WHY the poor are poor?

Question

simply because the rich are rih and have the power and authority yo beome riher and let the poor poorer.

Answer 1

The truth is, we don't know (except the obvious things like if "you are disabled, you can't earn a living"). What we do know is that poverty and wealth are localized by some really strange ethnic and geographic criteria:

Urban counties in the "Boston-Washington corridor" have per-capita income about 80% higher than the average urban county.

Urban counties have higher incomes compared to rural counties.

The vast majority of poor Americans belong to one of five groups: (1) inner-city Blacks, (2) Blacks living in the Mississippi delta, (3) Native Americans living in the Southwest, (4) Hispanics living in the Southwest, and (5) Whites living in Southeastern Kentucky (the last one is quite a mystery; out of 20 poorest counties with mostly white population, 18 are in Southeastern Kentucky).

On average, Blacks, Hispanics, and Native Americans earn less than Whites, while Asian Americans earn more than Whites.

Americans of Austrian descent on average earn 25% more than Americans of Belgian descent.

On average, Iroquois earn almost twice as much as Sioux.

On average, Episcopalians earn about 31% more than Methodists.

Some of this is really easy to write off as institutional racism, but racism still does not explain why Iroquois earn more than Sioux or what sets the "Boston-Washington corridor" apart from the rest of urban America...

Other countries have even more extreme disparities. Before the breakup of Yugoslavia, Slovenia had per-capita income twice as high as that of Croatia and five times as high as that of Bosnia. Before its cessation from Ethiopia, Eritrea has a per-capita GDP three times the national average. In South Africa, Whites earn about 9.5 times more than Blacks, but at the same time, only in one province, Natal, there exists a 54-fold (!) income disparity between different tribes. In Mexico, the poor account for about 18% of white population and about 81% of indigenous population. In China, per-capita GDP in Shanghai is five times the national average, while in Guizhou it is only 50% of the national average...

Answer 2

Just to follow up a little on the above, there is a wonderful book called "Why Men Earn More."

It was written by a former director of the National Organization for Women. At one point, he realized that since women were paid 59 cents for every dollar a man makes, he should be able to hire only women and make a killing because he should be able to pocket the other 41 cents.

But that of course is really dumb. People don't really work that way. You would have to have an a priori belief that women are really dumb for that to be true. So he set about doing research on income disparities and found twenty three determinants of demand for pay for all positions in the United States. Given that these are behavioral it is likely that most of these cross cultures.

One observation was that, if all 23 behavioral determinants were controlled for, women earned equal or more than men. In some fields women make statistically significantly more than men. Software engineering is a great example, the average women makes 40% than the average man all other things constant.

When you see large disparities in pay between people or societies then you are seeing large disparities in behaviors. Some of these are from within the person, but some are external. For example, if you live on the ocean then your access to working on a fishing boat is different than if you lived some distance away. Likewise, if tariffs eliminate competition in food markets you will see behavioral differences from markets that are competitive. On the other hand, some behaviors are purely internal such as general unwillingness among women as a group to engage in professions that endanger life and limb.

IMHO poverty is caused by systemic poverty sustaining behaviors on the part of both the government, the poor and the geographic area's power elite. Sometimes the power elite have a self interest in maintaining poverty. More generally, they don't know how to bring it to an end.

Answer 3

In answering this question, I think it is important to seperate inequality from poverty. Poverty refers to a situation where some people simply do not have enough to live secure and productive lives.

But inequality of income is different and not necessarily a bad thing. If everyone had enough resources to achieve their full potential and lived in societies where their full potential could be realised, it would not matter if some were richer than others on the basis of more talent or more luck. The problem is that we don't just see inequality, we see poverty.

A market economy will necessarily contain inequality but that does not mean that is must contain or promote poverty. Having said that, given all of the imperfections in markets, left to its own devices a market system can concentrate power and, provided there is no cultural norm to counteract it, the system will lead to poverty. That is where governments are meant to come in, improve the functioning of the market system, collect some of the its benefits and redistribute these to those who are underpriviledged.

The poor are poor for many different reasons but some key ones include: poor governance, bad luck, poor skills, a poorly functioning market system, a lack of opportunities, corruption, and the thirst for and maintenance of existing power structures. These are all problems that originate with human traits, they are not the fault of the market system per se.

It is interesting to note that economics has very little to say on redistribution of income. It simply says that if markets work properly then an efficient outcome will be achieved ( ie a situation where no one can be made better off without making someone else worse off).

Answer 4

Why did you ask the question if you already have the answer? besides.....your answer makes no sense. The rich have the authority to become richer? There are more cases in this country of poor people becoming rich by working hard and not making bad decisions. Give it a rest.

Answer 5

the poor are poor because that is how the economy works. Basically if everyone was rich, we as a society would invent new ways to differentiate the masses.

Answer 6

Poor people have poor ways. The difference is education, and it is free. You must have the want to!!!!

Answer 7

One reason there are poor is that the rich want it.
Another is that they are not into competition over ever **** here on dirtball earth.

Answer 8

economics is the study of the distribution of limited resources to the unlimited wants of human nature.

Answer 9

because the rich is rich

Answer 10

Lack of will, knowledge or
just being tired of themselves