There is a broad perception that people on welfare live like kings and queens. In reality, being poor is extremely dis-empowering, stressful and financially unworkable.
You might think of it as a poverty syndrome or cycle. Housing is expensive. Transportation is expensive. Insurance is expensive. Jobs are hard to find and keep. Food and clothing are expensive. Medical and dental care is expensive. Credit is expensive. Education is expensive. It is difficult to “break” an established poverty cycle.
In our society, many people face the serious problems associated with poverty. With a chronic shortage of financial resources, people on the poverty line often find themselves paying more (not less) for the essentials of life. A poor person, deep in debt, struggles to purchase such necessities as rent, food and clothing and, worse, they often pay a premium for the basic necessities of life due to a cumbersome and insufficient flow of cash. At a moment of urgent need, they may actually pay more for groceries, auto repairs, dental or medical visits, and other such services. Welfare programs run out and they can’t afford to pay their rent and other bills.
Poor people may have no choice but to rent sub-standard housing in less desirable areas of town. Their landlords are not always ethical or fair, charging unreasonably high weekly or monthly rentals. Late fees, if assessed, are exuberant making it even more difficult to meet the rental obligations. These unfortunate individuals have minimal bargaining power with landlords, yet, they can’t afford to move because of the high costs of moving, expensive deposits for utilities, and first and last month rent.
While the more financially secure families routinely order utilities without penalty or hardship, individuals with poor credit and payment history often find themselves paying much higher utilities deposits. This results in making moving decisions even more difficult for the financially poor. As bad as the condition may be, a roof over one’s head is far preferable to the uncertainty of finding housing elsewhere.
Transportation creates another level of financial dilemma. The poor tend to buy older cars, if they own a car at all, while many impoverished individuals are forced to use public transportation instead. Older cars tend to be less reliable, have higher maintenance costs and are less fuel efficient. The possibility for break downs occurs more frequently due to the inability to purchase tires, perform regular maintenance, batteries, etc. If a tire “blows out” or a battery goes dead, it is a crisis for them!
Unable to afford car insurance, the financial burden of accidents falls on the already struggling individual, rather than a large insurance carrier. Because people living on the poverty live in rundown neighborhoods, crime levels – including stolen cars, are more common. Again, without insurance, the financial burden of replacing a stolen car falls on the person who can least afford it.
Ask anyone living on the poverty line, and you will learn that the lack of reliable transportation means it is challenging to find employment, and difficult to keep a job. Public transportation is not always available, or on time. Employers typically do not excuse chronic lateness or absences from work. Poor people have a harder time finding jobs or earning job promotions due to the lack of reliable transportation. During hard economic times, or if injured, they tend to be the first person to be laid off and last to be hired.
Let’s consider the plight of a low income family shopping for food. Mothers often spend a great deal of time and money shopping for food daily. Due to lack of transportation they may go more frequently, walking to a local grocery store in their immediate neighborhood. These smaller stores, in poorer neighborhoods, do not always carry the freshest food and typically each line item is more expensive, maybe even double.
High-volume discount stores such as Costco, Wal-Mart and Target are often located in geographic areas out of their reach. Additionally, buying in bulk is too expensive – and how will they get it home? Because their household appliances such as refrigerators may be old and inefficient, food does not last as long. If the refrigerator breaks down, the food is lost. While social services are available, i.e., food stamps and other governmental assistance programs, these services typically offer only minimum support, subsistence or are available only for emergencies. In addition, to gain this support it often requires a waiting period.
Poverty-line individuals often suffer from lack of healthy and nutritious food and can become over weight. Eating highly nutrition food is expensive and takes time to prepare. They may not have the money or time for high-value food preparation. Generally, poverty stricken individuals may not live near a park, or other place, where they can safely walk or jog for exercise; neither can they afford the membership of a health club or a gym.
