A lot of it comes down to leverage: if you're poor, you have very, very bad options when it comes to borrowing money.
Say you're already living paycheck-to-paycheck, and then you fall and break your wrist. You don't have health insurance, so you go to an urgent care clinic, and have to pay $200 out of pocket (a very optimistic number!)
You were already gonna finish this week with less than $30 in the bank. Now you literally can't buy yourself groceries until Friday. What do you do?
For a lot of people, the answer is credit card debt (18-26% or more APR) or, worse, payday loans (20-40% PER MONTH if it's a legal place, worse if it's not).
Say you take out a payday loan at 20% to borrow back just that $200. Now you're gonna owe the place $40 at the end of the month. Congrats -- your bank account is now gonna be overdrawn. Hope you don't try and use your debit card, because now you owe $35 in overdraft fees, too.
If you can't borrow money cheaply, the very first time that you're forced to borrow, you are fucked if you can't get back out very quickly. And if you're in a place where you were going to a payday loan, there's very little reason to think you're gonna be able to get back out.
There's a lot of other shit. If you're poor you have a worse car that needs more maintenance/uses more gas/gets more traffic tickets. You get shittier sleep because your mattress is 12 years old and you're stressed all the time, so it's harder to even bring yourself to work. You can't afford a daycare, so you have to stay home with your kid an extra day every week, so you work fewer hours and make even less.
And that's not even scratching the surface of what it's like to live amongst poverty. Everything I've said can happen to someone who's trying their absolute hardest every single day, and doing it all "right"; and people aren't perfect. An unexpected kid, a drug addiction, getting involved with gangs; these things happen to well-meaning, good people, and trap them in a life of poverty in a way that's incredibly difficult to escape even if you do everything right afterwards.
It's a vicious spiral when you don't have a safety net.
A lot of it comes down to leverage: if you're poor, you have very, very bad options when it comes to borrowing money.
Say you're already living paycheck-to-paycheck, and then you fall and break your wrist. You don't have health insurance, so you go to an urgent care clinic, and have to pay $200 out of pocket (a very optimistic number!)
You were already gonna finish this week with less than $30 in the bank. Now you literally can't buy yourself groceries until Friday. What do you do?
For a lot of people, the answer is credit card debt (18-26% or more APR) or, worse, payday loans (20-40% PER MONTH if it's a legal place, worse if it's not).
Say you take out a payday loan at 20% to borrow back just that $200. Now you're gonna owe the place $40 at the end of the month. Congrats -- your bank account is now gonna be overdrawn. Hope you don't try and use your debit card, because now you owe $35 in overdraft fees, too.
If you can't borrow money cheaply, the very first time that you're forced to borrow, you are fucked if you can't get back out very quickly. And if you're in a place where you were going to a payday loan, there's very little reason to think you're gonna be able to get back out.
There's a lot of other shit. If you're poor you have a worse car that needs more maintenance/uses more gas/gets more traffic tickets. You get shittier sleep because your mattress is 12 years old and you're stressed all the time, so it's harder to even bring yourself to work. You can't afford a daycare, so you have to stay home with your kid an extra day every week, so you work fewer hours and make even less.
And that's not even scratching the surface of what it's like to live amongst poverty. Everything I've said can happen to someone who's trying their absolute hardest every single day, and doing it all "right"; and people aren't perfect. An unexpected kid, a drug addiction, getting involved with gangs; these things happen to well-meaning, good people, and trap them in a life of poverty in a way that's incredibly difficult to escape even if you do everything right afterwards.
It's a vicious spiral when you don't have a safety net.