Barriers to Economic Equality in the United States: Analyzing Economic, Social, and Legal Impediments to Financial Security

By: Krish Arora, Miah Maliha Akter Dina, Samantha Binder, Govi Chadalavada, Nikita Kumar, David Jen, Ethan Offei-Addo, Akhil Reddy, Paxton Wang

Teen Think Tank Project | Change Agent Academy |2024 Summer Session | Financial Security Research Cohort | August 8, 2024

Keywords: financial security, economic inequality, poverty

Abstract

Achieving financial equality in the United States remains a significant challenge due to a variety of interconnected barriers. This paper combines insights from various economic, social, and legal dimensions to unravel these complex obstacles and propose actionable solutions. Economically, the affordable housing crisis and wage disparities among large corporations create significant obstacles to financial stability. Socially, economic inequality manifests in disparate health outcomes, educational disparities, and varying cultural norms. Politically and legally, systemic issues such as an unclear definition of poverty, historical racial discrimination, and the financial repercussions faced by former inmates create entrenched disadvantages. Addressing these multifaceted issues requires a comprehensive approach, blending educational initiatives, policy reforms, and societal shifts. Confronting historical injustices, challenging discriminatory practices, and reshaping societal norms are crucial steps toward fostering a more inclusive and equitable society. By dismantling these barriers through collaborative efforts, we can create a more financially equitable society and secure a prosperous future for all Americans.

Keywords: financial security, economic inequality, poverty

Introduction

The pursuit of financial equality in the United States is an intricate challenge intertwined with a myriad of economic, social, and legal barriers that perpetuate disparities across different segments of the population. Economic impediments such as the affordable housing crisis and wage disparities among large corporations are major contributors to financial instability, particularly affecting low-income families. Simultaneously, social constructs related to education, health, and cultural norms exacerbate these inequalities, creating a cycle of disadvantage that is difficult to break. Legal frameworks, too, have historically reinforced economic inequities, particularly through policies that disproportionately affect marginalized communities.

This paper aims to unravel these complex barriers to financial equality by examining the economic, social, and legal dimensions that contribute to the issue. Through a comprehensive analysis of these interconnected factors, the paper proposes actionable solutions that could foster a more inclusive and equitable society. By addressing both historical injustices and contemporary challenges, the research highlights the need for a multifaceted approach that includes policy reform, societal shifts, and educational initiatives. Ultimately, this paper seeks to contribute to the ongoing discourse on economic inequality in the United States by offering insights into the systemic changes necessary for achieving financial security and prosperity for all Americans.

Economic Impediments

As the United States grapples with ongoing financial crises and a rise in poverty, the lack of affordable housing in urban areas emerges as a critical economic barrier that exacerbates these challenges. Compounding this crisis is income inequality that is brought about by massive wage disparities in corporate America. The following section examines the economic impediments (e.g., high living costs, low wages, inadequate government support, and market factors) that prevent sustainable economic reform from taking hold in America.

The Affordable Housing Crisis

In the context of ongoing financial crises and increasing poverty in America, the lack of affordable housing in urban areas stands out as a major economic barrier. This section explores how the affordable housing crisis exacerbates financial instability among low-income families, perpetuating poverty and widening economic inequality. Despite an adequate number of housing units for every citizen, homelessness remains a critical issue in the U.S. The problem lies not in the shortage of housing itself but rather in the deficiency of affordable housing (Meyer, 2018). The availability, accessibility, and quality of affordable housing significantly impact low-income individuals and families, exacerbating financial instability and perpetuating the cycle of poverty. Since 2000, the affordable housing crisis has intensified due to several factors, including inadequate government support, rising cost of living, and market dynamics. While the affordable housing crisis persisted for decades, the 2008 housing crisis further exacerbated the distress, increasing housing insecurity among low-income families in urban areas. Consequently, the demand for low-cost housing far surpasses the available supply, compelling low-income families into inadequate living arrangements or homelessness, which ultimately gives rise to a cascade of challenges — such as aggravated poverty, detrimental health outcomes, restricted access to education and job opportunities, and the perpetuation of intergenerational inequality.

This section defines affordable housing as housing that costs no more than 30% of a household’s income (Freeman, 2002) and low-income families as households earning less than 50% of the region’s median income (Meyer, 2018). Additionally, financial stability is defined as the ability to sustain current and future financial obligations, including the capacity to absorb economic shocks (Sirmans et al., 2003).

The Role of Income Inequality in Housing

Income inequality significantly exacerbates housing challenges in the United States. As the income gap widens, low-income households struggle to find affordable housing and end up spending a large portion of their income on housing costs. In 2023, over 8.53 million low-income citizens spent more than half of their annual income on housing, showing the significant financial burden they face (Castaldi, 2024). This widening income gap creates difficulty for low-income households in finding affordable housing, forcing them to allocate a disproportionate share of their income to housing costs (Sirmans et al., 2003). This financial strain not only deepens poverty but also increases the risk of eviction for these families when they are unable to pay rent. In 2015, over 40.4% of the expenditures of the lowest-earning 20% of Americans went directly to housing (Meyer, 2018). More recent studies confirm that in 2023, over 8.53 million low-income citizens directed over half their annual income directly to housing costs (Castaldi, 2024). In comparison, a financially stable household should spend no more than 30% of its income on housing (Freeman, 2002).

As income inequality persists and housing costs continue to rise, the impact of income on access to stable and affordable housing becomes increasingly clear. Addressing income inequality and its effect on housing and evictions is crucial for promoting financial stability and reducing poverty in the United States (Meyer, 2018).

High Cost of Living

The cost of living significantly influences the availability and accessibility of affordable housing, particularly in urban areas with more low-income families and high living expenses. As the cost of living continues to increase in many cities, it becomes increasingly challenging for low-income households to find housing that fits within their limited budgets.

A general guideline is that a household should spend a maximum of 30% of its income on housing. Unfortunately, many families were spending over 50% of their income on housing in the 1990s, and this trend continues in the 21st century (Freeman, 2002). The issue is that while the cost of renting a house has significantly increased, incomes have barely changed. Since 2001, average monthly rent costs have risen by 18.8%, while average income has only increased by slightly over 4% (Castaldi, 2024). Ultimately, this increased cost of living makes it almost impossible for low-income families to afford housing. This is especially true in urban areas like Chicago: the high cost of living worsens housing insecurity for those who cannot afford the rental prices, leading to a widening gap between low-income residents and affordable housing options (Miller, 2015).

