Ehh. A $1/week expense which buys you hope and dreams for a week isn't that bad in the grand scheme of things. It's certainly cheaper than cigarettes, alcohol, or drugs to temporarily take the stress out of the fact that you're in a long-term shitty situation with little way out of it.
This concept that the poor should only ever work, eat, and sleep, and any attempt to look after their mental health is wasting money, is outright dangerous.
> Ehh. A $1/week expense which buys you hope and dreams for a week isn't that bad in the grand scheme of things
There's a demographic of lottery players that really only are spending $1 a week (or even $1 every few months or whatever), but there is also a large demographic that is regularly buying multiple $20 scratch tickets on a regular basis, which tends to be more of what people are thinking of when they evoke the stereotype of someone who "can't afford" to play the lottery.
I'm not saying that only the rich should be allowed to enjoy myself, but if a friend asked me to get their finances in order and was spending multiple percent of their salary on lottery tickets (which is a real phenomenon), cutting back would be my first suggestion.
The actual solution for the population which spends significant money on scratch cards, of course, is to invest in social care and support for people who are obviously very vulnerable. They'd be vulnerable whether the scratch cards existed or not.
Invest? This is a pitfall that all people are vulnerable to, including the ones who invest.
I'm not for humanity dedicating more resource to social service. But we have to get socially vigilant and strict. Otherwise more people will be susceptible to this vulnerability. Part of that vigilance means shaming people for drugs, gambling, & alcohol, etc.
I can assure you that people are shamed more than enough for their faults. I volunteer with people who come in with the stories of people shaming them for their faults every week.
The issue is that there is fuck-all support for people to overcome their faults - we've become a society in which if you can't get out of your situation on your own, you also can't get help getting out of your situation - because we don't believe that anybody can possibly be in that position. Individualism at its worst. The faults are usually a result of the shitty environment you're in, of course - nobody becomes an alcoholic because they're happy with how their life is going or feel they can do much to change it.
I don't think you understood my post. I mean we, as a society, need to help vulnerable people in our society - we need to invest resources into helping them. We can do that ourselves, we can do that through charity, we can do that through mutual aid, and we can do that through Government policy and services. Broadly speaking, as a society, we choose not to.
> Ehh. A $1/week expense which buys you hope and dreams for a week isn't that bad in the grand scheme of things.
The problem is that poor people aren't just dropping 1 dollar per week. They're spending much more. Some people have a very poor grasp of how bad the odds are and mention that playing the lottery is their way to retirement.
Taking a convenient top link from a Google search (admittedly it references a study from 2008), they mention households earning 13k annually spending 645 (9% of income) on the lottery.
True, there's a population which overspends on lottery tickets. But those people would also be spending their money on other pleasures otherwise - the solution there is increased social care and responsibility for these people, rather than taking the lottery away from the many people who play it responsibly.
Also, that article may be very wrong - at least one other news article which would appear to reference the same study received an update to suggest the total is 2-3%, rather than the 9% originally stated, and I can't find the 9% referenced in the study itself, while the 2-3% does show up.
> But those people would also be spending their money on other pleasures otherwise
That's a pretty tall claim to make. Do you have any sources to back it up? Especially because if these people were putting money into savings instead with proper education it could make a significant path to getting out of poverty.
Experience with primarily being around decidedly working-class people?
If they put it into savings, their mental health would generally go down the drain, which would screw heavily with their ability to turn up for work, which would put them in even worse of a place. I've seen this happen. Note that studies show that the poorer you are, the more likely you are to be depressed - many attempt to escape from that feeling of pointlessness and having no future with alcohol, drugs, gambling, television, and so on and so forth.
The overuse of scratch cards is just one possible manifestation of an underlying problem - that these people usually don't have the support they need to get out of their situation. That they're living paycheque-to-paycheque with no end in sight, whether they were to save $20 a week or not. And it turns out giving them the support they need is rather expensive.
Also, proper education is incredibly expensive and inaccessible to many (night classes or long-distance learning need serious dedication and motivation with no guarantee of a job at the end of it - a well-known recipe for something that poor people are generally just not good at), and on top of that, many people just don't have the skills they'd need to succeed in further education.
My opinion? The actual issue is that there's little career progression or practical training available to get an employee from e.g. retail shift worker to somewhere else in the company with a near-guaranteed job at the end of it and full pay the entire time. And there's no reason for businesses to create those pathways so long as they have no responsibility to their employees.
> If they put it into savings, their mental health would generally go down the drain,
Does this not come back to education, though? Putting money away in savings, hopefully to secure a more stable future, should bring some measure of confidence/happiness.
This sort of basic financial sense does not require an expensive education. At least I don't think it does, maybe I am being naive.
I do take your last point. I think society in general sees retail and the like as stop-gap work or jobs for teens. The reality is very different and opportunities to improve become more and more limited with age and a lack of education.
> Putting money away in savings, hopefully to secure a more stable future, should bring some measure of confidence/happiness.
Only if you actually believe that saving money secures a more stable future. In practice, it really doesn't - you're still working at the same shitty job with no prospects, just with nothing to distract you from the reality of what that means, and maybe if you manage to save enough over half a year you can survive a couple of weeks between jobs. Woop.
