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A Shortage in Opportunity Leaves a Deficit Generationally

Posted on November 4th, 2022
Deficit Generationally

In January 1964, President Lyndon B. Johnson declared an “unconditional war on poverty in America” during his first State of the Union address. Johnson called for an all-out war against poverty and unemployment in the United States.” This involved a series of social programs enacted in 1964-1965 that were considered the most ambitious domestic policy initiatives since the Great Depression.

For decades, political leaders and social scientists have debated whether Johnson’s antipoverty programs lifted people out of poverty or trapped them in chains of dependency.

As an example, compared to 1964, the official poverty rate has dropped only modestly, from 19% to 15% in 2012. In 2020, the official poverty rate was 11.4%, up 1.0% point from 10.5% in 2019. It is the first increase in poverty in five consecutive years.

In addition, nearly 11 million children in America live in poverty. In other words, one in seven children lives in poverty in this country, representing almost one-third of all poor people. Despite being one of the richest countries in the world, child poverty remains alarmingly high.

So, what hasn’t the cycle of poverty been broken since President Johnson’s declaration? Despite the fact that there is no single answer, it isn’t dependent on an individual’s characteristics and choices. Rather, generational poverty is about lack of opportunity.

Limited access to healthcare.

Over the past few decades, developmental science has changed the way it understands child poverty. For children, poverty means more than living with fewer necessities. Poverty, especially at its extremes, can adversely affect the development of the body and mind. There is an increased risk, extending into adulthood, for many chronic illnesses and a shorter life expectancy for children living in poverty.

Growing up poor increases children’s chances of having poor health, including emotional and behavioral problems, even when poverty doesn’t directly alter their biological systems. Children are exposed to multiple threats to their well-being when they live in poverty. In addition to a lack of “food security,” poor children have diets that are deficient in important nutrients. There are higher rates of chronic health conditions among poor children, including asthma.

Despite this, they tend to receive less preventive dental and medical care. In April 2021, a study reported that parents whose incomes did not exceed 400 percent of the federal poverty level (FPL) were more than nine times more likely to be uninsured.

Moreover, access to mental health care is limited.

The National Council found that “Forty-two percent of the population saw cost and poor insurance coverage as the top barriers for accessing mental health care. One in four (25%) Americans reported having to choose between getting mental health treatment and paying for daily necessities.”

People living just above the poverty line are particularly affected by this disparity between cost and need.

Health Affairs explains, “not all low-income people with serious mental illnesses are eligible for Medicaid because they aren’t disabled enough to qualify for Supplemental Security Income (SSI); they don’t meet other Medicaid eligibility criteria (such as single adults or immigrants), or they are homeless, incarcerated, or too ill to follow through with the enrollment and eligibility process.

With states shifting an increasing proportion of their mental health budgets onto Medicaid, fewer state funds are available to provide services for low-income uninsured people with serious mental illnesses who are not eligible for Medicaid.”

Creating and widening achievement gaps.

When compared with their economically secure peers, children who grow up in poverty are far behind. From infancy onward, there are significant gaps in the development of learning, knowledge, and social-emotional skills. Leaving these early gaps unaddressed will lead to progressive widening. When optimal development is achieved early, further optimal development is possible, whereas when poor development is achieved, these doors are closed.

Consequently, poor children lag behind their peers at the beginning of kindergarten, in reading ability in third grade, in self-monitoring skills in eighth grade, and in school attendance. Dropout rates are higher among poor children, and they are less likely to complete their education after high school.

To make matters worse, there are fewer resources and opportunities in poverty schools.

For example, schools with high poverty offer fewer advanced courses and fewer experienced teachers. Additionally, fewer dollars are spent on instructors and instructional materials per student.

According to the above, high-poverty students receive fewer resources in the classroom than their peers outside of school buildings. These effects are disproportionately felt by students of color.

In Virginia, for example, 16% of teachers in the state’s high-poverty schools were in their first or second year of teaching. Furthermore, teachers in high-poverty schools earned about $46,000 compared with over $57,000 in low-poverty schools in 2013-2014.

