January is Poverty in America Awareness Month
- As January is National Poverty in America Awareness Month, now is an excellent time to consider the causes and effects of poverty.
- Poverty is a complex issue. Many factors cause poverty.
- There are no simple, quick-fix solutions. However, you can take steps to improve your finances and help people in your community deal with poverty.
In 2019, the official poverty rate in the U.S. was 10.5%, which was the lowest rate since estimates began in 1959. However, that’s still a staggering 34 million people living below the poverty line, and other estimates put the number much higher. Additionally, according to a recent report, these numbers jumped to at least 11.7% in 2020, thanks in large part to the coronavirus pandemic.
While some may only experience poverty briefly, others remain trapped by it for a lifetime, with generations weighed down by its persistence, even in America. So, what are we to do? As January is National Poverty in America Awareness Month, now is a good time to consider the causes and effects of poverty, as well as ask what we can do to fight against it — both for ourselves and for others.
Causes of poverty in America
To try and fit a thorough discussion of the causes of poverty into a few paragraphs would be a fool’s errand. This is not a simple issue, and there are many opinions and studies on the matter. Some researchers argue that structural causes, such as the economy or income inequality, are to blame and must be addressed through government programs and initiatives. Others contend that behavioral and cultural factors related to education, employment, and family are more causal, and that some government programs actually enable poverty. Many see it as a complex combination of structural, behavioral, and cultural influences, and that both personal choice and government intervention play crucial roles.
In addition to deep root causes, we should highlight key factors that the researchers linked above say tend to cause, perpetuate, or correlate to poverty, such as:
Education: Frequent school absences and failure to finish high school are caused by, and perpetuate, poverty.
Crime: Greater exposure to crime and drug use are believed to raise the probability of poverty.
Marriage: Poverty is much more common in single family households.
Health: Serious health issues, mental illness, and a lack of health insurance can all contribute to poverty.
Employment: Poor economic conditions and the inability or failure to obtain employment are often precursors to, and perpetuators of, poverty.
Of course, exhaustive research has and will continue to be done on these and other causes of extreme hardship in America. But having a basic understanding of them puts us each in a better position to help ourselves and others escape or avoid poverty going forward.
Who is most affected?
Studies show that poverty disproportionately affects certain demographics. A recent study found that while almost half of people in poverty were non-Hispanic whites, minority races and ethnicities were overrepresented relative to their numbers in the general population. For example, in 2018, Hispanics comprised 18.5% of the total population, but 27.6% of those in poverty. Similarly, Blacks made up 12.3% of the overall population, but 21.9% of the population in poverty.
Additionally, a majority of people in poverty are women, and almost one-third are children. Women are more likely to head single-parent households and their earnings are, on average, less than men’s. With regard to age, working-age adults comprise the largest group, and most of those living in poverty do not have full- or even part-time jobs. With these numbers, it’s easy to see why many efforts to address poverty are focused on minorities, at-risk youth, single mothers, and the unemployed.
How to fight poverty
It’s understandable to feel overwhelmed by such a complex, pervasive problem. There are no simple, quick-fix solutions, but each of us can make decisions in our daily lives that might affect outcomes for ourselves and those close to us. We can start by prioritizing education, efforts to become and stay employed, and individual and community work giving youth alternatives to drugs and crime.
At the individual level, we can also do everything in our power to improve and maintain our own financial literacy and well-being, including:
Making a budget
Building up an emergency fund
Avoiding excessive debt
Building up savings, including for retirement
And on a larger scale, whether we’re in great financial shape or still struggling, reaching out to help others is always a good thing to do. Some options for contributing to the fight against poverty in America include:
Donating to or volunteering for local charities, like soup kitchens, food banks, shelters, after school programs, etc.
Promoting local and national policies and initiatives aimed at helping the poor and minorities, and fighting against discriminatory practices.
Donating to national charities who focus on poverty solutions.
Teaching others how to improve their money management skills.
These things may seem like small contributions that would hardly make a dent in such a colossal problem. But like many great movements, it starts with individuals in their communities. As minister and abolitionist Edward Hale wrote, “I am only one, but I am one. I cannot do everything, but I can do something. And I will not let what I cannot do interfere with what I can do.”
Stay informed and grow your financial literacy
Understanding and combatting poverty in America is one of those noble endeavors that takes time, effort, and an open mind. But even seemingly small actions can have a large ripple effect. Come back to our blog for more information and developing stories related to financial skills, literacy, debt management, and how to move yourself and your family toward a better financial future.
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