Over the past few decades, the cost of living has increased dramatically. In the 1980s, the average price of a home was around $62,200. By 2000, it had risen well above $160,000 (Sirmans et al., 2003). High costs of living, driven by factors such as housing, transportation, and healthcare expenses, directly affect the affordability of rental and homeownership options. In cities with high living costs, the gap between income and housing expenses widens, necessitating affordable housing solutions (Mallach, 2018).

Furthermore, the cost of living can force low-income households to make difficult choices between housing and other essential needs, such as food, healthcare, and education. This often leads to housing instability, increased poverty, and reduced opportunities for economic advancement. Housing instability can have a ripple effect, impacting not only the immediate financial situation of these families but also their long-term prospects for economic mobility and stability (Meyer, 2018).

Inadequate Government Support

The United States government has both a moral and a legal responsibility to ensure that all its citizens have access to adequate and affordable housing options (Freeman, 2002). However, this commitment has yet to be fulfilled. Government funding for affordable housing programs and subsidies has not kept up with the increasing demand, resulting in lengthy waiting lists and inadequate resources for individuals needing assistance. As of the early 2000s, the United States assisted “approximately 4.6 million households, but roughly 9.7 million low-income households receive no housing assistance.” Thus, less than half of low-income households that qualify for federal assistance receive it (Freeman, 2002).

Furthermore, there has been minimal federal government support in increasing accessibility for the elderly and those with disabilities. Accessibility is crucial for older people with functional limitations and disabilities, and the U.S. Department of Housing and Urban Development found that over 1.1 million home modifications still needed to be completed as of the early 2000s (Bognár, 2002). There has been considerable debate over whether living in stable but inadequate housing — such as housing without any plumbing or heating — counts as being homeless. This can artificially deflate the numbers of those without sustainable housing (Meyer, 2018). Similarly, the number of non-accessible housing units for people with disabilities is commonly ignored.

The affordable housing crisis intersects with various social issues, amplifying its impact on marginalized communities. Low-income families often belong to historically marginalized groups, including racial minorities, immigrants, and individuals with disabilities, as outlined by Bognár (Meyer, 2018). These communities face systemic barriers that exacerbate their financial instability and limit their access to affordable housing. Addressing the affordable housing crisis through an intersectional lens is crucial to understanding and mitigating the compounded challenges faced by these groups, and increased government support is a necessity to overcome these barriers.

Market Factors

Market factors play a crucial role in shaping the availability and accessibility of affordable housing. Factors such as housing supply and demand dynamics, development costs, and market trends can either hinder or promote the creation of low-cost housing options. In many areas, the demand for affordable housing far exceeds the available supply, leading to increased competition and rising housing costs (Meyer, 2018). Additionally, market trends like gentrification can significantly impact affordable housing availability. As higher-income residents move into traditionally low-income neighborhoods, housing costs often rise, displacing long-time residents and reducing the stock of affordable housing (Mallach, 2018). Mallach argues that gentrification is an ongoing process. Although it may have lessened in a broader sense, it is still very prominent in cities like New York, San Francisco, and Chicago.

Market factors not only harm tenants but also incentivize landlords to raise housing prices. Affordable housing projects almost always benefit tenants dramatically, but they risk undermining private landlords and increasing abandonment. As a result, landlords become incentivized to either evict tenants or raise rent prices so that most low-income tenants cannot afford it (Mallach, 2018). Recognizing the influence of market factors on the affordable housing crisis is essential for developing effective strategies to promote housing affordability and mitigating the economic impediments posed by market dynamics.

Policy Options to Address the Crisis

Addressing the economic impediments posed by the affordable housing crisis requires a comprehensive approach that considers the complex interplay of factors impacting housing availability, accessibility, and quality. There are multiple potential avenues to address the affordable housing crisis.

First, utilizing a Housing First framework in all future policies is critical. The Housing First approach involves shifting government resources from transitional to permanent housing. This way, “the chronically homeless are placed in permanent housing as quickly as possible and then matched with services to meet…needs that are often a primary cause of their having become homeless in the first place” (Meyer, 2018, p. 21).

The Housing First approach in Kensington, Philadelphia, serves as a compelling example of how addressing the affordable housing crisis can lead to positive outcomes. Kensington has long struggled with issues of homelessness, addiction, and poverty. The Housing First model prioritizes providing stable housing to individuals experiencing homelessness without preconditions such as sobriety or employment. Once housed, individuals receive supportive services to address their needs and challenges. Implementing the Housing First approach in Kensington has led to significant improvements in residents’ lives.

Stable housing provides a foundation for individuals to address other issues, such as addiction, mental health, and employment. By removing the barriers to housing, the Housing First model promotes long-term stability and reduces the burden on emergency services and shelters. This approach demonstrates that providing affordable housing is not only a moral imperative but also a practical and cost-effective solution to homelessness and poverty (Mettraux et al., 2019).

Second, the federal government must scale up solutions that have been empirically proven to work. Expanding federal rental assistance, with the eventual goal of reaching every person with low income who needs it, should become a priority. Policymakers should focus initially on reaching people with the lowest incomes, starting with people at approximately 15–30 percent of the area median income and below, who are most at risk of experiencing homelessness (Bailey et al., 2024). While Bailey proposes using existing funds to achieve this, skeptics like Castaldi need more status quo funding. However, this can easily be amended by taxing high-value home sales to raise revenue, which would be diverted to fund affordable housing (Castaldi, 2024).

Finally, while the federal government must take action, nonprofit housing organizations are central to the affordable housing agenda, too (Lento et al., 2011). A Community Land Trust (CLT) is a nonprofit organization that acquires and holds land and then leases it to low-income residents for a fee. This removes the cost of land from housing prices, making homes more affordable. CLTs have been successful in cities such as Burlington, Minneapolis, and, most notably, Chicago (Miller, 2015). Miller articulates that while Chicago still has one of the highest living costs in America, CLTs are proven to overcome the majority of these costs.

Conclusion

In conclusion, the affordable housing crisis is a significant economic barrier to financial stability and poverty alleviation in America. By addressing the multifaceted challenges of affordable housing through targeted policies and comprehensive support systems, we can promote economic stability and improve the well-being of vulnerable populations. Future research should focus on the long-term impacts of affordable housing initiatives and explore innovative policy solutions.

Wage Disparities Within Corporations

In today’s corporate wage structures, it is a common occurrence for the CEO of a major corporation to earn more in a single day than the average employee does in an entire year. For instance, Amazon’s CEO, Andy Jassy, earns an amount that vastly exceeds the average Amazon employee’s salary. This disparity highlights the significant differences in compensation within many organizations. As corporations play an increasingly dominant role in the global economy, their internal wage structures have a significant impact on broader economic trends.