In addition, high-poverty middle and high schools tend to have fewer advanced courses than schools with low concentrations of poverty. As an example, most middle schools with low poverty concentrations (93%) offered Algebra I, while only three-quarters (75%) of middle schools with high poverty concentrations did. In order to establish foundational math skills and prepare students for higher-level math, this course is crucial.

Math and science aren’t the only subjects involved. In high-poverty schools, Advanced Placement (AP) and International Baccalaureate (IB) classes are less likely to be offered.

Income inequality has also fueled a class-based social disconnect that’s led to unfair educational outcomes.

“Now, your family income matters more than your own abilities in terms of whether you complete college,” said Robert Putnam, the Peter and Isabel Malkin Professor of Public Policy at Harvard Kennedy School (HKS). “Smart poor kids are less likely to graduate from college now than dumb rich kids. That’s not because of the schools, that’s because of all the advantages that are available to rich kids.”

As a matter of fact, 46 percent of 2020 graduates from high-poverty high schools went to college that fall, compared with 70 percent from low-poverty high schools.

Family instability.

Although poor families have many strengths, they also face numerous challenges that can affect their emotional well-being and that of their children. Compared to higher-income parents, poor parents report more stress, aggravation, and depression symptoms. Providing for their families’ material needs can be difficult for parents who do not have sufficient economic resources.

It is also less likely that children in poor families have access to books and other educational resources at home, as well as activities, outings, and programs that can enhance their learning opportunities. There is a greater likelihood of housing instability in their families.

Further, poverty makes it difficult for parents to maintain a work-life balance that allows them to spend time at home with their children and to be active in school, extracurricular activities, and community activities. Working long hours in a precarious job, without parental leave, sick pay, and other basic support, is more likely for parents on a low income. The flexibility and choice of low-income workers are often limited. For example, they use public transportation and cannot work from home.

However, many experimental studies have demonstrated that increasing family income improves the social and academic outcomes of children.

Lack of resources.

Lack of finances makes it difficult for parents to raise their families and live independently. Having poor eating habits, lacking confidence, and optimism can spread to children because parents are their closest role models.

As a consequence of the perception of scarce resources, this behavior is also a part of the scarcity mindset.” This mindset traps people in a cycle of insecurity and a struggle to achieve short-term goals.

In other words, a scarcity mindset is caused by a perception that resources are limited. Because the bandwidth in our brain is limited, we cannot solve two problems at once.

As such, without meeting your current needs, investing in the future is impossible. Planning ahead is also difficult when you have limited funds and are focused on the short term. It would just be like buying the same pair of cheap shoes over and over again instead of investing in a pair of high-quality shoes.

There is no doubt that this will have a huge impact on your life. First of all, if you’re worried about running out of money, you stay where you are. Secondly, low-income individuals who thought about a high car repair bill had significantly impaired cognition.

As  a Jean-Paul Sartre quote goes, “Introspection is always retrospection.” By looking back to the origins of our beliefs about money, we can change our generational patterns of money,” says Dr. Katherine Elder co-founder of Delaware Psychological Services. “Sometimes these patterns exist throughout several generations.”

It is not possible for all families to benefit from America’s economic system.

On average, raising a child can cost more than $200,000 over the years, even before higher education costs are considered. As families grow, expenses increase. But the largest expenses often occur far before their peak earning years. Although families across income levels face this challenge, those with the least resources face the greatest financial hardship.

Since America’s current policies do not guarantee an adequate standard of living for children, their economic security is directly influenced by their caregivers’ experiences in the labor market. Over the past few decades, caregivers’ work has largely driven changes in child poverty rates.

Continually high economic inequality.

Over the past few decades, even during periods of economic growth, child poverty rates have remained high. Additionally, there has been a dramatic increase in income inequality since the 1970s. Because of this, in 2019, only 3% of total household income went to the poorest 20 percent of Americans, while more than half went to the richest 20 percent.

It is estimated that the richest 5 percent had 248 times as much wealth in 2016 as those in the middle of the distribution. In comparison, the poorest 20 percent had no wealth or even negative wealth due to debt.

