Crossing the Chasm. The Impossible Escape from Poverty.

The main thing I remember from being a kid was people always asking me what my favorite color was. I just don't understand what this obsession is with favorite colors. It seemed like everyone wanted to know what color I wanted every gift I was ever given to be. At one point when I will a little kid, my mom reminded me that my favorite color was green, perhaps because of something I must have said when I was younger that I don't remember. At the time, I was thinking "I really kind of like blue", but she said my favorite color was green so I just went with it. The notion of having a favorite color was something I just accepted at the time. A helpful reminder was the one inch of green stitching that was added into some pants for fun so that every time I went to the bathroom I would be able to enjoy a small sample of what I supposedly considered the best color there is. They were my favorite pants at the time. Ironically, if memory serves, these pants were blue.

I do remember other things, like eating raw cabbage because that was basically the only option to have any food in the middle of the day, since we didn't really eat lunch when I was a kid. The cabbage I ate was also not green. The most distinctive memory was the rare field trip my sister and I were able to go on with a group of kids who were homeschooled like us. During the lunch break that was built into our trip, my sister and I opened the lunch bag that Mom prepared for us. We found the following:

1. One wedge of red cabbage
2. One wedge of white cabbage
3. Two whole carrots
4. Two apples

My friends thought this was weird, which sort of embarrassed me a little bit, but not really until they made a comment about us eating like rabbits as I watched my sister chomp down on the corner of the wedge of cabbage. To be fair, I thought they were weird for having packaged goods like “Oreos” and “Doritos” with their nicely prepared sandwiches cut at an angle from corner to corner. Don’t get me wrong, I wanted those Doritos, I just simply knew that they were pretentious for insisting on extravagant things and we were normal and down to earth.

At the time I thought out standards were decidedly different than others, but I know now that we were just poor.

It's actually pretty bad being poor.

When you're a kid, to you, your life is always normal. That is all you know. For me, I thought the way we ate was normal. I thought it was normal to never ever go to a doctor. Not celebrating Christmas didn't seem weird to me. It was a strange realization when I finally noticed that our car was the only one with rust amongst other people we were acquainted with. It didn't even occur to me that for most people, eating lunch every day was a given. I didn't know any different.

So there's this tradition where people raise their kids, put them through college, pay for their wedding, buy them a dining set, and then surprise them a few years later with money they saved for their grandchildren. Our tradition was to help our parents pay the bills with money we made babysitting or cutting lawns.

I'm not convinced the poor have a chance in most cases. The leap between poverty and financial security is not big in terms of a number of dollars. It's big in other ways. Here's why.

Poverty is a trap.

Investopedia describes the poverty trap as follows.

A poverty trap is a mechanism that makes it very difficult for people to escape poverty. A poverty trap is created when an economic system requires a significant amount of capital in order to earn enough to escape poverty.

You have to have money to invest in any form or wealth building. Buying a home, furniture, secondary education, licenses and tools for any trade occupation, a reliable vehicle, etc. When I started my own lawn care business, I saved up a $2 per week allowance until I had $24 dollars which I used to go get a lawn mower from a second hand store after which I went door to door to get customers that would pay me 10 dollars to cut their grass every week. That money was financed by my dad, and I used it wisely, but 100% of my income was disposable. Imagine if you are barely making ends meet as it is. For many, $2 per week is not all of their inheritance. For my Dad, it was a sacrifice.

You have to have money to get money.

As with my case, a loan can open up possibilities to start a business, buy a car or become a homeowner. But loans require credit, and income history. Especially loans that can have a meaningful impact on someone's financial security. In the current housing market, people with means are selling their homes with significant gains, and are able to roll that equity into their next home or other investments. Some have done this several times over the last 13 years, and improved their economic situation dramatically. For the poor, this is far more difficult. Lacking, not only good credit, but the income history to required to secure the loan keeps people from improving their housing situation, which keeps them from gaining equity. Even for two individuals who earn the same income, the financial help with college, or help buying furniture for a first home can give someone a head start in life. Without it, financial independence is much further from reach.

What's more, rich people's neighbors are rich people, and poor people's neighbors are poor people. People tend to spend the bulk of their time with other people in their class for various reasons, reinforcing their position in society as well as the divide between them and other classes of people. This helps to maintain lucrative connections for the wealthy and the opposite for the poor.

Those connection matter too. Parents who are connected because of their line of work or status in the community are able to open doors for their children when they are young and as they enter into adulthood. This means opportunities for jobs, mentors, college admission, credit for loans, or even just increasing their chances of making it on the sports teams which can add value to someones education and create opportunities to gain scholarships. Often, pedigree matters when you are interviewing for a job, or prospecting for new clients, which increase someone's opportunity of advancing in their career. The connections and startup capital that parents of even modest means are able to invest in their children makes a big difference in their child's life into adulthood.

Even free education is not free.

