Have you ever had to replace something that you need as cheaply as possible? Has an emergency ever forced you to give something up on your monthly budget? What if that was the reality of every purchasing decision you make? You would be approaching the daily struggle of being poor.
Understanding poverty means understanding the poverty cycle on both a daily and generational level. Being poor isn’t about living with less money. Good financial planning can’t fix poverty.
“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes ‘Boots’ theory of socioeconomic unfairness.”
— Terry Pratchett, “Men At Arms”
Being Poor Is Expensive
When every dollar counts, financial services can be far too expensive to maintain. Bank and ATM fees force many poor families to seek other options. Without good credit or bank accounts, many are forced to rely on pre-paid debit cards and payday loans (which have interest rates upward of 300 percent). Poverty is often more expensive due to inflation, which disproportionately affects those in poverty as prices for basic necessities inflate faster than other goods.
Living on assistance to survive also means not being able to put money away for emergencies. A cheap car is more likely to break down, and when it does, someone who lives paycheck to paycheck might have to choose between repairs, food, rent, or childcare. If the car doesn’t get repaired, the household loses the ability to get to work. They are then unable to find cheaper grocery stores or the right ATMs, especially in rural areas with poor public transit.
There’s also the distressing fact that, for people living on assistance, especially with children, getting a job is more expensive than living on assistance. Working for minimum wage often won’t cover everything that assistance helps with, such as childcare. In some cases, a family simply wouldn’t survive if the adult in the house took enough work to be removed from assistance programs.
Members of vulnerable and poor communities are unlikely to have access to healthcare, dental care, education, quality food, and other necessities. Health problems exacerbate financial issues, and the long-term effects of not being able to afford preventative healthcare can damage the prospects of a family trying to clamber out of the poverty cycle.
Health insurance is one major issue in poor families. This is another case in which being poor is more expensive. Not spending money on health insurance opens people up to disastrous medical expenses. The Affordable Care Act has done a great deal to improve insurance coverage among lower income communities, including programs that give people federal financial aid for insurance plans. But for some families, “affordable” still isn’t manageable. Some still can’t afford marketplace premiums. That’s all before we even get into the limitations of “networks” and the lack of nearby services.
Even with coverage, there is the elephant of deductibles in the room, which prevent many people from seeking health care even if they are covered. Choosing not to be covered, because you don’t want to spend money on a plan with deductibles you can’t afford anyway, can also get you hit by Affordable Care Act tax penalties. Many would qualify for exemptions, but filing for them is an added complication during tax season, and hiring someone to do it for you can be prohibitively expensive. The ACA was a step in the right direction, but for many families health insurance does not necessarily mean health care access. There’s a big difference. Let’s not even talk about the repeal effort, or this post is going way off the rails.
Lack of access to education is another factor that keeps a family in poverty across generations. The wages of family members stagnate, and they can’t keep up when pitted against inflation, medical costs and debt. The more expensive education becomes, the harder it is to gain job skills that have a higher demand, which in turn effects job security for even those poor who do work. Lack of education puts people at the front of the line when lay-offs come around.
This process radiates out to consume entire communities, often if they are located far away from health and education services or potential employment. They become isolated, physically and financially from services and networks that can support them.
How Can the Cycle be Broken?
Ending poverty is going to require a concerted effort from the government, nonprofits, as well as expanding our understanding of the role of isolation in poverty.
The traditional approach to poverty has been hierarchical, like Maslow’s Hierarchy of Needs. Social assistance has focused on helping people maintain the bottom rung — housing, food, and other basic biological needs. When economically disadvantaged people can do this themselves, the assistance stops and they’re expected to climb the rest of the way to the top on their own, because being able to maintain one rung on the hierarchy is assumed to naturally lead upward. This would all be very well if it was, well, correct. Little to no evidence has been found to support this hierarchical structure to human needs. Human society is a great deal more complicated than that, and all of these needs have one connecting theme: community. As it happens, isolation, whether physical or emotional, is one of the biggest factors driving poverty.
Any strategy to reduce poverty needs to focus on bringing poor communities “in from the cold” in the figurative, as well as the literal sense. Larger communities have access to better, cheaper resources. Even in big cities, impoverished communities live in isolation, either in “food deserts” or in sequestered housing projects. In many ways, initiatives to create affordable housing further isolate poor communities and clump them together, removing them from the economic power of the rest of the city.
In essence, many current approaches to poverty do things the wrong way around. They begin by granting beneficiaries access to community resources through child support and food stamps, and then gradually take them away as the beneficiary gains work. This perpetrates the cycle, as many fall back into the trap of isolation. Instead, programs need to focus on increasing access to community resources in ways that take financial pressure off, but don’t trap people into receiving just enough to survive, and feeling unable to progress for fear of losing access. Services like healthcare, education, targeted infrastructure and public transit projects, incentives for companies to bring jobs, better jobs, to low-income areas.
The story of pulling one’s self out from the cycle of poverty through hard work and dedication is one of the most American anecdotes. But for many poor communities, as hardworking and dedicated as they are, isolation from the larger American community makes fulfilling the story impossible. Targeted solutions that seek to end the economic and physical isolation of poor communities and families might give people just enough leverage to make that story their own. But first, we need to stop making being poor more expensive, and we need to realize that lack of access is often what makes the difference between living comfortably and living on the edge.
Avery Phillips is a magical unicorn of a human being who loves everything human. She’s a fiery socialist and would love to talk about it. Tweet her @A_taylorian or comment below.