It doesn't actually provide stability in the sense that makes people feel happy - a job in which it's unlikely you'll get fired without warning in the first place does that. Hopping jobs, hopping rented accommodation, hopping shitty transport that you can't really depend on but you need to depend on for a living... that's the stressor. Many people with professional jobs, stable housing, and health insurance, but no savings to speak of are quite happy.
You're never going to save enough to actually do anything with it within five years on a low-income job, no matter how much you cut back - doubly so if you have any debt at all - and there's studies that show that planning for the future where that future is not guaranteed is not a strength of many people on low incomes.
> ... poor households, with annual take-home incomes under $13,000, on average, spend $645 a year on lottery tickets, which comes to about 9% of their yearly income..
I don't think there's anyone out there that has played the lottery that isn't acutely aware of how poor the odds are. As some people above have mentioned, they're not buying a ticket to riches, they're buying daydreams and aspirations to let them forget about their financial situation.
They're not bringing up the lottery as their way to retirement as an actual financial plan. It's gallows humor.
Per capita spending on lotteries in Chicago's poorest neighborhoods is about ~$600 per year, of which the state of Illinois pays back about ~$100 to advertising agencies to continue to immiserate its own poor people, because if they don't constantly market the games sales go down.
I have no issue with state run lotteries, what I have a major issue with is their promotion. By all means people should be able to spend their money as they wish, but should the state be involved in promoting them spending their money in such a regressive (tax) way?
My guess is that when you are that much poor, you don't just buy the chance of winning, but also a little amount of hope that helps to get through the dull (or even awful) life.
Even if you don't win you get something back for that money.
We've built an entire society on the notion that you should aspire to buy a bunch of things you'll never be able to afford. See also: luxury car repossession rates
I never really understood this argument. I mean, you can daydream for free about Warren Buffet choosing you at random to give $300 million to, or inheriting a distant relatives belongings and finding a Pollock in there.
Maybe with the lottery its easier for people to deceive themselves about the actual odds?
Not sure why you think it would be 0%; people have stumbled across $15 million Pollock paintings by accident[1]. William Durkin happened to be at the right place at the right time to save Howard Hughe's life, and it looks like he was at least offered money afterwards[2]. There's plenty of other stories where something extremely unlikely happens and someone gets rich.
The likelihood of winning the Powerball is something like 0.000000005%. Not sure what the odds are of these other unlikely events, but even if they're less likely - you really think someone is able to daydream about a 0.000000005% chance but not a 0.000000000005% chance?
The kind of fantasy you're describing isn't an equivalent good. People buying lotto tickets are fantasizing, amongst other things, on not being dependent on the largesse of others.
I play every once in awhile, when the jackpot gets to be large enough they start talking about it on TV. The $10 or $20 I spend is well worth daydreaming about the things I would if I won.
The general principle here is right, but I was kind of curious about exactly what your gains would be.
I curled the last 90 days from http://online.wsj.com/mdc/public/page/2_3021-gainnyse-gainer...
and if you selected the largest percentage gainer every day for the past 100 days, given you started with $10, you'd have about 828 million after 90 days. (It's worth noting however with 2,800 stocks on the NYSE, that 2800^100 is much longer odds than winning the lottery. Actually, your odds of selected the very highest percentage stock gainer three days in a row are lower than your odds of winning the powerball, assuming such a thing is random).
Unrelated, this has really been a winning quarter for logistics and trucking companies!
>>if you selected the largest percentage gainer every day for the past 100 days, given you started with $10, you'd have about 828 million after 90 days.
Oh. I totally misread your post as advocating putting the money into an index fund instead of buying lottery tickets.
Actually, retiring on the winnings is pretty much what I'd do, too. Though I'd want to diversify holdings over more asset classes than just index funds. When you just want to coast on passive income, it's fair to say even index funds are too risky to put everything in.
Gambling addiction and various mega-jackpot ticket-purchasing fervors are an indication that many people can't really comprehend the odds. A human can easily visualize 1 (the number of jackpot winners), but less so the scale of the 292,201,337 chances you have to lose (Powerball odds)
If you had a contest where you asked someone to pay $5 to correctly choose a single grain of rice out of 10,000lbs of rice... I doubt you'd get many takers because you're confronted with the physical reality of the odds.
It would be harder than picking a random year between now and when the first dinosaurs existed.
>Is this so much more stupid than throwing your money away on useless consumer junk?
"Junk" in the form of physical goods still holds some level of value. If you bought $1,000 of random physical goods in a year you'd more likely than not have something >$0
I think this is broadly correct. Your system 1 (in Kahneman terms) can tell the difference between 50/50 and 1/10 but something like 1 in 1000 in is put in the same bucket as 1 in 100,000,000 -- unlikely but not impossible. If you want to actually work with odds like that you need to use system 2 to compute something more tractable like EV (~$0.75 on a $2 ticket for tonight's drawing).
In the interest of full disclosure, I probably spent $30 on lotto tickets last year.
I hear this a lot, but I think people know what a longshot is.
Is this so much more stupid than throwing your money away on useless consumer junk?