poverty as a social issue essay

Poverty as a Social Problem

This free essay on poverty as a social problem looks at a grave problem that exists in America and in the world. It provides reasons why people are experiencing poverty as well as some solutions.

Introduction

Literature review, poverty as a social problem: reflection, solutions to poverty as a social problem, social problems: poverty essay conclusion.

Society often perceives poverty as an individualistic issue, believing it is a consequence of bad decisions. That is, people themselves are responsible for the level of income and financial stability of households. However, the subject is much more complex as poverty also results from inadequate structuring of the country’s economy, distribution of goods, and other sectors, making it a social problem. Failure to build a system that would help citizens become financially stable results in various issues associated with crime levels, education, health care, and others. The government is the one that should work to solve them.

There are numerous studies and publications researching the reasons behind poverty. E. Royce (2019) tries to explain in his book how the existing economic system in the United States prevents citizens from reaching an adequate level of income and financial support. The main idea is that the current structure of how goods are distributed across the population does not benefit a large portion of it. Few rich individuals grow wealthier yearly, while millions struggle to find a stable job with a minimum wage.

The inequality created by the government’s failure to build a fair economic system results in a range of social problems. The idea of a poverty line as a measure of well-being has not changed much since the 1960s despite the obvious changes in consumption patterns (Royce, 2019). It is calculated as the sum required for purchasing essential items for living, which does not include modern commodities such as computers, mobile phones, and others.

As a result, low-income people become socially isolated since they do not possess things essential for the modern lifestyle, like social networks. They may be excluded from a community for not corresponding with the public image of active individuals. These mechanisms, combined with the dominant idea of the necessity to achieve success, push poor people away from social life. This factor comes together with the inability to receive proper health care and education services.

The literature also contains studies on how poverty affects the behavior of individuals. For instance, children exposed to life in a low-income household are more likely to develop adverse reactions in the future due to strain resulting from the inability to receive wished items (McFarland, 2017). When placed in a densely populated neighborhood, they may later cause legal problems, creating delinquent areas.

It is easy to predict the social issues that poor people face daily. They cannot receive proper health care services as they are usually costly. Moreover, many commercial organizations offering low-paid jobs traditionally based on customer service may prevent employees from taking sick leaves. As a result, people suffer from various illnesses without attending a hospital, fearing to lose a work placement.

Another issue is the inability of poor people to send their children to high-performing schools, which are expensive as a rule. This factor causes youth to continue living with the same income level as their parents since the absence of quality education prevents them from receiving a decent job. Moreover, children who cannot acquire goods valued by their peers are likely to adopt criminal behavior to achieve success since community norms and morals do not help this purpose.

Summarizing all the above said, it becomes evident that changing the existing economic structure on the governmental level is the most appropriate solution to the issue of poverty. There should be a strategy covering all the aspects affected by this problem. The goal is to increase the level of financial support for disadvantaged groups and give more opportunities for people to grow their income.

Firstly, the social sector should be transformed to meet the needs of all citizens. The government should increase the financing of schools so that all children will have access to quality education. Also, various programs should engage youth in activities after classes. Another step is to make health care affordable for everyone, and there should be no pressure on workers when they decide to take sick leaves.

Secondly, the structure of budget spending should be redesigned. It is evident that social support programs require much financing from taxes. One of the possible strategies is to make the government spend less on other sectors. Also, solving the issue of delinquent behavior among youth by advancing social support may cut costs on police functioning as there will be a lower need for services such as patrolling.

Poverty is a structural problem resulting from a country’s inadequate economic system. It creates various social issues associated with poor health care services, low-quality education, criminal activity, and others. Poverty is a complex subject that cannot be resolved shortly. However, one of the possible strategies is to provide better financial and social support for the population, which will create more opportunities for people to increase their income level.

McFarland, M. (2017). Poverty and problem behaviors across the early life course: The role of sensitive period exposure. Population Research & Policy Review , 36 (5), 739-760.

Royce, E. (2019). Poverty and power: The problem of structural inequality (3rd ed.). Lanham, MD: Rowman & Littlefield.

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Why poverty is not a personal choice, but a reflection of society

Research Investigator of Psychiatry, Public Health, and Poverty Solutions, University of Michigan

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As the Senate prepares to modify its version of the health care bill, now is a good time to back up and examine why we as a nation are so divided about providing health care, especially to the poor.

I believe one reason the United States is cutting spending on health insurance and safety nets that protect poor and marginalized people is because of American culture, which overemphasizes individual responsibility. Our culture does this to the point that it ignores the effect of root causes shaped by society and beyond the control of the individual. How laypeople define and attribute poverty may not be that much different from the way U.S. policymakers in the Senate see poverty.

As someone who studies poverty solutions and social and health inequalities, I am convinced by the academic literature that the biggest reason for poverty is how a society is structured. Without structural changes, it may be very difficult if not impossible to eliminate disparities and poverty.

Social structure

About 13.5 percent of Americans are living in poverty. Many of these people do not have insurance, and efforts to help them gain insurance, be it through Medicaid or private insurance, have been stymied. Medicaid provides insurance for the disabled, people in nursing homes and the poor.

Four states recently asked the Centers for Medicare and Medicaid Services for permission to require Medicaid recipients in their states who are not disabled or elderly to work.

This request is reflective of the fact that many Americans believe that poverty is, by and large, the result of laziness , immorality and irresponsibility.

In fact, poverty and other social miseries are in large part due to social structure , which is how society functions at a macro level. Some societal issues, such as racism, sexism and segregation, constantly cause disparities in education, employment and income for marginalized groups. The majority group naturally has a head start, relative to groups that deal with a wide range of societal barriers on a daily basis. This is what I mean by structural causes of poverty and inequality.

Poverty: Not just a state of mind

We have all heard that the poor and minorities need only make better choices – work hard, stay in school, get married, do not have children before they can afford them. If they did all this, they wouldn’t be poor.

Just a few weeks ago, Housing Secretary Ben Carson called poverty “ a state of mind .” At the same time, his budget to help low-income households could be cut by more than US$6 billion next year.

This is an example of a simplistic view toward the complex social phenomenon. It is minimizing the impact of a societal issue caused by structure – macro‐level labor market and societal conditions – on individuals’ behavior. Such claims also ignore a large body of sociological science.

American independence

Americans have one of the most independent cultures on Earth. A majority of Americans define people in terms of internal attributes such as choices , abilities, values, preferences, decisions and traits.

This is very different from interdependent cultures , such as eastern Asian countries where people are seen mainly in terms of their environment, context and relationships with others.

A direct consequence of independent mindsets and cognitive models is that one may ignore all the historical and environmental conditions, such as slavery, segregation and discrimination against women, that contribute to certain outcomes. When we ignore the historical context, it is easier to instead attribute an unfavorable outcome, such as poverty, to the person.

Views shaped by politics

Many Americans view poverty as an individual phenomenon and say that it’s primarily their own fault that people are poor. The alternative view is that poverty is a structural phenomenon. From this viewpoint, people are in poverty because they find themselves in holes in the economic system that deliver them inadequate income.

The fact is that people move in and out of poverty. Research has shown that 45 percent of poverty spells last no more than a year, 70 percent last no more than three years and only 12 percent stretch beyond a decade.

The Panel Study of Income Dynamics ( PSID ), a 50-year longitudinal study of 18,000 Americans, has shown that around four in 10 adults experience an entire year of poverty from the ages of 25 to 60. The last Survey of Income and Program Participation ( SIPP ), a longitudinal survey conducted by the U.S. Census, had about one-third of Americans in episodic poverty at some point in a three-year period, but just 3.5 percent in episodic poverty for all three years.

Why calling the poor ‘lazy’ is victim blaming

If one believes that poverty is related to historical and environmental events and not just to an individual, we should be careful about blaming the poor for their fates.

Victim blaming occurs when the victim of a crime or any wrongful act is held entirely or partially responsible for the harm that befell them. It is a common psychological and societal phenomenon. Victimology has shown that humans have a tendency to perceive victims at least partially responsible . This is true even in rape cases, where there is a considerable tendency to blame victims and is true particularly if the victim and perpetrator know each other.

I believe all our lives could be improved if we considered the structural influences as root causes of social problems such as poverty and inequality. Perhaps then, we could more easily agree on solutions.

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Poverty Essay for Students and Children

500+ words essay on poverty essay.

“Poverty is the worst form of violence”. – Mahatma Gandhi.

How Poverty is Measured?

For measuring poverty United nations have devised two measures of poverty – Absolute & relative poverty.  Absolute poverty is used to measure poverty in developing countries like India. Relative poverty is used to measure poverty in developed countries like the USA. In absolute poverty, a line based on the minimum level of income has been created & is called a poverty line.  If per day income of a family is below this level, then it is poor or below the poverty line. If per day income of a family is above this level, then it is non-poor or above the poverty line. In India, the new poverty line is  Rs 32 in rural areas and Rs 47 in urban areas.

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Causes of Poverty

According to the Noble prize winner South African leader, Nelson Mandela – “Poverty is not natural, it is manmade”. The above statement is true as the causes of poverty are generally man-made. There are various causes of poverty but the most important is population. Rising population is putting the burden on the resources & budget of countries. Governments are finding difficult to provide food, shelter & employment to the rising population.

The other causes are- lack of education, war, natural disaster, lack of employment, lack of infrastructure, political instability, etc. For instance- lack of employment opportunities makes a person jobless & he is not able to earn enough to fulfill the basic necessities of his family & becomes poor. Lack of education compels a person for less paying jobs & it makes him poorer. Lack of infrastructure means there are no industries, banks, etc. in a country resulting in lack of employment opportunities. Natural disasters like flood, earthquake also contribute to poverty.

In some countries, especially African countries like Somalia, a long period of civil war has made poverty widespread. This is because all the resources & money is being spent in war instead of public welfare. Countries like India, Pakistan, Bangladesh, etc. are prone to natural disasters like cyclone, etc. These disasters occur every year causing poverty to rise.

Ill Effects of Poverty

Poverty affects the life of a poor family. A poor person is not able to take proper food & nutrition &his capacity to work reduces. Reduced capacity to work further reduces his income, making him poorer. Children from poor family never get proper schooling & proper nutrition. They have to work to support their family & this destroys their childhood. Some of them may also involve in crimes like theft, murder, robbery, etc. A poor person remains uneducated & is forced to live under unhygienic conditions in slums. There are no proper sanitation & drinking water facility in slums & he falls ill often &  his health deteriorates. A poor person generally dies an early death. So, all social evils are related to poverty.

Government Schemes to Remove Poverty

The government of India also took several measures to eradicate poverty from India. Some of them are – creating employment opportunities , controlling population, etc. In India, about 60% of the population is still dependent on agriculture for its livelihood. Government has taken certain measures to promote agriculture in India. The government constructed certain dams & canals in our country to provide easy availability of water for irrigation. Government has also taken steps for the cheap availability of seeds & farming equipment to promote agriculture. Government is also promoting farming of cash crops like cotton, instead of food crops. In cities, the government is promoting industrialization to create more jobs. Government has also opened  ‘Ration shops’. Other measures include providing free & compulsory education for children up to 14 years of age, scholarship to deserving students from a poor background, providing subsidized houses to poor people, etc.

Poverty is a social evil, we can also contribute to control it. For example- we can simply donate old clothes to poor people, we can also sponsor the education of a poor child or we can utilize our free time by teaching poor students. Remember before wasting food, somebody is still sleeping hungry.

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2.4 The Consequences of Poverty

Learning objectives.

• Describe the family and housing problems associated with poverty.
• Explain how poverty affects health and educational attainment.

Regardless of its causes, poverty has devastating consequences for the people who live in it. Much research conducted and/or analyzed by scholars, government agencies, and nonprofit organizations has documented the effects of poverty (and near poverty) on the lives of the poor (Lindsey, 2009; Moore, et. al., 2009; Ratcliffe & McKernan, 2010; Sanders, 2011). Many of these studies focus on childhood poverty, and these studies make it very clear that childhood poverty has lifelong consequences. In general, poor children are more likely to be poor as adults, more likely to drop out of high school, more likely to become a teenaged parent, and more likely to have employment problems. Although only 1 percent of children who are never poor end up being poor as young adults, 32 percent of poor children become poor as young adults (Ratcliffe & McKernan, 2010).

Poor children are more likely to have inadequate nutrition and to experience health, behavioral, and cognitive problems.

Kelly Short – Poverty: “Damaged Child,” Oklahoma City, OK, USA, 1936. (Colorized). – CC BY-SA 2.0.

A recent study used government data to follow children born between 1968 and 1975 until they were ages 30 to 37 (Duncan & Magnuson, 2011). The researchers compared individuals who lived in poverty in early childhood to those whose families had incomes at least twice the poverty line in early childhood. Compared to the latter group, adults who were poor in early childhood

• had completed two fewer years of schooling on the average;
• had incomes that were less than half of those earned by adults who had wealthier childhoods;
• received $826 more annually in food stamps on the average;
• were almost three times more likely to report being in poor health;
• were twice as likely to have been arrested (males only); and
• were five times as likely to have borne a child (females only).

We discuss some of the major specific consequences of poverty here and will return to them in later chapters.

Family Problems

The poor are at greater risk for family problems, including divorce and domestic violence. As Chapter 9 “Sexual Behavior” explains, a major reason for many of the problems families experience is stress. Even in families that are not poor, running a household can cause stress, children can cause stress, and paying the bills can cause stress. Families that are poor have more stress because of their poverty, and the ordinary stresses of family life become even more intense in poor families. The various kinds of family problems thus happen more commonly in poor families than in wealthier families. Compounding this situation, when these problems occur, poor families have fewer resources than wealthier families to deal with these problems.

Children and Our Future

Getting under Children’s Skin: The Biological Effects of Childhood Poverty

As the text discusses, childhood poverty often has lifelong consequences. Poor children are more likely to be poor when they become adults, and they are at greater risk for antisocial behavior when young, and for unemployment, criminal behavior, and other problems when they reach adolescence and young adulthood.

According to growing evidence, one reason poverty has these consequences is that it has certain neural effects on poor children that impair their cognitive abilities and thus their behavior and learning potential. As Greg J. Duncan and Katherine Magnuson (Duncan & Magnuson, 2011, p. 23) observe, “Emerging research in neuroscience and developmental psychology suggests that poverty early in a child’s life may be particularly harmful because the astonishingly rapid development of young children’s brains leaves them sensitive (and vulnerable) to environmental conditions.”

In short, poverty can change the way the brain develops in young children. The major reason for this effect is stress. Children growing up in poverty experience multiple stressful events: neighborhood crime and drug use; divorce, parental conflict, and other family problems, including abuse and neglect by their parents; parental financial problems and unemployment; physical and mental health problems of one or more family members; and so forth. Their great levels of stress in turn affect their bodies in certain harmful ways. As two poverty scholars note, “It’s not just that poverty-induced stress is mentally taxing. If it’s experienced early enough in childhood, it can in fact get ‘under the skin’ and change the way in which the body copes with the environment and the way in which the brain develops. These deep, enduring, and sometimes irreversible physiological changes are the very human price of running a high-poverty society” (Grusky & Wimer, 2011, p. 2).

One way poverty gets “under children’s skin” is as follows (Evans, et. al., 2011). Poor children’s high levels of stress produce unusually high levels of stress hormones such as cortisol and higher levels of blood pressure. Because these high levels impair their neural development, their memory and language development skills suffer. This result in turn affects their behavior and learning potential. For other physiological reasons, high levels of stress also affect the immune system, so that poor children are more likely to develop various illnesses during childhood and to have high blood pressure and other health problems when they grow older, and cause other biological changes that make poor children more likely to end up being obese and to have drug and alcohol problems.

The policy implications of the scientific research on childhood poverty are clear. As public health scholar Jack P. Shonkoff (Shonkoff, 2011) explains, “Viewing this scientific evidence within a biodevelopmental framework points to the particular importance of addressing the needs of our most disadvantaged children at the earliest ages.” Duncan and Magnuson (Duncan & Magnuson, 2011) agree that “greater policy attention should be given to remediating situations involving deep and persistent poverty occurring early in childhood.” To reduce poverty’s harmful physiological effects on children, Skonkoff advocates efforts to promote strong, stable relationships among all members of poor families; to improve the quality of the home and neighborhood physical environments in which poor children grow; and to improve the nutrition of poor children. Duncan and Magnuson call for more generous income transfers to poor families with young children and note that many European democracies provide many kinds of support to such families. The recent scientific evidence on early childhood poverty underscores the importance of doing everything possible to reduce the harmful effects of poverty during the first few years of life.

Health, Illness, and Medical Care

The poor are also more likely to have many kinds of health problems, including infant mortality, earlier adulthood mortality, and mental illness, and they are also more likely to receive inadequate medical care. Poor children are more likely to have inadequate nutrition and, partly for this reason, to suffer health, behavioral, and cognitive problems. These problems in turn impair their ability to do well in school and land stable employment as adults, helping to ensure that poverty will persist across generations. Many poor people are uninsured or underinsured, at least until the US health-care reform legislation of 2010 takes full effect a few years from now, and many have to visit health clinics that are overcrowded and understaffed.

