From Poverty to Productivity

Across the world, economists, sociologists and policymakers have long debated whether providing people with an unconditional basic income could help lift them out of poverty. Despite numerous pilot projects, there are relatively few long-term studies showing the large-scale social and health impacts of such measures. One striking exception, highlighted by the Dutch historian Rutger Bregman, provides rare empirical evidence of how a sudden, guaranteed flow of money can transform an entire community — not just economically, but psychologically and socially.

In 1997, in the state of North Carolina, the Eastern Band of Cherokee people opened the Harrah’s Cherokee Casino Resort. By 2010, the casino’s annual revenues had reached around 400 million USD, where they have remained relatively stable ever since. The income was used to build a new school, hospital and fire station — but the most significant portion of the profits went directly to the tribe’s members, about 8,000 in total.

The Findings: Money Really Did Change Everything

By 2001, the funds from the casino already accounted for roughly 25–33 per cent of household income for many families. These payments acted, in effect, as an unconditional basic income.

What made this case extraordinary was that, purely by coincidence, a research group led by psychiatrist Jane Costello at Duke University had been tracking the mental health of young people in the area since 1991. This provided a unique opportunity to compare the same community before and after the introduction of this new source of income.

Costello’s long-term data revealed that children who had grown up in poverty were far more likely to suffer from behavioural problems than their better-off peers. Yet after the casino opened — and the Cherokee families’ financial situation improved — behavioural problems among children lifted out of poverty declined by up to 40 per cent, reaching levels comparable to those of children from non-poor households.

The benefits went beyond behaviour. Youth crime, alcohol consumption and drug use all decreased, while school performance improved significantly. Ten years later, researchers found that the earlier a child had been lifted out of poverty, the better their mental health as a teenager.

Bregman (2018) uses this case to make a clear point: poverty is not caused by laziness, stupidity or lack of discipline. It is caused by not having enough money. When poor families finally have the financial means to meet their basic needs, they frequently become more productive citizens and better parents.

In his words, “Poor people don’t make stupid decisions because they are stupid, but because they live in a context where anyone would make stupid decisions.” Scarcity — whether of time or money — narrows focus and drains cognitive resources, leading to short-sighted, survival-driven choices. And as Bregman puts it poignantly:

“There is one crucial difference between the busy and the poor: you can take a holiday from busyness, but you can’t take a holiday from poverty.”

How Poverty Shapes the Developing Brain

The deeper roots of these findings lie in how poverty and stress affect brain development and emotional regulation. The Canadian physician and trauma expert Gábor Maté (2018) explains how adverse childhood experiences — known as ACE scores — are far more common among children raised in poverty. Such children face a higher risk of being exposed to violence or neglect, or of witnessing domestic conflict in their homes and neighbourhoods.

Chronic stress, insecurity and emotional unavailability of caregivers can leave lasting marks on the developing brain. The orbitofrontal cortex — located behind the eyes and crucial for interpreting non-verbal emotional cues such as tone, facial expressions and pupil size — plays a vital role in social bonding and empathy. If parents are emotionally detached due to stress, trauma or substance use, this brain region may develop abnormally.

Maté describes how infants depend on minute non-verbal signals — changes in the caregiver’s pupils or micro-expressions — to determine whether they are safe and loved. Smiling faces and dilated pupils signal joy and security, whereas flat or constricted expressions convey threat or absence. These signals shape how a child’s emotional circuits wire themselves for life.

When children grow up surrounded by tension or neglect, they may turn instead to peers for validation. Yet peer-based attachment, as Maté notes, often fosters riskier behaviour: substance use, early pregnancy, and susceptibility to peer pressure. Such patterns are not signs of inherent cruelty or weakness, but rather of emotional immaturity born of unmet attachment needs.

Not Just a Poverty Problem: The Role of Emotional Availability

Interestingly, these developmental challenges are not confined to low-income families. Children from wealthy but emotionally absent households often face similar struggles. Parents who are chronically busy or glued to their smartphones may be physically present yet emotionally unavailable. The result can be comparable levels of stress and insecurity in their children.

Thus, whether a parent is financially poor or simply time-poor, the emotional outcome for the child can be strikingly similar. In both cases, high ACE scores predict poorer mental and physical health, lower educational attainment, and reduced social mobility.

While Finland is often praised for its high social mobility, countries like the United States show a much stronger intergenerational persistence of poverty. In rigidly stratified societies, the emotional and economic consequences of childhood disadvantage are far harder to escape.

Towards a More Humane Future: Basic Income and the AI Revolution

As artificial intelligence reshapes industries and redefines the meaning of work, society faces a profound question: how do we ensure everyone has the means — and the mental space — to live well?

If parents could earn their income doing the work they truly value, rather than chasing pay cheques for survival, they would likely become more productive, more fulfilled, and more emotionally attuned to their children. In turn, those children would grow into healthier, happier adults, capable of sustaining positive cycles of wellbeing and productivity.

Such an outcome would not only enhance individual happiness but would also reduce public expenditure on health care, policing and welfare. Investing in people’s emotional and economic stability yields returns that compound across generations. A universal basic income (UBI), far from being utopian, could therefore represent one of the wisest and most humane investments a modern society could make.

Conclusion

The story of the Eastern Band of Cherokee people and the Harrah’s Cherokee Casino stands as powerful evidence that unconditional income can transform lives — not through moral exhortation, but through simple material security. Poverty, as Bregman reminds us, is not a character flaw; it is a cash-flow problem. And as Maté shows, the effects of that scarcity extend deep into the wiring of the human brain. When financial stress eases, parents can connect, children can thrive, and communities can flourish. In an age of automation and abundance, perhaps the greatest challenge is no longer how to produce wealth — but how to distribute it in ways that allow everyone the freedom to be fully human.

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References

Bregman, R. (2018). Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek. Bloomsbury.
Maté, G. (2018). In the Realm of Hungry Ghosts: Close Encounters with Addiction. North Atlantic Books.