Families across the country suffer from persistent poverty due to rising inequality. However, poverty would have been significantly lower had all families’ incomes grown at the same rate. For example, a U.S. Department of Agriculture report estimates that income inequality accounts for 93 percent of the increase in rural child poverty between 2003 and 2014. There are ramifications beyond just financial inequality. It also contributes to a disparity in child development markers and learning gaps.

Wage stagnation.

Economic vulnerability threatens millions of low-income children in families with at least one worker. It is estimated that over 15 million low-wage workers are raising children, and one in ten of these are single parents. The schedules of their jobs are unpredictable, employment is unstable, and they do not receive sufficient benefits or are not eligible for them.

Furthermore, the quality of jobs has declined. As a result, job growth will be concentrated in the service sector, where workers in the hospitality, restaurant, care, and retail sectors are often paid less, receive fewer benefits, and do not have as many opportunities for promotion. It has been over a decade since the federal minimum wage was increased, even though low-wage workers saw the most wage growth in states that raised their minimum wages.

Over 4 million fewer children would be in poverty in a full-employment economy if wages grew at the same rate as broader economic productivity.

FAQS

1. Can the poverty trap be eliminated?

Currently, some people are advocating a two-generational model of poverty reduction, meaning that we can’t just focus on children without ensuring that parents have good employment, health, and life opportunities. Consistency is also important.

If we want to improve our schools, we must act on it, not just talk about it. Investing at the local, state, and federal levels is essential, but neighborhood investments are also necessary.

2. What causes poverty, and how do those factors affect escaping poverty?

In spite of the multi-faceted nature of poverty, we can categorize it into two primary categories: culture and believing the lie of worthlessness.

Poverty is caused by both internal and external factors in cultures. There are some conditions that are tangible and external, such as:

  • Lack of access to quality education and healthcare
  • Unemployment
  • Lack of shelter
  • Limited access to clean water resources
  • Food insecurity
  • Physical disabilities
  • Absence of social services
  • Gender or racial; discrimination
  • Poor infrastructure

There are also intangible and internal elements. For example, knowledge, aspiration, diligence, confidence, participation in governance, social capital, values, and peace are all important.

People of low income often believe that they are failures, which is a lie of worthlessness. Their hope for a better future is hindered by this message of oppression and hopelessness. Due to previous generations living in poverty, the cycle continues and will continue for the next generation as well.

3. Isn’t poverty a choice?

Many people do not have a choice but to live in poverty. Most of those living in poverty work very hard to get escape. However, many are born into poverty (intergenerational poverty) and sacrifice their education for the sake of their families’ well-being..

Some fall into it due to unexpected medical emergencies or other unforeseen circumstances (situational poverty). In many cases, they work hard at low-paying jobs that are stressful and demanding. Whether visible to you or not, people with disabilities, single parents, international students, veterans, and even your neighbor all face overwhelming obstacles.

4. How does economic hardship affect children?

Children’s development and prospects for the future can be profoundly affected by economic hardship and other types of deprivation – and this affects the nation as a whole as well. Children with a low family income may have difficulties learning and developing cognitively. As a result, behavioral, social, and emotional problems may arise. Moreover, it can adversely affect the health of children. Children who experience severe and chronic hardship when they are young are those at greatest risk.

Child poverty is not simply a matter of income. Families with low wages may experience fluctuating incomes due to the instability and unpredictability of their work. A child whose family is in unstable economic circumstances is more likely to suffer negative effects than a child whose family is stable.

It is troubling to see how low-income families affect young children.

As well as being associated with difficulties later in life, these effects also contribute to problems in school, adolescent and adult health, employment outcomes, and poverty. Children who grow up in safe, nurturing, and enriching environments are more likely to succeed in school, and to become economically productive and responsible citizens.

For children to thrive and grow into healthy, productive adults, parents need financial resources and human and social capital (basic life skills, education, and social networks).

The list includes high-quality health care, adequate housing, stimulating early learning programs, good schools, money for books, and other enriching activities.

Those facing chronic economic hardship are far more likely than their more affluent peers to suffer from severe stress and depression — both of which are detrimental to their children’s social and emotional development.

John Rampton

John Rampton

John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due.

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