THE MANY CAUSES OF POVERTY
Randy Reynolds, Director, Community Renewal, Tucson, Arizona
Many people are confused about the causes of poverty. As humans, we have a tendency to prejudge people and the cause of their condition. The more liberal sector of society believes most poverty is caused by injustice. Many conservatives, and even some religious people, believe people are poor mostly because they’re irresponsible. The Christian community also has misunderstandings. But both Scripture and observation show there are many causes of poverty. Before we address solutions, we must understand the causes. So, this post will mostly describe the main causes of poverty. We will expand on solutions in future posts.
How do we define poverty?
Poverty is a state in which a person or community lacks the resources and essentials to meet their basic human needs. We often think in terms of only one cause of poverty, rather than looking at the multiple factors. Compassion International states that those in poverty regularly go without proper housing, clean water, proper sanitation, healthy food, and medical care. Poverty level is an annual income amount below which the government considers you poor. But this definition isn’t very helpful to our discussion, as this amount varies greatly between different communities, cultures, and societies.
CAUSES OF POVERTY
Poverty can be fluid. When we lack resources to cope with a burden or deal with a crisis, we may at that time be considered poor. Most of us will be poor at least once during our lifetime, but we usually come out of it. But some fall into poverty and stay there for much or even most of their lives.
Some people are poor from absolutely no fault of their own, but others because of something they are doing or can control. Most poverty is multifaceted, having many contributing factors. It’s sometimes difficult to sort out all of the causes that are at work in an impoverished community or family. When Scott and Nancy Rogers worked among the Tarahumara Indians of Mexico in the 1980’s, these people were by most standards extremely poor. But the causes of their poverty were numerous: debilitating chronic diseases such as tuberculosis, competition for scant resources, injustices caused by a more dominant culture pushing them into remote, less productive lands, and even destructive cultural practices such as excessive drinking. A casual visitor might see only one or two of these factors, but in reality all of them were at work.
Although causes of poverty can be many and interrelated, we will describe them separately. We begin by describing those causes in which there is no responsibility on the part of the poor, progressing with those involving greater degrees of human responsibility, and ending with the greatest degree. Many are mentioned in the Bible, and for these the references are listed. Take the time to read these passages as part of your study. By reading this far, it shows you have an interest in this topic, so stay with us as we go through the study!
Structural causes of poverty are the result of negative societal or economic structures over which people have no control. These include excessive taxation, and unjust or unequal implementation of laws, policies, or monetary rules. These structures may impact all people of a society by impacting the economy as a whole. But they sometimes affect only certain sectors such as the elderly or a certain race, reducing employment opportunities and ability to advance in life. Poverty workers may have little power to change these structures. But they need to be aware of them so that they can provide realistic responses to problems people suffer.
INJUSTICE AND GREED
(James 5:1-6) Injustice is unfairness, usually involving a more powerful person or group of people taking advantage of less powerful people. Unchecked human nature will commit injustices against others for personal power or gain. This can result in impoverishment of individuals, communities, or even whole classes of people. Exploitation of populations by corporations or by rogue governments is common in parts of the world.
Injustice can be driven by greed, where the powerful exploit the powerless for profit. Cheap labor from which employees do not benefit substantially from their work can further enrich the wealthy. Some (not all) large corporations have ugly pasts, intentionally keeping their employees powerless, voiceless, and poor. Slavery is the ultimate abuse of laborers, and still exists today.
Those working among the poor should help victims of injustice to safety and a stable life. They should also strive to help people focus on the present and what can be changed, as opposed to dwelling on injustices that have happened in the past. Over the years Community Renewal (Renewal) has worked with many poor who fell victim to predatory payday and title loans. Most did not know or understand the trap of 204% to 390% interest loans, and once into them, couldn’t escape. In response, Renewal helped develop policies against payday loans and has offered no-interest micro-loans to victims.
MISFORTUNE AND NATURAL DISASTERS
When misfortune hits, people can quickly fall into poverty through no fault of their own. Human sin can compound problems caused by misfortune. But the people of God can be his hands and feet to show his mercy and love to a hurting world.
