Top Causes of Poverty in the U.S.

Poverty in its most broad definition is a condition where people live without adequate amounts of basic necessities such as food, clothing, and housing. The U.S. Census describes that those living in poverty are individuals who have an income of less than $34 per day or a family of four who earns less than $69 per day. By that definition, there are around 38 million people in poverty in the United States. So, what are the main causes of poverty? There are no easy answers, and many of them are fiercely debated, but here are a few of the main causes.

Changes in the Labor Market

Many of the higher-paying manufacturing and labor jobs of the past have since been outsourced. Replacing them are service industry jobs with lower pay and no or little benefits. To an unskilled worker without a college degree this can be a scenario that lands them in poverty.

Tied into this are the instability of these lower-paying positions. Many of them can be seasonal in nature, and when economies slow down or head into a recession these jobs are often the first to be cut.

Education

Formal education beyond high school is becoming more expensive every year. The increase in tuition rates is far outpacing inflation and the price increases of other goods and services. This makes school out of reach for many people. Even with aid and grants, the costs are still overwhelming. Also, working in a low-level retail or service job the schedules are often not steady and are inflexible. This makes taking classes near impossible for many.

Housing

As with education, the cost of housing in America is on the rise. The average 2-bedroom apartment requires a wage of a little over $15 an hour. Many are well below this number forcing them into less than ideal housing in less than ideal areas. Homeownership also remains out of reach as often a minimum credit score and a substantial down payment are required.

Substance Abuse Issues

Drug and alcohol abuse can totally consume someone who is addicted to them, and often any money that they are able to earn will pay to sustain their habit. This causes lost opportunity to save or move up to a better living situation or career. In extreme cases, people can lose their jobs due to missing time or breaking rules of employment. Health problems and medical bills will also no doubt come into play at some point.

Obviously not all low wage earners have an addiction to substances, but the ones who do magnify an already stressful circumstance. It can be argued as to why low earners develop drug and alcohol addictions. Some of it could be attributed to where these people are forced to live. Less desirable areas often have issues with drugs and crime and will no doubt influence people who live in the middle of it.

Medical Expenses

We all know how expensive medical expenses can be. Even with insurance a medical procedure can still result in thousands of dollars out of pocket. To someone with no or little insurance, a medical procedure can spell financial ruin. A minimum-wage worker has no chance of paying back a six-figure medical bill.

An unfortunate side effect of this is that lower-paid workers will often avoid going to the doctor because they know that they won’t be able to afford it. This can leave people with untreated medical conditions which in the long run can make them sicker or even shorten their lifespan.

Final Thoughts

There are countless reasons why someone can be in poverty, and there are endless arguments of how to lift people out of poverty or prevent them from being in that situation in the first place. I gave 5 of the main reasons. What are your thoughts on this subject? Do you have any ideas to help end poverty? Can you think of any other reasons people end up poor? Comment below and share.

See Also:

How to NOT Protect Your Net Worth

How to Become Wealthy

Sandile Shezi – The Story of the South African Who Beat the Odds

How To Avoid Getting Into Medical Debt

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