Why is There so Much Poverty?

With the thought of poverty, several issues come to mind: money, crime, health and welfare. These are the top four concerns when responding to the issue of poverty in our nation as a whole. Each presents problems and solutions, but addressing them in the face of government is difficult; for every good point or action, there is a negative reaction affecting both pro and con supporters.

The most prevalent means of measuring poverty have been, and continue to be, bench marks related to money. Poverty lines are used to measure absolute and relative poverty in terms of incomes and affordability. Such measurements are relatively easy to make and quantify. However, lack of money is more a symptom of poverty rather than its cause. In most cases the poor are not without some income. What they lack is the ability to accumulate assets, which is a key ingredient to the creation of wealth and breaking the cycle of poverty (6).

In addition to low earnings, the prime reason for the inability to increase funds and thus increase security of income is that profits or potential savings are often pocketed by moneylenders who charge lofty interest rates, by formal and informal regulatory and enforcement agents/organizations who demand bribes or extort protection money, and by middlemen or other stronger business partners who exploit the poor because they lack market information or the ability to use the market information to increase their own incomes. Another key that prevents the poor from raising capital is that they are often forced to purchase public goods and services at a much higher cost that are readily available to other groups in society at market or below market prices(6).

Some effects of poverty are not easily understood, and are therefore sometimes mistakenly considered the cause of poverty. For example, studies link poverty to crime. In many cases, most crime leads to poverty and not the other way around. Crime indirectly increases poverty in many ways, even simple burglary or mugging. A high crime rate drives businesses out of neighborhoods. This eliminates both availability of products and services, as well as sources of jobs. Further, those who do stay find it necessary to charge higher prices to compensate for losses due to thievery, and hig...

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...than a poverty-level income, and as a last resort, government should provide temporary jobs to unemployed workers (4, 5).

Their critics say that guaranteeing jobs for all Americans or providing public sector jobs for those who cannot find employment elsewhere, would be prohibitively expensive, and that substantially raising the minimum wage would be counterproductive as many employers would be forced to lay off workers. They also fight the thought that the best way to reduce poverty hinges on something that government cannot provide: motivation and hard work. But in our free market economy, government should not be the employer of last resort. We need less government, not more of it, and we certainly do not want millions of Americans in makeshift government jobs (4).

In the United States alone, 45% of all Americans are considered to be living in poverty, and with that statistic come many causes and effects. We have solutions to these problems, but utilizing them may not be easy or quick. It just takes a strong government and even stronger support from the population to tailor our approach to fit the needs of our society.