Physical illness can debilitate a person and drain their ability to do productive work. In some cases, prolonged illness can greatly reduce income due to missed work and mounting medical bills. Renewal has seen families lose their homes, businesses and even marriages from illness and medical debt. One family lost everything and sent their children who were in college into the work force to support the family. The kids never made it back to college.
Mental illness is one of the most common causes of individual poverty. The mentally ill commonly don’t fit into society and can’t hold a job. If they have no family support, they will usually end up in poverty. A large percentage of the homeless and socially marginalized have mental problems. For over 40 years Renewal ministered to one man who was periodically homeless. Because of anxiety he was easily threatened and angered and became alienated from those with whom he needed support.
Political unrest or war
Those affected by war or conflict are usually not responsible for the violence in any way. But they may have no choice but to leave their home and seek refuge. In the process their income may be greatly reduced. Millions live in refugee camps around the world. Many refugees end up facing a much different culture and language. They stay in poverty if they can’t assimilate to the new culture.
Natural disasters/ crop failure
Natural disasters such as hurricanes and earthquakes can displace people from their home and livelihood. Pandemics also affect large populations and negatively impact the economy, resulting in job loss for many. Subsistence farming communities in less developed countries are vulnerable to drought and the resulting crop failures. A number of Christian relief ministries specialize in responding to natural disasters.
Those who are persecuted for their religion or race are sometimes forced from their community to seek a place free from hatred and bigotry. Many times, this will involve having to accept a lower income. Persecution of the religious by repressive governments is also on the rise.
Everyone at some time in life gets too old to work. Some elderly have no stable income, medical insurance, or reliable family members to care for them when they reach this point. The elderly are some of the most neglected poor. Renewal has seen most every kind of elder abuse:
- A woman was taken advantage of by a care giver who exploited $5,500 from her.
- A man on the phone told a sad story to an elderly woman, so she gave him $15,000. He then got her to take out a title loan at 112% so she could give him another $3,000.
In a marital failure, usually one person does not want the divorce, but it is forced on them nonetheless. Also, victims of gross physical or emotional abuse sometimes have no choice but to separate from their spouse to protect themselves or their children. Divorce or separation almost always results in financial loss, especially for the one who is not the primary bread winner. Most divorced women end up with about half the income that they had in marriage. Becoming a single mom early in life can severely hinder a woman from achieving prosperity.
People can lose a job from no fault of their own: layoffs due to a failing company, a plant shutdown, or poor economic conditions. Both government policy and business greed caused the U.S. recession of 2008. Widespread foreclosures and job loss resulted.
(Prov. 22:16, giving to the rich) It’s hard to imagine someone giving money to a rich person as this Proverb implies. But rulers of some countries don’t see themselves subject to God’s law, and commit abuses of power that victimize their citizens. Citizens then have to pay taxes or bribes to a corrupt or despotic government without receiving much in return. Corruption or excessive taxation can greatly reduce the take-home pay of average to low-income earners. Renewal staff have known of such people where the government confiscated their land, businesses, and assets.
CULTURAL AND GENERATIONAL
Practices that contribute to poverty can be engrained into a family, subculture, or culture. People born into a depressed community such as an inner-city ghetto live in a negative environment that is difficult to escape. Generational poverty is defined as one having lived in poverty for at least two generations.
Children in these families may accept their poor environment as normal. As they mature, they duplicate the practices and values of their parents. Even though they may realize their condition isn’t ideal, they may despair and lose motivation to make positive changes. One of the greatest contributing factors to poverty is lack of an intact family with functional parents investing in their children. Renewal has worked with many people from broken families with no contributing father and incapacitated family members. They lacked education, basic abilities and social skills, and made significant mistakes, all contributing to their poverty.
However, God’s people in these places can give hope where there is none. Many children have overcome this lack of social structure and achieved prosperity. They found other role models, and their positive beliefs and faith motivated them to overcome their adversity. In her book A Framework for Understanding Poverty, educator Ruby Payne identified social factors and resources that enable children to leave poverty, including:
- Having money to purchase goods and services to establish oneself.
- Being able to control emotions in negative situations without engaging in self-destructive behavior.
- Possessing mental abilities and skills (reading, writing, computing) to deal with daily life.