As Chapter 12 “Work and the Economy” discusses, it is unclear how much of poor people’s worse health stems from their lack of money and lack of good health care versus their own behavior such as smoking and eating unhealthy diets. Regardless of the exact reasons, however, the fact remains that poor health is a major consequence of poverty. According to recent research, this fact means that poverty is responsible for almost 150,000 deaths annually, a figure about equal to the number of deaths from lung cancer (Bakalar, 2011).

Poor children typically go to rundown schools with inadequate facilities where they receive inadequate schooling. They are much less likely than wealthier children to graduate from high school or to go to college. Their lack of education in turn restricts them and their own children to poverty, once again helping to ensure a vicious cycle of continuing poverty across generations. As Chapter 10 “The Changing Family” explains, scholars debate whether the poor school performance of poor children stems more from the inadequacy of their schools and schooling versus their own poverty. Regardless of exactly why poor children are more likely to do poorly in school and to have low educational attainment, these educational problems are another major consequence of poverty.

Housing and Homelessness

The poor are, not surprisingly, more likely to be homeless than the nonpoor but also more likely to live in dilapidated housing and unable to buy their own homes. Many poor families spend more than half their income on rent, and they tend to live in poor neighborhoods that lack job opportunities, good schools, and other features of modern life that wealthier people take for granted. The lack of adequate housing for the poor remains a major national problem. Even worse is outright homelessness. An estimated 1.6 million people, including more than 300,000 children, are homeless at least part of the year (Lee, et. al., 2010).

Crime and Victimization

As Chapter 7 “Alcohol and Other Drugs” discusses, poor (and near poor) people account for the bulk of our street crime (homicide, robbery, burglary, etc.), and they also account for the bulk of victims of street crime. That chapter will outline several reasons for this dual connection between poverty and street crime, but they include the deep frustration and stress of living in poverty and the fact that many poor people live in high-crime neighborhoods. In such neighborhoods, children are more likely to grow up under the influence of older peers who are already in gangs or otherwise committing crime, and people of any age are more likely to become crime victims. Moreover, because poor and near-poor people are more likely to commit street crime, they also comprise most of the people arrested for street crimes, convicted of street crime, and imprisoned for street crime. Most of the more than 2 million people now in the nation’s prisons and jails come from poor or near-poor backgrounds. Criminal behavior and criminal victimization, then, are other major consequences of poverty.

Lessons from Other Societies

Poverty and Poverty Policy in Other Western Democracies

To compare international poverty rates, scholars commonly use a measure of the percentage of households in a nation that receive less than half of the nation’s median household income after taxes and cash transfers from the government. In data from the late 2000s, 17.3 percent of US households lived in poverty as defined by this measure. By comparison, other Western democracies had the rates depicted in the figure that follows. The average poverty rate of the nations in the figure excluding the United States is 9.5 percent. The US rate is thus almost twice as high as the average for all the other democracies.

This graph illustrates the poverty rates in western democracies (i.e., the percentage of persons living with less than half of the median household income) as of the late 2000s

Source: Data from Organisation for Economic Co-operation and Development (OECD). (2011). Society at a glance 2011: OECD social indicators. Retrieved July 23, 2011, from http://www.oecd-ilibrary.org/sites/soc_glance-2011-en/06/02/index.html;jsessionid=erdqhbpb203ea.epsilon?contentType=&itemId=/content/chapter/soc_glance-2011-17-en&containerItemId=/content/se .

Why is there so much more poverty in the United States than in its Western counterparts? Several differences between the United States and the other nations stand out (Brady, 2009; Russell, 2011). First, other Western nations have higher minimum wages and stronger labor unions than the United States has, and these lead to incomes that help push people above poverty. Second, these other nations spend a much greater proportion of their gross domestic product on social expenditures (income support and social services such as child-care subsidies and housing allowances) than does the United States. As sociologist John Iceland (Iceland, 2006) notes, “Such countries often invest heavily in both universal benefits, such as maternity leave, child care, and medical care, and in promoting work among [poor] families…The United States, in comparison with other advanced nations, lacks national health insurance, provides less publicly supported housing, and spends less on job training and job creation.” Block and colleagues agree: “These other countries all take a more comprehensive government approach to combating poverty, and they assume that it is caused by economic and structural factors rather than bad behavior” (Block et, al., 2006).

The experience of the United Kingdom provides a striking contrast between the effectiveness of the expansive approach used in other wealthy democracies and the inadequacy of the American approach. In 1994, about 30 percent of British children lived in poverty; by 2009, that figure had fallen by more than half to 12 percent. Meanwhile, the US 2009 child poverty rate, was almost 21 percent.

Britain used three strategies to reduce its child poverty rate and to help poor children and their families in other ways. First, it induced more poor parents to work through a series of new measures, including a national minimum wage higher than its US counterpart and various tax savings for low-income workers. Because of these measures, the percentage of single parents who worked rose from 45 percent in 1997 to 57 percent in 2008. Second, Britain increased child welfare benefits regardless of whether a parent worked. Third, it increased paid maternity leave from four months to nine months, implemented two weeks of paid paternity leave, established universal preschool (which both helps children’s cognitive abilities and makes it easier for parents to afford to work), increased child-care aid, and made it possible for parents of young children to adjust their working hours to their parental responsibilities (Waldfogel, 2010). While the British child poverty rate fell dramatically because of these strategies, the US child poverty rate stagnated.

In short, the United States has so much more poverty than other democracies in part because it spends so much less than they do on helping the poor. The United States certainly has the wealth to follow their example, but it has chosen not to do so, and a high poverty rate is the unfortunate result. As the Nobel laureate economist Paul Krugman (2006, p. A25) summarizes this lesson, “Government truly can be a force for good. Decades of propaganda have conditioned many Americans to assume that government is always incompetent…But the [British experience has] shown that a government that seriously tries to reduce poverty can achieve a lot.”

Key Takeaways

• Poor people are more likely to have several kinds of family problems, including divorce and family conflict.
• Poor people are more likely to have several kinds of health problems.
• Children growing up in poverty are less likely to graduate high school or go to college, and they are more likely to commit street crime.

For Your Review

• Write a brief essay that summarizes the consequences of poverty.
• Why do you think poor children are more likely to develop health problems?

Bakalar, N. (2011, July 4). Researchers link deaths to social ills. New York Times , p. D5.

Block, F., Korteweg, A. C., & Woodward, K. (2006). The compassion gap in American poverty policy. Contexts, 5 (2), 14–20.

Brady, D. (2009). Rich democracies, poor people: How politics explain poverty . New York, NY: Oxford University Press.

Duncan, G. J., & Magnuson, K. (2011, winter). The long reach of early childhood poverty. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 22–27.

Evans, G. W., Brooks-Gunn, J., & Klebanov, P. K. (2011, winter). Stressing out the poor: Chronic physiological stress and the income-achievement gap. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 16–21.

Grusky, D., & Wimer, C.(Eds.). (2011, winter). Editors’ note. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 2.

Iceland, J. (2006). Poverty in America: A handbook . Berkeley, CA: University of California Press.

Krugman, P. (Krugman, 2006). Helping the poor, the British way. New York Times , p. A25.

Lee, B., Tyler, K. A., & Wright, J. D. ( 2010). The new homelessness revisited. Annual Review of Sociology, 36 , 501–521.

Lindsey, D. (2009). Child poverty and inequality: Securing a better future for America’s children . New York, NY: Oxford University Press.

Moore, K. A., Redd, Z., Burkhauser, M., Mbawa, K., & Collins, A. (2009). Children in poverty: Trends, consequences, and policy options . Washington, DC: Child Trends. Retrieved from http://www.childtrends.org/Files//Child_Trends-2009_04_07_RB_ChildreninPoverty.pdf .

Ratcliffe, C., & McKernan, S.-M. (2010). Childhood poverty persistence: Facts and consequences . Washington, DC: Urban Institute Press.

Russell, J. W. ( 2011). Double standard: Social policy in Europe and the United States (2nd ed.). Lanham, MD: Rowman & Littlefield.

Sanders, L. (2011). Neuroscience exposes pernicious effects of poverty. Science News, 179 (3), 32.

Shonkoff, J. P. (2011, winter). Building a foundation for prosperity on the science of early childhood development. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 10–14.

Waldfogel, J. (2010). Britain’s war on poverty . New York, NY: Russell Sage Foundation.

Social Problems Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

5 Essays About Poverty Everyone Should Know

Poverty is one of the driving forces of inequality in the world. Between 1990-2015, much progress was made. The number of people living on less than $1.90 went from 36% to 10%. However, according to the World Bank , the COVID-19 pandemic represents a serious problem that disproportionately impacts the poor. Research released in February of 2020 shows that by 2030, up to ⅔ of the “global extreme poor” will be living in conflict-affected and fragile economies. Poverty will remain a major human rights issue for decades to come. Here are five essays about the issue that everyone should know:

“We need an economic bill of rights” –  Martin Luther King Jr.

The Guardian published an abridged version of this essay in 2018, which was originally released in Look magazine just after Dr. King was killed. In this piece, Dr. King explains why an economic bill of rights is necessary. He points out that while mass unemployment within the black community is a “social problem,” it’s a “depression” in the white community. An economic bill of rights would give a job to everyone who wants one and who can work. It would also give an income to those who can’t work. Dr. King affirms his commitment to non-violence. He’s fully aware that tensions are high. He quotes a spiritual, writing “timing is winding up.” Even while the nation progresses, poverty is getting worse.

This essay was reprinted and abridged in The Guardian in an arrangement with The Heirs to the Estate of Martin Luther King. Jr. The most visible representative of the Civil Rights Movement beginning in 1955, Dr. King was assassinated in 1968. His essays and speeches remain timely.

“How Poverty Can Follow Children Into Adulthood” – Priyanka Boghani

This article is from 2017, but it’s more relevant than ever because it was written when 2012 was the worst economic crisis since the Great Depression. That’s no longer the case. In 2012, around ¼ American children were in poverty. Five years later, children were still more likely than adults to be poor. This is especially true for children of colour. Consequences of poverty include anxiety, hunger, and homelessness. This essay also looks at the long-term consequences that come from growing up in poverty. A child can develop health problems that affect them in adulthood. Poverty can also harm a child’s brain development. Being aware of how poverty affects children and follows them into adulthood is essential as the world deals with the economic fallout from the pandemic.

Priyanka Boghani is a journalist at PBS Frontline. She focuses on U.S. foreign policy, humanitarian crises, and conflicts in the Middle East. She also assists in managing Frontline’s social accounts.

“5 Reasons COVID-19 Will Impact the Fight to End Extreme Poverty” – Leah Rodriguez

For decades, the UN has attempted to end extreme poverty. In the face of the novel coronavirus outbreak, new challenges threaten the fight against poverty. In this essay, Dr. Natalie Linos, a Harvard social epidemiologist, urges the world to have a “social conversation” about how the disease impacts poverty and inequality. If nothing is done, it’s unlikely that the UN will meet its Global Goals by 2030. Poverty and COVID-19 intersect in five key ways. For one, low-income people are more vulnerable to disease. They also don’t have equal access to healthcare or job stability. This piece provides a clear, concise summary of why this outbreak is especially concerning for the global poor.

Leah Rodriguez’s writing at Global Citizen focuses on women, girls, water, and sanitation. She’s also worked as a web producer and homepage editor for New York Magazine’s The Cut.

“Climate apartheid”: World’s poor to suffer most from disasters” – Al Jazeera and news Agencies

The consequences of climate change are well-known to experts like Philip Alston, the special rapporteur on extreme poverty and human rights. In 2019, he submitted a report to the UN Human Rights Council sounding the alarm on how climate change will devastate the poor. While the wealthy will be able to pay their way out of devastation, the poor will not. This will end up creating a “climate apartheid.” Alston states that if climate change isn’t addressed, it will undo the last five decades of progress in poverty education, as well as global health and development .

“Nickel and Dimed: On (not) getting by in America” – Barbara Ehrenreich

In this excerpt from her book Nickel and Dimed, Ehrenreich describes her experience choosing to live undercover as an “unskilled worker” in the US. She wanted to investigate the impact the 1996 welfare reform act had on the working poor. Released in 2001, the events take place between the spring of 1998 and the summer of 2000. Ehrenreich decided to live in a town close to her “real life” and finds a place to live and a job. She has her eyes opened to the challenges and “special costs” of being poor. In 2019, The Guardian ranked the book 13th on their list of 100 best books of the 21st century.

Barbara Ehrenreich is the author of 21 books and an activist. She’s worked as an award-winning columnist and essayist.

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About the author, emmaline soken-huberty.

Emmaline Soken-Huberty is a freelance writer based in Portland, Oregon. She started to become interested in human rights while attending college, eventually getting a concentration in human rights and humanitarianism. LGBTQ+ rights, women’s rights, and climate change are of special concern to her. In her spare time, she can be found reading or enjoying Oregon’s natural beauty with her husband and dog.

Why Poverty Persists in America

A Pulitzer Prize-winning sociologist offers a new explanation for an intractable problem.

A mother and son living in a Walmart parking lot in North Dakota in 2012. Credit... Eugene Richards

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By Matthew Desmond

• Published March 9, 2023 Updated April 3, 2023

In the past 50 years, scientists have mapped the entire human genome and eradicated smallpox. Here in the United States, infant-mortality rates and deaths from heart disease have fallen by roughly 70 percent, and the average American has gained almost a decade of life. Climate change was recognized as an existential threat. The internet was invented.

On the problem of poverty, though, there has been no real improvement — just a long stasis. As estimated by the federal government’s poverty line, 12.6 percent of the U.S. population was poor in 1970; two decades later, it was 13.5 percent; in 2010, it was 15.1 percent; and in 2019, it was 10.5 percent. To graph the share of Americans living in poverty over the past half-century amounts to drawing a line that resembles gently rolling hills. The line curves slightly up, then slightly down, then back up again over the years, staying steady through Democratic and Republican administrations, rising in recessions and falling in boom years.

What accounts for this lack of progress? It cannot be chalked up to how the poor are counted: Different measures spit out the same embarrassing result. When the government began reporting the Supplemental Poverty Measure in 2011, designed to overcome many of the flaws of the Official Poverty Measure, including not accounting for regional differences in costs of living and government benefits, the United States officially gained three million more poor people. Possible reductions in poverty from counting aid like food stamps and tax benefits were more than offset by recognizing how low-income people were burdened by rising housing and health care costs.

The American poor have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most.

Any fair assessment of poverty must confront the breathtaking march of material progress. But the fact that standards of living have risen across the board doesn’t mean that poverty itself has fallen. Forty years ago, only the rich could afford cellphones. But cellphones have become more affordable over the past few decades, and now most Americans have one, including many poor people. This has led observers like Ron Haskins and Isabel Sawhill, senior fellows at the Brookings Institution, to assert that “access to certain consumer goods,” like TVs, microwave ovens and cellphones, shows that “the poor are not quite so poor after all.”

No, it doesn’t. You can’t eat a cellphone. A cellphone doesn’t grant you stable housing, affordable medical and dental care or adequate child care. In fact, as things like cellphones have become cheaper, the cost of the most necessary of life’s necessities, like health care and rent, has increased. From 2000 to 2022 in the average American city, the cost of fuel and utilities increased by 115 percent. The American poor, living as they do in the center of global capitalism, have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most. As Michael Harrington put it 60 years ago: “It is much easier in the United States to be decently dressed than it is to be decently housed, fed or doctored.”

Why, then, when it comes to poverty reduction, have we had 50 years of nothing? When I first started looking into this depressing state of affairs, I assumed America’s efforts to reduce poverty had stalled because we stopped trying to solve the problem. I bought into the idea, popular among progressives, that the election of President Ronald Reagan (as well as that of Prime Minister Margaret Thatcher in the United Kingdom) marked the ascendancy of market fundamentalism, or “neoliberalism,” a time when governments cut aid to the poor, lowered taxes and slashed regulations. If American poverty persisted, I thought, it was because we had reduced our spending on the poor. But I was wrong.

Reagan expanded corporate power, deeply cut taxes on the rich and rolled back spending on some antipoverty initiatives, especially in housing. But he was unable to make large-scale, long-term cuts to many of the programs that make up the American welfare state. Throughout Reagan’s eight years as president, antipoverty spending grew, and it continued to grow after he left office. Spending on the nation’s 13 largest means-tested programs — aid reserved for Americans who fall below a certain income level — went from $1,015 a person the year Reagan was elected president to $3,419 a person one year into Donald Trump’s administration, a 237 percent increase.

Most of this increase was due to health care spending, and Medicaid in particular. But even if we exclude Medicaid from the calculation, we find that federal investments in means-tested programs increased by 130 percent from 1980 to 2018, from $630 to $1,448 per person.

“Neoliberalism” is now part of the left’s lexicon, but I looked in vain to find it in the plain print of federal budgets, at least as far as aid to the poor was concerned. There is no evidence that the United States has become stingier over time. The opposite is true.

This makes the country’s stalled progress on poverty even more baffling. Decade after decade, the poverty rate has remained flat even as federal relief has surged.