The scale of wage disparity within corporations is staggering. For example, in 2022, the average CEO-to-worker pay ratio at S&P 500 companies, the leading publicly traded companies in the US, was 272-to-1, meaning CEOs earned 272 times more than the median employee (Economic Policy Institute, 2023). This stark contrast in earnings within a single organization exemplifies the broader issue of economic inequality and its roots in corporate wage structures. Companies like Amazon and Tesla have been at the forefront of this debate, with their executives earning astronomical sums, while warehouse workers and factory employees struggle to make ends meet.

Increased Concentration of Wealth

One of the primary ways in which corporate wage disparities contribute to economic inequality is through the increased concentration of wealth at the top. The Economic Policy Institute reports that “between 1979 and 2019, the compensation of the median U.S. worker rose by only 13.7%, while economy-wide productivity grew by 59.7%” (The Economic Policy, 2021). This 46 percentage point divergence between productivity growth and typical worker compensation illustrates how the benefits of economic growth have been disproportionately captured by those at the top of the corporate ladder.

When wealth is concentrated in the hands of a few, it limits the purchasing power of the broader population, which in turn affects overall economic demand. High-income individuals are more likely to save or invest their money rather than spend it on goods and services, leading to a decrease in consumer spending. This reduction in spending can stifle business growth and innovation as companies face lower demand for their products and services.

Reduced Buying Power of the Workforce

As wage growth stagnates for the majority of workers, their buying power is significantly reduced. This reduction in purchasing power has far-reaching consequences for consumer demand and overall economic growth. Nearly 800 million workers worldwide have seen their wages fail to keep pace with inflation, resulting in a loss of $1.5 trillion for those workers over a two-year period (Amladi, 2024). The impact of reduced buying power is not limited to individual households. As consumers struggle to afford goods and services, businesses may experience decreased demand, potentially leading to slower economic growth and job creation. This creates a negative feedback loop that further exacerbates economic inequality.

The consequences of reduced buying power are evident in various sectors of the economy. For instance, the fast-fashion industry, which relies heavily on low-wage labor, has seen a decline in consumer spending as workers’ wages have stagnated. This decline has forced some companies to cut costs further, often at the expense of their employees, perpetuating the cycle of low wages and reduced buying power. The ripple effect of wage disparity can be seen across industries, highlighting the interconnectedness of corporate wage structures and broader economic health.

The Cycle of Inequality

Wage disparity within corporations can become an autonomous cycle. As wealth becomes increasingly concentrated at the top, those with high incomes have more resources to invest in education, healthcare, and other opportunities that can lead to higher future earnings. Meanwhile, low-wage workers may struggle to access these same opportunities, limiting their economic mobility. This cycle of inequality is evident in the growing wealth gap. Since 2020, the world’s five richest men have more than doubled their fortunes at a rate of $14 million per hourIn contrast, five billion people have become poorer over the same time period (Oxfam America, 2024). This stark contrast highlights how corporate wage structures can contribute to a widening economic divide.

The cycle of inequality is further reinforced by corporate policies and practices that prioritize short-term profits over long-term sustainability. For example, companies that rely on sweatshops and exploitative labor practices may see immediate financial gains, but these practices contribute to long-term economic instability and social unrest. By maintaining low wages and poor working conditions, corporations create an environment where economic mobility is limited, and the cycle of inequality continues.

Impact on Social Issues

The consequences of wage disparity extend beyond economic indicators, exacerbating social issues such as poverty, crime, and access to healthcare. Economic inequality can lead to social unrest and political instability, as seen in protests and movements worldwide calling for more equitable economic systems. Addressing wage disparity within corporations can contribute to a more equitable and stable society. For instance, if 10% of every business in the U.S. was employee-owned, it could double the share of the wealth of the bottom 50% and the median wealth of Black households, which are among the most affected by economic disparities (Oxfam America, 2024). Currently, racial inequalities compound economic challenges, making it harder for Black families to achieve financial security.

The impact of wage disparity on social issues is multifaceted. For example, communities with high levels of economic inequality often experience higher rates of crime and violence. This correlation can be attributed to the lack of economic opportunities and social mobility for low-wage workers, leading to increased frustration and desperation. Additionally, economic inequality can limit access to essential services such as healthcare and education, further entrenching social disparities.

Consumer Behavior and Economic Inequality

Interestingly, consumer behavior can both reflect and perpetuate economic inequality. An in-depth look at consumer purchasing habits in the pet food industry found that factors such as education and income significantly influenced consumer choices (Banton et al., 2021). For example, higher education levels were associated with a greater likelihood of selecting premium food options, while lower income levels were associated with a preference for value-oriented products. This pattern of consumption based on socioeconomic factors can further reinforce existing economic disparities.

The influence of consumer behavior on economic inequality extends beyond individual purchasing decisions. For instance, companies that cater to high-income consumers may prioritize premium products and services, further marginalizing low-income consumers who cannot afford these options. This dynamic can create a market where the needs and preferences of low-wage workers are overlooked, perpetuating economic disparities and limiting opportunities for social mobility.

Solutions

As the issue of wage disparity gains more attention, there is growing pressure on corporations to address internal pay structures. Some companies have begun implementing more transparent pay practices and narrowing the gap between executive and average employee salaries. However, progress remains slow, and many argue that more substantial changes are needed to address the root causes of economic inequality. Here are some ways we can address these shortcomings.

Corporate Responsibility and Wage Equity. Corporate responsibility initiatives, such as profit-sharing programs and Employee Stock Ownership Plans (ESOPs), have shown promise in promoting wage equity and giving workers a stake in corporate success. These initiatives can help align the interests of employees and executives, fostering a more inclusive and equitable corporate culture.

Changing Corporate Cultures. Despite these efforts, significant challenges remain in addressing wage disparities within corporations. Entrenched corporate cultures and resistance to change can hinder the implementation of equitable pay practices.

Shareholder Action. Additionally, the influence of shareholders and market pressures can create incentives for companies to prioritize short-term profits over long-term wage equity. Addressing these challenges requires a concerted effort from policymakers, corporate leaders, and stakeholders to develop a more equitable economic system.

Conclusion

As we move forward, it is crucial to recognize that economic inequality is not an inevitable outcome of market forces but rather the result of deliberate policy choices and corporate practices. By addressing wage disparities within corporations, we can take a significant step toward creating a more just and prosperous society for all. The challenge of economic inequality is complex and multifaceted, one that requires policy innovation and corporate responsibility. As consumers, workers, and citizens, we all have a role to play in advocating for more equitable economic structures and holding corporations accountable for their impact on society. Only through collective effort and sustained commitment can we hope to build an economy that truly works for everyone.

