Poverty and mental health are linked, and poverty reduces cognition

'There is a direct link between poverty and mental health problems, and poverty underlies wider health inequalities,' argued Lee Nifton, director of the Health Policy Centre at the University of Strathclyde in Scotland, and Graig Inglis, a psychology lecturer at the University of the West of Scotland.

Poverty and mental health: policy, practice and research implications - PMC
https://pmc.ncbi.nlm.nih.gov/articles/PMC7525587/

Poverty is also caused by job loss and the breakdown of social relationships, which can contribute to poor mental health in childhood and adulthood through social stress and trauma.

According to the paper, people living in the most deprived areas report significantly higher levels of mental distress than those in wealthier areas. A 2018 survey found that 23% of men and 26% of women living in the most deprived areas of Scotland reported levels of mental distress that could indicate a mental disorder, compared with only 12% of men and 16% of women in the most affluent areas. This disparity is also reflected in suicide rates, with Scottish suicide statistics showing that suicides are three times more likely to occur in deprived areas than in wealthier areas.

For example, the Scottish city of Glasgow was a center of shipbuilding and heavy industry, but the rapid deindustrialization policy implemented by the British government in the 1980s resulted in many jobs being lost. Furthermore, postwar urban renewal forced many residents to relocate to new housing developments outside the city, disrupting community ties. This urban change affected living conditions and social connections, with adverse effects on residents' well-being and health.

Glasgow has a high proportion of income poverty, working-age adults receiving unemployment benefits, and children living in low-income families, and its residents' mental health is worse than the Scottish average. 'Glasgow's excess mortality is characterised by 'deaths of despair', such as suicide and alcohol- and drug-related deaths,' Nifton and Inglis argue.

The findings are similar to those of a study presented by historian Rutger Bregman at a TED talk in 2017.

Rutger Bregman: Poverty is not a 'lack of character' but a 'lack of money' | TED Talk
https://www.ted.com/talks/rutger_bregman_poverty_isn_t_a_lack_of_character_it_s_a_lack_of_cash/

In his talk titled 'Poverty is Not a Lack of Character, It's a Lack of Money,' Bregman noted the surprising impact that poverty has on people's cognitive abilities.

A study conducted by American psychologists on sugarcane farmers in India found that there was a big difference in the IQ test results of the same people during the economically difficult period before the harvest and the prosperous period after the harvest. The IQ of those in economically difficult periods was about 14 points lower than that of those after the harvest, which is a decline in cognitive ability comparable to the effects of not sleeping a night or of alcoholism.

Bregman explains this phenomenon with a theory called the 'scarcity mentality.' When people feel they lack something, whether it's time, money, or food, their behavioral patterns change and they lose their long-term perspective. This is similar to how a computer running many heavy programs simultaneously slows down and eventually freezes. In other words, poor people make poor decisions not because they're stupid, but because they live in a context of poverty, Bregman argues.

As a direct solution, Bregman proposes a basic income, a regular payment to cover basic needs such as food, housing, and education. In fact, a basic income experiment conducted in Canada has shown that residents' mental health has improved.

Survey results show that people don't quit their jobs and their health improves even if they receive basic income - GIGAZINE

In their conclusion, Nifton and Inglis propose three approaches that psychiatry should take to address the issues of poverty and mental health:

First, to revitalize social psychiatry and influence public policy. In recent years, social psychiatry has declined in the UK and the US, and has shifted attention away from the social causes and consequences of mental health problems. Now, they argue, is the time to renew social psychiatry in a time of growing social inequality.

Second, address intersectional stigma and disadvantage. Intersectional stigma refers to the phenomenon in which discrimination, prejudice, and social identities held by individuals overlap and influence each other, resulting in more complex and significant discrimination and disadvantage. They pointed out that there is a need for research and measures on 'intersectional stigma,' in which discrimination and prejudice against mental illness intersect with multiple social identities such as ethnicity, gender, sexuality, and poverty, doubling the impact.

Third, embed poverty-sensitive practice and service delivery. This includes providing income maximization plans as a key aspect of care, such as assistance with benefits access, debt management, access to local child care, and employment support, and making major investments in mental health services targeted to low-income areas.

Nifton and Inglis argue that poverty needs to be seen as a structural social problem and its root causes addressed, rather than simply treated as an individual problem or lack of knowledge.