If the gains are so obvious, why don't the poor eat better? Eating well doesn't have to be prohibitively expensive. Most mothers could surely afford iodized salt, which is now standard in many parts of the world, or one dose of iodine every two years (at 51 cents per dose). Poor households could easily get a lot more calories and other nutrients by spending less on expensive grains (like rice and wheat), sugar, and processed foods, and more on leafy vegetables and coarse grains. But in Kenya, when the NGO that was running the deworming program asked parents in some schools to pay a few cents for deworming their children, almost all refused, thus depriving their children of hundreds of dollars of extra earnings over their lifetime.
Why? And why did anemic Indonesian workers not buy iron-fortified fish sauce on their own? One answer is that they don't believe it will matter -- their employers may not realize that they are more productive now. (In fact, in Indonesia, earnings improved only for the self-employed workers.) But this does not explain why all pregnant women in India aren't using only iodine-fortified salt, which is now available in every village. Another possibility is that people may not realize the value of feeding themselves and their children better -- not everyone has the right information, even in the United States. Moreover, people tend to be suspicious of outsiders who tell them that they should change their diet. When rice prices went up sharply in 1966 and 1967, the chief minister of West Bengal suggested that eating less rice and more vegetables would be both good for people's health and easier on their budgets. This set off a flurry of outrage, and the chief minister was greeted by protesters bearing garlands of vegetables wherever he went.
It is simply not very easy to learn about the value of many of these nutrients based on personal experience. Iodine might make your children smarter, but the difference is not huge, and in most cases you will not find out either way for many years. Iron, even if it makes people stronger, does not suddenly turn you into a superhero. The $40 extra a year the self-employed man earned may not even have been apparent to him, given the many ups and downs of his weekly income.
So it shouldn't surprise us that the poor choose their foods not mainly for their cheap prices and nutritional value, but for how good they taste. George Orwell, in his masterful description of the life of poor British workers in The Road to Wigan Pier, observes:
The basis of their diet, therefore, is white bread and margarine, corned beef, sugared tea and potatoes -- an appalling diet. Would it not be better if they spent more money on wholesome things like oranges and wholemeal bread or if they even, like the writer of the letter to the New Statesman, saved on fuel and ate their carrots raw? Yes, it would, but the point is that no ordinary human being is ever going to do such a thing. The ordinary human being would sooner starve than live on brown bread and raw carrots. And the peculiar evil is this, that the less money you have, the less inclined you feel to spend it on wholesome food. A millionaire may enjoy breakfasting off orange juice and Ryvita biscuits; an unemployed man doesn't.… When you are unemployed … you don't want to eat dull wholesome food. You want something a little bit "tasty." There is always some cheaply pleasant thing to tempt you.
The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim. We shouldn't forget, too, that other things may be more important in their lives than food. Poor people in the developing world spend large amounts on weddings, dowries, and christenings. Part of the reason is probably that they don't want to lose face, when the social custom is to spend a lot on those occasions. In South Africa, poor families often spend so lavishly on funerals that they skimp on food for months afterward.
And don't underestimate the power of factors like boredom. Life can be quite dull in a village. There is no movie theater, no concert hall. And not a lot of work, either. In rural Morocco, Oucha Mbarbk and his two neighbors told us they had worked about 70 days in agriculture and about 30 days in construction that year. Otherwise, they took care of their cattle and waited for jobs to materialize. All three men lived in small houses without water or sanitation. They struggled to find enough money to give their children a good education. But they each had a television, a parabolic antenna, a DVD player, and a cell phone.
This is something that Orwell captured as well, when he described how poor families survived the Depression:
Instead of raging against their destiny they have made things tolerable by reducing their standards.
But they don't necessarily lower their standards by cutting out luxuries and concentrating on necessities; more often it is the other way around -- the more natural way, if you come to think of it. Hence the fact that in a decade of unparalleled depression, the consumption of all cheap luxuries has increased.
These "indulgences" are not the impulsive purchases of people who are not thinking hard about what they are doing. Oucha Mbarbk did not buy his TV on credit -- he saved up over many months to scrape enough money together, just as the mother in India starts saving for her young daughter's wedding by buying a small piece of jewelry here and a stainless-steel bucket there.
We often see the world of the poor as a land of missed opportunities and wonder why they don't invest in what would really make their lives better. But the poor may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible and celebrating when occasion demands it.
We asked Oucha Mbarbk what he would do if he had more money. He said he would buy more food. Then we asked him what he would do if he had even more money. He said he would buy better-tasting food. We were starting to feel very bad for him and his family, when we noticed the TV and other high-tech gadgets. Why had he bought all these things if he felt the family did not have enough to eat? He laughed, and said, "Oh, but television is more important than food!"
Some flaws in this model but the gist is clear. The less a person earns, the harder it is to save enough for retirement. Making $30,000/yr and saving up $600-800,000 to maintain 30K/yr in retirement (excluding SS)...that's 20 + years of full income saved instead of spent. Fingers crossed on that 4% return with 3% inflation.
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Originally Posted by oldmunchkin
I didn't click your link, but if it has an employer-matching 401k contributions, not many making $30,000 have that perk. Do the math as a self-employed or those with multiple part time jobs, and assume SS is gone....
Using Lewk's prior metric of $50K as middle-class/middle income leaves huge gaping holes. Too many to ignore. Individual or couple, family with children, location and COL, type of job, etc. 
Almost everything we gave today was a carbohydrate or had added sugar or HFCS, or was processed: 