Social Impediments

While America’s economic systems undeniably present significant barriers to financial stability, these economic challenges are not the sole obstacles to achieving economic equality. The complexities of social constructs contribute to disparities that extend beyond the reach of purely economic solutions. Issues such as educational inequities, entrenched social norms, and deeply rooted political ideologies all intersect to create formidable barriers that impede progress toward financial security for many Americans. These social factors are often intertwined with economic conditions, reinforcing cycles of inequality that are difficult to break.

This section will delve into the various social impediments that hinder the pursuit of financial stability, examining how these non-economic factors perpetuate disparities and limit opportunities for economic advancement. By exploring these challenges, we can gain a deeper understanding of the multifaceted nature of economic inequality and the comprehensive strategies needed to address it.

Examining Educational Disparity Through Economic Inequality

In modern times, the key to educational success often lies in having up-to-date technology, endless extracurricular choices, and a strong academic support system. However, while many students are born into a system that provides these amenities, many students are born into a school with mildewed textbooks, no advanced placement courses, and a crippling teacher shortage. This educational divide often leads the student with substandard resources to struggle to succeed, while the student with the proper resources easily moves on to a college education.

This disparity is no coincidence, as it can be attributed to inequities created by economic disparities in the educational system. For example, there is a significant digital divide between affluent and low-income schools. About 90% of students in wealthier districts have access to high-speed internet and modern computers, compared to just “about 50% in low-income schools” (Reardon, 2019). When left with no assistance, these students will fall behind because they are not being given the same opportunities to succeed as high-income students. Today, digital access is more important than it has ever been as learning has become majorly digitalized, so this digital divide is extremely harmful when there is no intervention to help students.

Economic inequality influences educational disparities, reinforcing systemic barriers that disproportionately affect students from low-income communities. This section delves into how economic inequality negatively affects accessibility to higher education. Specifically, we will look at how funding disparities, resource accessibility, and socioeconomic pressures create inequities that create negative outcomes for students in poor or underserved areas.

Funding Disparities

Students in wealthy areas are much more likely to receive more funding than those in poorer areas. High-income school districts benefit from high property taxes, giving them access to superior facilities, extracurricular programs, and stellar technological resources. In contrast, schools in poorer areas face challenges, including outdated textbooks, deteriorating infrastructure, and a lack of necessary educational materials (Lafortune et al., 2018). Because of this, students in poorer areas must work a lot harder to achieve anything close to the results of students in more affluent areas. The lack of resources perpetuates a cycle of inequality where underfunded students are less likely to succeed academically, perpetuating socioeconomic divides.

Schools in the top 10% of income distribution spend nearly ten times more per student than those in the bottom 10%. The average per-student spending in high-income districts was $20,000, compared to just $2,000 in low-income ones. (U.S. Department of Education, 2018). This disparity in funding is crucial because it directly impacts the quality of education, resources available, and overall student outcomes. Addressing this imbalance is essential for ensuring that all students, regardless of their economic background, have access to the same opportunities for success.

This funding disparity creates a wide gap in educational accessibility, significantly affecting students’ college preparedness. Richer schools can offer more challenging coursework, counseling, and extracurriculars that better prepare students for college. However, low-income schools struggle to provide basic educational resources (Baker et al., 2018). This gap in resources due to funding disparities directly affects students in impactful ways. Low-income students will have a harder time learning due to inadequate access to proper resources. The lack of counseling or guidance when approaching the college process can harm the student as they may not receive the necessary support to apply to colleges successfully.

The debate around increased funding for poorer schools is often influenced by those who believe in meritocracy and limited government interference. Critics of increased funding for low-income schools say educational success should be based on merit rather than economic background. This claim exacerbates the misconception that richer schools are more successful due to their merit. Unfortunately, this perspective is widely accepted, leading to resistance against efforts to increase funding for disadvantaged schools (Reardon, 2019). These misconceptions lead to continuing funding inequalities and contribute to the widening gap in college access between the general population and low-income students.

Resource Accessibility

The accessibility of educational resources, including qualified teachers and advanced coursework, is directly related to students’ educational outcomes. Schools in affluent areas provide more security to experienced teachers while offering a wide range of curriculum options. On the other hand, schools in low-income areas face high teacher turnover rates and limited curriculum options, negatively affecting students’ academic performance (Darling-Hammond, 2015). This disparity in qualified teachers, which leads to poor economic outcomes, is directly related to poor economic outcomes.

Economic inequality greatly affects educational disparity, as shown by the gap in access to experienced teachers. In 2018, the National Center for Education Statistics (NCES) found that students in low-income schools are twice as likely to be taught by teachers with less than three years of experience compared to those in wealthier schools (U.S. Department of Education, 2018). The lack of experienced teachers in low-income areas negatively affects their ability to learn, as inexperienced teachers may not adequately prepare their students for college-level assignments.

Furthermore, many college admissions factors like accelerated courses or rigorous extracurriculars are not made available to low-income students. The limited availability of AP courses and extracurricular opportunities in low-income schools reduces students’ chances of meeting college admission requirements and competing for scholarships (Klopfenstein, 2004). Colleges take factors like advanced coursework and high SAT scores very seriously, but many low-income students have less access to these AP courses and cannot pay for SAT tutors. Students can do the most with the resources that they are given but still fall short of more affluent students when it comes to college admissions.

Social constructs related to race, class, and neighborhood reputation influence the distribution of educational resources. Schools in predominantly POC and low-income areas are frequently underfunded, reflecting broader societal biases. These biases perpetuate a cycle of disadvantage, as limited resources lead to poorer educational outcomes and reinforce stereotypes about the capabilities of students from marginalized backgrounds (Ladson-Billings, 2006). However, the educational outcomes of POC students should not be attributed to their race but to circumstances that they cannot control. Historically, policies like redlining and segregation have widened racial and economic divides, leading to high poverty rates in communities of color. These practices, designed to limit the opportunities of marginalized groups, specifically the black community, ensured that resources remained concentrated in predominantly white, affluent neighborhoods.

