Friday, January 4, 2019

Just Exactly HOW Does Someone Overcome Poverty? It's Not Easy.

I saw a post on Facebook today about how it is virtually impossible to save money when you are poor. It reminded me of a book review I read last year that argued that for someone living in poverty to lift themselves out of poverty, they need nearly 20 years with nothing going wrong

I remember - having grown up on welfare and then in foster care - how difficult it was to gain financial traction in my early and mid 20s, and to finally leave poverty behind me in my 30s.  And now in my 50s, I still live with a very real, although more and more faint, fear of falling back into poverty, especially in old age. I think once you have been poor, you just never forget how it felt. You might be more equipped to cope with poverty again as opposed to someone who has never been poor, but you also know you never want to be in that position again because you know how hard it is to live in, and to overcome poverty.

Multiple things - some positive, some negative, some resulting from my own efforts, some a matter of good fortune, helped me climb out of poverty in those 15 years after college. Not the least of which is the color of my skin, because White privilege gave me access to understanding, support and assistance from friends, landlords, employers, loan officers, etc. that I might not otherwise have had.

The more I wrote about this, the more I remembered about the events that facilitated my overcoming poverty. It's complicated. There are actually many, many details that I am not including here (like how many times I moved during those years, or how many roommates I lived with so I could afford rent, etc.), but I think this will give you a pretty good picture of how overcoming poverty, at least for me, was a combination of education, good and bad fortune, hard work, and the emotional and financial support of other people: 
  1. My first job out of college at age 21 was walking distance from my apartment, so I didn't have any transportation costs for the first 3 years on the job, which helped me save up for a down payment on my first used car at age 25. Even then, I could only buy that car after a friend promised me that I could live with her if I became homeless because I couldn't keep up with rent, student loans, AND car payments. I never had to take her up on that promise, but I needed the security of it to take what felt like the huge risk of  taking on car payments.
  2. I worked full-time in a corporate setting where I had access to health insurance and paid time off benefits.  And where I was able to start saving, however slowly, for retirement through a 401k. And I was lucky enough to stay with that corporation for 13 years, and to advance in responsibility and income over that time. Stable employment and advancement in employment are a MUST if you are going to overcome poverty or become and remain financially stable.
  3. My landlord for my first apartment was also my landlord my senior year in college. I graduated from college 5 months behind in rent to her, and she allowed me to set up a payment schedule to make up that debt while paying rent on the new apartment.
  4. During my first year on the job, I moonlighted as a bartender, and the tips from that second job helped me pay my landlord that back rent and also save money for rent and security deposit for a new apartment.
  5. My landlords for that new apartment were VERY flexible about my paying rent on time and not charging me late fees. Which was helpful because I got paid weekly and lived from paycheck to paycheck. So some months I had to delay my rent check by a week so that I could make my student loan payment on time. And anyone who has ever been poor knows how late fees can be the bane of your existence, keeping you from getting ahead of your debt no matter how hard you are working.
  6. That second job also resulted in my getting sick often that year, which ultimately cost me that second job and extra income. However, I had insurance to get medical care and paid sick time from my day job, so I didn't lose any of THAT income when I was sick. 
  7. There were multiple providers in my town that offered sliding fee scales for care - like the therapist I needed for several years to cope with childhood trauma, or Planned Parenthood, which was my only affordable provider of OB/GYN care during my 20s. And my primary care provider, who was willing to prescribe antibiotics over the phone for my *many* bouts of sinus and respiratory infections during those years, so that I didn't have to come up with copays every time I got sick.
  8. Being anorexic (from age 14 to 28) meant very low food bills, so I never had to choose between eating and making student loan payments or paying rent or making car payments. Thus helping me to avoid catastrophic financial setbacks, although also contributing to my lack of stamina in terms of working second jobs and my tendency to get sick.
  9. My first car was a used car, and I had an honest mechanic who accepted payment over time for major maintenance. For example, when my car died outside of Scranton, NJ, and he had to come and tow me back, he let me pay for the tow and the subsequent repairs over time. And he fixed the car just enough that I could trade it in for another car.
  10. My second car, at age 28, was the smallest, most stripped-down new car for which I could afford payments, thus reducing the risk of catastrophic car problems. And it was this car that enabled me to keep my job when the office moved out of our downtown location to a more rural setting.
  11. And actually it was a car accident in that new car, and a small insurance settlement from that accident, that enabled me to build up enough savings to qualify for a mortgage on my first little house at age 32. And again, I had health insurance and paid sick time to cope with the back problems that resulted from that accident, and which also led to that insurance settlement. 
  12. I was still poor enough to qualify for a subsidized second mortgage to help with the down payment and closing costs for the house, and the house and accompanying mortgage payments were small enough that I was actually able to start saving money on housing costs after purchasing the house.

    I would say that it was the purchase of that little 700 square foot bungalow that marked my exit from poverty. The challenge then was to stay out of poverty.
     
  13. When I sold this house 3 years later, I had improved upon it enough, and the market had gone up enough, to make a small profit on the sale.  Which resulted in my having more savings after selling it than I had from the car accident settlement when I bought it.
  14. By then, I was in a stable relationship with a fiscally responsible and non-poor partner, so we could take the profit from this house and invest some of it in improvements to the house that she owned and that I was now living in with her. And the rest could be kept as savings and a cushion against emergent needs in the future. This was a luxury and a sense of security that my always-poor parents never had.
  15. I did not encounter my first breast cancer until I was 35/36 (my second was 5 years later). By then, I was financially stable because of that first house, and I had the financial support of my partner to help with my cancer-related costs. And health insurance, and paid time off. The importance of these benefits cannot be overstated. My total bill for radiation therapy for my first cancer - just radiation therapy alone, this does not include the multiple biopsies and surgeries for that cancer - was over $15,000.00. However, the portion for which I was financially responsible was only $700. If I had to pay that full bill and the bill for all of the procedures and surgeries out of pocket, it would have exhausted our combined savings and perhaps even required me to take out a personal loan or borrow money from my 401k.
  16. Finally, I had my savings from that home sale and the financial support of my partner, both of which enabled me to go to graduate school after recovering from my first cancer, at age 37.
As you can see, it was a combination of fortuitous and not-so-fortuitous life events that helped me overcome poverty. Not everyone is as fortunate as I have been.

For example, owning a car can enable you to find a better paying job, which could be the first step out of poverty. However, if you are poor and own a car, it is probably a used car (because poor people cannot afford or do not have credit ratings to finance affordable new cars). Used cars require more maintenance and are at greater risk of breaking down. If you are forced to buy another car because your current used car has broken down more than once, and you need that car to keep your better job, then any money you have accrued from your better paying job could be lost to that one catastrophic event, which means it will take longer to get out of poverty.

Similarly, many lower-income workers work 1 or 2 or even 3 jobs to make ends meet or, if you're lucky, to start saving money. Usually the poor need multiple jobs because most employers (think retail, food service, manual labor, "unskilled" labor, etc.) restrict hours to avoid providing benefits like health insurance and paid time off. Working multiple jobs, none that offer health insurance, exposes workers to higher levels of stress, increasing the likelihood of getting sick. Getting sick without access to paid time off means losing income from all of your jobs. And without health insurance, getting sick can also drain your finances if you need medical care. So any extra money you had been making is lost, which means it will take longer to get out of poverty. And if you have a catastrophic illness like cancer, you may never get out of poverty.

If you take the time to consider it, I'm sure you can see how life events that don't derail the finances of the non-poor can be devastating if you are poor. Whether they were born into poverty or ended up there because of catastrophic events in their lives, it's this understanding that people in poverty need. It's this understanding that can inform our political support for safety net programs and ensure access to services and supports that address these risks and enable people who are poor to one day overcome poverty.

No comments:

Post a Comment