Why do social programs such as welfare, keep citizens in a cycle of poverty?

Answer 1

In and of themselves, they don't. The circle of poverty is perpetuated by the combination of welfare and tax penalties for people who try to get off it.

About 10 years ago, German economist Christian Thimann wrote in his article ("Germany's Social Assistance Program: The Dilemma of Reform", Finance and Development, Volume 33, Number 3, September 1996):

[Quote]

Social assistance benefits are adjusted with changes in net monthly earned income (gross income less social security contributions, taxes, and an allowance for employment expenses equivalent to around 10 percent of gross income), as follows:

* Less than DM 130: workers are entitled to receive full benefits.

* Between DM 130 and DM 1,000: social assistance payments are reduced by 85 percent of additional net income. In other words, a DM 100 increase in net earnings raises disposable income by only DM 15 -- an implicit tax rate of 85 percent.

* Between DM 1,000 and DM 1,150: social assistance payments are reduced by the full amount of the increase in net income, and the implicit marginal tax rate is 100 percent.

* More than DM 1,150: workers are no longer eligible for social assistance.

[End of quote]

In other words, getting off welfare in Germany carries a substantial tax penalty. Similar penalties exist in other developed nations. In the U.S., a mildly successful attempt was made to lessen (although not to get rid of) this penalty through introduction of Earned Income Credit...

Answer 2

The above article was an excellent example of the issue. Citizens are often kept in a cycle of poverty because the system encourages it. In addition to the above, some welfare systems in the United States are or have been lending systems. Until about ten years ago, if you were on welfare in Pennsylvania and owned a home or vehicle, the state took a lien on them and could sell them if you got off the system. You were also required to pay them back. You could then not buy another car as the state would have a prior lien against it nor could you sell your home and look for a new job, if you got out of the system. For someone who suddenly lost their job and went into welfare, who owned a home, the penalty for getting a job could be losing a home and you could not move to an area that demanded jobs and had higher wages without potentially losing your equity.

When the system makes it dangerous to leave the system, you do not leave the system. It is important to notice that in the US the cost of administration of the system is about 3x the benefits administered in order to guarantee no one cheats. We pass extremely restrictive rules in order for politicians to say no one is cheating, that are prohibitively expensive to administer which often guarantees an incentive to welfare workers to keep people in the system and to create regulation to block leaving the system.

On top of that, add depression and other self-esteem issues and you have a big problem created by government.

Answer 3

A few reasons of the many are:
a) when some people get a free hand-out (something for nothing), they get lazy and do not desire to work;
b) also, once they are on welfare, getting free money, shelter and clothing allowances, free medical care, they realize that by "getting off the system", they may end up being worse off as they will have to pay taxes, day care, medical, gas to get to work etc etc. and decide to just keep living at the same poverty or subsistence level that they are at now;
c) if they do find a job (even a part-time job) to help get off the system, then they receive reduced benefits since they are earning money. They see that they are bringing in the same money, but now are working for it, getting up early for work, maybe paying for baby sitters etc....and realize it is better to stay on welfare; and
d) once someone has been in the welfare trap for a sufficiently long period of time (and all the above factors kick in) and have been out of the workforce, it is harder to re-enter the workforce even if they wanted to, as employers have that built-in stigma of not wanting to hire a welfare recipient. THE TRAP

Answer 4

There's a commom saying "Give a man a fish and he'll be fed for a day. Teach a man to fish and he'll be fed for a lifetime".

The problem with a lot of welfare type programs, is that it just dispenses fish. The participants get used to free or reduced cost housing and food, and some states even offer cash benefits to help out during hard times. Honestly, if you had a choice between working for your money, or just getting it handed to you, which would you choose? People get used to being provided for, and don't feel motivated to find a job and support themselves.

A lot of people were raised by families on welfare, and they honestly don't have the skills to support themselves, either. They are caught in the same cycle as their parents were.

Also, it can be degrading and humiliating to be on a goverment program, such as welfare. People with low self esteen are going to be less likely to find themselves a job eventually.

To get citizens out of the welfare cycle, we need to concentrate more on why they are on welfare in the first place. If we find out why and fix that, (whether it's lack of skills, lack of available jobs, childcare issues, substance abuse issues, illness) then there's nothing stopping them from supporting themselves.

Hope this helps!

Answer 5

Would you work if someone was giving you everything for free? People on welfare are very smart, they know how to cheat the system so they never have to work and still have better stuff than the middle class blue collar worker who pays into the welfare system for their entire life, then one little thing happens to them and they end up destitute and homeless.

Answer 6

Because our economy doesn't reward WORK, it rewards CAPITAL.

The odds of a welfare recipient becoming a capitalist are slim to none, so they stay where the living is better. They are acting rationally based on the poor economic choices our system offers them.

Answer 7

Cause if they gave too much everyone would want to be on welfare,not evryone,but people got it in their heads there not going to suceed so they give up.To bad cause it's all in there heads.If a person is sick with a terminal illness than he needs more support,to be on welfare.

Answer 8

If people get free hand outs being poor, why should they change?

Then again, there are people who hit bottom and need help to get back up - so they need to have someone to turn to.