Why is getting out of poverty so difficult?
Imagine that you are unemployed and have been looking for work for months. Government aid helps you pay for rent, supplies and food, but with many difficulties. Until one day they finally offer you a job. You receive your first paycheck in months, and it seems that things are starting to improve.
But there is a problem . . . . .
Now you charge just enough to not be eligible for government aid, and not enough to cover your expenses. Plus now you have to pay for transportation to work and childcare, and in the end, you have less money than when you were unemployed. Economists call it “The poverty trap”, a situation that affects millions of low-income people around the world.
The economic and environmental circumstances that favor it reinforce themselves, perpetuating poverty for generations. Sometimes they are linked to the individual's personal situation, such as inaccessibility to healthy foods or education. Other times they affect entire nations, due to corrupt governments or climate change. But the cruel irony of this situation is that it is the result of policies designed to combat poverty.
Throughout history, most societies have tried to cover the basic needs of those most in need. Before the 20th century, religious groups and charitable organizations used to champion these initiatives. Today they are called social welfare programs, and they usually translate into government aid for rent, energy, and healthcare costs. They are generally approved based on income, that is, only those who are below a certain range can qualify for these aid. This is to ensure that those who need it most receive it. But when that threshold is exceeded, the right to receive them is lost, even if their economic situation does not offer much stability.
When employment decreases, the economy also decreases, perpetuating poverty and putting those who suffer from it in an extreme situation. Some suggest that a possible solution would be to completely eliminate all aid programs, but most agree that it would not be a very humane or realistic solution. How to redesign the system then so that employment is not penalized? Many countries have tried various strategies to solve it. Some allow aid to be supplemented with employment for a time, and others reduce it as income increases.
These policies do not completely encourage employment, but the risk of falling into the poverty trap is lower. Some governments provide education, child care, or medical assistance to all their citizens. One proposal takes this idea further. A universal income would provide a minimum income to all of society, regardless of their wealth or employment status. This is the only policy that could eliminate poverty traps, because wages would complement this help rather than replace it.
In fact, ensuring a minimum income for the entire population would directly eliminate poverty. Many economists and thinkers have defended this idea since the 18th century, but for the moment, universal basic income is still not a reality. Although tested on a small scale in some places, these local experiments cannot reflect how it would work if implemented internationally or globally.
Whatever the governments' strategy, resolving this issue requires respecting the will and autonomy of citizens. Only by empowering people to make long-term changes in their lives and communities can we begin to break the cycle of poverty.