Healthcare is yet another setback for the poor. People in poverty generally cannot afford private health insurance. Medicaid (or AHCCCS in Arizona) does not cover dental, eye care and many other healthcare services. AHCCCS has recently suffered cutbacks and restrictions. For those who are in need of transplants or complicated surgeries, it can be a life or death challenge. In addition, because the poor can’t afford a prescription plan, they don’t receive prescriptions a reasonable cost. With nowhere to go, many poor individuals use emergency rooms instead of primary care physicians for treatment (by law emergency rooms cannot turn people away, physicians can). Emergency rooms are far more costly than a doctor’s visit.
Hospital charges uninsured people the highest rates for services while big insurance companies negotiate favorable rates for the insured. Individuals have no bargaining power. Even if they “plan” for a hospital visit, financially strapped families may have to choose between healthcare and other critical living expenses. Poor people tend to delay healthcare until a crisis occurs – then it is more expensive to treat. For example, tooth decay if left untreated, is likely to result in gum disease, possible infection and the loss of the tooth. If dental treatment is ignored, the high risks of infection may even lead to heart disease. Finally, unpaid healthcare bills are turned over to collections. The collection process results in new collection costs, attorneys’ fees and judgments against the uninsured and underinsured individual.
Because of poor credit, or non-existing credit, high risk individuals tend to pay the highest interest rates on credit cards and late fees when they fall behind on payments. This causes interest rates to further rise. Like unpaid medical expenses, if credit problems are turned over to collections, they are once again forced to pay collection costs, penalties and attorney fees. This further affects their credit ratings and keeps them trapped in the poverty cycle. The poverty cycle continues to have a negative impact on their credit, housing, utilities, jobs and ability to create a sustainable life.
Further perpetuating the poverty cycle, education becomes an issue. Uneducated adults tend to produce uneducated children. While it is every parent’s responsibility and top priority, the high stress-level life the adults find themselves trapped in diverts their attention from this critical role. Children suffer because of the lack of funds for education. With the change in the economic climate, many companies are downsizing, automating, reducing high overhead, headcount and job functions. Automation and outsourcing overseas results in a lack of blue collar jobs. Unfortunately, they can’t afford the cost of education to improve themselves, enhance their lifestyle or break the poverty cycle.
People are stressed, nervous and insecure about their employment situations. When one or both of the parents lose their job(s), it puts a tremendous strain on the family. Their choices include applying for unemployment benefits (which only lasts about six months), and food stamps. They have a very limited budget to work with causing stress and worries for the parents, wondering how they are to buy the necessities for their family. It also creates a huge negative emotional impact on children who wish to further their education, and dream of going to college. Children that try to become successful in life may suffer in the future due to the lack of support and money from the failing economy.
Individuals struggling in the poverty cycle tend to be more mentally depressed and fatigued and when coupled with low self-esteem and self-worth may indulge in drugs and alcohol as an avenue for comfort and escape. Often, they may even end up in the streets dealing drugs or other substances; getting in trouble with the law. A criminal history makes them more unemployable and increases the difficulties of life maintenance in general.
While there is a broad perception that people living on the poverty-line are living like royalty, clearly they are not. In fact, they face more challenges and stresses than middle to high income families. A well-established poverty cycle is nearly impossible for an individual to “break out” of. In order to escape this poverty cycle, a dramatic change and choice must be made by the “trapped” individual. Unless this individual “does something different,” they can look forward to continuation of the same in the future. You don’t have to be a psychic to tell your future, just look at your past – uninterrupted you produce the same results.
Contributed by: Sharon Doherty
Rhonda Robbins is always available for one-on-one coaching sessions in person, on the phone, via Skype, Google Talk or Yahoo Video Call. You can call me directly at 480-343-8700 or email me at email@example.com to set up a time for a session, or to ask a question.
Copyright © 2011, Rhonda Robbins. All rights reserved.
No part of this publication/blog may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopy, recording, or any other — except for brief quotations in printed reviews, without the prior permission of the author.