What is Generational Poverty? Facts, Causes, and How To Overcome It

Over 37 million Americans live in poverty. While those in our cozy middle-class bubbles would like to think most of them did something to fall into poverty, the truth is far less comforting. 

Most people living in poverty were born into poverty. Their kids grow up in poverty and have kids who also experience poverty. 

Generational poverty thrives in America, and it’s far harder to escape than anyone who has never experienced extreme financial hardship can imagine. 

Poverty In America

To understand generational poverty, we first need to understand poverty in America. Here are some quick facts about poverty provided by the US Census Bureau:

  • The poverty threshold for an individual is a household income of approximately $14880 per year, and it’s roughly $29950 per year for a family of four
  • 37.9 million Americans live in poverty, an 11.5% poverty rate
  • Nearly 11 million children live in poverty
  • There is a racial disparity in poverty – 17.1% of black families are in poverty, 17% of Hispanic families, and 8.6% of white and Asian families. Native Americans have the highest rate of poverty, at 25%
  • 3 million Americans live in deep poverty
  • 93 million Americans live close to poverty

What is Generational Poverty?

Think of generational poverty as a contrast to generational wealth. Instead of inheriting a solid financial foundation and getting a leg up, kids are taught little about finance and learn to live hand to mouth. 

People trapped in generational poverty often lack the education, resources, and hope to escape it. Poverty is the only thing they know. There is no planning for the future; there’s only trying to survive day-to-day.

Technically, poverty becomes generational when a family lives in poverty for at least two entire generations, but many impoverished families have lived in destitution far longer. 

Is Generational Poverty Real?

Many scoff at the notion that poverty spans generations, but it’s a real phenomenon affecting millions of Americans. 

The idea that you can just pull yourself up by your bootstraps and escape poverty permeates American culture, leaving those without real-life experience to believe that situational poverty is a personal failure. 

People struggling financially always seem to find money for junk food, cigarettes, alcohol, and lottery tickets. The middle class looks down on the working poor, tsking those choices, believing if they saved their paltry paychecks rather than splurged on junk, they’d be able to dig out of poverty and provide better outcomes for their children. 

We shake our heads, blaming them for their situations, as if saving twenty dollars would make a dent in a college education fund. 

These biases lead us to the incorrect conclusion that generational poverty isn’t real and that people get trapped in poverty solely based on poor life decisions. 

Generational poverty shows us that’s not true. Institutional poverty is far more complicated.

What Causes Generational Poverty?

Generational poverty is a multi-faced issue with causes ranging from racism to financial policy, access to healthcare, and access to education. 

It’s systematic, meaning institutions and policies work to keep people trapped in poverty. These examples highlight the big-picture policy issues that contribute to generational poverty. 

Bias

Systematic racism and misogyny play massive roles in generational poverty. Our entire system perpetuates injustices based on race and gender, making it harder for women and people of color to get ahead. 

Racism

The US Department of Justice predicts that over 28% of all black men will be issued prison sentences in their lifetime, compared to just 4.4% of white men. 

Black men are more likely to be mistreated at every stage of the justice system. They’re targeted, searched, and convicted more while receiving harsher prison sentences. 

It’s impossible to help your family escape generational poverty while imprisoned, but the challenges don’t end after you’ve served your time. Finding a decent job after a prison sentence creates a significant barrier to self-improvement. 

Racial inequality is prevalent everywhere, not just in our justice system. Black-sounding names on job applications are less likely to get called for an interview than white names. 

Redlining was legal until the 1970s, making it impossible for black families to own homes and grow wealth. Though technically illegal now, the real estate industry still makes it more difficult for black families to buy homes.  They do it sneakily, requiring more documentation, higher credit scores, and higher incomes. 

People of color, especially women of color, earn less on average than any other population segment. 

Misogyny

The poverty rate for women remains 2 points higher than the rate for men (12.5% vs 10.5%, respectively), and institutional sexism plays a role. 

42% of women say they’ve faced gender discrimination on the job. They earn less, get passed over for promotion, and get assigned menial tasks that don’t stand out on resumes. 

Mothers face more extreme challenges. There’s no mandatory maternity leave, no universal childcare,  and the cultural expectation that mothers sacrifice their career aspirations to serve their children. Companies are less likely to hire mothers, but when they do, they offer lower salaries and limited opportunities for career advancement. 