If we have more than doubled government spending on poverty and achieved so little, one reason is that the American welfare state is a leaky bucket. Take welfare, for example: When it was administered through the Aid to Families With Dependent Children program, almost all of its funds were used to provide single-parent families with cash assistance. But when President Bill Clinton reformed welfare in 1996, replacing the old model with Temporary Assistance for Needy Families (TANF), he transformed the program into a block grant that gives states considerable leeway in deciding how to distribute the money. As a result, states have come up with rather creative ways to spend TANF dollars. Arizona has used welfare money to pay for abstinence-only sex education. Pennsylvania diverted TANF funds to anti-abortion crisis-pregnancy centers. Maine used the money to support a Christian summer camp. Nationwide, for every dollar budgeted for TANF in 2020, poor families directly received just 22 cents.

We’ve approached the poverty question by pointing to poor people themselves, when we should have been focusing on exploitation.

A fair amount of government aid earmarked for the poor never reaches them. But this does not fully solve the puzzle of why poverty has been so stubbornly persistent, because many of the country’s largest social-welfare programs distribute funds directly to people. Roughly 85 percent of the Supplemental Nutrition Assistance Program budget is dedicated to funding food stamps themselves, and almost 93 percent of Medicaid dollars flow directly to beneficiaries.

There are, it would seem, deeper structural forces at play, ones that have to do with the way the American poor are routinely taken advantage of. The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.

As a theory of poverty, “exploitation” elicits a muddled response, causing us to think of course and but, no in the same instant. The word carries a moral charge, but social scientists have a fairly coolheaded way to measure exploitation: When we are underpaid relative to the value of what we produce, we experience labor exploitation; when we are overcharged relative to the value of something we purchase, we experience consumer exploitation. For example, if a family paid $1,000 a month to rent an apartment with a market value of $20,000, that family would experience a higher level of renter exploitation than a family who paid the same amount for an apartment with a market valuation of $100,000. When we don’t own property or can’t access credit, we become dependent on people who do and can, which in turn invites exploitation, because a bad deal for you is a good deal for me.

Our vulnerability to exploitation grows as our liberty shrinks. Because labor laws often fail to protect undocumented workers in practice, more than a third are paid below minimum wage, and nearly 85 percent are not paid overtime. Many of us who are U.S. citizens, or who crossed borders through official checkpoints, would not work for these wages. We don’t have to. If they migrate here as adults, those undocumented workers choose the terms of their arrangement. But just because desperate people accept and even seek out exploitative conditions doesn’t make those conditions any less exploitative. Sometimes exploitation is simply the best bad option.

Consider how many employers now get one over on American workers. The United States offers some of the lowest wages in the industrialized world. A larger share of workers in the United States make “low pay” — earning less than two-thirds of median wages — than in any other country belonging to the Organization for Economic Cooperation and Development. According to the group, nearly 23 percent of American workers labor in low-paying jobs, compared with roughly 17 percent in Britain, 11 percent in Japan and 5 percent in Italy. Poverty wages have swollen the ranks of the American working poor, most of whom are 35 or older.

One popular theory for the loss of good jobs is deindustrialization, which caused the shuttering of factories and the hollowing out of communities that had sprung up around them. Such a passive word, “deindustrialization” — leaving the impression that it just happened somehow, as if the country got deindustrialization the way a forest gets infested by bark beetles. But economic forces framed as inexorable, like deindustrialization and the acceleration of global trade, are often helped along by policy decisions like the 1994 North American Free Trade Agreement, which made it easier for companies to move their factories to Mexico and contributed to the loss of hundreds of thousands of American jobs. The world has changed, but it has changed for other economies as well. Yet Belgium and Canada and many other countries haven’t experienced the kind of wage stagnation and surge in income inequality that the United States has.

Those countries managed to keep their unions. We didn’t. Throughout the 1950s and 1960s, nearly a third of all U.S. workers carried union cards. These were the days of the United Automobile Workers, led by Walter Reuther, once savagely beaten by Ford’s brass-knuckle boys, and of the mighty American Federation of Labor and Congress of Industrial Organizations that together represented around 15 million workers, more than the population of California at the time.

In their heyday, unions put up a fight. In 1970 alone, 2.4 million union members participated in work stoppages, wildcat strikes and tense standoffs with company heads. The labor movement fought for better pay and safer working conditions and supported antipoverty policies. Their efforts paid off for both unionized and nonunionized workers, as companies like Eastman Kodak were compelled to provide generous compensation and benefits to their workers to prevent them from organizing. By one estimate, the wages of nonunionized men without a college degree would be 8 percent higher today if union strength remained what it was in the late 1970s, a time when worker pay climbed, chief-executive compensation was reined in and the country experienced the most economically equitable period in modern history.

It is important to note that Old Labor was often a white man’s refuge. In the 1930s, many unions outwardly discriminated against Black workers or segregated them into Jim Crow local chapters. In the 1960s, unions like the Brotherhood of Railway and Steamship Clerks and the United Brotherhood of Carpenters and Joiners of America enforced segregation within their ranks. Unions harmed themselves through their self-defeating racism and were further weakened by a changing economy. But organized labor was also attacked by political adversaries. As unions flagged, business interests sensed an opportunity. Corporate lobbyists made deep inroads in both political parties, beginning a public-relations campaign that pressured policymakers to roll back worker protections.

A national litmus test arrived in 1981, when 13,000 unionized air traffic controllers left their posts after contract negotiations with the Federal Aviation Administration broke down. When the workers refused to return, Reagan fired all of them. The public’s response was muted, and corporate America learned that it could crush unions with minimal blowback. And so it went, in one industry after another.

Today almost all private-sector employees (94 percent) are without a union, though roughly half of nonunion workers say they would organize if given the chance. They rarely are. Employers have at their disposal an arsenal of tactics designed to prevent collective bargaining, from hiring union-busting firms to telling employees that they could lose their jobs if they vote yes. Those strategies are legal, but companies also make illegal moves to block unions, like disciplining workers for trying to organize or threatening to close facilities. In 2016 and 2017, the National Labor Relations Board charged 42 percent of employers with violating federal law during union campaigns. In nearly a third of cases, this involved illegally firing workers for organizing.

Corporate lobbyists told us that organized labor was a drag on the economy — that once the companies had cleared out all these fusty, lumbering unions, the economy would rev up, raising everyone’s fortunes. But that didn’t come to pass. The negative effects of unions have been wildly overstated, and there is now evidence that unions play a role in increasing company productivity, for example by reducing turnover. The U.S. Bureau of Labor Statistics measures productivity as how efficiently companies turn inputs (like materials and labor) into outputs (like goods and services). Historically, productivity, wages and profits rise and fall in lock step. But the American economy is less productive today than it was in the post-World War II period, when unions were at peak strength. The economies of other rich countries have slowed as well, including those with more highly unionized work forces, but it is clear that diluting labor power in America did not unleash economic growth or deliver prosperity to more people. “We were promised economic dynamism in exchange for inequality,” Eric Posner and Glen Weyl write in their book “Radical Markets.” “We got the inequality, but dynamism is actually declining.”

As workers lost power, their jobs got worse. For several decades after World War II, ordinary workers’ inflation-adjusted wages (known as “real wages”) increased by 2 percent each year. But since 1979, real wages have grown by only 0.3 percent a year. Astonishingly, workers with a high school diploma made 2.7 percent less in 2017 than they would have in 1979, adjusting for inflation. Workers without a diploma made nearly 10 percent less.

Lousy, underpaid work is not an indispensable, if regrettable, byproduct of capitalism, as some business defenders claim today. (This notion would have scandalized capitalism’s earliest defenders. John Stuart Mill, arch advocate of free people and free markets, once said that if widespread scarcity was a hallmark of capitalism, he would become a communist.) But capitalism is inherently about owners trying to give as little, and workers trying to get as much, as possible. With unions largely out of the picture, corporations have chipped away at the conventional midcentury work arrangement, which involved steady employment, opportunities for advancement and raises and decent pay with some benefits.

As the sociologist Gerald Davis has put it: Our grandparents had careers. Our parents had jobs. We complete tasks. Or at least that has been the story of the American working class and working poor.

Poor Americans aren’t just exploited in the labor market. They face consumer exploitation in the housing and financial markets as well.

There is a long history of slum exploitation in America. Money made slums because slums made money. Rent has more than doubled over the past two decades, rising much faster than renters’ incomes. Median rent rose from $483 in 2000 to $1,216 in 2021. Why have rents shot up so fast? Experts tend to offer the same rote answers to this question. There’s not enough housing supply, they say, and too much demand. Landlords must charge more just to earn a decent rate of return. Must they? How do we know?

We need more housing; no one can deny that. But rents have jumped even in cities with plenty of apartments to go around. At the end of 2021, almost 19 percent of rental units in Birmingham, Ala., sat vacant, as did 12 percent of those in Syracuse, N.Y. Yet rent in those areas increased by roughly 14 percent and 8 percent, respectively, over the previous two years. National data also show that rental revenues have far outpaced property owners’ expenses in recent years, especially for multifamily properties in poor neighborhoods. Rising rents are not simply a reflection of rising operating costs. There’s another dynamic at work, one that has to do with the fact that poor people — and particularly poor Black families — don’t have much choice when it comes to where they can live. Because of that, landlords can overcharge them, and they do.

A study I published with Nathan Wilmers found that after accounting for all costs, landlords operating in poor neighborhoods typically take in profits that are double those of landlords operating in affluent communities. If down-market landlords make more, it’s because their regular expenses (especially their mortgages and property-tax bills) are considerably lower than those in upscale neighborhoods. But in many cities with average or below-average housing costs — think Buffalo, not Boston — rents in the poorest neighborhoods are not drastically lower than rents in the middle-class sections of town. From 2015 to 2019, median monthly rent for a two-bedroom apartment in the Indianapolis metropolitan area was $991; it was $816 in neighborhoods with poverty rates above 40 percent, just around 17 percent less. Rents are lower in extremely poor neighborhoods, but not by as much as you would think.

Yet where else can poor families live? They are shut out of homeownership because banks are disinclined to issue small-dollar mortgages, and they are also shut out of public housing, which now has waiting lists that stretch on for years and even decades. Struggling families looking for a safe, affordable place to live in America usually have but one choice: to rent from private landlords and fork over at least half their income to rent and utilities. If millions of poor renters accept this state of affairs, it’s not because they can’t afford better alternatives; it’s because they often aren’t offered any.

You can read injunctions against usury in the Vedic texts of ancient India, in the sutras of Buddhism and in the Torah. Aristotle and Aquinas both rebuked it. Dante sent moneylenders to the seventh circle of hell. None of these efforts did much to stem the practice, but they do reveal that the unprincipled act of trapping the poor in a cycle of debt has existed at least as long as the written word. It might be the oldest form of exploitation after slavery. Many writers have depicted America’s poor as unseen, shadowed and forgotten people: as “other” or “invisible.” But markets have never failed to notice the poor, and this has been particularly true of the market for money itself.

The deregulation of the banking system in the 1980s heightened competition among banks. Many responded by raising fees and requiring customers to carry minimum balances. In 1977, over a third of banks offered accounts with no service charge. By the early 1990s, only 5 percent did. Big banks grew bigger as community banks shuttered, and in 2021, the largest banks in America charged customers almost $11 billion in overdraft fees. Previous research showed that just 9 percent of account holders paid 84 percent of these fees. Who were the unlucky 9 percent? Customers who carried an average balance of less than $350. The poor were made to pay for their poverty.

In 2021, the average fee for overdrawing your account was $33.58. Because banks often issue multiple charges a day, it’s not uncommon to overdraw your account by $20 and end up paying $200 for it. Banks could (and do) deny accounts to people who have a history of overextending their money, but those customers also provide a steady revenue stream for some of the most powerful financial institutions in the world.

Every year: almost $11 billion in overdraft fees, $1.6 billion in check-cashing fees and up to $8.2 billion in payday-loan fees.

According to the F.D.I.C., one in 19 U.S. households had no bank account in 2019, amounting to more than seven million families. Compared with white families, Black and Hispanic families were nearly five times as likely to lack a bank account. Where there is exclusion, there is exploitation. Unbanked Americans have created a market, and thousands of check-cashing outlets now serve that market. Check-cashing stores generally charge from 1 to 10 percent of the total, depending on the type of check. That means that a worker who is paid $10 an hour and takes a $1,000 check to a check-cashing outlet will pay $10 to $100 just to receive the money he has earned, effectively losing one to 10 hours of work. (For many, this is preferable to the less-predictable exploitation by traditional banks, with their automatic overdraft fees. It’s the devil you know.) In 2020, Americans spent $1.6 billion just to cash checks. If the poor had a costless way to access their own money, over a billion dollars would have remained in their pockets during the pandemic-induced recession.

Poverty can mean missed payments, which can ruin your credit. But just as troublesome as bad credit is having no credit score at all, which is the case for 26 million adults in the United States. Another 19 million possess a credit history too thin or outdated to be scored. Having no credit (or bad credit) can prevent you from securing an apartment, buying insurance and even landing a job, as employers are increasingly relying on credit checks during the hiring process. And when the inevitable happens — when you lose hours at work or when the car refuses to start — the payday-loan industry steps in.

For most of American history, regulators prohibited lending institutions from charging exorbitant interest on loans. Because of these limits, banks kept interest rates between 6 and 12 percent and didn’t do much business with the poor, who in a pinch took their valuables to the pawnbroker or the loan shark. But the deregulation of the banking sector in the 1980s ushered the money changers back into the temple by removing strict usury limits. Interest rates soon reached 300 percent, then 500 percent, then 700 percent. Suddenly, some people were very interested in starting businesses that lent to the poor. In recent years, 17 states have brought back strong usury limits, capping interest rates and effectively prohibiting payday lending. But the trade thrives in most places. The annual percentage rate for a two-week $300 loan can reach 460 percent in California, 516 percent in Wisconsin and 664 percent in Texas.

Roughly a third of all payday loans are now issued online, and almost half of borrowers who have taken out online loans have had lenders overdraw their bank accounts. The average borrower stays indebted for five months, paying $520 in fees to borrow $375. Keeping people indebted is, of course, the ideal outcome for the payday lender. It’s how they turn a $15 profit into a $150 one. Payday lenders do not charge high fees because lending to the poor is risky — even after multiple extensions, most borrowers pay up. Lenders extort because they can.

Every year: almost $11 billion in overdraft fees, $1.6 billion in check-cashing fees and up to $8.2 billion in payday-loan fees. That’s more than $55 million in fees collected predominantly from low-income Americans each day — not even counting the annual revenue collected by pawnshops and title loan services and rent-to-own schemes. When James Baldwin remarked in 1961 how “extremely expensive it is to be poor,” he couldn’t have imagined these receipts.

“Predatory inclusion” is what the historian Keeanga-Yamahtta Taylor calls it in her book “Race for Profit,” describing the longstanding American tradition of incorporating marginalized people into housing and financial schemes through bad deals when they are denied good ones. The exclusion of poor people from traditional banking and credit systems has forced them to find alternative ways to cash checks and secure loans, which has led to a normalization of their exploitation. This is all perfectly legal, after all, and subsidized by the nation’s richest commercial banks. The fringe banking sector would not exist without lines of credit extended by the conventional one. Wells Fargo and JPMorgan Chase bankroll payday lenders like Advance America and Cash America. Everybody gets a cut.

Poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that. When we ignore the role that exploitation plays in trapping people in poverty, we end up designing policy that is weak at best and ineffective at worst. For example, when legislation lifts incomes at the bottom without addressing the housing crisis, those gains are often realized instead by landlords, not wholly by the families the legislation was intended to help. A 2019 study conducted by the Federal Reserve Bank of Philadelphia found that when states raised minimum wages, families initially found it easier to pay rent. But landlords quickly responded to the wage bumps by increasing rents, which diluted the effect of the policy. This happened after the pandemic rescue packages, too: When wages began to rise in 2021 after worker shortages, rents rose as well, and soon people found themselves back where they started or worse.

Antipoverty programs work. Each year, millions of families are spared the indignities and hardships of severe deprivation because of these government investments. But our current antipoverty programs cannot abolish poverty by themselves. The Johnson administration started the War on Poverty and the Great Society in 1964. These initiatives constituted a bundle of domestic programs that included the Food Stamp Act, which made food aid permanent; the Economic Opportunity Act, which created Job Corps and Head Start; and the Social Security Amendments of 1965, which founded Medicare and Medicaid and expanded Social Security benefits. Nearly 200 pieces of legislation were signed into law in President Lyndon B. Johnson’s first five years in office, a breathtaking level of activity. And the result? Ten years after the first of these programs were rolled out in 1964, the share of Americans living in poverty was half what it was in 1960.

But the War on Poverty and the Great Society were started during a time when organized labor was strong, incomes were climbing, rents were modest and the fringe banking industry as we know it today didn’t exist. Today multiple forms of exploitation have turned antipoverty programs into something like dialysis, a treatment designed to make poverty less lethal, not to make it disappear.

This means we don’t just need deeper antipoverty investments. We need different ones, policies that refuse to partner with poverty, policies that threaten its very survival. We need to ensure that aid directed at poor people stays in their pockets, instead of being captured by companies whose low wages are subsidized by government benefits, or by landlords who raise the rents as their tenants’ wages rise, or by banks and payday-loan outlets who issue exorbitant fines and fees. Unless we confront the many forms of exploitation that poor families face, we risk increasing government spending only to experience another 50 years of sclerosis in the fight against poverty.