This history has a lasting impact because schools are funded by property taxes, leading to the underfunding of low-income schools. This pattern of discrimination in education is long-standing. From the exclusion of African Americans and other minority groups from public education to the ongoing struggles against redlining and trickle-down segregation, our history has shaped the current landscape. The landmark case of Brown v. Board of Education was a significant step toward dismantling legal segregation, but integration was slow and met with resistance. The Civil Rights Movement of the 1960s further highlighted the need for equity in education, yet systemic inequalities persist. Schools in wealthier, predominantly white neighborhoods receive more funding, better facilities, and more experienced teachers. In contrast, schools in poorer, predominantly POC areas struggle with outdated materials, overcrowded classrooms, and teacher shortages (Rothstein, 2013). Instead of working to solve these issues, many work to blame and belittle marginalized communities for not working hard enough. Improving resource accessibility in low-income schools should be a priority.

Improving college access for all students hinges on changing these constructs and addressing the unequal distribution of resources. By acknowledging and confronting the historical and systemic roots of these disparities, we can work towards an education system that truly reflects the principles of equity and justice.

Socio-Economic Pressures

Socio-economic pressures such as housing instability, food insecurity, and lack of access to health care worsen existing educational inequality. Students from low-income families face these additional challenges that hinder their ability to focus on academics and succeed in school, affecting their readiness for college (Basch, 2011). Factors out of their control greatly affect their ability to focus and succeed in learning environments.

Housing instability severely impacts students’ academic performance and future opportunities. Students with housing instability frequently move between schools, disrupting their education and making it harder to maintain academic progress (Herbers et al., 2012). Such pressures can lower students’ chances of performing well on college entrance exams and getting into college. Because students are worrying about whether or not they will have a home to return to, they often are unable to focus on academic success.

Also, food insecurity can greatly impact a student’s attendance rates and grades. Students experiencing food insecurity are more likely to have lower grades and higher absenteeism rates (American Psychological Association, 2017). Although it is not the student’s fault, factors like food insecurity often go unnoticed by schools, leading to punishment for low attendance rates. The lack of good grades also greatly affects the student’s ability to successfully apply to college.

Additionally, students from low-income families often lack access to adequate health care, which can lead to health issues that impede academic performance (Basch, 2011). For example, untreated vision or hearing problems can significantly affect a student’s ability to learn and perform well in school. Furthermore, the stress associated with economic instability can lead to mental health issues such as anxiety and depression, which can further hinder academic achievement (Evans & Kim, 2013). Basically, suppose a student is constantly worried about whether or not they will have food on the table the next day. In that case, they are much less likely to focus well on academic achievements or results, leading to mental health issues and unseen pressure on lower-income kids. This mental issue can lead to bright students doing significantly worse than their richer peers who do not have to worry constantly about the next meal or whether they have a house to go back to.

Possible Solutions

To address the pervasive educational disparities fueled by economic inequality, it is essential to consider comprehensive solutions that target the root causes of these inequities. The following sections outline key strategies aimed at leveling the playing field for all students, regardless of their socioeconomic background. By focusing on funding disparities, resource allocation, and the impact of socioeconomic pressures, we can begin to dismantle the systemic barriers that hinder academic success for students in low-income areas. These targeted interventions are crucial for fostering a more equitable and just educational landscape, ensuring that every student has an equal opportunity to achieve academic success.

Funding Disparities. The first thing we need to do in order to create more equitable education outcomes is to eliminate funding disparities. Advocating for federal and state policies that ensure equitable funding across schools, regardless of local property taxes, would significantly reduce disparities in educational outcomes. Currently, most states do not fund each student equally, as more affluent areas have higher property taxes. So, equitable funding would fight the disparity between low-income and high-income areas. State-level school finance reforms that increased funding in low-income districts led to “improved student performance in math and reading” (Lafortune et al., 2018).

Resource Allocation. The second step we can take to improve resource allocation to low-income schools is to improve the working conditions in low-income schools to reduce teacher turnover. Presently, many teachers in low-income areas are not sure whether they will receive their next paycheck, and their classrooms often have a lack of resources. Teachers do not leave schools because they are in low-income areas but because they have bad working conditions. In a study where Arizona schools were analyzed over three years, schools where teachers rated their working conditions as more satisfactory had lower attrition rates and also were schools with higher rates of low-income and/or minority students (Geiger & Pivovarova, 2017). This shows that good working conditions can help keep teachers at schools with low-income students. Ensuring safe, supportive, and well-resourced environments can make these schools more attractive to educators. Better working conditions can decrease turnover rates, allowing for greater continuity and stability in the classroom. Allocating funds specifically for expanding AP courses and extracurricular programs in low-income schools helps solve the issue as well. Providing access to advanced coursework and diverse extracurricular activities can enhance college readiness and overall student engagement (Klopfenstein, 2004). Increased funding for these programs has been shown to improve educational outcomes and close achievement gaps (Reardon, 2019).

Socio-Economic Pressures. Ensure that schools in low-income areas have access to programs addressing food insecurity, housing instability, and healthcare. Providing comprehensive support services can mitigate the adverse effects of socioeconomic pressures on students’ academic performance (American Psychological Association, 2017). Schools with integrated support services show improved attendance and academic outcomes (Basch, 2011).

Conclusion

Economic inequality significantly contributes to disparities in college access through differences in funding, resource allocation, and socioeconomic pressures. These factors are deeply intertwined with social constructs and narratives that shape public perception and policy-making.

In summary, wealthier schools benefit from higher funding, resulting in superior educational facilities and opportunities. In contrast, low-income schools struggle with limited resources, impacting students’ college readiness. Well-off schools attract more experienced teachers and offer a broader range of courses, while underfunded schools face high teacher turnover and limited curriculum options, affecting students’ academic performance and college prospects. Low-income students encounter additional challenges, such as housing instability and food insecurity, which negatively impact their academic performance and ability to prepare for college.

Addressing economic inequality is essential for closing the educational access gap and working towards social justice. Through concerted efforts in policy-making, community support, and societal change, we can ensure that education becomes a tool for empowerment rather than a reflection of economic divides. A commitment to equity and inclusion is crucial for dismantling the barriers of economic inequality and creating a future where every student has the opportunity to succeed in higher education and beyond.

Socioeconomic Status and Social Determinants of Health?

Social Determinants of Health (SDOH) are the non-medical factors that significantly impact health and longevity. These determinants affect different socioeconomic levels differently. On one end of the scale, those surrounded by wealth generally face fewer struggles and lead healthier lives, therefore making more money to support themselves and their families more effectively. Conversely, individuals living in poverty struggle more with SDOH, leading to poorer health and shorter lifespans, which can then impact their ability to make a livable wage.

Across America, the richest men tend to live about 15 years longer than the poorest, while the richest women live around ten years longer than the poorest (The Equality of Opportunity Project, n.d.). Having access to healthcare, education, and living in safe neighborhoods are all key factors in someone’s longevity. However, since people living in poverty do not have these luxuries, they not only face to shorter lifespans, but they are pushed even further into debt in order to address basic healthcare needs, further perpetuating the economic disparities they face.

