Mining the Gold at the Bottom Of the Pyramid

Screen Shot 2013-09-17 at 12.35.08 AMThe “bottom of the pyramid” is the term used to describe the large portion of the population that has low incomes.   Businesses have traditionally targeted the upper parts of the income pyramid, segments with fewer people but more purchasing power.  Over the last decade hundreds of ventures have been created in the developing world based to do well by doing good — having a profitable business that provides low income people with low-priced products and often benefits them in the  manufacturing and distribution of the goods as well.  More recently, strictly profit-focused businesses have also increased sales and profits in the U.S. by tuning their products to the newly poor (e.g. online pawn shops).  But there is another way to leverage the bottom of the pyramid. Instead of mining it for profits we can mine it for big social and economic gains.

Here is just one example of how everyone can win by investing in poor mothers’ parenting skills .

Wise mothers instill determination and confidence in their children.  Those children are more likely to finish high school.

How can we quantify the value of that?  Well, twenty five percent of graduation-age teens do not graduate. That is 1 million teens a year.  The research shows that people who do not get a high school diploma:

(The differences are even more dramatic if you compare drop-outs with people who go on to get any further education.)

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If better parenting increased the graduation rate by just 1 point (from 75% to 76%), an additional 40,000 students would graduate each year.  Even if those young people got no further education, everyone wins.

  • An additional 55,000 people would be employed over the next ten years
  • There would be 7500 fewer people in jails/prisons over the next ten years
  • Those additional graduates would make $11.7 Billion in increased net fiscal contributions to the country over their lifetimes through significant increased tax income and lower government service costs
  • Countless other social benefits.  For example:
    • Unemployment and incarceration and have major impacts on mental health and the well-being of family members
    • Young unmarried mothers often struggle to take care of themselves and their children.

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This is just one example of how wise poor mothers can make the country stronger.  As you can see, if we recognize the women who are already doing this and invest in helping other women do the same, financial returns and benefits worth more than gold will feed back up and throughout  the national pyramid.

Categories: All Posts, For Social Service Organizations, Poverty Data

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