Everyone loves rooting for the underdog and a rags-to-riches fairytale. Hundreds of books,
films, and stories are based on the concept of pulling oneself up, by one's metaphorical
bootstraps and succeeding. However, especially in America, this is far easier said than done.
This becomes the exception rather than the rule,
and families become trapped in an almost impossible-to-break cycle of poverty.
But why is that? Why is it so difficult for these low-income families to improve their situation?
Well, in today's video, we will be looking into nine reasons why this is so.
9. The Cost of Living is Rising, But the Minimum Wage Isn't
The federal minimum wage is currently $7.25 per hour, and it hasn't changed since 2009. So,
if you work 40 hours a week, you'll make $290 before taxes. You'll make $580 in
two weeks of full-time employment or a little under $14,000 a year before taxes. Meanwhile,
the expense of living has increased. It currently costs roughly $20,194 per year per person.
These statistics don't account for any unforeseen costs, and it's nearly difficult to live
comfortably without working a second, third, or side job to help pay the bills. Some states
are boosting the minimum wage, however, this may lead to an increase in the cost of living.
It's not much different in undeveloped countries. Wage work is the exception rather than the rule.
The demand for steady-paying jobs significantly outnumbers the supply.
Due to a lack of employment opportunities, many low-income parents turn to self-employment. They
labour hard but earn little since there are few options for them to earn enough to escape poverty.
These are classified as the "working poor" families because, at least one member of the
household works, yet the household still lives on less than $2 per person per day.
8. Building Credit is Next to Impossible I bet you don't give your credit score
much thought unless you rely on it. Did you know that 14% of Americans do not have a credit score?
Your credit score has an impact on your capacity to obtain loans,
housing, and even employment. However, when you're impoverished, you're likely to fall behind on your
obligations, which might harm your credit score. When you start falling back on your expenses,
late fines accumulate, making it more difficult to catch up. All of these minor
blemishes on your credit, might cause your score to plummet, even more, making it impossible to
begin developing a healthy credit portfolio. When you begin to actively develop credit,
you'll be astounded at how minor infractions can cause your score to plummet by dozens of points.
A missing bill here, a late payment there, and all your hard work is gone. Furthermore,
security deposits are required for secured credit lines or cards, and who has the funds to do so?
7. You Get Stuck in Debt Traps You will eventually run out of
money to pay your bills, no matter how good you are. Maybe life got in the way,
and you had to deal with an unexpected repair or medical bill. You've spent all of the money
you'd set aside with care, and you've gotten yourself into one of the most common debt traps.
Payday loans, debt consolidation scams, and emergency credit card use
can all have disastrous financial consequences. When you're worried, it's all too easy to make
hasty decisions that you'll come to regret later. So be wise when making these decisions.
6. Vehicles Are Expensive You'll need a car to commute to work,
school, run errands, or pick up your kids unless you live in a region with public transportation
and can afford it. Some of us live in rural areas where there's no public transportation,
or we prefer the convenience of a car. So, here's something to consider.
Upkeep on a vehicle costs around $8,000 per year,
not including insurance or unforeseen repair costs.
Furthermore, low-income families' vehicles are frequently in poor condition.
They wear out, have problems, and require more maintenance. If you can't afford a car,
you'll have to pick employment that is within walking distance, which is frequently
dead-end or low-paying entry-level jobs. Ok, So, I would like you to do something
for me. Pause this video right now. And do me a huge favour by hitting the “like” button.
If you did, you’re awesome, and thank you so much for your support.
5. Unexpected Expenses Seem Never-Ending Things like vehicle problems, getting sick,
or replacing an appliance can be minor annoyances if you have money.
You can replace it and go on with your life without any serious setbacks. What you may
consider minor inconveniences might be disastrous for someone living on or around the poverty line.
These unplanned expenses can mean the difference between someone who can afford food,
rent, or utility payments and not being able to.
They fall behind or fall further behind on their bills if they choose the expenses. If they pay
their expenses, they can survive without whatever is broken, such as a vehicle or an appliance.
4. You Don't Monitor Your Bank Account
It's easy to get stressed out and neglect a bill when you don't have a lot of money.
You could easily overdraw your account if you do so. Then you'll have to spend more to
get out of debt, which will put you even further behind. All of these tiny things pile up rapidly,
and no matter how hard you try to get out of debt, they can keep you broke.
It's nearly impossible to accumulate savings or emergency funds.
When you're trying to pay your expenses and deal with life,
it's difficult to save money. It may not be impossible, but it certainly appears to be.
Just when you think you've made it, a financial setback throws you back to square one.
If you get multiple financial setbacks in a row, you go even deeper into debt.
3. Missing out on a quality education A decent education can completely transform
a child's life, giving them a path out of poverty and a method to break the cycle for
future generations. As a result, education should be considered a fundamental right for all children
around the world. There are entire international organizations devoted to monitoring this.