Social determinants of health play a critical role in perpetuating cycles of poverty and inequality by influencing access to healthcare, education, and safe neighborhoods. Historical injustices, structural inequities, economic disparities, and social and cultural factors collectively contribute to maintaining these cycles across generations, leading to entrenched poverty. This thesis explores these interconnected factors and proposes comprehensive strategies to disrupt the persistent cycle of poverty and inequality.

Education

One of the most important social determinants of health is education. Education is crucial because people with higher levels of education generally have higher-paying jobs. In fact, according to the United States Bureau on Labour Statistics, “Workers whose highest level of education was a [high school] diploma made $853 per week or just over 25 percent more than those who did not finish high school — and earnings improved with every level of education completed” (Education pays, 2022). Higher education levels are directly associated with higher-paying jobs, allowing one to be able to spend more money on medical procedures. Therefore, medical necessities are not met because of lower education levels in low-income communities.

Furthermore, people living in poverty also face challenges when waiting for healthcare. As they have lower levels of education and cannot pay for more timely care, they are forced to wait longer to be seen by a doctor. For example, “…low-income people spend at least six more hours per year waiting for services than high-income people” (Holt & Vinopal, n.d, para.1). This can be debilitating for people who live paycheck to paycheck because they will have to take time off of work to get the care that they need, which then discourages them from going to the doctor at all. This becomes cyclical: people in poverty do not get the care that they need promptly, which forces them to take time off of work, so they are making less money, which pushes them further into poverty.

The Importance of Health Literacy. Further, education levels are an integral aspect of physical health because of the ability to understand important health information, whether that be from a healthcare professional or the government. Health Literacy is “…the ability of individuals to ‘gain access to, understand and use information in ways which promote and maintain good health’ for themselves, their families and their communities” (World Health Organization, n.d.).

Health Literacy is important because it gives people the ability to completely understand what may be physically wrong with them, allowing them to understand when they need to be seen by a doctor or physician. This, in turn, allows them to spend less money on unnecessary appointments and, rather, turn to self-care and over-the-counter medications.

Health Literacy Disparities Based on Race. While low health literacy is seen in low-income communities, it is also disproportionately seen in black communities. Because of discriminatory practices within some healthcare offices, some people from predominantly black and brown communities do not trust the healthcare system. Specifically, “systemic factors such as limited educational opportunities, racism, health system mistrust, and a lack of culturally tailored health information and services are health literacy barriers for this population” (Muvuka et al., 2020). These systemic factors push these communities of people away, which makes their health literacy decline because they are not seeing the doctor as much and cannot get well-versed in the subject. If they are not going to the doctor, they are more likely to let illness and injury fester, which can put them out of work for longer periods, causing them to earn less money, which only perpetuates a cycle of debt and poverty.

Healthcare

People living in poverty are at a significant disadvantage when it comes to acquiring health insurance. Due to their low incomes, obtaining health insurance, even Medicaid, is challenging as, “people with incomes below poverty often do not have access to employer-based health insurance or, if available, it is often unaffordable” (Drake et al., 2024). This means that even discounted employer-provided health insurance remains too costly for many low-income employees. Without health insurance, necessary doctor visits become prohibitively expensive, and emergency hospitalization is often out of reach for those in this situation.

Consequently, many low-income individuals choose to endure their ailments, which can be dangerous or even fatal. Furthermore, even low-income individuals may not qualify for government-issued insurance. For instance, “adults who fall into the coverage gap have incomes above their state’s eligibility for Medicaid but below poverty, making them ineligible for subsidies in the ACA Marketplaces” (Drake et al., 2024, para.4). This lack of access to insurance can be detrimental to those who need it but cannot afford or qualify for it, leading to severe negative health outcomes. As these people are already struggling financially, limited access to healthcare can create a vicious cycle that only makes them struggle more. As they cannot go to the doctor and get medication, they may take longer to recover from illness or injury, which forces them to take time off of work, impeding their ability to make more money, which then forces them even farther into poverty.

Even when individuals living in poverty are able to obtain insurance,they may be judged unfairly by their doctors or other healthcare professionals. For example, “patients with low income may be unintentionally shamed by the care team when their behaviors are seen as evidence of being ‘non-compliant’ (e.g., missing appointments, not adhering to a medical regimen, not getting tests done)” (Poverty and Health — The Family Medicine Perspective (Position Paper), 2022, para. 26). Healthcare professionals may not understand the struggles of their patients outside of their physical health, and by shaming them, the patient may be less likely to go back to the doctor. This behavior by healthcare professionals creates a stigma around people in poverty and may make them less able to get healthcare in the future.

Many doctors are not forgiving of these behaviors, even if the patient cannot control them. A way to fix this is to make a more realistic treatment plan. For instance, “Formulating a treatment plan that makes sense for the patient’s life circumstances is vital to success” (Poverty and Health — the Family Medicine Perspective (Position Paper), n.d.). While many physicians do not currently follow this protocol, it may make more sense when treating a patient coming from poverty. These patients need doctors to make a treatment plan around their work schedules and child care, even if that is not the most convenient or ideal way to treat their condition. This will help them to lead healthier and more fulfilling lives without having to sacrifice their jobs and the majority of their income.

Neighborhoods and Communities

The neighborhoods and communities that one might live in are an important factor in one’s health because they may develop negative health behaviors, such as smoking cigarettes and eating unhealthy foods.

Tobacco Use. Big tobacco corporations generally target advertisements toward low-income communities, making the smoking rate much higher in said communities. According to the American Lung Association, “tobacco companies often target advertising campaigns toward low-income communities, and a higher density of tobacco retailers can often be found in low-income neighborhoods’’ (Top 10 Communities Disproportionately Affected by Cigarette Smoking and Tobacco Use, 2024). Tobacco use is dangerous for the respiratory system, especially when used frequently. Its use can cause lung cancer and strokes. Because of the addictive nature of cigarettes due to nicotine content, it can only take one time smoking for someone to get addicted.

Food Deserts. Further, low-income communities are also disproportionately impacted by the prevalence of food deserts. They do not have access to affordable healthy foods to feed themselves or their families, causing health problems such as obesity. According to the Food Ethics Council, “Essentially, people are suffering from the effects of underweight, obesity, and malnutrition because they can’t afford healthy, nutritious food” (Food & Poverty — Food Ethics Council, n.d.). People who are living in poverty cannot afford healthy food and, therefore, turn to cheaper, processed foods instead. These foods cause a plethora of health problems, but for many, any food is better than no food at all. However, because unhealthy foods are more prevalent in these communities, many cannot find healthier foods.