The best way to address labor exploitation is to empower workers. A renewed contract with American workers should make organizing easy. As things currently stand, unionizing a workplace is incredibly difficult. Under current labor law, workers who want to organize must do so one Amazon warehouse or one Starbucks location at a time. We have little chance of empowering the nation’s warehouse workers and baristas this way. This is why many new labor movements are trying to organize entire sectors. The Fight for $15 campaign, led by the Service Employees International Union, doesn’t focus on a single franchise (a specific McDonald’s store) or even a single company (McDonald’s) but brings together workers from several fast-food chains. It’s a new kind of labor power, and one that could be expanded: If enough workers in a specific economic sector — retail, hotel services, nursing — voted for the measure, the secretary of labor could establish a bargaining panel made up of representatives elected by the workers. The panel could negotiate with companies to secure the best terms for workers across the industry. This is a way to organize all Amazon warehouses and all Starbucks locations in a single go.

Sectoral bargaining, as it’s called, would affect tens of millions of Americans who have never benefited from a union of their own, just as it has improved the lives of workers in Europe and Latin America. The idea has been criticized by members of the business community, like the U.S. Chamber of Commerce, which has raised concerns about the inflexibility and even the constitutionality of sectoral bargaining, as well as by labor advocates, who fear that industrywide policies could nullify gains that existing unions have made or could be achieved only if workers make other sacrifices. Proponents of the idea counter that sectoral bargaining could even the playing field, not only between workers and bosses, but also between companies in the same sector that would no longer be locked into a race to the bottom, with an incentive to shortchange their work force to gain a competitive edge. Instead, the companies would be forced to compete over the quality of the goods and services they offer. Maybe we would finally reap the benefits of all that economic productivity we were promised.

We must also expand the housing options for low-income families. There isn’t a single right way to do this, but there is clearly a wrong way: the way we’re doing it now. One straightforward approach is to strengthen our commitment to the housing programs we already have. Public housing provides affordable homes to millions of Americans, but it’s drastically underfunded relative to the need. When the wealthy township of Cherry Hill, N.J., opened applications for 29 affordable apartments in 2021, 9,309 people applied. The sky-high demand should tell us something, though: that affordable housing is a life changer, and families are desperate for it.

We could also pave the way for more Americans to become homeowners, an initiative that could benefit poor, working-class and middle-class families alike — as well as scores of young people. Banks generally avoid issuing small-dollar mortgages, not because they’re riskier — these mortgages have the same delinquency rates as larger mortgages — but because they’re less profitable. Over the life of a mortgage, interest on $1 million brings in a lot more money than interest on $75,000. This is where the federal government could step in, providing extra financing to build on-ramps to first-time homeownership. In fact, it already does so in rural America through the 502 Direct Loan Program, which has moved more than two million families into their own homes. These loans, fully guaranteed and serviced by the Department of Agriculture, come with low interest rates and, for very poor families, cover the entire cost of the mortgage, nullifying the need for a down payment. Last year, the average 502 Direct Loan was for $222,300 but cost the government only $10,370 per loan, chump change for such a durable intervention. Expanding a program like this into urban communities would provide even more low- and moderate-income families with homes of their own.

We should also ensure fair access to capital. Banks should stop robbing the poor and near-poor of billions of dollars each year, immediately ending exorbitant overdraft fees. As the legal scholar Mehrsa Baradaran has pointed out, when someone overdraws an account, banks could simply freeze the transaction or could clear a check with insufficient funds, providing customers a kind of short-term loan with a low interest rate of, say, 1 percent a day.

States should rein in payday-lending institutions and insist that lenders make it clear to potential borrowers what a loan is ultimately likely to cost them. Just as fast-food restaurants must now publish calorie counts next to their burgers and shakes, payday-loan stores should publish the average overall cost of different loans. When Texas adopted disclosure rules, residents took out considerably fewer bad loans. If Texas can do this, why not California or Wisconsin? Yet to stop financial exploitation, we need to expand, not limit, low-income Americans’ access to credit. Some have suggested that the government get involved by having the U.S. Postal Service or the Federal Reserve issue small-dollar loans. Others have argued that we should revise government regulations to entice commercial banks to pitch in. Whatever our approach, solutions should offer low-income Americans more choice, a way to end their reliance on predatory lending institutions that can get away with robbery because they are the only option available.

In Tommy Orange’s novel, “There There,” a man trying to describe the problem of suicides on Native American reservations says: “Kids are jumping out the windows of burning buildings, falling to their deaths. And we think the problem is that they’re jumping.” The poverty debate has suffered from a similar kind of myopia. For the past half-century, we’ve approached the poverty question by pointing to poor people themselves — posing questions about their work ethic, say, or their welfare benefits — when we should have been focusing on the fire. The question that should serve as a looping incantation, the one we should ask every time we drive past a tent encampment, those tarped American slums smelling of asphalt and bodies, or every time we see someone asleep on the bus, slumped over in work clothes, is simply: Who benefits? Not: Why don’t you find a better job? Or: Why don’t you move? Or: Why don’t you stop taking out payday loans? But: Who is feeding off this?

Those who have amassed the most power and capital bear the most responsibility for America’s vast poverty: political elites who have utterly failed low-income Americans over the past half-century; corporate bosses who have spent and schemed to prioritize profits over families; lobbyists blocking the will of the American people with their self-serving interests; property owners who have exiled the poor from entire cities and fueled the affordable-housing crisis. Acknowledging this is both crucial and deliciously absolving; it directs our attention upward and distracts us from all the ways (many unintentional) that we — we the secure, the insured, the housed, the college-educated, the protected, the lucky — also contribute to the problem.

Corporations benefit from worker exploitation, sure, but so do consumers, who buy the cheap goods and services the working poor produce, and so do those of us directly or indirectly invested in the stock market. Landlords are not the only ones who benefit from housing exploitation; many homeowners do, too, their property values propped up by the collective effort to make housing scarce and expensive. The banking and payday-lending industries profit from the financial exploitation of the poor, but so do those of us with free checking accounts, as those accounts are subsidized by billions of dollars in overdraft fees.

Living our daily lives in ways that express solidarity with the poor could mean we pay more; anti-exploitative investing could dampen our stock portfolios. By acknowledging those costs, we acknowledge our complicity. Unwinding ourselves from our neighbors’ deprivation and refusing to live as enemies of the poor will require us to pay a price. It’s the price of our restored humanity and renewed country.

Matthew Desmond is a professor of sociology at Princeton University and a contributing writer for the magazine. His latest book, “Poverty, by America,” from which this article is adapted, is being published on March 21 by Crown.

An earlier version of this article referred incorrectly to the legal protections for undocumented workers. They are afforded rights under U.S. labor laws, though in practice those laws often fail to protect them.

An earlier version of this article implied an incorrect date for a statistic about overdraft fees. The research was conducted between 2005 and 2012, not in 2021.

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Poverty as Social Issue

26 May 2022

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Poverty is a major social issue that affects the whole world. A quarter of the population in the world live in absolute poverty. Most of the poor people lack the basic needs in life, which are shelter and food. Due to the high poverty levels, the vulnerable population causes stress to social programs like schools, healthcare systems, and the government. 

The media has presented poverty in many different perspectives from causes of poverty to ways that can be used to reduce poverty levels. It explains that there are people who live in extreme poverty and spend 1.90 $ per day (Roser & Ortiz 2013). Research has also been presented in different articles on how the World vision has committed to ending poverty levels. Some media researchers have explained that industrialization and technology have contributed to a decrease in poverty levels. The media has also highlighted how the Covid-19 pandemic has contributed to the rise in poverty levels around the world (Patel et al 2020). A present finding explained in the media shows that by the end of the year 2020, an addition of 90-115m people will live in extreme poverty. 

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My sociological imagination of poverty is that it arises due to the inequality from social to economic systems in the society. In most countries, particular groups and communities are neglected. Society is often in a capacity to help the needy people and support each other to rise from poverty levels. The leadership systems in most countries contribute significantly to the poverty levels of its citizens. For example, the lack of proper infrastructure to enable businesses' development leads to high poverty levels. In other leadership systems, increased tax revenues, which result in expensive living, make it impossible for all people to live comfortably, especially as they earn low wages. Lack of proper management of natural hazards also results in high poverty levels. The governments are responsible for ensuring measures to control flooding and drought are put into place. In my perspective, I think that many factors cause poverty. The lack of empowerment through education and motivation also leads to high poverty levels. Education and motivation are tools that help people identify ways to earn and live better lives. Conflict is also another reason for the increase in poverty. In regions where war leads to immigration, people live their lands and wealth to seek refuge in other areas. 

I understand poverty as a social issue that should not exist in such high numbers. I believe in hard work and empowering myself. I think that poverty-stricken people should strive to better their lives. I also believe in using diverse methods to improve my living status. My culture perceives poverty as a social ill that people should strive to get rid of. Parents should strive to instill the values of hard work and independence in their children. I also think that people’s habits also contribute to high poverty levels. For example, lazy people would have no way out of poverty. Despite the fact that many factors are leading to increased poverty levels, my personal culture is that choices are essential in improving lives. There is no need to have many children if one has no means to cater for their food and medical expenses. People should empower themselves by improving their skills and having a positive attitude towards work to escape poverty. 

Applying my sociological imagination has helped me understand the various social aspects that cause poverty in the world. The structure of society contributes to the increase or decline in poverty. I have learned that the distribution of resources and their management matters in decreasing poverty. The emergence of pandemics like the Covid 19 also lead to the increase of poverty. Through sociological imagination, I have also understood that every individual has a role to play despite the social structures and should contribute to improving their own lives and others. 

References 

Patel, J. A., Nielsen, F. B. H., Badiani, A. A., Assi, S., Unadkat, V. A., Patel, B., ... & Wardle, H. (2020). Poverty, inequality and COVID-19: the forgotten vulnerable.  Public Health ,  183 , 110. 

Roser, M., & Ortiz-Ospina, E. (2013). Global extreme poverty.  Our World in Data 

Zuccala, A., & van Eck, N. J. (2011). Poverty research in a development policy context.  Development Policy Review ,  29 (3), 311-330. 

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The Social Consequences of Poverty: An Empirical Test on Longitudinal Data

Carina mood.

Institute for Futures Studies, Box 591, 101 31 Stockholm, Sweden

Swedish Institute for Social Research (SOFI), Stockholm University, Stockholm, Sweden

Jan O. Jonsson

Nuffield College, OX1 1NF Oxford, England, UK

Poverty is commonly defined as a lack of economic resources that has negative social consequences, but surprisingly little is known about the importance of economic hardship for social outcomes. This article offers an empirical investigation into this issue. We apply panel data methods on longitudinal data from the Swedish Level-of-Living Survey 2000 and 2010 (n = 3089) to study whether poverty affects four social outcomes—close social relations (social support), other social relations (friends and relatives), political participation, and activity in organizations. We also compare these effects across five different poverty indicators. Our main conclusion is that poverty in general has negative effects on social life. It has more harmful effects for relations with friends and relatives than for social support; and more for political participation than organizational activity. The poverty indicator that shows the greatest impact is material deprivation (lack of cash margin), while the most prevalent poverty indicators—absolute income poverty, and especially relative income poverty—appear to have the least effect on social outcomes.

Introduction

According to the most influential definitions, poverty is seen as a lack of economic resources that have negative social consequences—this is in fact a view that dominates current theories of poverty (Townsend 1979 ; Sen 1983 ; UN 1995 ), and also has a long heritage (Smith 1776 /1976). The idea is that even when people have food, clothes, and shelter, economic problems lead to a deterioration of social relations and participation. Being poor is about not being able to partake in society on equal terms with others, and therefore in the long run being excluded by fellow citizens or withdrawing from social and civic life because of a lack of economic resources, typically in combination with the concomitant shame of not being able to live a life like them (e.g., Sen 1983 ). Economic hardship affects the standard of life, consumption patterns, and leisure time activities, and this is directly or indirectly related to the possibility of making or maintaining friends or acquaintances: poverty is revealed by not having appropriate clothes, or a car; by not being able to afford vacation trips, visits to the restaurant, or hosting dinner parties (e.g., Mack and Lansley 1985 ; Callan et al. 1993 )—in short, low incomes prevent the poor from living a life in “decency” (Galbraith 1958 ).

The relational nature of poverty is also central to the social exclusion literature, which puts poverty in a larger perspective of multiple disadvantages and their interrelationships (Hills et al. 2002 , Rodgers et al. 1995 ; Room 1995 ). While there are different definitions of the social exclusion concept, the literature is characterized by a move from distributional to relational concerns (Gore 1995 ) and by an emphasis on the importance of social integration and active participation in public life. The inability of living a decent or “ordinary” social life may in this perspective erode social networks, social relations, and social participation, potentially setting off a downward spiral of misfortune (Paugam 1995 ) reinforcing disadvantages in several domains of life. This perspective on poverty and social exclusion is essentially sociological: the playing field of the private economy is social. It is ultimately about individuals’ relations with other people—not only primary social relations, with kin and friends, but extending to secondary relations reflected by participation in the wider community, such as in organizations and in political life (UN 1995 ).

Despite the fact that the social consequences of limited economic resources are central to modern perspectives on poverty and marginalization, this relation is surprisingly seldom studied empirically. Qualitative research on the poor give interesting examples on how the negative effects of poverty works, and portray the way that economic problems are transformed into social ones (Ridge and Millar 2011 ; Attree 2006 ). Such studies, however, have too small sample sizes to generalize to the population, and they cannot tell us much about the range of the problem. The (relatively few) studies that have addressed the association between poverty and social outcomes on larger scale tend to verify that the poor have worse social relations (Böhnke 2008 ; Jonsson and Östberg 2004 ; Levitas 2006 ), but Barnes et al. ( 2002 ) did not find any noteworthy association between poverty (measured as relative income poverty, using the 60 %-limit) and social relations or social isolation. Dahl et al. ( 2008 ) found no relation between poverty and friendships, but report less participation in civic organizations among the poor. All these studies have however been limited to cross-sectional data or hampered by methodological shortcomings, and therefore have not been able to address the separation of selection effects from potentially causal ones.

Our aim in this study is to make good these omissions. We use longitudinal data from the Swedish Level of Living Surveys (LNU) 2000 and 2010 to study how falling into poverty, or rising from it, is associated with outcomes in terms of primary and secondary social relations, including participation in civil society. These panel data make it possible to generalize the results to the Swedish adult population (19–65 in 2000; 29–75 in 2010), to address the issue of causality, and to estimate how strong the relation between economic vulnerability and social outcomes is. Because the data provide us with the possibility of measuring poverty in several ways, we are also able to address the question using different—alternative or complementary—indicators. Poverty is measured as economic deprivation (lack of cash margin, self-reported economic problems), income poverty (absolute and relative), and long-term poverty, respectively. The primary, or core, social outcomes are indicated by having social support if needed, and by social relations with friends and relatives. We expand our analysis to secondary, or fringe, social outcomes in terms of participation in social life at large, such as in civil society: our indicators here include the participation in organizations and in political life.

Different Dimensions/Definitions of Poverty

In modern welfare states, the normal take on the issue of poverty is to regard it as the relative lack of economic resources, that is, to define the poor in relation to their fellow citizens in the same country at the same time. Three approaches dominate the scholarly literature today. The first takes as a point of departure the income deemed necessary for living a life on par with others, or that makes possible an “acceptable” living standard—defined as the goods and services judged necessary, often on the basis of consumer or household budget studies. This usage of a poverty threshold is often (somewhat confusingly) called absolute income poverty , and is most common in North America (cf. Corak 2006 for a review), although most countries have poverty lines defined for different kinds of social benefits. In Europe and in the OECD, the convention is instead to use versions of relative income poverty , defining as poor those whose incomes fall well behind the median income in the country in question (European Union using 60 % and OECD 50 % of the median as the threshold). As an alternative to using purchasing power (as in the “absolute” measure), this relative measure defines poverty by income inequality in the bottom half of the income distribution (Atkinson et al. 2002 ; OECD 2008 ).

The third approach argues that income measures are too indirect; poverty should instead be indicated directly by the lack of consumer products and services that are necessary for an acceptable living standard (Mack and Lansley 1985 ; Ringen 1988 ; Townsend 1979 ). This approach often involves listing a number of possessions and conditions, such as having a car, washing machine, modern kitchen; and being able to dine out sometimes, to have the home adequately heated and mended, to have sufficient insurances, and so on. An elaborate version includes information on what people in general see as necessities, what is often termed “consensual” poverty (e.g., Mack and Lansley 1985 ; Gordon et al. 2000 ; Halleröd 1995 ; van den Bosch 2001 ). Other direct indicators include the ability to cover unforeseen costs (cash margin) and subjective definitions of poverty (e.g., van den Bosch 2001 ). The direct approach to poverty has gained in popularity and measures of economic/material deprivation and consensual poverty are used in several recent and contemporary comparative surveys such as ECHP (Whelan et al. 2003 ) and EU-SILC (e.g., UNICEF 2012 ; Nolan and Whelan 2011 ).