Society still expects mothers to provide primary care for their children and complete most domestic labor. Married women spend far more time on chores than their husbands, even when they earn more money. The burden of household and caregiving responsibilities forces mothers to pursue flexible jobs with lower pay. 

The backlash against women’s healthcare and autonomy will only exacerbate these issues. 

Child Care

It’s impossible to discuss systematic misogyny leading to poverty without discussing one of the biggest reasons women fall into poverty: motherhood. 

Having kids is expensive. According to American Progress, it costs Americans, on average, $1230 per month  ($15000 per year) to pay for childcare. 

The poverty threshold for a single parent with one child is $18900 per year. Even if that parent made enough to be just at the threshold, paying for childcare would only leave $3900 to pay for every other expense. 

If they have more than one child, the cost of working would be far more. That’s not feasible. No wonder single parents chose to stay on government assistance rather than work.

Education

A college education remains the best ticket to a good job and out of poverty. 

However, the outrageous cost of tuition makes pursuing education a pipe dream for those in poverty. In 2023, the average price for one year of college was over $36,000. That’s double the poverty threshold. 

Those who forge ahead despite the high price tag enter adulthood burdened with massive student loan debt, which stays with them for most of their lives. 

The Welfare Cliff

The US offers social programs to help lift people out of poverty, but the system’s design keeps people trapped. 

The Welfare Cliff creates an insurmountable wall, making it nearly impossible for those needing help to improve their lives. 

Most welfare programs in the US rely on defined income levels. If a family makes under a certain amount, they’re eligible but lose all benefits if they make even a tiny bit more. 

Consider the food stamp program. The income limit is 130% of the federal poverty limit (for gross income). The program cuts a family off entirely if they make even a single penny more.  The cliff incentivizes families to keep their income just below that level. 

How Can Someone Overcome Generational Poverty?

Throughout history, we can find examples of extraordinary people achieving impressive feats of courage and perseverance. We can find shining examples of hard-working individuals who crawled their way out, defeating all odds to break the cycle of poverty that trapped their families for generations. 

We often look to those exceptional examples as proof that anyone can do it and wash our hands of any responsibility to fix a broken system. 

While it’s true that individuals can escape generational poverty through hard work, perseverance, and a little luck, most people can’t. 

We can’t expect everyone to be extraordinary. Some people lack the aptitude and ability to work their way out of poverty, while others lack the time and resources to pursue an education or work multiple jobs. 

We shouldn’t expect individuals to overcome generational poverty when it’s not their fault that they are stuck in it.

How Can Society Fix Generational Poverty?

Society needs to fix generational poverty. Though there’s not one easy solution to solve all the problems, there are a few accessible places to start. 

Admit It Exists

The first step to solving any problem is admitting we have one, and many people refuse to acknowledge generational poverty as a real problem. 

It’s a harsh reality to face. Admitting it’s a systematic issue means acknowledging that you likely benefited from a system that oppresses others. 

We must identify the systems that gave us a leg up at the expense of others, a challenging task in a society that celebrates rugged individualism above all else. Some people can’t even see that their parents contributed to their success and refuse even to consider how something as inconsequential (to them) as skin color or gender may play a role. 

Fix Social Safety Nets

Politicians constantly put social safety nets on the chopping block, labeling them “entitlement programs” to convince middle-class voters they’re the root of the nation’s financial problems. 

We must collectively decide that programs designed to help people are worthwhile.

Then, we must fix the programs by ensuring they work for those who need them. We can achieve this by transforming the welfare cliff into a welfare slope, allowing benefits to taper off with each raise. 

Make Education and Childcare Affordable

Affordable childcare and education are two of the biggest obstacles to escaping poverty. 

We can start by expanding programs like Head Start, which helps low-income families send their children to daycare. We could also introduce universal childcare credits and help parents pay for daycare. 

To reduce education costs, we could cap interest rates on student loans, reduce in-state tuition charges for state schools, or offer free job training in trades. 

Support Parenthood

America loves to boast about families but does absolutely nothing to support parenthood. It derides single mothers, forces all the cost and labor of raising the next generation onto women, and mocks people who can’t keep up. 

We need a paradigm shift in how we think about work and families. Our work culture opposes our family structure, making it nearly impossible for people to be successful in both spheres. 

