Poverty influences our society more now than ever before. Covid exposed the many gaps in our culture and institutions and continues to impact marginalized and vulnerable populations throughout the country. But what is the "Cycle of Poverty"? The month of June we will be featuring "shorts" written by and for sex workers from around the country about this very complicated and difficult subject and we hope it will be informative but will also inspire our readers take action on initiatives that will impact those that need it most.
The cycle of poverty, or "poverty trap" as it is also known in sociology and economics, is a self-reinforcing mechanism that makes it difficult for people to get out of poverty.
There are several types of individual poverty, including generational, which usually means at least a couple successive generations lack financial capital and resources; or situational poverty which can occur as a result of job loss, economic recession, natural disaster, illness, etc.
Generational poverty happens when one does not have the financial resources necessary to get out of poverty and is characterized also by a lack of resources, which can cause poor educational opportunities, which may lead to a lack of profitable job opportunities, leading to a lack of affordable housing, access to healthy food options, and transportation.
All in and of themselves, these things further reinforce poverty as lack of housing leads to being a victim of violence and physical/psychological trauma, and lack of healthy food (sometimes known as “food deserts”) leads to hypertension, high cholesterol and obesity.
Additionally, a lack of transportation means people aren’t able to get to job interviews or to grocery stores.
Other examples of things that sustain the poverty cycle are overdraft fees and checking account minimums that result in penalty fees if not consistently kept. If someone does not have good credit, which most people can accumulate only through access to generational financial capital and the ability to consistently pay credit card bills, they will be given a high-interest credit card. Oftentimes, if someone does not have a job or consistent income, a credit card (if approved) may be the only way they can pay for essentials such as food, clothes, medicine, etc. With high interest cards, it’s extremely easy to miss a payment or two and find the principal has nearly doubled.
People living in poverty are often put in a position where they have to roll the dice and take financial risks that wealthier people do not have to because they can pay for something outright.
Other ways that people in poverty have challenges breaking out of the trap is compounded penalties and late fees for bills that aren’t able to be paid, which can then be sent to collections, inevitably dinging someone’s credit rating. This, in turn, affects their ability to ever buy a house or land or accumulate any assets, in and of itself reinforcing someone’s ability to ever, say, get a loan to start a small business.
The cycle of poverty is both a generational cycle and an acute set of cycles in an individual’s life that due to external systems, only serves to reinforce itself, contributing to a family’s inability to get out of poverty over generations.
Next week we will continue with a discussion on generational poverty and racism, so stay tuned for our multiple part series on the cycle of poverty!