Rags to riches stories get circulated so much to empower and inspire people who have little to no status within the society that you’ll lose count if you try gauging the number of films and books that tell a story of how to pull a person up by their bootstrap.
However, climbing up the ladder of success in the United States isn’t as easy as fictional stories convey. In America, low-income families get trapped in poverty like herding cats. Regardless of the means that poverty is measured, the United States is at its peak when it comes to inequality and poverty. Whether in poverty among working-age adults, poverty among single-parent families, or children’s rates of poverty, the poverty story is almost just the same.
By a great amount, the U.S. has the highest poverty rates in the developed world. The extent of the United States wealth and income inequality also tends to be underserved in comparison with other industrialized counties. But despite being among the richest countries in the world, why is it so hard for low-income American families to improve their situation?
The rising cost of living and the stagnant minimum wage
Since 2009, the Federal minimum wage in the United States has not changed and remained by $7.25. Hence, even if you dedicate 40 hours to work every week, you’ll only receive $290 before taxes. For two weeks, you’ll receive about $580 in two weeks of employment and around $14,000 a year before hefty charges of taxes.
Despite this doubtlessly low income, the expense of living is continuously increasing and is currently about $20,194 on average per person annually. In addition, there are also unforeseen events that might require some cash which can make the mentioned living cost even higher. Without having to work multiple jobs, it will be pretty hard to pay bills. Other states are facilitating the increase of minimum wage, pushing the increase of cost of living more.
In underdeveloped countries, the job demands significantly exceed supply, and due to the scarcity of employment opportunities, the low-income parents pivot into self-employment. Yet, despite the back-breaking work they do, they still earn very little to support themselves. Such families are regarded as “working poor” since there’s a working figure in the family, but they still earn even less than the bare minimum, living for $2 or less per person every day.
Establishing credit becomes forlorn
Credit scores aren’t given much thought unless people rely on them. In fact, about 14% of American citizens haven’t established a credit score. Not many are aware, but credit scores help in acquiring the capacity to get a loan, employment, and even housing. However, being penniless makes it hard to build good credit.
When you use up too much credit, and your expenses fall back, it will be very hard for you to catch up because of the accumulating penalties. Even minor gashes on your credit might cause your score to plunge, making it relatively hard to acquire a healthy credit portfolio.
Debt traps chains people
No matter how good you are in budgeting and handling your finances, you’ll eventually run out of money if you encounter unexpected events that require you to pay a hefty amount of money—for instance, unforeseen medical expenses or repairs.
Sometimes, even after all the sacrifice and strict self-discipline just to save up a lot of money, people still end up in poverty by falling into debt consolidation scams, emergency credit card use, and payday loans.
Vehicles are pretty costly
In regions rich in public transportation, a private car isn’t much needed to get into school, work, and run errands every day. However, if you live in a rural area where there’s not much public transportation to hop into, the convenience that owning vehicles bring is much more favorable.
However, the upkeep cost of owning a vehicle is about $8,000 annually, not to mention insurance or other unforeseen car repair costs. The cost of owning a car is too much for low-income families, so most poor households have to pick low-paying entry-level employment close to their homes.
Never-ending unforeseen expenses
Medical expenses, vehicles problems, or appliance repairs aren’t much of an issue if you have money to spend. It’s easy to just pay for them since it won’t really hurt your pocket if you have stockpile cash on your bank.
Nevertheless, this minor inconvenience for some is catastrophic for people already living in the line of poverty. The funds that could’ve been allotted for food, utility payments, and other necessity gets overshadowed by unexpected expenditures. Paying for unforeseen expenses causes low-income families to fall behind their conditions, while not paying for unforeseen costs forces them to survive without the thing that needs repair.
Missing out on quality education
Education possesses the power to transform people from nothing into something. With quality educations, many people will be able to break the cycle of poverty and open up a life full of good opportunities for future generations. This is one of the reasons why education should be a fundamental right of children all over the globe.
Unfortunately, a lot of young children are missing out on the chances of having quality education because of sanitary and safety concerns. Out of five primary-school-aged children, one is out of school in undeveloped countries, and about 36% attends school for secondary education.
Generational and inherited poverty
Generational poverty is a relentless cycle where poverty passes down from one generation to the next. This indicates that poor parents will have impoverished children. Children who were raised in poverty have more chances to fall into the poverty line later in life, and support for these underprivileged children isn’t enough to improve generational poverty.
To address the generational transmission of poverty, societal norms that contribute to the nasty cycle should be acknowledged. By counteracting the suppressive benchmarks with refined policies, children will be able to flee from poverty.
The cycle of poverty can be interrupted through some options that require some time, attention, and greater financial risk. The first and foremost key to breaking poverty is education. With a strong educational background and diploma, people can have more employment options and higher income to advance in their careers.
Yet, overworked, and underpaid teachers contribute greatly to today’s challenges in public education. Political movements are much needed to increase educational possibilities for everyone. To provide more accessible avenues for people, changes in the government must be undertaken.
Furthermore, a strong and supportive network of people and community plays a major role in beating poverty. Sadly, this area often tends to be overlooked. Support and connection are among the fundamental needs of humans, just as shelter, food, and clean water are.