Please don’t comment saying, “They shouldn’t have gotten pregnant” or “Stop having kids you can’t afford.” Comments like that show a complete lack of empathy for the person and a misunderstanding of the system. Not only should parenthood be accessible for all people, not just the rich, but you don’t know any person’s circumstances. 

Some women don’t have a choice. Some families did everything right until circumstances beyond their control thrust them into poverty. Others didn’t receive sex education. Many simply want to be parents despite being poor. 

We need to stop judging these families and start helping them. 

End Trickle-Down Economics

Trickle-down economics led to massive income inequality and made it more difficult for people to advance in socioeconomic status.

It’s time to end this system that benefits only the richest among us and start looking into programs to help everyone.

Let’s start with a fair tax code, closing loopholes for the wealthy and taxing investment earnings like income. 

However, with advances in technology and artificial intelligence, the entire work culture is shifting, and we need to act now to avoid the same social upheaval the Industrial Revolution brought. 

A UBI could help. It would guarantee income for people facing economic uncertainty as technology takes jobs while allowing them to spend on what they need. It would lift people out of poverty and stimulate economic growth. 

It’s a drastic solution without much favor or political will, but we must do something drastic to change the system. 

Vote

We have the power to change this system. We can lift millions of families out of generational poverty and help our fellow Americans have better lives.

Our power lies in our vote. 

Stop voting among party lines and support politicians who, regardless of party, have a proven track record of fighting the systematic issues that cause generational poverty. Vote for policies that would reduce generational poverty, even if they cost you a little more in taxes. 

The health and welfare of millions of Americans depends on it. 

Generational Poverty vs. Situational Poverty

Although this post focuses on generational poverty, it’s not the only type. Situational poverty results from a crisis. For example, someone who hasn’t lived in poverty may experience a sudden job loss, medical problem, or relationship change that thrusts them into it. 

Situational poverty can lead to generational poverty, and the same programs that would fix generational poverty can also assist those experiencing situational poverty. 

Ending Generational Poverty is Possible

We can end generational poverty but lack the political will to do it. 

Some folks may have to give up some of the privileges they’ve been accustomed to for generations, and as they say, equality feels like oppression when you are used to privilege. Ending generational poverty won’t be easy and won’t happen overnight. 

However, despite the difficulty, it’s a worthy cause we should strive to accomplish with everything we do.

Author: Melanie Allen

Title: Journalist

Expertise: Pursuing Your Passions, Travel, Wellness, Hobbies, Finance, Gaming, Happiness

Bio:

Melanie Allen is an American journalist and happiness expert. She has bylines on MSN, the AP News Wire, Wealth of Geeks, Media Decision, and numerous media outlets across the nation and is a certified happiness life coach. She covers a wide range of topics centered around self-actualization and the quest for a fulfilling life. 

3 thoughts on “What is Generational Poverty? Facts, Causes, and How To Overcome It”

  1. At the end of 2019, the poverty rate was at a 60 year low, and for blacks and Hispanics it was at a record low. The poverty rate for blacks overall may be 20%, but if you break it down, the poverty rate for a black child in a single-parent home is 45%, but falls to 11% for a black child in a two-parent home. That is about even with the US poverty rate. Unfortunately, almost 70% of black children grow up in a single parent home. Fix that problem and you fix almost all of the problems that plague the inner cities, because they are interconnected.

    In 2019, wages grew by the largest annual gain ever recorded. From 2017 to 2019, wages grew at 6.8%, while wages only grew at 1.7% in the previous 8 years. Median household incomes grew by 7.9% for blacks, 7.1% for Hispanics, and only 5.7% for whites. They also increased 7.8% for women and only 2.8% for men. The wage gap between the races and sexes actually narrowed from 2017 to 2019. In the same time frame , net worth increased 33% for blacks, 65% for Hispanics, while only increasing 3% for whites. The wealth gap also narrowed.

    The 4 most prosperous periods in our nations history in terms of growth all occurred after a major tax overhaul(Coolidge, Kennedy, Reagan, Clinton). Clinton began his term with a tax hike, but saw revenues as a share of GDP fall from 8.3% to 7.8%. It wasn’t until the ’94 tax overhaul that we saw revenues accelerate and growth pick up. The near 4% growth we saw from 2003 to 2007 was also the result of a tax overhaul, as were the stats I mentioned earlier about wage growth from 2017 to 2019..