It is often pointed out that, due to the often quite volatile income careers of households, the majority of poverty episodes are short term and the group that is identified as poor in the cross-section therefore tends to be rather diluted (Bane and Ellwood 1986 ; Duncan et al. 1993 ). Those who suffer most from the downsides of poverty are, it could be argued, instead the long-term, persistent, or chronically poor, and there is empirical evidence that those who experience more years in poverty also are more deprived of a “common lifestyle” (Whelan et al. 2003 ). Poverty persistence has been defined in several ways, such as having spent a given number of years below a poverty threshold, or having an average income over a number of years that falls under the poverty line (e.g., Duncan and Rodgers 1991 ; Rodgers and Rodgers 1993 ). The persistently poor can only be detected with any precision in longitudinal studies, and typically on the basis of low incomes, as data covering repeated measures of material deprivation are uncommon.

For the purposes of this study, it is not essential to nominate the best or most appropriate poverty measure. The measures outlined above, while each having some disadvantage, all provide plausible theoretical grounds for predicting negative social outcomes. Low incomes, either in “absolute” or relative terms, may inhibit social activities and participation because these are costly (e.g., having decent housing, needing a car, paying membership fees, entrance tickets, or new clothes). Economic deprivation, often indicated by items or habits that are directly relevant to social life, is also a valid representation of a lack of resources. Lastly, to be in long-term poverty is no doubt a worse condition than being in shorter-term poverty.

It is worth underlining that we see different measures of poverty as relevant indicators despite the fact that the overlap between them often is surprisingly small (Bradshaw and Finch 2003 ). The lack of overlap is not necessarily a problem, as different people may have different configurations of economic problems but share in common many of the experiences of poverty—experiences, we argue, that are (in theory at least) all likely to lead to adverse social outcomes. Whether this is the case or not is one of the questions that we address, but if previous studies on child poverty are of any guidance, different definitions of poverty may show surprisingly similar associations with a number of outcomes (Jonsson and Östberg 2004 ).

What are the Likely Social Consequences of Poverty?

We have concluded that poverty is, according to most influential poverty definitions, manifested in the social sphere. This connects with the idea of Veblen ( 1899 ) of the relation between consumption and social status. What you buy and consume—clothes, furniture, vacation trips—in part define who you are, which group you aspire to belong to, and what view others will have of you. Inclusion into and exclusion from status groups and social circles are, in this view, dependent on economic resources as reflected in consumption patterns. While Veblen was mostly concerned about the rich and their conspicuous consumption, it is not difficult to transfer these ideas to the less fortunate: the poor are under risk of exclusion, of losing their social status and identity, and perhaps also, therefore, their friends. It is however likely that this is a process that differs according to outcome, with an unknown time-lag.

If, as outlined above, we can speak of primary and secondary social consequences, the former should include socializing with friends, but also more intimate relations. Our conjecture is that the closer the relation, the less affected is it by poverty, simply because intimate social bonds are characterized by more unconditional personal relations, typically not requiring costs to uphold.

When it comes to the secondary social consequences, we move outside the realm of closer interpersonal relations to acquaintances and the wider social network, and to the (sometimes relatively anonymous) participation in civil or political life. This dimension of poverty lies at the heart of the social exclusion perspective, which strongly emphasizes the broader issues of societal participation and civic engagement, vital to democratic societies. It is also reflected in the United Nation’s definition, following the Copenhagen summit in 1995, where “overall poverty” in addition to lack of economic resources is said to be “…characterized by lack of participation in decision-making and in civil, social, and cultural life” (UN 1995 , p. 57). Poverty may bring about secondary social consequences because such participation is costly—as in the examples of travel, need for special equipment, or membership fees—but also because of psychological mechanisms, such as lowered self-esteem triggering disbelief in civic and political activities, and a general passivity leading to decreased organizational and social activities overall. If processes like these exist there is a risk of a “downward spiral of social exclusion” where unemployment leads to poverty and social isolation, which in turn reduce the chances of re-gaining a footing in the labour market (Paugam 1995 ).

What theories of poverty and social exclusion postulate is, in conclusion, that both what we have called primary and secondary social relations will be negatively affected by economic hardship—the latter supposedly more than the former. Our strategy in the following is to test this basic hypothesis by applying multivariate panel-data analyses on longitudinal data. In this way, we believe that we can come further than previous studies towards estimating causal effects, although, as is the case in social sciences, the causal relation must remain preliminary due to the nature of observational data.

Data and Definitions

We use the two most recent waves of the Swedish Level-of-living Survey, conducted in 2000 and 2010 on random (1/1000) samples of adult Swedes, aged 18–75. 1 The attrition rate is low, with 84 % of panel respondents remaining from 2000 to 2010. This is one of the few data sets from which we can get over-time measures of both poverty and social outcomes for a panel that is representative of the adult population (at the first time point, t 0 )—in addition, there is annual income information from register data between the waves. The panel feature obviously restricts the age-groups slightly (ages 19–65 in 2000; 29–75 in 2010), the final number of analyzed cases being between 2995 and 3144, depending on the number of missing cases on the respective poverty measure and social outcome variable. For ease of interpretation and comparison of effect sizes, we have constructed all social outcome variables and poverty variables to be dichotomous (0/1). 2

In constructing poverty variables, we must balance theoretical validity with the need to have group sizes large enough for statistical analysis. For example, we expand the absolute poverty measure to include those who received social assistance any time during the year. As social assistance recipients receive this benefit based on having an income below a poverty line that is similar to the one we use, this seems justifiable. In other cases, however, group sizes are small but we find no theoretically reasonable way of making the variables more inclusive, meaning that some analyses cannot be carried out in full detail.

Our income poverty measures are based on register data and are thus free from recall error or misreporting, but—as the proponents of deprivation measures point out—income poverty measures are indirect measures of hardship. The deprivation measure is more direct, but self-reporting always carries a risk of subjectivity in the assessment. To the extent that changes in one’s judgment of the economic situation depend on changes in non-economic factors that are also related to social relations, the deprivation measure will give upwardly biased estimates. 3 As there is no general agreement about whether income or deprivation definitions are superior, our use of several definitions is a strength because the results will give an overall picture that is not sensitive to potential limitations in any one measure. In addition, we are able to see whether results vary systematically across commonly used definitions.

Poverty Measures

• Cash margin whether the respondent can raise a given sum of money in a week, if necessary (in 2000, the sum was 12,000 SEK; in 2010, 14,000 SEK, the latter sum corresponding to approximately 1600 Euro, 2200 USD, or 1400 GBP in 2013 currency rates). For those who answer in the affirmative, there is a follow-up question of how this can be done: by (a) own/household resources, (b) borrowing.
• Economic crisis Those who claim that they have had problems meeting costs for rent, food, bills, etc. during the last 12 months (responded “yes” to a yes/no alternative).
• Absolute poverty is defined as either (a) having a disposable family income below a poverty threshold or (b) receiving social assistance, both assessed in 1999 (for the survey 2000) or 2009 (for the survey 2010). The poverty line varies by family type/composition according to a commonly used calculation of household necessities (Jansson 2000 ). This “basket” of goods and services is intended to define an acceptable living standard, and was originally constructed for calculating an income threshold for social assistance, with addition of estimated costs for housing and transport. The threshold is adjusted for changes in the Consumer Price Index, using 2010 as the base year. In order to get analyzable group sizes, we classify anyone with an income below 1.25 times this threshold as poor. Self-employed are excluded because their nominal incomes are often a poor indicator of their economic standard.
• Deprived and income poor A combination of the indicator of economic deprivation and the indicator of absolute poverty. The poor are defined as those who are economically deprived and in addition are either absolute income-poor or have had social assistance some time during the last calendar year.
• Long - term poor are defined as those interviewed in 2010 (2000) who had an equivalized disposable income that fell below the 1.25 absolute poverty threshold (excluding self-employed) or who received social assistance in 2009 (1999), and who were in this situation for at least two of the years 2000–2008 (1990–1998). The long-term poor (coded 1) are contrasted to the non-poor (coded 0), excluding the short-term poor (coded missing) in order to distinguish whether long-term poverty is particularly detrimental (as compared to absolute poverty in general).
• Relative poverty is defined, according to the EU standard, as having a disposable equivalized income that is lower than 60 % of the median income in Sweden the year in question (EU 2005). 4 As for absolute poverty, this variable is based on incomes the year prior to the survey year. Self-employed are excluded.

Social and Participation Outcomes

Primary (core) social relations.

• Social support The value 1 (has support) is given to those who have answered in the positive to three questions about whether one has a close friend who can help if one (a) gets sick, (b) needs someone to talk to about troubles, or (c) needs company. Those who lack support in at least one of these respects are coded 0 (lack of support).
• Frequent social relations This variable is based on four questions about how often one meets (a) relatives and (b) friends, either (i) at ones’ home or (ii) at the home of those one meets, with the response set being “yes, often”, “sometimes”, and “no, never”. Respondents are defined as having frequent relations (1) if they have at least one “often” of the four possible and no “never”, 5 and 0 otherwise.

Secondary (fringe) Social Relations/Participation

• Political participation : Coded 1 (yes) if one during the last 12 months actively participated (held an elected position or was at a meeting) in a trade union or a political party, and 0 (no) otherwise. 6
• Organizational activity : Coded 1 (yes) if one is a member of an organization and actively participate in its activities at least once in a year, and 0 (no) otherwise.

Control Variables

• Age (in years)
• Educational qualifications in 2010 (five levels according to a standard schema used by Statistics Sweden (1985), entered as dummy variables)
• Civil status distinguishes between single and cohabiting/married persons, and is used as a time-varying covariate (TVC) where we register any changes from couple to single and vice versa.
• Immigrant origin is coded 1 if both parents were born in any country outside Sweden, 0 otherwise.
• Labour market status is also used as a TVC, with four values indicating labour market participation (yes/no) in 2000 and 2010, respectively.
• Global self - rated health in 2000, with three response alternatives: Good, bad, or in between. 7

Table  1 shows descriptive statistics for the 2 years we study, 2000 and 2010 (percentages in the upper panel; averages, standard deviations, max and min values in the lower panel). Recall that the sample is longitudinal with the same respondents appearing in both years. This means, naturally, that the sample ages 10 years between the waves, the upper age limit being pushed up from 65 to 75. Both the change over years and the ageing of the sample have repercussions for their conditions: somewhat more have poor health, for example, fewer lack social support but more lack frequent social relations, and more are single in 2010 (where widows are a growing category). The group has however improved their economic conditions, with a sizeable reduction in poverty rates. Most of the changes are in fact period effects, and it is particularly obvious for the change in poverty—in 2000 people still suffered from the deep recession in Sweden that begun in 1991 and started to turn in 1996/97 (Jonsson et al. 2010 ), while the most recent international recession (starting in 2008/09) did not affect Sweden that much.

Table 1

Descriptive statistics of dependent and independent variables in the LNU panel

N for variables used as change variables pertains to non-missing observations in both 2000 and 2010

The overall decrease in poverty masks changes that our respondents experienced between 2000 and 2010: Table  2 reveals these for the measure of economic deprivation, showing the outflow (row) percentages and the total percentages (and the number of respondents in parentheses). It is evident that there was quite a lot of mobility out of poverty between the years (61 % left), but also a very strong relative risk of being found in poverty in 2010 among those who were poor in 2000 (39 vs. 5 % of those who were non-poor in 2000). Of all our respondents, the most common situation was to be non-poor both years (81 %), while few were poor on both occasions (6 %). Table  2 also demonstrates some small cell numbers: 13.3 % of the panel (9.4 % + 3.9 %), or a good 400 cases, changed poverty status, and these cases are crucial for identifying our models. As in many panel studies based on survey data, this will inevitably lead to some problems with large standard errors and difficulties in arriving at statistically significant and precise estimates; but to preview the findings, our results are surprisingly consistent all the same.

Table 2

Mobility in poverty (measured as economic deprivation) in Sweden between 2000 and 2010

Outflow percentage (row %), total percentage, and number of cases (in parentheses). LNU panel 2000–2010

We begin with showing descriptive results of how poverty is associated with our outcome variables, using the economic deprivation measure of poverty. 8 Figure  1 confirms that those who are poor have worse social relationships and participate less in political life and in organizations. Poverty is thus connected with both primary and secondary social relations.

The relation between poverty (measured as economic deprivation) and social relations/participation in Sweden, LNU 2010. N = 5271

The descriptive picture in Fig.  1 does not tell us anything about the causal nature of the relation between poverty and social outcomes, only that such a relation exists, and that it is in the predicted direction: poor people have weaker social relations, less support, and lower levels of political and civic participation. Our task now is to apply more stringent statistical models to test whether the relation we have uncovered is likely to be of a causal nature. This means that we must try to rid the association of both the risk for reverse causality—that, for example, a weaker social network leads to poverty—and the risk that there is a common underlying cause of both poverty and social outcomes, such as poor health or singlehood.

The Change Model

First, as we have panel data, we can study the difference in change across two time-points T (called t 0 and t 1 , respectively) in an outcome variable (e.g., social relations), between groups (i.e. those who changed poverty status versus those who did not). The respondents are assigned to either of these groups on the grounds of entering or leaving poverty; in the first case, one group is non-poor at t 0 but experiences poverty at t 1 , and the change in this group is compared to the group consisting of those who are non-poor both at t 0 and t 1 . The question in focus then is: Do social relations in the group entering poverty worsen in relation to the corresponding change in social relations in the group who remains non-poor? Because we have symmetric hypotheses of the effect of poverty on social outcomes—assuming leaving poverty has positive consequences similar to the negative consequences of entering poverty—we also study whether those who exit poverty improve their social outcomes as compared to those remaining poor. We ask, that is, not only what damage falling into poverty might have for social outcomes, but also what “social gains” could be expected for someone who climbs out of poverty.

Thus, in our analyses we use two different “change groups”, poverty leavers and poverty entrants , and two “comparison groups”, constantly poor and never poor , respectively. 9 The setup comparing the change in social outcomes for those who change poverty status and those who do not is analogous to a so-called difference-in-difference design, but as the allocation of respondents to comparison groups and change groups in our data cannot be assumed to be random (as with control groups and treatment groups in experimental designs), we take further measures to approach causal interpretations.

Accounting for the Starting Value of the Dependent Variable

An important indication of the non-randomness of the allocation to the change and comparison groups is that their average values of the social outcomes (i.e. the dependent variable) at t 0 differ systematically: Those who become poor between 2000 and 2010 have on average worse social outcomes already in 2000 than those who stay out of poverty. Similarly, those who stay in poverty both years have on average worse social outcomes than those who have exited poverty in 2010. In order to further reduce the impact of unobserved variables, we therefore make all comparisons of changes in social outcomes between t 0 and t 1 for fixed t 0 values of both social outcome and poverty status.

As we use dichotomous outcome variables, we get eight combinations of poverty and outcome states (2 × 2 × 2 = 8), and four direct strategic comparisons:

• Poverty leavers versus constantly poor, positive social outcome in 2000 , showing if those who exit poverty have a higher chance of maintaining the positive social outcome than those who stay in poverty
• Poverty leavers versus constantly poor, negative social outcome in 2000 , showing if those who exit poverty have a higher chance of improvement in the social outcome than those who stay in poverty
• Poverty entrants versus never poor, positive social outcome in 2000 , showing if those who enter poverty have a higher risk of deterioration in the social outcome than those who stay out of poverty, and
• Poverty entrants versus never poor, negative social outcome in 2000 , showing if those who enter poverty have a lower chance of improvement in the social outcome.

Thus, we hold the initial social situation and poverty status fixed, letting only the poverty in 2010 vary. 10 The analytical strategy is set out in Table  3 , showing estimates of the probability to have frequent social relations in 2010, for poverty defined (as in Table  2 and Fig.  1 above) as economic deprivation.

Table 3

Per cent with frequent social relations in “comparison” and “change” groups in 2000 and 2010, according to initial value on social relations in 2000 and poverty (measured as economic deprivation) in 2000 and 2010

LNU panel 2000–2010. N = 3083

The figures in Table  3 should be read like this: 0.59 in the upper left cell means that among those who were poor neither in 2000 nor in 2010 (“never poor”, or 0–0), and who had non-frequent social relations to begin with, 59 % had frequent social relations in 2010. Among those never poor who instead started out with more frequent social relations, 90 per cent had frequent social relations in 2010. This difference (59 vs. 90) tells us either that the initial conditions were important (weak social relations can be inherently difficult to improve) or that there is heterogeneity within the group of never poor people, such as some having (to us perhaps unobserved) characteristics that support relation building while others have not.

Because our strategy is to condition on the initial situation in order to minimize the impact of initial conditions and unobserved heterogeneity, we focus on the comparisons across columns. If we follow each column downwards, that is, for a given initial social outcome (weak or not weak social relations, respectively) it is apparent that the outcome is worse for the “poverty entrants” in comparison with the “never poor” (upper three lines). Comparing the change group [those who became poor (0–1)] with the comparison group [never poor (0–0)] for those who started out with weak social relations (left column), the estimated probability of frequent social relations in 2010 is 7 % points lower for those who became poor. Among those who started out with frequent relations, those who became poor have a 17 % points lower probability of frequent relations in 2010 than those who stayed out of poverty.