- Believing in divine purpose and guidance.
- Possessing physical health and mobility.
- Having friends, family, and backup resources available in times of need.
- Having access to stable adults who can nurture and not engage in destructive behavior.
BELIEFS AND VICTIMHOOD
Beliefs are a major cause of poverty. The belief that you are helpless blocks initiative and personal responsibility. Even people with good intentions can give the message to those they are trying to help that they are helpless. People who believe they are victims are no longer responsible for their lives and behavior because they have someone else to blame. So they won’t take initiative to make better lives for themselves. To prosper and rise above poverty, a person needs to reject the victim identity.
This isn’t to say people in poverty don’t have huge obstacles to overcome, or that people can’t be victimized. But many do overcome and achieve success and independence by believing they can have a better life, and acting on that belief. They aren’t stuck in a powerless victim role.
When people discover their God-given abilities and resources and learn how to develop them, they have power to direct their lives and futures. The Rogers and their co-workers spent years in remote Mexico training workers how to care for sick people, promote better health, drill water wells, and develop small businesses such as carpenter shops. Gaining these skills and knowledge lifted the workers both personally and financially, and they in turn lifted their communities.
LACK OF WISDOM
The following causes of poverty are not gross sins or crimes, but are due to a lack of wisdom. Many people Renewal works with are financially illiterate. They have never done a budget or even have hope they could make one work. They have no vision of how to make money work for them—instead, they work for money. Good counseling and pastoring are a great help to these people. Renewal has had success in helping people reduce their debt and accumulate some wealth for their later years by encouraging their faith in God.
(Prov. 12:1, 28:19). Get-rich-quick schemes and unrealistic plans or investments can quickly drain one’s resources. An unwise or overoptimistic investor can’t tell the difference between realistic and unrealistic goals, and is careless with money.
Resisting discipline or ignoring good advice
(Prov. 13:18). Not listening to good advice about personal issues can result in extreme financial loss. Many poor can benefit from a wise mentor who can help them learn the rules that empower them to prosper. Counselors frequently hear “I never learned that in my family.”
Hastiness in making financial decisions
(Prov. 21:5). The worst financial decisions that people make are those made in haste or under pressure. This includes committing to buy things they can’t afford. Many people Renewal meets with are buried in debt from impulse buying, student loans, or credit card use. Usually, these people are desperate for cash and take out loans without understanding the risk. Renewal has encountered many who just borrowed money whenever they needed it. Some debt comes from title loans with interest rates of up to 204%.
Excessive borrowing and credit card use throw many people into debt they can’t escape. Many turn to high interest loans and become the victims of predatory lending. Whether from credit cards, title loans, student loans or any other form of debt, excessive borrowing invites a form of slavery: working to pay off debt. They then found themselves so far in debt they couldn’t escape. One person had $275,000 in student loans, was living with his mother and working as a dishwasher.
(Prov. 22:7, 22:26-27). Gambling is endemic in our society. Millions are addicted and are now in deep debt. Renewal worked with one elderly woman who lost $175,000 in one year. Her kids had to put restraints on her gambling.
Indiscriminate or excessive giving by groups and individuals
Indiscriminate giving is careless giving with no prayer, discernment, or plan—responding immediately to anyone’s request. Well-meaning people can carelessly give too much to the dependent. However, the bigger problem is that they can unknowingly contribute to someone else’s downfall by funding an addiction or irresponsible lifestyle. A person with a big heart is often vulnerable to a sad story, and ends up rescuing, instead of encouraging responsible behavior. It’s a mistake to assume that people just need financial help and their problems will disappear.
When the Rogers were working in Mexico, some well meaning churches brought in food and clothing to distribute in poor communities. But with time, some people felt that free beans were easier to get than working hard to grow beans themselves. This damaged the community, as many began to believe that outsiders were the answer to their difficult life, not their own God-given resources and abilities.
Indiscriminate giving by the government
Indiscriminate giving by government agencies has contributed to the poverty of countless people in the U.S. Unwise or dishonest politicians eager for votes like to give benefits and entitlements to “help the poor.” Interestingly, this often increases poverty among those it’s intended to help. Over time this creates an unhealthy dependency and an entitlement attitude among otherwise productive people. People then lose motivation to use their God-given abilities to be fruitful. They begin to see their survival as dependent on the giver, in this case the government.