Young girls and boys, on the other hand, are at risk of missing out on their education in many
parts of the world due to safety and sanitary concerns, as well as prevalent gender bias.
For example, did you know that 132 million girls are currently out of school.
In the world's least developed countries, one out of every five primary school-aged
children is out of school; little over half of the children reach Year Six, and only 36% of
students attend secondary education. So, if we haven't already made it clear, what's the link?
Poverty and education are deeply intertwined. Education may be free in many poor countries,
but school supplies, uniforms, and transportation costs aren't covered. These basic necessities
might be prohibitively expensive for a struggling family, preventing children from attending school.
And many children are forced to quit school early in order to assist their families financially.
2. Inherited and Generational Poverty The poverty cycle is defined as a series of
reasons or events that contribute to poverty and, once started, will continue to create impoverished
conditions until external intervention is made. A financial windfall, such as winning the lottery,
an inheritance from an estranged cousin, or any other fortunate receipt, could be that outside
intervention. It could also be the result of a change in circumstances, such as relocating
and starting a new job, earning a diploma that advances your career, or experiencing another
condition that results in increased earnings. It's worth noting, though, that the poverty
cycle frequently involves numerous generations. In general, for poverty to become generational, it
must go back at least three generations, because only then has enough time passed, to eliminate
any potential past relatives who may possess and can potentially transmit the intellectual,
social, and cultural capital required to stay out of or change their impoverished state.
Individuals living now must rely on other measures to break the cycle of poverty
because, they have no chance of inheriting anything. Other elements, however, are at work,
all of which necessitate some type of financial access.
1. Growing Up Poor All of the aforementioned elements
might have a significant impact on wealth growth and development. Poor families typically struggle
to meet even their most basic needs, unlike those born into a middle-class family with their parents
owning a home (property), having a consistent job, and having access to good food and clean water.
They are unlikely to possess a home, have access to nutritious food, or safe drinking water,
or provide a consistent salary to support a child while they attend public school.
As a result of this (together with additional hurdles like racism, ableism, or sexism),
these people are at a serious disadvantage in terms of earning money and breaking the cycle of
poverty. Furthermore, whereas some families may be able to provide financial security for their
children in the future by leaving an inheritance, many poor children do not have that security.
Furthermore, they are more prone to have an unhealthy relationship with money as adults.
Consider this: your parents' financial worries caused them much stress,
and you, the following generation of children, was born into poverty.
It's more likely that you'll internalize the stress that your parents projected.
You might even have a rudimentary understanding of how to balance a chequebook, budget their money,
and access social agencies that can assist them in their time of need. General, due to mental limits,
physical health concerns, limited experience with economics and education, and a lack of overall
social, intellectual, and cultural capital, growing up poor can create another generation
that is unable to break the cycle of poverty. But it's not all doom and gloom; the poverty
cycle can be interrupted. We understand how discouraging it can be to observe all of the
factors that contribute to the poverty cycle. It's a terrible cycle, so how can anyone break
free and triumph over it? Fortunately, there are some options, but they require time, attention,
and, in certain cases, greater financial risks that many poor people are willing to face.
The first, and most obvious, is education. Many people believe that education is the key to
escaping poverty. It is true that having a college diploma and a strong educational background can
help people advance in their careers by providing more employment options and higher income.
However, severe budget cuts, overworked and underpaid teachers, and overcrowded classrooms,
are all contributing to today's challenges in public education. Unfortunately, it is
government improvements that are most needed to increase educational possibilities for all people,
not just those who are poor. This brings us to a third, more obvious opportunity: public policy.
Changes in government are also required to provide more accessible avenues for poor people. Many
large cities criminalize homelessness, further stigmatizing those who are poor and erecting
new barriers, not to mention costing the city, those arrested, and the local community thousands
of dollars in taxes and incarceration costs. When it comes to making budget cuts, many local
governments turn to the various social programs designed to assist those in poverty first.
Finally, having a strong and supportive network or community of people is one of the most crucial
parts, and perhaps the most ignored. If you find yourself in a difficult circumstance,
having a support system can help you get through it, whether it's by offering emotional
or mental support, or by providing additional financial assistance to help you pay your bills.
Community and our connection to one another are fundamental human needs, just as food, shelter,
and clean water are. If you're lucky, you might be able to escape the cycle of poverty over time,
and finally, to repay people who aided you when you were in need. Poverty can be a vicious cycle,
and numerous factors influence one's financial situation. Unfortunately, many social ideas and
government regulations may be working against you, but with time, effort, the aid of social agencies
and your community, and education, you can lift yourself, and future generations, out of poverty.
Well, thank you all so much for watching. I hope you have enjoyed and found value in this video.
If you did, go ahead and give it a thumbs-up, and if you are new here, welcome and subscribe
for more content like this. With that said, have a good day, and I'll see you all in the next one.