If we move down Table  3 , to the three bottom lines, the change and comparison groups are now different. The comparison group is the “constantly poor” (1–1), and the change group are “poverty leavers” (1–0). Again following the columns downwards, we can see that the change group improved their social relations in comparison with the constantly poor; and this is true whether they started out with weak social relations or not. In fact, the chance of improvement for those who started off with non-frequent social relations is the most noteworthy, being 33 % units higher for those who escaped poverty than for those who did not. In sum, Table  3 suggests that becoming poor appears to be bad for social relations whereas escaping poverty is beneficial.

Expanding the Model

The model exemplified in Table  3 is a panel model that studies change across time within the same individuals, conditioning on their initial state. It does away with time-constant effects of observed and unobserved respondent characteristics, and although this is far superior to a cross-sectional model (such as the one underlying Fig.  1 ) there are still threats to causal interpretations. It is possible (if probably unusual) that permanent characteristics may trigger a change over time in both the dependent and independent variables; or, put in another way, whether a person stays in or exits poverty may be partly caused by a variable that also predicts change in the outcome (what is sometimes referred to as a violation of the “common trend assumption”). In our case, we can for example imagine that health problems in 2000 can affect who becomes poor in 2010, at t 1 , and that the same health problems can lead to a deterioration of social relations between 2000 and 2010, so even conditioning on the social relations at t 0 will not be enough. This we handle by adding control variables, attempting to condition the comparison of poor and non-poor also on sex, age, highest level of education (in 2010), immigrant status, and health (in 2000). 11

Given the set-up of our data—with 10 years between the two data-points and with no information on the precise time ordering of poverty and social outcomes at t 1 , the model can be further improved by including change in some of the control variables. It is possible, for example, that a non-poor and married respondent in 2000 divorced before 2010, triggering both poverty and reduced social relations at the time of the interview in 2010. 12 There are two major events that in this way may bias our results, divorce/separation and unemployment (because each can lead to poverty, and possibly also affect social outcomes). We handle this by controlling for variables combining civil status and unemployment in 2000 as well as in 2010. To the extent that these factors are a consequence of becoming poor, there is a risk of biasing our estimates downwards (e.g., if becoming poor increases the risk of divorce). However, as there is no way to distinguish empirically whether control variables (divorce, unemployment) or poverty changed first we prefer to report conservative estimates. 13

Throughout, we use logistic regression to estimate our models (one model for each social outcome and poverty definition). We create a dummy variable for each of the combinations of poverty in 2000, poverty in 2010 and the social outcome in 2000, and alternate the reference category in order to get the four strategic comparisons described above. Coefficients do thus express the distance between the relevant change and comparison groups. The coefficients reported are average marginal effects (AME) for a one-unit change in the respective poverty variable (i.e. going from non-poor to poor and vice versa), which are straightforwardly interpretable as percentage unit differences and (unlike odds ratios or log odds ratios) comparable across models and outcomes (Mood 2010 ).

Regression Results

As detailed above, we use changes over time in poverty and social outcomes to estimate the effects of interest. The effect of poverty is allowed to be heterogeneous, and is assessed through four comparisons of the social outcome in 2010 (Y 1 ):

• Those entering poverty relative to those in constant non-poverty (P 01  = 0,1 vs. P 01  = 0,0) when both have favourable social outcomes at t 0 (Y 0  = 1)
• Those exiting poverty relative to those in constant poverty (P 01  = 1,0 vs. P 01  = 1,1) when both have favourable social outcomes at t 0 (Y 0  = 1)
• Those entering poverty relative to those in constant non-poverty (P 01  = 0,1 vs. P 01  = 0,0) when both have non-favourable social outcomes at t 0 (Y 0  = 0)
• Those exiting poverty relative to those in constant poverty (P 01  = 1,0 vs. P 01  = 1,1) when both have non-favourable social outcomes at t 0 (Y 0  = 0)

Poverty is a rare outcome, and as noted above it is particularly uncommon to enter poverty between 2000 and 2010 because of the improving macro-economic situation. Some of the social outcomes were also rare in 2000. This unfortunately means that in some comparisons we have cell frequencies that are prohibitively small, and we have chosen to exclude all comparisons involving cells where N < 20.

The regression results are displayed in Table  4 . To understand how the estimates come to be, consider the four in the upper left part of the Table (0.330, 0.138, −0.175 and −0.065), reflecting the effect of poverty, measured as economic deprivation, on the probability of having frequent social relations. Because these estimates are all derived from a regression without any controls, they are identical (apart from using three decimal places) to the percentage comparisons in Table  3 (0.33, 0.14, −0.17, −0.07), and can be straightforwardly interpreted as average differences in the probability of the outcome in question. From Table  4 it is clear that the three first differences are all statistically significant, whereas the estimate −0.07 is not (primarily because those who entered poverty in 2010 and had infrequent social relations in 2000 is a small group, N = 25).

Table 4

Average marginal effects (from logistic regression) of five types of poverty (1–5) on four social outcomes (A-D) comparing those with different poverty statuses in 2000 and 2010 and conditioning on the starting value of the social outcome (in 2000)

Right columns control for sex, education, age, immigrant status, health in 2000, civil status change between 2000 and 2010, and unemployment change between 2000 and 2010. P values in parentheses. Excluded estimates involve variable categories with N < 20. Shaded cells are in hypothesized direction, bold estimates are statistically significant ( P  < 0.05). N in regressions: 1A: 3075; 1B: 3073; 1C: 3075; 1D: 3069; 2A: 3144; 2B: 3137; 2C: 3144; 2D: 3130; 3A: 3074, 3B: 3072; 3C: 3074; 3D: 3068; 4A: 2995; 4B: 2988; 4C: 2995; 4D: 2981; 5A: 3128; 5B: 3121; 5C: 3128; 5D: 3114

In the column to the right, we can see what difference the controls make: the estimates are reduced, but not substantially so, and the three first differences are still statistically significant.

The estimates for each social outcome, reflecting the four comparisons described above, support the hypothesis of poverty affecting social relations negatively (note that the signs of the estimates should differ in order to do so, the upper two being positive as they reflect an effect of the exit from poverty, and the lower two being negative as they reflect an effect of entering poverty). We have indicated support for the hypothesis in Table  4 by shading the estimates and standard errors for estimates that go in the predicted direction.

Following the first two columns down, we can see that there is mostly support for the hypothesis of a negative effect of poverty, but when controlling for other variables, the effects on social support are not impressive. In fact, if we concentrate on each social outcome (i.e., row-wise), one conclusion is that, when controlling for confounders, there are rather small effects of poverty on the probability of having access to social support. The opposite is true for political participation, where the consistency in the estimated effects of poverty is striking.

If we instead follow the columns, we ask whether any of the definitions of poverty is a better predictor of social outcomes than the others. The measure of economic deprivation appears to be the most stable one, followed by absolute poverty and the combined deprivation/absolute poverty variable. 14 The relative poverty measure is less able to predict social outcomes: in many instances it even has the non-expected sign. Interestingly, long-term poverty (as measured here) does not appear to have more severe negative consequences than absolute poverty in general.

Because some of our comparison groups are small, it is difficult to get high precision in the estimates, efficiency being a concern particularly in view of the set of control variables in Table  4 . Only 14 out of 62 estimates in models with controls are significant and in the right direction. Nonetheless, with 52 out of 62 estimates in these models having the expected sign, we believe that the hypothesis of a negative effect of poverty on social outcomes receives quite strong support.

Although control variables are not shown in the table, one thing should be noted about them: The reduction of coefficients when including control variables is almost exclusively driven by changes in civil status. 15 The time constant characteristics that are included are cross-sectionally related to both poverty and social outcomes, but they have only minor impacts on the estimated effects of poverty. This suggests that the conditioning on prior values of the dependent and independent variables eliminates much time invariant heterogeneity, which increases the credibility of estimates.

Conclusions

We set out to test a fundamental, but rarely questioned assumption in dominating definitions of poverty: whether shortage of economic resources has negative consequences for social relations and participation. By using longitudinal data from the Swedish Level-of-living Surveys 2000 and 2010, including repeated measures of poverty (according to several commonly used definitions) and four social outcome variables, we are able to come further than previous studies in estimating the relation between poverty and social outcomes: Our main conclusion is that there appears to be a causal relation between them.

Panel models suggest that falling into poverty increases the risk of weakening social relations and decreasing (civic and political) participation. Climbing out of poverty tends to have the opposite effects, a result that strengthens the interpretation of causality. The sample is too small to estimate the effect sizes with any precision, yet they appear to be substantial, with statistically significant estimates ranging between 5 and 21 % units.

While these findings are disquieting insofar as poverty goes, our results also suggest two more positive results. First, the negative effects of poverty appear to be reversible: once the private economy recovers, social outcomes improve. Secondly, the negative consequences are less for the closest social relations, whether there is someone there in cases of need (sickness, personal problems, etc.). This is in line with an interpretation of such close relations being unconditional: our nearest and dearest tend to hang on to us also in times of financial troubles, which may bolster risks for social isolation and psychological ill-being,

Our finding of negative effects of poverty on civic and political participation relates to the fears of a “downward spiral of social exclusion”, as there is a risk that the loss of less intimate social relations shrinks social networks and decreases the available social capital in terms of contacts that can be important for outcomes such as finding a job (e.g., Lin 2001 ; Granovetter 1974 ). However, Gallie et al. ( 2003 ) found no evidence for any strong impact of social isolation on unemployment, suggesting that the negative effects on social outcomes that we observe are unlikely to lead to self-reinforcement of poverty. Nevertheless, social relations are of course important outcomes in their own right, so if they are negatively affected by poverty it matters regardless of whether social relations in turn are important for other outcomes. Effects on political and civic participation are also relevant in themselves beyond individuals’ wellbeing, as they suggest a potentially democratic problem where poor have less of a voice and less influence on society than others.

Our results show the merits of our approach, to study the relation between poverty and social outcomes longitudinally. The fact that the poor have worse social relations and lower participation is partly because of selection. This may be because the socially isolated, or those with a weaker social network, more easily fall into poverty; or it can be because of a common denominator, such as poor health or social problems. But once we have stripped the analysis of such selection effects, we also find what is likely to be a causal relation between poverty and social relations. However, this effect of poverty on social outcomes, in turn, varies between different definitions of poverty. Here it appears that economic deprivation, primarily indicated by the ability of raising money with short notice, is the strongest predictor of social outcomes. Income poverty, whether in absolute or (particularly) relative terms, are weaker predictors of social outcomes, which is interesting as they are the two most common indicators of poverty in existing research.

Even if we are fortunate to have panel data at our disposal, there are limitations in our analyses that render our conclusions tentative. One is that we do not have a random allocation to the comparison groups at t 0 ; another that there is a 10-year span between the waves that we analyze, and both poverty and social outcomes may vary across this time-span. We have been able to address these problems by conditioning on the outcome at t 0 and by controlling for confounders, but in order to perform more rigorous tests future research would benefit from data with a more detailed temporal structure, and preferably with an experimental or at least quasi-experimental design.

Finally, our analyses concern Sweden, and given the position as an active welfare state with a low degree of inequality and low poverty rates, one can ask whether the results are valid also for other comparable countries. While both the level of poverty and the pattern of social relations differ between countries (for policy or cultural reasons), we believe that the mechanisms linking poverty and social outcomes are of a quite general kind, especially as the “costs for social participation” can be expected to be relative to the general wealth of a country—however, until comparative longitudinal data become available, this must remain a hypothesis for future research.

1 http://www.sofi.su.se/english/2.17851/research/three-research-departments/lnu-level-of-living .

2 We have tested various alternative codings and the overall pattern of results in terms of e.g., direction of effects and differences across poverty definitions are similar, but more difficult to present in an accessible way.

3 Our deprivation questions are however designed to reduce the impact of subjectivity by asking, e.g., about getting a specified sum within a specified time (see below).

4 In the equivalence scale, the first adult gets a weight of one, the second of 0.6, and each child gets a weight of 0.5.

5 We have also tried using single indicators (either a/b or i/ii) without detecting any meaningful difference between them. One would perhaps have assumed that poverty would be more consequential for having others over to one’s own place, but the absence of support for this can perhaps be understood in light of the strong social norm of reciprocity in social relations.

6 We have refrained from using information on voting and membership in trade unions and political parties, because these indicators do not capture the active, social nature of civic engagement to the same extent as participation in meetings and the holding of positions.

7 We have also estimated models with a more extensive health variable, a s ymptom index , which sums responses to 47 questions about self-reported health symptoms. However, this variable has virtually zero effects once global self-rated health is controlled, and does not lead to any substantive differences in other estimates. Adding the global health measure and the symptom index as TVC had no effect either.

8 Using the other indicators of poverty yields very similar results, although for some of those the difference between poor and non-poor is smaller.

9 We call these comparison groups ”never poor” and ”constantly poor” for expository purposes, although their poverty status pertains only to the years 2000 and 2010, i.e., without information on the years in between.

10 With this design we allow different effects of poverty on improvement versus deterioration of the social outcome. We have also estimated models with a lagged dependent variable, which constrains the effects of poverty changes to be of the same size for deterioration as for improvement of the social outcome. Conclusions from that analysis are roughly a weighted average of the estimates for deterioration and improvement that we report. As our analyses suggest that effects of poverty differ in size depending on the value of the lagged dependent variable (the social outcome) our current specification gives a more adequate representation of the process.

11 We have also tested models with a wider range of controls for, e.g., economic and social background (i.e. characteristics of the respondent’s parents), geography, detailed family type and a more detailed health variable, but none of these had any impact on the estimated poverty effects.

12 It is also possible that we register reverse causality, namely if worsening social outcomes that occur after t 0 lead to poverty at t 1 . This situation is almost inevitable when using panel data with no clear temporal ordering of events occurring between waves. However, reverse causality strikes us, in this case, as theoretically implausible.

13 We have also estimated models controlling for changes in health, which did not change the results.

14 If respondents’ judgments of the deprivation questions (access to cash margin and ability to pay rent, food, bills etc.) change due to non-economic factors that are related to changes in social relations, the better predictive capacity of the deprivation measure may be caused by a larger bias in this measure than in the (register-based) income measures.

15 As mentioned above, this variable may to some extent be endogenous (i.e., a mediator of the poverty effect rather than a confounder), in which case we get a downward bias of estimates.

Contributor Information

Carina Mood, Phone: +44-8-402 12 22, Email: [email protected] .

Jan O. Jonsson, Phone: +44 1865 278513, Email: [email protected] .

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1 (page 1) p. 1 Introduction

• Published: July 2018
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Poverty is a global issue. There are people in every country with a standard of living that is significantly lower than that of others. Nevertheless, the absolute number of people living in poverty has decreased since 1990, especially in the poorest countries in the world. Therefore, there is reason to hope that further poverty reduction can occur. The Introduction outlines the pervasiveness and trends in poverty around the world; the many different causes of poverty that embed themselves in social, political, economic, educational, and technological processes, which affect all of us from birth to death; and considers why poverty matters. Overall, the economy suffers if systematic public policy does not address poverty.

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Poverty as a Social Problem

Poverty is a social issue facing people in every country across the world. Poverty refers to a relative concept that is used to describe individuals in a society who lack the essentials taken for granted by most people. In Australia, people living in relative poverty are those whose living standards fall below an overall community standard. In most cases, people living below the poverty line in Australia have low-income levels; they lack the opportunities as well as resources such as education, housing, health care, employment opportunities, recreation, and food. Individual circumstances and major inequalities built-in society are the main causes of poverty. Poverty as well as other social miseries are mostly caused by  social structures . Societal issues such as segregation, racism, cause disparities in employment, education as well as income for marginalized people.

Gender  inequality is the most pervasive and oldest form of inequality in the globe. Women are denied their voices and make women unequal to men, from the household, national and international levels. Though there has been some progress towards changing this narrative in the modern world, women have not achieved economic equality hence women being more likely to live in poverty compared to men. Moreover, poverty is considered higher among black and minority  ethnic  groups compared to the white population. People from some ethnic groups get less pay than individuals from other groups with the same experience and qualifications.

In addition, poverty  stereotypes  have negative effects on people’s performance across the world. Economic scarcity is one of the vital factors of poverty that makes poor people more vulnerable to poverty experience and life pressure. Also, low-income earners are more likely to experience poverty and stress.

Even though it is possible to moderate poverty by use of social transfers, it is not possible to mitigate the processes, which cause poverty under  capitalism . The main effect of capitalism causes competition between states and spreads poverty among developing countries because of the individual interests of private firms rather than their workers’ needs. Also,  globalization  reduces income inequality hence leading to poverty reduction. When states open up to trade, they grow faster and the living standards of their people tend to increase.

Poverty leads to  social changes  as poor individuals are more likely to experience different issues such as a divorce as well as family conflicts. Moreover, poor people are more prone to health problems. Children from poor families are less likely to get a quality education or go to college level, hence being more likely to engage in criminal activities. Moreover, issues such as poor sanitation, illness as well as hunger are the causes and also effects of poverty. Poor people are less likely to have adequate food and clean water.

In conclusion, sociology can provide a significant tool for thinking about poverty as a social issue that affects many people across the globe. Thinking sociologically can help people to better understand poverty and disentangle it from a range of associated concepts and pejorative discussions regarding a variety of social issues.

Germov, J & Poole, M (eds) 2019,  Public Sociology: An introduction to Australian society , 4th edn, Allen & Unwin, Crows Nest.