The health problems caused by these foods force people to spend more money on healthcare when they probably do not have quality health insurance. They end up having to spend exorbitant amounts of money on healthcare, money that could be better spent on healthy foods. This unequal access to healthy foods ends up pushing people further into the cycle of poverty.

Crime and Violence

Violence plays a major role in the health of a community. For example, in an article written about crime and violence, “While crime and violence can affect anyone, certain groups of people are more likely to be exposed” (Crime and Violence — Healthy People 2030 | Health.gov, n.d.). The article goes on to say that low-income communities are more heavily impacted by crime and violence than higher-income communities. Crime and violence can cause stress on communities and people, leading to negative health outcomes. Also, as violence plays a large role in the types of crimes committed in these neighborhoods, people are more likely to be physically injured in low-income areas.

Further, people exposed to violence are more likely to have negative long-term impacts on their health than people who are not exposed to the same violence. For instance, “In addition to the potential for death, disability, and other injuries, people who survive violent crime endure physical pain and suffering and may also experience mental distress and reduced quality of life” (Crime and Violence — Healthy People 2030 | Health.gov, n.d.). These outcomes can seriously limit someone’s ability to lead a fulfilling life as they are fighting to survive rather than thrive simply. Also, as people have to deal with their mental and physical injuries from violence, they may have to take time off of work, which only pushes them further into debt.

Suggested Policy Improvements

There has to be a way for people to get the healthcare they need without worrying about if they can pay for it. Healthcare is necessary and must be able to be accessed by everyone. For starters, there must be a free or affordable health insurance option that is available to everyone who displays the need. By expanding eligibility for Medicare and Medicaid to 138 percent of the federal poverty level, or $20,780 for an individual, health insurance coverage would increase, racial health inequalities would be reduced, and financial security for many with low incomes would increase (Medicaid Coverage Gap: State Fact Sheets, 2024).

Implementing programs to give low-income communities healthy food options would reduce the health issues that come from eating cheap and processed food, as well as save people money from having to go to the doctor for such health issues. An example of a program that gives people healthy options is Michelle Obama’s Let’s Move initiative. This gave students healthier lunch options, which allowed children to avoid health problems such as obesity and reduce the medical expenses taken on by their parents (“Healthy Food Access,” n.d., 56). Giving students and children healthy food in their early years reduces the health problems that they will have down the line, therefore making it easier for low-income people to get out of the cycle of poverty.

A reduction in the advertisement of nicotine products is also important for allowing people to get out of poverty. As aforementioned, pack-a-day smokers spend around seven to eight dollars a day on cigarettes, which is well over 2,500 dollars per year. In certain low and middle-income countries, there are bans on tobacco advertising, promotion, and sponsorship to reduce tobacco use (Tobacco et al.). While some states have their own laws and restrictions on advertising tobacco products, there are no concrete solutions at the national level other than required warning labels informing people of health risks (Liu, n.d.). While these warnings are important, there have to be regulations on how much these companies can advertise and where they can advertise.

By implementing these changes, there will be a reduction in the number of people who have severe health issues from cigarettes, as well as a reduction in how much money is spent on these dangerous products, especially in low-income communities where that money can be better spent elsewhere.

Many doctors are not forgiving of certain behaviors, even if the patient cannot control them. A way to fix this is to make a more realistic treatment plan. For instance, “Formulating a treatment plan that makes sense for the patient’s life circumstances is vital to success” (Poverty and Health — the Family Medicine Perspective (Position Paper), n.d.). While many physicians do not currently follow this protocol, it may make more sense when treating a patient coming from poverty. These patients need doctors to make a treatment plan around their work schedules and child care, even if that is not the most convenient or ideal way to treat their condition. This will help them to lead healthier and more fulfilling lives without having to sacrifice their jobs and the majority of their income.

Lastly, by implementing a health literacy course as early as elementary school, people would be more well-versed in medical terminology and be able to understand when they need to go to the doctor and when they do not. This is more efficient than teaching these skills in high school because low-income communities in the United States have a high school dropout rate of about ten percent (Catterall, n.d.). By teaching students these skills early, even if they do eventually drop out of school, they will at least have health literacy to get them through their adult lives. All of these solutions, in conjunction, would help keep people in poverty from continuing in that seemingly never-ending cycle.

Conclusion

People living in poverty are at a severe risk of being less healthy than people living in wealth. They are far less likely to have a quality education, access to healthcare, and live in safe neighborhoods. All of these factors only push them further into poverty and debt. Resources have to be enacted in these communities to give the people living in them a better chance at leading healthy lives, just like their wealthy counterparts. They need access to affordable and free healthcare that is accepted by all practicing doctor offices. They need safer neighborhoods where the people who perpetuate violence are arrested and do not hurt others. They need access to quality education so that they understand why their health is so important. People who live in poverty deserve the same time and resources that are given to people who live surrounded by wealth, and with policies to give them the help that they need, they can lead healthier lives without worrying about where their next meal will come from.

The Role of Social Norms in Financial Stability

Cultural norms and values are deeply interwoven into the fabric of society in an attempt to create an overarching standard for social behaviors, outlining how individuals should interact with others in their communities. While these norms are intended to create a universally accepted blueprint for societal functioning, these cultural norms often have a negative impact on one’s ability to pursue educational opportunities, find employment, and use medical resources. Because these cultural norms affect various social segments of our society differently, the outcomes for members of certain economic classes are often constrained by the restrictions these norms put on them. This section examines how cultural norms disproportionately disadvantage minority groups in terms of education and employment, and proposes solutions to reduce the barriers these groups face in achieving economic equality.

Educational Norms and Financial Security

Cultural values have a profound effect on educational opportunities and professional success. As a society that values education, “America’s middle class demands an education system grounded in the cultivation and celebration of each child’s individuality” (Hymowitz, 2021, para. 4). As a nation, we tend to offer the upper class more avenues for excellent education and resources, including tutoring and extracurricular activities.

\ America deems education to be essential because educated people earn higher wages and, theoretically, allow members of lower economic classes to break the cycle of poverty. The Bureau of Labor Statistics states, “workers age 25 and over who have less education than a high school diploma had the highest unemployment rate (5.4 percent) and lowest median weekly earnings ($592) in 2019 among those at all education levels. Workers with graduate degrees had the lowest unemployment rates and highest earnings.” (U.S Bureau of Labor Statistics, 2020).

