Why is it so hard to escape poverty? - Ann-Helén Bay
Explore the paradox of welfare programs, and learn how they inadvertently reinforce generational poverty, and what we can do to fix them.
Imagine that you’ve been unemployed for months. Government benefit programs have helped you cover your expenses, but you’re barely getting by. Finally, you receive a paycheck— but there’s a catch. Your new job pays enough to disqualify you from benefit programs, but not enough to cover your costs. So how do we design benefit programs that don’t penalize you for working? Ann-Helén Bay investigates.
@stux This is a real problem, but its prevalence is greatly exaggerated as a anti-welfare propaganda tactic.
The truth is that most welfare programs are designed to take this into account, with benefits tapering in, and thus the "welfare traps", if they exist at all, are pretty shallow.
Consider the US's "Earned Income Credit" program, which is "reverse taxation". If you work, but are low income, you get a subsidy.
@stux The biggest problem with the US system is all the paperwork hurdles you have to go through, and the stigma attached to applying for aid.
This encourages a lot of people who qualify not to receive the services -- and there is enormous resentment, perversely directed at those who do receive the benefits, rather than the system that makes it hard to use (this difficulty is often touted by conservatives as a cost-saving method, so it's intentional).