The paradox of poverty.

Poverty is about a lack of money, but also about a lack of hope. People living in poverty often feel powerless to change their situation. They can feel isolated from their community. If you want to overcome poverty, you need a combination of financial planning, a positive attitude, and a willingness to ask for help.

The global economic system is built on the exploitation of the majority, mainly in the so called third world countries. The system needs cheap labourers to work as it does. Therefore, it does not allow too many poor to become wealthier simply because then they wouldn’t do the labour anymore. That would either mean reduced profits for the investors or increased prices up to the point where the normal people in the so called first world could not afford it anymore.

Stereotypes about how to get out of poverty have real consequences. Unfortunately, despite mountains of evidence, you may still have a hard time shaking the idea that the only thing standing between poor people and wealthy people is how hard they’ve worked and how much they wanted to succeed. Even more unfortunately, this belief – when held by voters and reinforced by lawmakers eager to please their constituents – has led to troubling and even dangerous policies that perpetuate the cycle of poverty.

Poverty is an intersectional issue We don’t often look at the ways that poverty intersects with the issues of marginalized groups, and instead, tend to treat it as a separate ailment. In reality, poverty is caused by much more than just a lack of jobs or expensive housing. For many communities, poverty is a by-product of other systemic issues. Poverty is a complex cycle of factors. One of the most important aspects of conceptualizing how poverty impacts people is to understand that it is more than just not having money. We often think of poverty as monetary status – someone doesn’t have money right now; thus, they are poor – rather than a cycle. Put more simply, poor people are just like not-poor people, except they have less money right now. But chronic poverty (the kind that impacts families and entire communities) is not the same as being broke, and it’s not the same as being low on funds before your parents deposit your rent money.

In economics, a poverty trap or cycle of poverty is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention.  It can persist across generations, and when applied to developing countries, is also known as a development trap. Families trapped in the cycle of poverty have few to no resources. There are many self-reinforcing disadvantages that make it virtually impossible for individuals to break the cycle. This occurs when poor people do not have the resources necessary to escape poverty, such as financial capital, education, or connections. Impoverished individuals do not have access to economic and social resources as a result of their poverty. This lack may increase their poverty. This could mean that the poor remain poor throughout their lives.

Controversial educational psychologist Ruby K. Payne, author of A Framework for Understanding Poverty, distinguishes between situational poverty, which can generally be traced to a specific incident within the lifetimes of the person or family members in poverty, and generational poverty, which is a cycle that passes from generation to generation, and goes on to argue that generational poverty has its own distinct culture and belief patterns

Factors maintaining personal poverty

Once poor, people can experience difficulty escaping poverty because many changes that would allow them to do so require money they don’t have, such as:

  • Education and retraining with new skills
  • Child care which would enable a single parent or second parent to work or take classes
  • Transportation to a distant job
  • Migration to an area with better economic opportunities
  • Starting a new business, which might require market research, technical assistance, and startup funding
  • Obtaining land for subsistence farming
  • Cure a health condition that prevents work, including diseases of poverty which don’t affect people outside of the “cycle of poverty”

This vicious cycle is harmful to those in poverty and those outside of it. Mainstream economic models think people are rational actors who weigh the costs and benefits of their options and choose the most advantageous path forward. If those in poverty know they’ll get no net benefit from working they’re incentivized to remain on government assistance. Of course, people works for many reasons including societal norms and personal values .but income is major incentive in pursuing new employment. When less people take on jobs the economy slows down keeping people in poverty and potentially pushing people in the cusp of  poverty over the edge. Some of them suggest feedback loop could be removed by eliminating government assistance programmes all together. But most agree this solution is neither realistic nor humane. So how can we redesign benefits in a way that doesn’t penalize people for working? Many countries have tried different ways to circumvent this problem. Some allow people to continue receiving benefits after finding a job. Others faze out benefits gradually as income increases. These policies still removes financial incentive to work but the risk for welfare trap is lower. Other Gov. provide benefits like education, Child care or medical care, equally across all their citizens. One proposed solution takes this idea of universal benefits even further. Universal basic income would provide a fixed benefit all members of society regardless of wealth or employment status this is the only known policy that removes welfare trap since earned wages would supplement benefit rather than replace it. In fact creating a stable income floor which no one can call basic income might prevent people from falling into poverty in the first place. Numerous economists, thinkers have championed this idea. Eighteenth century. But for now universal basic income remains largely hypothetical. Although it’s been tried in some places on a limited scale these local experiments don’t tell us much about how the policy will play out across the entire nation or a plant. Whatever strategy government’s pursuit, solving the welfare trap requires respecting people’s agency and autonomy. Only by empowering individuals to create long term change in their lives and communities can we begin to break the cycle of poverty.

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