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Social Issues of Families in Poverty Essay

Issue #1: parental stress and mental health, identification of the issue.

Poverty is a state where one lacks adequate resources to meet all essential human needs. Families living in poverty are unable to save some money for investment or for emergency purposes. In essence, families living in poverty spend at least 75% of their income on food, shelter, and clothing. Parental stress and mental health have a causal link with poverty. With the tightened budget, parents of the families living in poverty struggle to make ends meet, and in the course of their struggles, they experience many stresses and depressions.

The toughened struggles lead to irritability of the parenting role as a whole, and this causes the entire family to experience some mental distresses. Financial stresses increase the parents’ emotional distresses, and the parents are unable to respond sensitively to the children’s needs. Parents end up being harsh, inconsistence and non-responsive. With the above-mentioned living conditions, the children’s mental health is affected. The children live in denial; they relate poorly with their peers from elite families, and they perform poorly in schools.

Rational interventions

As evident, the families living in poverty are those from the minority ethnic communities. These families need family strengthening interventions and family support services. It is noteworthy that these services are available; however, they are not readily accessible to most of the families living in poverty. An intervention to make the services readily available and accessible would help in addressing the issue. The service providers can offer the services in venues that the target audience can readily access.

Moreover, time is a very important aspect to the families living in poverty. Since most of the parents spend the entire day doing manual jobs to earn a living, the family support services would work perfectly if scheduled to take place during the evenings. Moreover, most of the families living in poverty are those from minority ethnic groups, and thus, they suffer from inferiority complex.

Therefore, the family-support service providers ought to be resilient. They may receive several setbacks from the target audience, but they ought to find ways to win the trust of the members of the families living in poverty. They should find a way to overcome the prejudice regarding members with mental disabilities and those with difficulties in learning.

The most important lesson that the members of the families living in poverty should learn is the coping strategies. The parents should learn how to respond to their children, and thus improve their relationship with the children despite the toughened economic conditions.

The parents ought to learn several skills; efficient conflict resolution skills, child centered parenting skills, efficient budgetary skills, enhanced emotional functioning skills, and the principles of developing healthy relationships. On the other hand, the children ought to learn how to remain resilient despite the massive poverty related stresses. The family strengthening interventions should help parents and children living in poverty to learn how to develop safe and healthy relationships in spite of the adverse effects of poverty.

Cost and benefits of the proposed interventions

The above named interventions would cost the government quite some large amount of money. Further, the involved service providers will have to work extra hard to make sure they attain their goals. They may have to work for extra hours to convince the parents to adhere to certain aspects.

The service providers may experience several setbacks from their target audience, and thus, they have to be resilient throughout the exercise. However, the benefits associated outweigh the costs. If the parents and the children living in poverty adhere to the teachings, the parental stresses, economic stresses, and emotional stresses that lead to mental health issues would decrease drastically.

Issue #2: Food Insecurity and Hunger

Food is a basic need for human survival; however, the fact that not all families can afford quality and quantity food is very distressing. Food and nutrition determines the health status of an individual. However, families living in poverty do not access the right amount of food to replenish the body’s nutrition requirements. Therefore, members of families living in poverty suffer from malnutrition. Poverty, food insecurity and hunger are somewhat related. Children of families living in poverty are prone to nutrition inadequacy ailments.

In America, there are minority ethnic communities that suffer from food insecurity and hunger. Insecure and non-lucrative jobs are the core causes of extreme poverty levels. American is a first class nation, and one would not expect to find families suffering from adverse poverty, food insecurity, and hunger. However, the tragedy affects millions of American citizens, where, the unnecessary health conditions associated with child hunger burdens the taxpayer.

It is very embarrassing that America has children who suffer from growth and developmental impairments because of food insecurity and hunger. It is also worth noting that food insecurity and hunger leads to deterred emotional, cognitive, and intellectual development, which affects the educational performance of the affected children.

Food insecurity and hunger is a problem that directly or indirectly affects the entire nation. The pediatricians, in collaboration with the ministry of health should take the role of vaccinating all children against childhood hunger medical conditions. In addition to the vaccinations, the pediatricians should treat the children in an effective and efficient manner whenever they have any health condition associated with hunger and malnutrition.

It is noteworthy that food insecurity and hunger is a community problem, and businesses have to come in and show their Social Corporate Responsibility (CSR). Business leaders have the obligation to help in financing and enabling the success of the interventions to eradicate food insecurity and hunger.

Nutrition assistance programs, food assistance programs, programs to invest in the poor, food aid programs, agricultural programs, and programs to prevent humanitarian crisis would help in eradicating food insecurity and hunger. It is the role of the federal government, the non-federal government, and the businesses to fund the above-mentioned programs to eliminate food insecurity and hunger.

Obviously, the government will undergo extra costs in addressing the issue of food insecurity and hunger because not all business owners will be willing to fund the programs. In addition, the pediatricians and the ministry of public health will have to go an extra mile to reach the hidden patients who suffer from malnutrition. However, this worthwhile exercise would greatly help the children. The approach would solve all the problems associated with the physical, emotional, and intellectual development of the children living in poverty.

The children would perform highly in schools, and thus enhance their future life like the children from elite families. In addition to the associated benefits to the members of the families living in poverty, the exercise would save the taxpayers from the burden of financing the hospitalization of the sickened hungry children.

The employers will benefit from reduced absenteeism because of child sickness and the improved employee turnover at the work place. Finally, the government would benefit from the effective and competitive workforce of the healthy citizens.

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The Hardships and Dreams of Asian Americans Living in Poverty

Illustrations by Jing Li

Asian Americans are often portrayed as economically and educationally successful.

In reality, about one-in-ten Asian Americans live in poverty. Asian Americans also have the most income inequality of any major racial or ethnic group in the United States.

Without closely examining the diversity of Asian American experiences, it’s easy to miss the distinct stories of Asian Americans living with economic hardship.

To understand more about this population, Pew Research Center conducted 18 focus groups in 12 languages to explore the stories and experiences of Asian Americans living in poverty.

Table of Contents

Of the 24 million Asians living in the United States, about 2.3 million live in poverty . Many are working to overcome the economic hardships they encounter and achieve their American dream. But they face challenges along the way, from Asian immigrants grappling with language barriers to U.S.-born Asians navigating pathways to success.

In February 2023, Pew Research Center conducted 18 focus groups with adult participants from 11 Asian origin groups in different regions across the U.S. These are among the most likely Asian origin groups to experience economic hardship in the U.S. Focus groups included those whose approximate family income is at or below 140%-250% of the 2022 federal poverty line, depending on their location. Accompanying these focus group findings are results from a Pew Research Center survey about the hardships and dreams of Asians living in poverty, conducted from July 2022 to January 2023.

Some common themes that focus group participants shared include day-to-day financial difficulties, assumptions by others that they do not need help because they are Asian, and the importance of financial security in achieving the American dream.

Related:   1 in 10: Redefining the Asian American Dream (Short Film)

Focus groups also reveal that Asian Americans’ experiences with economic hardship differ by whether they were born in the U.S. or outside the country. Some immigrants not only experience difficulties making ends meet, but also face challenges that come with living in a new, unfamiliar country. These include learning English, navigating daily life in a new place and finding a stable job.

Even though U.S.-born Asians grew up in this country and speak English, they talk about the challenges of understanding what it takes to succeed in America. This includes getting the “right” education, getting access to the “right” knowledge and knowing the “right” people to succeed.

The findings in this data essay reveal what participants shared about their experiences with economic hardship, overcoming challenges, and their views of the American dream and social mobility in America.

The terms Asians and Asian Americans are used interchangeably throughout this data essay to refer to those who self-identify as Asian, either alone or in combination with other races or Hispanic identity.

The terms living in poverty, living near or below the federal poverty line and living with economic hardship are used interchangeably throughout this essay to refer to adults whose family income is close to or below the 2022 federal poverty line.

• For results on Asian adults from the focus groups, this refers to adults whose approximate family income is at or below 140%-250% of the federal poverty line. Thresholds varied by focus group recruitment locations to account for differences in the cost of living.
• For results on Asian adults from the survey , this refers to adults whose approximate family income falls at or below 100% of the federal poverty line.
• For data on the total U.S. Asian population from the U.S. Census Bureau , this refers to all Asian Americans whose family income is at or below 100% of the federal poverty line.

The terms federal poverty line and poverty line are used interchangeably to refer to the federal poverty guidelines published yearly by the U.S. Department of Health and Human Services.

The term U.S. born refers to people born in 50 U.S. states, the District of Columbia, Puerto Rico or other U.S. territories.

The term immigrant refers to people who were born outside the 50 U.S. states or the District of Columbia, Puerto Rico or other U.S. territories.

Asian Americans and financial struggles

Financial difficulties are part of many Asian Americans’ day-to-day lives, according to the 2022-23 survey. Asian adults were asked if they had experienced any of the following financial challenges in the past 12 months: gotten food from a food bank or a charitable organization, lost their health insurance, had problems paying for their rent or mortgage, had trouble paying for medical care for themselves or their family, had trouble paying their bills, or been unable to save money for emergencies.

“It got really bad to the point where a simple bowl of rice, we weren’t even able to afford that. So there were times where a bowl of rice would be a meal for all three meals, or we just simply did not eat.” NOLAN , FILM PARTICIPANT

The most common financial difficulty experienced is being unable to save for emergencies. More than half of Asian adults living in poverty (57%) said this had happened to them. By comparison, fewer Asian adults living above the poverty line (40%) said this.

Note: “Asian adults living in poverty” refers to survey respondents whose approximate family income is at or below 100% of the federal poverty line. Share of respondents who didn’t offer an answer or answered “no” not shown.

Source: Survey of Asian American adults conducted July 5, 2022-Jan. 27, 2023. “The Hardships and Dreams of Asian Americans Living in Poverty”

Some focus group participants shared how challenging it was for them to save because of their earnings and their family needs. Participants also talked about the urgency they feel to save for their children and retirement:

“I feel a bit helpless [about my financial situation]. … I don’t want to be in debt. I have to save money to raise my kids, but I don’t have money to save.”

–Immigrant man of Korean origin in early 30s (translated from Korean)

“[I save money] to go to Pakistan. Because I have four children … I needed five or six tickets, in case my husband traveled with us, and it required a lot of money. We used to save for one whole year, and when we were back from Pakistan, we were usually empty-handed. Then the cycle started again.”

–Immigrant woman of Pakistani origin in late 40s (translated from Urdu)

“You’re not going to work forever. No one is going to work forever. You want to have savings … for your rent [or] in case of medical bills [if] something happens. [You] might as well [save for] some trips down the while when you [can] travel still. But you’re not going to be working at 80 years old, are you?”

–U.S.-born man of Chinese origin in early 40s

“We were all four of us in one apartment, four siblings, plus the parents, so that’s six people in a house, which was very, very cramped.” SABA , FILM PARTICIPANT

Other common difficulties for Asian Americans living near or below the poverty line include having trouble paying their bills (42%), needing to get food from a food bank or a charitable organization (38%) and having problems paying their rent or mortgage (33%), the survey found. Smaller shares of Asian adults living above the poverty line say they experienced difficulties paying their bills (17%), got food from a food bank or a charity (6%) or had trouble paying their rent or mortgage (11%).

These findings were echoed in our focus groups, where participants recalled the stress and tension their families felt when things like this happened to them:

“My dad lost his car a couple of times. There was this one time where I remember it was nighttime. All of a sudden, a cop comes over to our home [with another person]. … And my dad was forced to give up his car to this stranger … because, I don’t know, he wasn’t paying off the car or something. And it was very humiliating, and my brothers wanted to get physical with that person because he was acting very arrogantly. My dad was able to eventually pay back the car and somehow get it back. But there were many times when we might not have had a roof over our heads.”

–U.S.-born man of Pakistani origin in late 20s

Asian immigrants face challenges navigating life and employment in the U.S.

Immigrant and U.S.-born Asians experience economic hardship in different ways. Asian immigrants in the focus groups discussed how a lack of English proficiency, navigating transportation and getting a good job all shape their experiences with economic hardship.

“I felt sad about life, didn’t know the language, didn’t know the roads. I had no friends, so I felt very sad.” PHONG , FILM PARTICIPANT (TRANSLATED FROM VIETNAMESE)

For example, not knowing English when they first arrived in the country created extra challenges when using local transportation systems and meeting basic daily life needs such as shopping for groceries:

“When we were very young, the most difficult thing we faced [after coming to the U.S.] was not being able to speak the language. Unless you lived in those times, you wouldn’t know. We didn’t know how to buy food. … We didn’t know the language and there was no interpreter available. … I didn’t know how to take the bus, I didn’t know where to go, or to which place they were taking me to school. When we were asked to go to the classroom, we didn’t know where to go. … There was no other way, because there was no communication.”

–Immigrant woman of Hmong origin in late 50s (translated from Hmong)

Language barriers also brought extra hurdles for Asian immigrants in the job market. Some focus group participants said it was hard to explain their skills to potential employers in English effectively, even if they had the relevant education or skills for the job and had learned English before they immigrated:

“After coming [to the U.S.], there were many problems to face, first … the language problem. We have read English … but we are not used to speaking. … We also had education … but since we can’t explain ourselves in English – what we can do, what we know … we are getting rejected [from jobs] as we cannot speak. … Another problem was that I had a child. My child was small. I could not go to work leaving him. At that time, my husband was working. He also had the same thing – he had education, but he could not get a good job because of the language. [As another participant] said, we had to work below the minimum wage.”

–Immigrant woman of Bangladeshi origin in late 30s (translated from Bengali)

Not wanting to be a burden influenced life choices of many U.S.-born participants

For many U.S.-born focus group participants, concerns about being a burden to their families shaped their childhoods and many of their life decisions:

“It’s difficult to talk to [my parents] because you grew up here and it’s just totally different from them growing up in Vietnam. … It’s the same like what [another participant] was saying, when you take off the burden to your parents, right? So I dropped out of college, just because I didn’t want them paying anymore. I just didn’t think that I was going to do or be anything in college, right? So I would rather work. So I started taking responsibility of my own and you start working really hard and you getting out of the house and helping them pay for bills.”

–U.S.-born man of Vietnamese origin in mid-40s

“My family’s struggling. Is education more important, [or] is working more important? I really felt that growing up because a lot of my friends, education – going to college and going to a techno school – wasn’t really on their radar, it wasn’t really something on their plan. I think talking to a lot of the folks and a lot of my friends during their time, they felt like they had to grow up to provide for their family or for you to find some type of income to kind of help their family. And so that really drove the direction of at least one of my friends, or a lot of my friends.”

–U.S.-born man of Hmong origin in mid-30s

Some U.S.-born focus group participants said that when reflecting on their childhoods, they could see the financial burden they had on their families in a way they did not realize as a child:

“At a certain point you become very aware of how much of a financial burden you are. You don’t ask for anything you want. Like, you don’t ask for prom. You don’t ask to join clubs. You don’t ask to go on field trips, things like that. You just know that it’s going to cause so much drain on your parents.”

–U.S.-born woman of Vietnamese origin in mid-20s

“[My parents] had like a lot of responsibilities, like … giving money back to their father, and then their sisters and brothers, helping them out back [in Pakistan]. … [My father] had to support us and then send money back constantly there. I didn’t know that until now, basically. … We would hardly see him. Maybe like on Sunday, we would see him a couple of hours. But it was on the weekdays, we would hardly see our father. He was always working.”

–U.S.-born woman of Pakistani origin in early 30s

Overcoming economic challenges

The survey found that when Asian adults living in poverty have needed help with bills, housing, food or seeking a job, about six-in-ten (61%) say they’ve turned to family or friends.

Some focus group participants mentioned that families and friends in their ethnic community were a great source of financial help. For others, the limited size of their ethnic community in the U.S. posed obstacles in obtaining assistance.

“My dad arrived in the U.S. when he was 26 years old, and I’m now 29 years old. … I have seven siblings and my parents who support me. And my parents didn’t have that, they didn’t have their parents to support them.” TANG , FILM PARTICIPANT

“It was very difficult during [my] study [at university]. … I had a scholarship, most of the part was scholarship; however, I had to pay something between $10,000 and $15,000 per semester. And I had to eat, I had to pay rent, I had to do everything. At the same time, there are many other things too, aren’t there? And there was always a stress about money. This semester is over now, how do I pay for the next? I had no clarity about what to do and not to do. In that situation, I approached those friends studying there or who came there a little earlier and were working to borrow money. … I [was] offered help by some friends and in finding a job and being helped for my needs.”

–Immigrant man of Nepalese origin in early 40s (translated from Nepali)

“We didn’t have a large Burmese community to ask for such help. It was not yet present. As we had no such community, when we had just arrived, we told close friends, got directions and went to ask for help.”

–Immigrant woman of Burmese origin in late 40s (translated from Burmese)

However, not all Asians living with economic hardship have asked for or received help. In the focus groups, participants shared why they or their families sometimes did not do so or felt hesitant. Fear of gossip and shame were mentioned multiple times:

“[I experienced financial difficulties after I first arrived in the U.S.] because I came here as a student. … It’s because I had to pay monthly rent and I paid for living expenses. I felt a little pressured when the monthly payment date approached. I had no choice but to ask my parents in Korea for money even as an adult, so I felt a sense of shame.”