We should support relief work when appropriate—giving a hungry person a fish, but also development work—teaching them how to fish. It takes time and relationship to move from relief to development.
LACK OF CHARACTER OR MOTIVATION
The following causes of poverty involve a higher level of personal responsibility. Good pastoring, repentance, exposure to God’s Word, fellowship, and accountability can help these people. Having people that believe the best in you can invite good character and initiative.
(Prov. 6:9-11, 10:4, 12:24, 20:13, 21:25-26, 24:33-34). Although it’s politically incorrect to attribute poverty to laziness, numerous Scriptures and countless examples affirm it. Perseverance is essential for achieving financial stability. Those who do not like to work make unproductive employees and poor members of family and society. But remember, it’s a mistake to assume that someone is poor because they are lazy.
(Prov. 21:17). The desire for pleasure drains incentive to work and distracts us from developing skills that facilitate success. People who can’t defer pleasure to the future want fulfillment now. Some people abuse their bodies through overeating, lack of physical exercise, poor sleep habits, or excessive risk taking. These lifestyle practices can result in disease or disability.
(Prov. 12:9). We all have pride. But those who have an excess can’t admit when they’re wrong, and can’t learn from their mistakes. They may fail in a business venture, or lose friends, a good job, or a marriage. Pride also contributes to poor social skills, making a less valuable employee. The employer may believe they are more of a burden than an asset and fire them.
(Prov. 11:24, 28:22). The value a person brings to a relationship is important. If they are too selfish, it’s difficult for others to value them. A selfish person may gain small amounts by withholding generosity. But people dislike them, and they eventually lose friends, clients, customers, and even potential business partners.
ADDICTIONS OR INTENTIONAL SIN
The following causes of poverty involve a high level of personal responsibility. In fact, they can be the direct and main cause of one’s poverty. For these cases, the sin or addiction is the problem, and poverty is only a symptom. Correcting these problems requires severe measures. This usually means a structured program to gain sobriety through repentance, restitution, support, and accountability.
Abuse of alcohol or drugs
(Prov. 23:20-21). We can argue about whether substance abuse is a disease, a sin, or both. However, there’s clearly a large component of personal choice in abusing substances. Once a person is addicted, their life enters a very difficult path: loss of self-esteem, domestic conflict and violence, job loss, poor health, and the list goes on. All of these contribute to failure and poverty.
Dishonesty and Deception
(Prov. 13:11, 17:20). Dishonest people think that they’re getting away with lies they tell or things they do in secret. They may temporarily succeed in various ventures, but eventually lose more than they gain. The time spent cheating others could be used for gainful employment. Trust is a key factor in any job, and employers often terminate the untrustworthy.
(Prov. 5:7-11). Out-of-control sexual sin affects the ability to live a productive life, for both the single and married. Resorting to prostitutes drains finances, degrades personal character, and risks health. Addiction to pornography can in some cases have a high financial cost and also destroy one’s marriage.
Life of crime and wickedness
(Prov. 11:5, 13:25). A life of crime may temporarily give a person great wealth, but with time the law will catch up. While a person is in prison, they are functionally poor—they can’t work, and can’t enjoy much of what they own. Many ex-offenders have tickets and fines that keep them from driving and finding a good job.
Abandoning commitments or responsibilities
Many people leave their marriage and family for another woman or man. Others abandon important commitments (such as a stable job) for pleasure or just to be free of responsibility. This can quickly plunge people into financial ruin, especially those on the short end of the decision—the innocent and vulnerable.
The world is full of poor and needy people. As God’s people, we can be the means through which he reaches them with his love. But with so many causes of poverty, it’s essential we use wisdom in ministering to the poor, and not prejudge the reason for their condition. As we get involved, we quickly realize that much poverty is only a symptom of greater underlying problems.
Inexperienced people who reach out to the needy on their own or churches who lack experience can make costly mistakes. To be effective, we need wisdom from God’s Word and from people with ministry experience. Consider getting involved in one of the many Christian organizations that minister to the poor.
We hope this was helpful.
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