afford, she told herself that being poor may not be comfortable, but it can be a good life. There is a bizarre security in being penniless in that you have already hit bottom. There is no further place to fall. Attempts to rise up are seen as painful and futile.

From the outside, a lot of what Tirado is saying seems bizarre, self-defeating, self-destructive, maybe even a touch psychotic. She’ll admit as much, but that’s how poor people think, she’ll insist.

An Experiment in Poverty

Adam Shepard joined the discussion of poverty and its causes in a dramatic way. He attempted to impoverish himself, at least financially and educationally, and see how far hard work and gumption could get him. He was dismayed by what he read in Barbara Ehrenreich’s Nickel and Dimed: On (Not) Getting By in America . Ehrenreich’s thesis was that for the poor, social and political obstacles make clawing out of poverty through hard work a sucker’s bet.

Shepard wanted to take that bet and so he traveled with $25 and the clothes on his back to a city where he knew no one. He did not rely on any family or friends for support and he would only claim a high school education during his experiment.

For all the handicaps he gave himself, Shepard is the first to recognize advantages he couldn’t shed. He was a healthy, strong, young male. He had no dependents. He was not addicted to anything. Yet he did start just about as close to zero as he could.

On the streets, Shepard quickly found his way into a homeless shelter where he was able to plug into a support system that kept him housed, fed and clothed while he beat the street and started hunting jobs. Day labor was easily found, but the pay was low and it was hard to put together many hours. It was several months before he landed a regular job as a mover, but from that point forward, Shepard had the foundation that allowed him to get an apartment which he shared with roommates, a truck, and some cash in savings.

Shepard experienced a lot of the hardship Tirado describes, along with first-hand accounts of “terrible thinking” in others around him. But Shepard manages to steer clear of the pitfalls that catch other people in the shelter. Even though he’s broke, he’s not thinking the way Tirado describes. If anything, he did the exact opposite. For example, he saved even when it only took a few dollars more to have a nicer meal. He maintained the ability to forestall reward and think long-term. He also didn’t identify as poor, at least in his head. Where he was and what he was doing as a homeless man was an outrage that burned at him until he got a place of his own. Adam Shepard was materially poor, but he didn’t have poor thinking — and that gave him an edge on escaping the street. He documented his experiences in his book Scratch Beginnings: Me, $25, and the Search for the American Dream .

Poverty Gets in Your Head

Taken together, I see Tirado’s despair and Shepard’s gritty triumph as two sources of confirmation of the poverty-as-mental-disorder hypothesis. Although these two authors have very different trajectories through life and Shepard clearly has some advantages that Tirado never had, his mindset — one full of high expectations of himself and ample long-term thinking — was essential in boosting him from a homeless man with $25 in his pocket to a person with an apartment, a job, a pickup truck and $5300 in savings ten months later.

All clinical material on this site is peer reviewed by one or more clinical psychologists or other qualified mental health professionals. This specific article was originally published by on and was last reviewed or updated by Dr Greg Mulhauser, Managing Editor on .

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