What Drives the Cycle of Poverty?

Posted on July 26, 2017

According to the 2016 Census, over 40 million Americans are living below the poverty line—a rate of approximately 13.5 percent. Additionally, 43 percent of children below the age of 18 live in low-income families—that is, families with incomes from the poverty line to 200 percent above the poverty line—and more than 1-in-5 live in families below the poverty line, according to the National Center for Children in Poverty.

For these Americans, poverty is much, much more than a lack of money—it’s a complex network of interrelated and virtually incalculable experiences and circumstances which affect one’s role in the workforce, one’s community, one’s family, education, relationships, health – nearly all aspects of one’s life. And, it does so in ways that researchers still cannot fully measure. Because the effects of poverty are so multifaceted, so interrelated, and often so incalculable, for many, gaining a foothold above the poverty line seems nearly impossible. This seemingly endless struggle to escape and to stay out of poverty is what we call the “cycle of poverty.”

At Stand Together Foundation, our vision is to unleash the power of community to help people improve their lives. We identify, support, and invest in innovative, effective organizations—we call them Catalysts—that help empower individuals to break out of the cycle of poverty. We look for organizations that believe in the intrinsic power of the individual and help remove internal and external barriers to success, providing the support people need to permanently rise out of poverty.

The Drivers of Poverty

Research suggests that poverty is driven primarily by five factors—chronic unemployment, personal debt, educational failure, addiction and trauma, and the breakdown of the family. These five factors are intimately interconnected and contribute to the complexity of problem, which requires integrated, innovative solutions. When evaluating organizations, we look for those Catalysts that directly fight one or more of these pathways.

  • Chronic Unemployment: We believe meaningful employment is the most direct way to transcend poverty. We partner with Catalysts that believe in the philosophy of personal empowerment, and which offer a helping hand to individuals eager to re-enter the workforce. Catalysts working to combat chronic unemployment provide career coaching, job and skills training, life skills and empowerment classes, and on-going support, which are designed to unleash the immense potential of individuals to succeed. Catalysts breaking the cycle of unemployment do more than edit resumes and teach interview skills; they work one-on-one with clients to help them find and keep a job.
  • Addiction and Trauma: Drug and alcohol abuse can often be at the center of the cycle of poverty. According to a report released by the surgeon general in 2016, 1-in-7 Americans are expected to develop a substance use disorder at some point, and while substance use disorders affect millions of Americans, only 10 percent receive treatment. The report, which names addiction as a national crisis, estimates that the annual economic toll for both alcohol and drugs amounts to $442 billion, and nearly 80 people die each day from these disorders, a number which has quadrupled since 1999. Because addiction to drugs and alcohol strengthens the chains of poverty, Stand Together Foundation is partnering with Catalysts who are helping individuals break the cycle of addiction by providing services that empower individuals to harness their gifts and potential, foster independence and human connection, restore dignity, and promote well-being.
  • Debt: Personal debt caused by overspending exceeds $12.7 trillion in the United States and keeps many individuals trapped within the cycle of poverty, limiting their significant potential. People often lack the skills and tools to gain control of their finances and see a way out of crippling debt. Stand Together Foundation is committed to partnering with Catalysts who are tackling this explosion in consumer debt by providing financial literacy and empowerment programs that address the roots of debt and offer practical approaches to finding financial freedom.
  • Family Breakdown: The breakdown of the family—through divorce, teen pregnancy, or “fatherlessness,” to name a few—produces significant emotional, educational, and financial tolls on today’s youth. The stress of parenting, exacerbated by financial strain, takes an emotional toll on adults that can quickly lead to depression and low self-esteem. Stand Together Foundation aims to combat the consequences of family breakdown by partnering with Catalysts who offer supportive family programs, at-risk youth mentoring, foster care, and gang intervention.
  • Educational Failure: Each year, 1.2 million students in the United States drop out of high school, putting them at great risk for drug use, unemployment, and government assistance. To give students a chance at success, Stand Together Foundation is partnering with Catalysts who provide remediation, supplemental education, and scholarship programs to assist at-risk students.

 

At Stand Together Foundation, we know that these pathways to poverty are not exhaustive, nor are they isolated. For example, an individual trapped in the cycle of poverty could be suffering from addiction, in conjunction with being outside the workforce for a prolonged period of time. A child from a broken home could suffer from adverse mental health effects and struggle in school as a result.

One pathway often leads to another.

A student who drops out of high school, the data show, is at increased risk for drug addiction and chronic unemployment. Consequently, when we work to combat one of the pathways to poverty, we usually combat other pathways, too. Our approach to combatting poverty focuses on providing solutions rather than managing a problem.

In our upcoming posts about the five pathways, we will discuss each pathway individually and in depth, talking about the interrelated nature of each pathway, how it contributes to poverty, and the Catalysts that Stand Together Foundation is partnering with to combat those pathways with proven track records and demonstrated results.