Maybe everyone doesn't need to go to college, but at least basic education is free, right? With the help of government funded schools, everyone is guaranteed an education. If you work hard enough, you can get ahead, right? It sounds nice, but it's not that simple.

Look at any job post for occupations providing a living wage, and growth opportunity. Most jobs require that you have a high school diploma, but furthermore a college degree (often one you likely will not use within your job). Employers will also conduct background checks to look for a criminal record prioritize candidates that are more favorable, keeping the poor out of more advancing workforce.

While public schools are free, there is a cost to every education to the family. This comes in the form of transportation, costs for participating in supplemental programs like sports or field trips, clothing, backpacks and lunch, after school care, and so on. With public schools predominantly being location based, you have to live in a "good" neighborhood to go to a school that is well financed, and therefore, the biggest costs is the aforementioned cost of housing just to be able to go to the school where you can get a good education. Poor neighborhoods often have poor performing schools because of the capacity of the families to be involved in their child's education. When parents are in more challenging income situations, it's common that they cannot spend as much time helping their child with their education, and that means that schools in poor neighborhoods are more likely to have lower graduation rates. When you have more students who are not performing well, you often have a revolving door of teachers and administrative staff too.

The logistics of escaping poverty is multi-faceted. Absent a stroke of luck or charity, it becomes logistically difficult and for some, even impossible to exit poverty, but the problem is more than just logistics.

Poverty causes trauma

All my life, I've heard people say that they worked hard, and made something of themselves and you can too if you just think smart and put in the effort. This sounds simple, but for the reasons above, it is not. Even more so, when you are raised in poverty during your formative years (specifically while your brain is still developing) your worldview, habits and subconscious behaviors are developing as well. To this day, I cannot seem to slow down my eating, because I had developed a subconscious habit to eat swiftly, in order to get more calories into my body. We all have countless habits that determine how we act in an interview, how we respond to difficult situations, how we handle money or whether we upgrade our beverages to a large size.

The effects of living in poverty, especially where there is any form of insecurity, is damaging. Poverty can bring on a sustained form of stress which can be toxic to brain function, even if the child does not know any difference, or display it in their emotions.

According to the Borgen project, a global campaign aimed at making poverty a focus of U.S. foreign policy, poverty acts as a traumatic experience in many people’s lives, causing post traumatic stress disorder (PTSD). The impact can reach the point where difficulties can persist even if someone is able to graduate into a higher class in society. Studies which find a link between poverty and PTSD show that poverty contributes to the majority of anxiety disorders. The How Movement explains many of the specific causes of PTSD and their connection to poverty. Neglect or abandonment, sexual assault, repeated exposure to life threatening events, all occurrences that are more likely to take place in impoverished settings.

People who live in poverty are more likely to be a victim of a crime, and more likely to commit a crime as well. Criminal convictions can sometimes keep people from getting jobs, and set people on a path of more trouble. So, should people just pull themselves up by their bootstraps, and make smarter life choices?

Some don't even have boot straps.

When I was a kid, I had two pair of shoes. My sneakers, and my church shoes. Church shoes are essentially dress shoes that you only wear on Sunday morning when you go to church, taken off right after you return home. My sneakers, typically a discount brand tennis shoe were worn every day with every outfit for all reasons, until I grew out of them or they had holes in the bottom. Typically, my shoes were "talking" before they were replaced as the sole peeled away from the upper. A pair of boots would have been a luxury. And the parabolic boots may also be hard to come by. The direction, in essence "make better decisions" does not recognize the obstacles that are in front of someone.

Making better decisions is difficult when you don’t have the emotional capacity to do so. In fact, poverty has an impact on decision making, but also on key thinking processes, as it relates to focus on goal oriented activities and resisting distracting alternatives that can derail one’s performance in life.

The question at hand is not “What do we do about the poor?” It is “what do we do about us?” The worst place society can be is at a place where people experiencing poverty are an “other”. Malcolm Gladwell demonstrates well in Outliers how the difference between Bill Gates and an unknown poor person is mostly circumstances–that is to say, luck. With that said, the poor and the rich are not separate. They depend on each other.

Unfortunately, their dependence on one another is that of a rather unhealthy relationship. The rich need people of economic need to take low paying jobs in order to produce cheap, profitable goods and services to get more rich. The poor depend on the rich to keep them alive with scraps even while the rich do their best to manage wage growth so that goods and services can still remain cheap and profitable. It’s ironic that one of the worst economic scenarios, the COVID-19 Pandemic has affected the poor in dramatic ways in terms of net worth and steady work. But this has made the rich far richer at the same time, even while they chagrin the difficulty in hiring labor. The credit of the rich, and their ability to hold assets has allowed them to amass greater wealth while more people are desperate to sell what little assets they had to make ends meet.

Poverty and wealth to a degree are natural occurrences. Uneven outcomes are a force of nature, and perhaps to be accepted. But poverty is a problem. It’s not their problem.

It’s our problem.