Why People Are Poor: No Savings Accounts. Also: Booze, Cigarettes, and Whores

One reason people live poverty-stricken lives in developing countries like Nicaragua is that jobs pay meager wages. Also, there aren’t that many places to save your money. Also, workers spend a big chunk of what little money they do make on vices, including alcohol, prostitutes, and Coca Cola.

So writes NY Times’columnist Nicholas Kristof:

One of the ugly secrets of global poverty is that a good deal of suffering is caused not only by low incomes but also by bad spending decisions. Research suggests that the world’s poorest families (typically the men in those families) spend about 20 percent of their incomes on a combination of alcohol, cigarettes, prostitution, soft drinks and extravagant festivals.

In one village here in Nicaragua where children were having to drop out of elementary school because they couldn’t afford notebooks, a midwife, Andrea Machado Garcia, estimated to me that if a man earned $150 working in the mountains as a day laborer during the coffee harvest, he might spend $50 on alcohol and women and bring back $100 to support his family.

Well, there goes my brilliant idea for a book I wanted to write called Drink, Smoke, and Fornicate Your Way to Financial Prosperity.

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parakori

With a small fraction of the hundreds of billions of dollars spent on the Iraq war, the US and Australia could ensure every starving, sunken-eyed child on the planet could be well fed, have clean water and sanitation and a local school to go to.

== Bob Brown ==

http://japan-russia.jimdo.com/the-difference-bush-obama/

Terrorism isn’t insanity. It grows out of social conditions that are well known: poverty, social oppression, dictatorship, and a void of meaning in the lives of ordinary people.

== Deepak Chopra ==
http://whatchannelareyouwatching.com Stephen Fofanoff

Perhaps we can all resolve to save a little more money in the New Year? I’ve posted my full thoughts here:

http://wp.me/pwg7T-8o
http://debtbeat.com/2010/01/booze-cigarettes-whores.html Booze, Cigarettes, and Whores? | Debtbeat

[...] I just learned that new research shows the the breadwinners in the world’s poorest families (typically the men) spend about 20 percent of their earnings on liquor, cigarettes, prostitution, soft drinks and extravagant festivals. Check out the full story at the New York Times (which I got to via a piece at Time Magazine’s It’s Your Money blog.) [...]
williwilli1

hey i want to say just that,The above statement is seen to be contradictory. The situation is very critical and need an experience complainer to resolve it. Fixed Rate Savings
http://laspenitasnicaragua.wordpress.com brinniewales

In countries such as Nicaragua, it isn’t just the men who cannot manage money. Money “burns a hole” in the pocket of many laborers, women included. While the cost of living is low, many squander their earnings on more clothing than one person could possibly need. When money is needed to purchase medicine or to repair the roof, there isn’t any because the person “needed’yet another pair of pants or chinelas (flip-flops) or a blouse. Many houses, no matter if block construction or plastic tarps, have a television but no refrigerator. Stealing electricity is common and accepted so why not have refrigerated food versus a TV or another multiple pairs of pants and shoes?
A bank account can be opened with as little as USD $2.50 with no minimum for deposits, yet most do not avail themselves of this simple savings plan. To put aside USD $1-5 per month would be simple and is doable (cut out the Coca Colas and snacks). Education about wants versus needs versus planning is totally lacking. It’s happening in the U.S. as well as in developing “third world” countries but it’s more pronounced in Nicaragua because of visible poverty and the low standard of living.
There are minimum wage laws set by the government. For the economy of Nicaragua, for example, the average laborer can live on that wage; however, few Nicaraguan business owners will pay their own countrymen the appropriate minimum wage. Most extranjeros, or foreigner business owners, do pay at least the minimum, if not more, as well as social security. It is truly a shame that the laborers are being exploited by their own countrymen.
Laborers are annually paid for 14 months of work – this includes one month of vacation, the actual time off which few want to take, as well as the “13th month” of pay. If the employee works for at least one year, he/she is entitled to yet another full month of pay when he/she terminates. Many laborers work for a year and then quit, with no other job lined up, just to receive the lump sum payment of accrued vacation, 13th month and the so-called liquidation pay. When this money runs out, the person is back to square one – no job and a former employer who does not want them to return because of the scam of working and quitting for lump sum payments.
It seems to me that education is the only way out of this but many in the rural areas opt out of going to school or forcing their children to attend school. I find it absurd to hear that the country is reaching a 100% literacy level when illiteracy abounds.
http://laspenitasnicaragua.wordpress.com brinniewales

If you think spending money on the war in Iraq is a shame, imagine the world perception of the U. S. intervening to “ensure every starving, sunken-eyed child on the planet could be well fed, have clean water and sanitation and a local school to go to.” Talk about the Yankee Imperialists taking over and going where they are not wanted. I didn’t say we are not needed, just not wanted.
There are a multitude of international NGOs as well as various international government sponsored aid programs for developing nations. These are the groups in the trenches and the private NGOs are the groups to which generous donations should be made. Yes, there are U.S. aid programs, including the Millennium Challenge Corporation, USAID, etc., and they do great work around the world. The MCC compacts, or contracts, for each country are available to read on-line so there are definite means of responsibility and accountability for every U.S. dollar given. The compacts are specific and can, and have been withdrawn when the receiving country failed to uphold the terms of the compact.
Every country has a right to sovereignty without U.S. intervention.