–Immigrant woman of Korean origin in early 40s (translated from Korean)

“My cousin will [help me financially] without judgment. But, like, my aunt and elders – if it gets back to them [that I asked for help], it’s going to for sure come with judgment. And if I could figure it out myself, I will take the way without judgment.”

“To add on to what [another participant] said, if you go to the community [for help] or whatever, you know, by tomorrow everybody’s going to know it’s your problem.”

–U.S.-born woman of Pakistani origin in early 40s

Immigrants who came to the U.S. because of conflict are more familiar with government aid programs

Asian immigrants come to this country for a variety of reasons. In the focus groups, immigrant participants who came to the U.S. due to conflict or war in their origin countries referenced government assistance programs more often than those who came for other reasons.

This reflects a broader pattern among Asian immigrants overall: Those who came because of conflict or persecution have turned to federal, state or local governments for help with living expenses or employment more often than immigrants who came for economic or educational opportunities, according to the survey.

Focus group participants reflected on differences in the amount of government help available. Sometimes, they expressed a sense of unequal treatment:

“Vietnamese have this program where people got sponsored because of the war. So for other Asians, they feel that we are more privileged. Because from what I know, the Koreans and the Japanese, they must have money in order to come to America. As for us, we can come here through the refugee program, we can come here through the political program. They feel that we got more preferential treatment than other Asians in that regard.”

–Immigrant man of Vietnamese origin in early 40s (translated from Vietnamese)

“During the pandemic, I had to go through housing assistance and everything [to pay my rent]. Something like that with EBT [Electronic Benefits Transfer], how they send you stimulus checks. Korea doesn’t have any of that stuff.”

–U.S.-born woman of Korean origin in late 40s

“I think my community is relatively traditional. Because 20 years ago, we went straight to Chinatown fresh off the plane [after immigrating]. I still remember being in [the local] hospital, lots of social workers were there to help out, including with a medical insurance card, and applying for service, most importantly medical insurance. We all went to [the same] street. We relied on other Chinese people.”

–Immigrant man of Chinese origin in late 30s (translated from Mandarin)

Family ties contribute to increased awareness of government programs. For example, when asked how they learned about using government programs for help, some U.S.-born participants said:

“[I learned about the government programs from] my parents. I had to translate for them.”

–U.S.-born woman of Cambodian origin in mid-30s

“I was working at [a smoothie shop], and I was 17 and a half. … My college loan was like $50,000 [and I was] making $12.50 [an hour], how the hell am I supposed to be paying that month to month? Because my month-to-month was damn near $300, $500. My $12.50 an hour does not even cover for it, any of it, whatsoever. And, you know, me [having] been kicked out of home … I was living with my aunt. … I don’t want to burden her. So I had to go and ask her. She told me, ‘Hey, you should go and apply for food stamps.’”

–U.S.-born woman of Laotian origin in mid-30s

U.S.-born and immigrant focus group participants hold different views on education’s role in achieving a better future

“My friend, he started out at internship … I was too naive. I was laughing at the time, like, ‘Man you spend your time? You took buses there every day? No pay?’ … I just didn’t know the big picture behind [it]. I wish I could plan for [it] just like how they did.” PHUOC , FILM PARTICIPANT

Reflecting on what could lead to success and achieving the American dream, focus group participants who were born in or grew up in the U.S. emphasized the value of getting connected to the “right” opportunities:

“[You don’t have] to go to school to be successful. I mean, they say there are people who are book smart and just people who are street smart, you know. [As long as you] grow up and you know the right people … networking on the right people to get into things. Or, you know, the right people to do the right things to get to where you want to be in life.”

–U.S.-born man of Hmong origin in late 20s

Other participants said it would have helped if their families had a deeper understanding of how the education system prepares them for good careers:

“I feel if my parents were educated and they could have guided me in the right direction [for college] – although, they tried their best. I’m not blaming them. But, you know, if I had someone of a more academic background who knew the system … I will try my best to help my daughter out in college or help her choose what her major is going to be. [My parents couldn’t provide] that kind of help that really helped me in choosing my major. … And so I think just the background that we come from was not the best – or not having the full grasp of this system. … Versus someone who’s had parents here for multiple years, and their parents are now telling them, like, ‘Hey, this is not the right decision for you. Try doing this. This will be better in the long run.’”

–U.S.-born man of Pakistani origin in early 30s

Some also said firsthand knowledge of how to invest and how the U.S. financial system works would have helped:

“[In] the newer generation, we have access to learn all the things we need to, right? [I watch videos] that talk about, like, ‘These are the things you need to do in order to be financially successful. You need to invest your money, get into stocks,’ and stuff like that. And I know that not even 1% of my Hmong community knows anything about that stuff. … So I think we can be more financially successful, including myself, if we were to look more deeply into those things.”

–U.S.-born woman of Hmong origin in late 20s

“If you’re educated and know how, like, let’s say investments work, if you know how that’s done and then you apply it actually going through [someone] like investors or even stockbrokers, then you’ll see the fruits of your labor, or at least experience that, as opposed to not even having the knowledge or even the experience to begin with.”

–U.S.-born man of Cambodian origin in mid-30s

Some participants shared that even when they have some knowledge of financial institutions, they feel the system is working against them:

“I think systematic racism [is a barrier to achieving the American dream]. … I mean, if you own a car, you got to get the bank to approve you. … And they charge people with, like, no credit the highest fee, the most percentage, which are a lot of the folks [like] us trying to achieve the American dream. And then we go to neighborhoods that have the highest crime rate, we also have the most premiums. … And so I think that, one, we’re paying a lot more with much less … the system [was] set up well before minorities, and I think we’re pretty much going to fall behind.”

Many focus group participants also see the value of education, especially a college one, in leading toward a better future and achieving the American dream:

“[When I think of the American dream, it means] if you work hard enough, you can succeed. … You can get an education or a higher education. Then you have so many choices here and exposure to so many ideas and concepts that you wouldn’t otherwise.”

“The bachelor’s degree was important to me in the sense that I needed it so that I could apply for the jobs I wanted. … I guess it made things a bit easier.” THET , FILM PARTICIPANT (TRANSLATED FROM BURMESE)

But this sentiment resonated more with immigrant participants than those born in the U.S.:

“It is the education and the relevant knowledge I think that our Hmong people must have. We’ve been living in this country for the last 45 years. I think that to live in this country, it is very important for some people. I do not think everyone has a ‘lawyer’ or a ‘doctor’ in their house. If it happens, maybe we will reach our goal and the poverty will gradually disappear from our lives.”

–Immigrant woman of Hmong origin in mid-30s (translated from Hmong)

“I think if I obtain any degree, I would perhaps be able to do something.”

Assumptions about Asians hurt their chances of overcoming challenges

Participants shared that other people’s assumptions about Asians complicate their experience of living with economic hardship. Asians are often characterized as a “model minority” and portrayed as educationally and financially successful when compared with other groups.

Some participants shared how the assumption that all Asians are doing well hurt their ability to seek help:

“I have a daughter … she’s the only Asian in class. … Everybody tends to think, ‘She’s Asian; she’s so smart; her mommy has money. So you got to invite her to your birthday party because her mom is rich. [Her] mom will buy you a present.’ … I’m not rich, but because we’re Asian … she’s invited to all these parties.”

–U.S.-born woman of Hmong origin in early 30s

“What I can assume is that outside of our community, especially at the government level, [including] state level and central federal level here, we are missing out or not eligible for benefits. In their opinion, we are rich, no matter if we are working or not. [They may think] our stories may not be genuine. They may think we are making up a story [if we apply for benefits].”

Striving for the American dream

Freedom was a recurring theme in how focus group participants define their American dream. Two aspects were mentioned. The first was freedom from debt and stress over making ends meet, such as paying for everyday basic needs including rent and food. The second was the ability to make life choices freely without financial constraints, enabling them to live the life they aspire to.

Reaching the American dream

Half of Asians living near or below the federal poverty line say they believe they have achieved the American dream or are on their way to achieving it, the survey found. This includes 15% who say they have achieved it and 36% who say they are on their way. By comparison, among those living above the poverty line, 27% say they’ve achieved the American dream, and another 46% say they are on their way.

“Before I came to America, I had never heard of the American dream. … But because I was able to at least bring my son along, not only my life but also his education has improved significantly.” THEIN , FILM PARTICIPANT (TRANSLATED FROM BURMESE)

Among focus group participants, many were optimistic about reaching the American dream for themselves:

“[To me, the American dream is] the opportunity to come to America. I’ve learned a lot after reaching here. And I’ve been able to help my parents and relatives. Despite facing some troubles here, I’ve [provided them a] little financial assistance. I would’ve been unable to help them if I had been in Bhutan.”

–Immigrant woman of Bhutanese origin in late 40s (translated from Dzongkha)

Some participants were also hopeful that the next generation can achieve their American dream, even when they themselves are not there yet:

“When I think about the American dream, I look back at myself, because I belong to the first generation that came to this country. We all started very late. I know that this country will help you, but really it will not be easy for us. … What I think will help me to be happy is to ‘reach the American dream.’ If I can’t achieve it, then I will support my children so that they can reach the dream and I will be happy with them. I will give my children money to help them study.”

“If I can’t get [the American dream] for myself, it is okay. No matter how I am, I’ve already reached half of my life. But I’ve done as much as I can do for [my children], so my responsibility is done. If it’s their turn, I believe they will be able to do all that I couldn’t. I believe it.”

“I would like to own a home one day. And at this rate, and like many of my peers, that’s not a reachable goal right now. I don’t see it being a reachable goal for me for a very, very, very long time.” TANG , FILM PARTICIPANT

Still, the survey found that 47% of Asian adults living in poverty say the American dream is out of reach for them, higher than the share among those living above the poverty line (26%). Not all Asians living in poverty feel the same way about achieving the American dream, with U.S.-born Asians in the focus groups being less optimistic about reaching the American dream than immigrant Asians.

“In a certain era with the U.S. and the immigrants coming, the American dream [was] you come, you study, you do this, you can climb up the ladder, etc., etc. That was the big American dream. And I think there was a period where that was possible. Not any longer.”

Others also shared worries about their prospects of reaching the American dream because of different immigration histories and economic concerns such as inflation:

“I think I was conditioned to think too small to have the American dream. … Vietnamese Americans came over here at a very specific time. … There were Chinese Americans that came here like centuries ago, and they had the time to build generational wealth. We know that Vietnamese people came here in the ’70s. That’s not enough time to grow generational wealth.”

–U.S.-born woman of Vietnamese origin in late 20s

“I have kids. … They’re spoiled. … Now with inflation, houses are more expensive now [than 10, 20 years ago], right? Let’s say 20 years from now, when they buy a house, [the American dream] is going to be unachievable, you know what I mean? Like, unless they are a TikTok star or an entertainer or some kind. … [It’s] going to be tough.”

–U.S.-born man of Chinese origin in late 30s

Freedom from debt

For many participants, being debt-free is important to their vision of the American dream and promotes a life with more financial stability and independence:

“[If I could choose one dream in America, it would be to have] no debt. … When buying something, they always say, ‘Be careful, or you’ll be in debt.’ … And that is what got stuck in my throat.”

–Immigrant woman of Laotian origin in mid-30s (translated from Lao)

“[I haven’t achieved the American dream because I’m not] debt-free, you know, just trying to have extra money, instead of living paycheck to paycheck.”

“[My dream in America is] to be independent, for example, we always lived with the money of mom and dad. One is to be independent when you come here. Let me earn so much money that if I go to the store and buy something, I don’t even have to look at the price tag. That [is] my dream.”

–Immigrant woman of Nepalese origin in early 40s (translated from Nepali)

Participants shared that being debt-free also means having less stress and worry about making ends meet so that they can have extra resources and bandwidth to help their families:

“[The most important thing to achieving the American dream is] being debt-free and having real estate and income steadiness. … If you have rent income, you’re not trading in your time for money, so you have real estate. … You’re not stressing, you have time for your kids more, and your family. You’re probably a little bit happier.”

–Immigrant man of Cambodian origin in mid-20s

“The main thing is that I want to fully support my father and mother, and that I don’t have to worry about [how] I will support myself, or how I will pay my house rent. This is my number one.”

–Immigrant woman of Bangladeshi origin in late 20s (translated from Bengali)

For others, having a stable job is an important step to reaching the American dream:

“I want to have a job, and if I have a job, I’ll have money. I’m only working three and a half days a week right now, and I want to work more. I want more jobs the most, right now. I don’t need anything in America. Just a job.”

Freedom to dream

Focus group participants mentioned having the financial ability to not only meet their basic needs, but also pursue their dreams. Asians born in the U.S. mentioned the freedom to chase one’s aspirations without financial constraints more often than immigrants. Regardless of nativity, the ability to live the life they want is fundamental to many focus group participants’ definitions of the American dream:

“[When] everyone around you is immigrants and you’re all just trying to survive, the only thing you’re trained to think about is survival. But you’re not thinking about investment. Like, when you grow older and you start thinking, ‘Okay, I need to spend money to make money,’ that’s when you start thinking bigger. Yeah, I’m not just thinking about like having one home, I want 10 homes.”

“[Financial] stability is you have nothing but you could survive. [Financial] freedom is you have enough that you can do anything you want. That’s my financial freedom.”

“As it was so hard at that time … what motivated you to keep going and work so hard?” “My strength, my mindset was I wanted to earn money so that my children could have a bright future.” PHUOC AND PHONG , FILM PARTICIPANTS (TRANSLATED FROM VIETNAMESE)

The American dream, to some focus group participants, is about more than financial achievements. Finding happiness and helping others, ultimately leading them to live the life they desire, are key parts of their American dream.

“I want to thank [another participant] for saying ‘self-actualization,’ because personally I think it’s really powerful to be able to know what you want. Because then you’ll know what kind of job you want, what kind of house you want, whether you want to be in politics or not. Like, loving yourself and understanding yourself to your core, then that will be the [deciding factor].”

–Immigrant man of Cambodian origin in early 40s

“I think for me [the American dream] is that there is a house for me, with no interest, I do not owe any loan, my parents could live there comfortably, their struggle is over, and also I have enough … to be able to do something for Pakistan later [in life], God willing.”

–Immigrant woman of Pakistani origin in mid-20s (translated from Urdu)

“[Some people define success as having] lots of money, kids, cars, right? But that’s not really … what I would consider success. Success is something that – does it make you happy? … Are you happy every day going to work? Does it make you happy? When you come home, are you happy?”

About this project

Pew Research Center designed these focus groups and survey questions to better understand the experiences of Asian Americans living with economic hardship. By including participants who are among the Asian origin groups most likely to experience poverty, the focus groups aimed to capture, in their own words, their experiences and challenges in America today. The discussions in these groups may or may not resonate with all Asians living in poverty in the United States.

The project is part of a broader research portfolio studying the diverse experiences of Asians living in the U.S.

Survey and demographic analysis of Asians living in poverty

For a comprehensive examination of Asian adults’ experiences with economic hardship from Pew Research Center’s 2022-23 survey of Asian Americans, as well as a demographic analysis of the U.S. Census Bureau’s 2022 American Community Survey, read “Key facts about Asian Americans living in poverty.”

Videos throughout this data essay illustrate what focus group participants discussed. Individuals recorded in these video clips did not participate in the focus groups but were selected based on similar demographic characteristics and thematically relevant stories.

Watch the short film related to the themes in the data essay.

Methodological note

This multi-method research project examines the many facets of living with economic hardship among Asian Americans today.

The qualitative analysis is based on 18 focus groups conducted in February 2023 in 12 languages with 144 participants across four locations. Recruited participants had an approximate family income that is at or below 140%-250% of the federal poverty line, depending on the location. More information about the focus group methodology and analysis can be found in the focus group methodology .

The survey analysis included in this data essay is based on 561 Asian adults living near or below the poverty line from Pew Research Center’s 2022-23 survey of Asian Americans, the largest nationally representative survey of Asian American adults of its kind to date, conducted in six languages. For more details, refer to the survey methodology . For questions used in this analysis, refer to the topline questionnaire .

Acknowledgments

Pew Research Center is a subsidiary of The Pew Charitable Trusts, its primary funder. The Center’s Asian American portfolio was funded by The Pew Charitable Trusts, with generous support from The Asian American Foundation; Chan Zuckerberg Initiative DAF, an advised fund of the Silicon Valley Community Foundation; the Robert Wood Johnson Foundation; the Henry Luce Foundation; the Doris Duke Foundation; The Wallace H. Coulter Foundation; The Dirk and Charlene Kabcenell Foundation; The Long Family Foundation; Lu-Hebert Fund; Gee Family Foundation; Joseph Cotchett; the Julian Abdey and Sabrina Moyle Charitable Fund; and Nanci Nishimura.

We would also like to thank the Leaders Forum for its thought leadership and valuable assistance in helping make this survey possible.

The strategic communications campaign used to promote the research was made possible with generous support from the Doris Duke Foundation.

This is a collaborative effort based on the input and analysis of a number of individuals and experts at Pew Research Center and outside experts.

• In this data essay, definitions of “living near or below the poverty line” and related terms differ between survey respondents and focus group participants. Refer to the terminology box for details. ↩

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About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts .