Money
This is Why We Can Not Get Out of Poverty
Exploration of The Welfare Trap
Picture this with me: You have been laid off from your job for some time and are eligible for government services and benefits. Now, you are anxious, yearning for financial stability.
The government benefits were enough to keep you alive while looking for another job. You think, “OK,” I just need a job, and then I can get out of my problems, pay all my debts, and feel some financial stability.
Yes, you did it, and you found a nice job! But there was a catch. The job paid just above the government limit for benefits/services eligibility so that the government wouldn’t help anymore. Now, you’re back to financial instability since your job didn’t pay enough to cover everything — rent, food, utilities, taking the bus, and daycare for your kids while at work.
Somehow, with a new job, you have less money than when you are just looking for work. It doesn’t seem fair, right? Economists call this getting stuck in the “welfare trap.”
There are a few reasons why this happens. Government help has a limit on how much money you can make; once you make more than that, bye-bye help, even if the new paycheck isn’t enough yet.