    According to the OECD., the US has the most progressive tax system in the world, where those at the bottom pay the least, and those at the top pay the most. In the US, the top 1% of wage earners pay 39% of the revenue collected from the income tax. The top 5% pay 59%. The top 10% pay 70%. The top 25% pay 86%. The top 50% pay 97%.

    People want to blame society or their upbringing for their problems because that is more palatable than owning up to the mistakes they have made in their life. The vast majority of the poor in this country are there by their own doing, usually drug and alcohol induced criminal behavior. Some people have a tougher hill to climb than others, but upward mobility is available for anyone willing to work for it. You will never get your piece of the economic pie if you are constantly waiting for someone to serve you your slice.

    There is a fine line between helping someone and enabling them, We don’t need income redistribution and Government mandates, we need an invisible hand economy that is allowed to thrive and work it’s magic. Cut taxes, lower regulations, and incentivize people to make better choices.

    • Thank you for the well thought out comment. I agree with your first point about single-parent homes – And I think fixing racial inequalities in our justice system would do a lot towards making that a reality.

      I disagree with your assertion that the majority of the poor are in the situations they are in due to their own faults and mistakes. Did many people make mistakes? Yes. Should a mistake force people into a life of poverty? No. Are there societal reasons why so many people become addicted to substances? Lack of mental health care? Hopelessness? Etc? Likely. I think we as a society can do more for all of our people. We’ve been cutting taxes and lowering regulations for years, and it hasn’t helped the addiction problems, the hopelessness, the healthcare issues, the education issues. We are the richest country in the world, we should be able to do better for our people.

      • If they are honest, most adults who are struggling can look back on their life and point to a decision they made that led them to where they are. For many it will be the time they started using drugs or alcohol. For others it is dropping out of high school or getting pregnant at 14. Those aren’t societal issues, they are cultural. We all come to crossroads in our life, and if we take the wrong path, and don’t turn around soon enough, we make it difficult on ourselves. People with mental health problems are a small percentage of those. The most are self-inflicted wounds.

        Some kids will grow up poor, and they have to work much harder than someone who grew up wealthy, but they are given a lifeline to overcome the obstacles. We as a society have come up with a litany of welfare programs to assist those people, yet instead of climbing out of poverty, the “generational poor” slide into a life of generational dependency. We do not incentivize people to get off of these programs. It has become too comfortable to be poor, where taxpayers provide their needs, while they can use their money on their wants.

        I want to reform the welfare system. I would like to see all welfare recipients required to pay back what they collected. We can do that by seizing their tax refund after they have found work. Once you reform the welfare system, you solve many other issues simultaneously. Those people are now forced into the workforce, which dries up jobs currently being held by illegal migrants, which disincentivizes them from coming here. As a result of those people entering the workforce, you no longer have to fund their lifestyle, which eases the deficit and debt burden. So many of these problems are connected, and solving one solves many others.

        On racial inequities, I think people look at the disproportionate number of blacks that cycle through the justice system and assume there is a structural bias that causes that. when in reality the problem exists within the black community itself. Young blacks and Hispanics emulate the lowest rung of their social ladder, namely the criminal and gang culture. The “Gangsta rap” trend that started in the 90’s, as well as popular culture(Boyz In The Hood, Friday, etc) glorified that lifestyle, and has led to a cultural decline. That leads to rampant crime and drug usage, which leads to a death spiral.

        A few years ago, when Michael Brown was shot, I believed the myth that black people were killed disproportionately by police, and then I did some research., There are over 375 million police interactions a year. Of those, 11 million result in an arrest and 1000 result in the suspect being killed. Only 21% of the population will have any interaction with police in a given year. In a given year, 10% of black people will be pulled over by police, compared to 9% of white people and 8% of Hispanics.

        Of those arrests, black people account for 28%, white people account for 49%, Hispanics account for 21%, and Asians account for 1%. On the deaths, blacks account for 25%, whites account for 51%, Hispanics account for 19%, and Asians account for 2%. Those arrest and death numbers correlate perfectly.

        People scapegoat their failures by blaming the system or some other external force beyond their control. As a result, because they believe they are not responsible, they take few steps to remedy it. That is why we have spent over $25 trillion on welfare programs in the last 50 years, and the poverty rate remains fairly constant. We have to change things.

Comments are closed.