The segments of the population that are underrepresented in our society are not able to adhere to these social norms because of practical issues such as poverty, poor schools, and the need to prioritize immediate financial outcomes over long-term educational goals. For example, children from low-income families frequently have to attend schools with a reduced budget that provides fewer resources, which in turn results in less satisfactory exams and diminished opportunities to seek higher education or advanced degrees.

The educational norms that underline the significance of education as a means to achieve financial stability due little to help underserved populations. Instead, they highlight the systematic inequalities that limit their potential for upward mobility.

The Role of Employment Norms in Economic Stability

In America , the cultural norms pertaining to professional opportunities point toward rewarding individual effort and talent. However, in reality, cultural stereotyping often dictates hiring decisions wherein one group would be favored over another based on perceived work ethics or cultural fit (Klien et al, 2015). For instance, women and minorities can be further distanced from economic security by such practices and cultural biases making economic security even more out of reach for specific groups. Women of color face racial and gender discrimination in the labor market, inhibiting their ability to become financially stable. This compounded discrimination can result in lower wages, fewer job opportunities, and limited access to career advancement.

Solutions

Cultural competence is the understanding and knowing how to relate to and work with individuals from different cultures, and it is the key to addressing social justice issues. Addressing the impact of cultural norms on financial mobility and stability requires a cultural competence mindset as a foundational framework for developing effective solutions.

The NlH indicates that “patient and family preferences, values, cultural traditions, language, and socioeconomic conditions are respected. The concepts of cultural competence and patient-centered care intersect in meaningful ways.” (Stubbe, 2020, para. 2) Cultural Competence is crucial and needs to be utilized in all policy solutions.

Moreover, acknowledging and respecting these diverse cultural backgrounds will enable policymakers and organizations to devise more inclusive and fair means of attending to the challenges that different social groups go through. Culture has a significant impact on education and jobs. These are what people value, expect, and hold as a standard against which one’s good performance and achievements can be measured. Many cultures will hold care for the group’s well-being above personal career growth. This will impact students’ focus at school and job choices.

To address these challenges, school districts could adopt approaches that relate to the students’ backgrounds, which would enable the students to become more involved in school and excel further. Cultural competence training for educators can raise awareness and advocate for inclusive practices, while advocacy for policy improvement can address significant structural barriers for various groups.

During recruitment, companies may also implement hiring practices that are racially and culturally blind, thereby ensuring that each person has equal opportunities for employment.

Research and data collection to understand the individual needs of different cultural groups would be crucial to organizing correct problem-solving measures. With the application of such strategies, we, therefore, develop more equitable and effective models of education and employment systems that show respect for diversity.

Conclusion

Cultural norms and values have a significant influence on perceptions related to issues of fairness, accessibility of resources, and growth opportunities; hence, social justice is experienced differently in different social classes. It is, therefore, very important to understand these cultural influences in addressing matters of social justice and enhancing equity. This involves developing policies that lessen discrimination and increase opportunities for a more just and equitable society for all those of lower incomes. Reflecting on these significant social justice issues, one finds out that cultural competence, targeted policies, and support of the marginalized are multifaceted ways to ensure lasting change and improved outcomes for persons across all social classes.

Partisan Politics as a Social Impediment to Financial Security

Financial security is the length of time people estimate they can live off of their savings (Pew Research Center, 2015). It is evident throughout society that there have been many determinants of how people approach the conversation of financial security. Often, ideas and viewpoints about financial stability are drawn from those who make our laws and regulations.

Politicians and partisan ideologies are some of the most critical factors in how the general public views and addresses the issue of financial insecurity and whether or not it remains relevant in the political sphere. The conversation about economic security has become a focal point in many political debates as people begin to associate the social issue with ideologies on the political spectrum.

In 2014, about 94% of financially secure Americans were registered to vote (with 63% being likely voters), while only about 54% of financially insecure Americans were registered to vote (with 20% being likely voters) (Pew Research, 2020). Furthermore, there is broad assumption is that Republicans and more conservative politicians garner support from those who are “rich,” while Democrats receive significantly more support from those who are deemed “poor.”

Regardless of whether or not those assumptions are ultimately proven to be significant in the quest to provide financial security for all in America, what is glaringly obvious is that those who are have not achieved financially stability do not participate in the political system at the same rate of those who are financially secure. This section will examine how common stereotypes about financial security are effected by political ideology and how those sterotypes negatively affect the general landscape of economic equality.

Financial Secruity Shaped by Political Typology

The two extremes of the political spectrum have the highest family incomes and report the highest amounts of financial satisfaction. However, in most cases, it can be seen that extreme conservatives (Faith and Flag Conservatives) express more satisfaction with their finances at 76% as opposed to extreme liberals (Progressive Liberals) who report a 62% satisfaction rate (Pew Research Center, 2021). Similarly, those who lie in the gray area of the spectrum, identified as independent voters, have 72% of people saying they are financially satisfied, even though just a third of family incomes reach $75,000 or more.

Typically, households that receive an income of $100,000 or more are conservative/Republican-leaning, whereas more liberal/Democratic-leaning households report an income of less than $30,000 (Pew Research Center, 2021). This statistic already seemingly gives Republican households a drastic advantage regarding financial stability.

Many Faith and Flag Conservatives are confident in their savings, with 72% reporting that they can live off of them for a minimum of three months. Conversely, just 36% of Liberal/Democratic-leaning individuals reported that their savings could last them that long (Pew Research Center, 2021). This translates to more Conservative citizens expressing lower levels of concern about the issue of inequality.

On the other hand, Progressive Liberals believe the opposite; financial inequality is a significant issue, and the government should do more for those who face it, even if it means potentially growing our national deficit. In fact, 99% of extreme liberals and Democratic-leaning citizens say that the country’s financial system is unfair, favoring powerful interests (Pew Research Center, 2022). Similarly, the broad majority of Democratic-oriented persons/groups say that financial inequality is a moderately big/huge problem, with all extreme liberals saying that it is at the very least a moderately big problem.

Political Typology and Employment

Many conservatives whose decisions are underlined by a “country first” narrative are typically 50 and older, with only 47% reporting being employed full or part-time. Only 8% of this group reported that they were unemployed, whereas the rest said that they were jobless and not looking for work (Pew Research Center, 2022).

In stark contrast, the majority of Democratic-leaning liberals are relatively young, with 37% being 50 and older. While 8% of Flag & Faith Conservatives reported underemployment, nearly 30% of Democratic-leaning liberals reported that they were underemployed. (Pew Research Center, 2022).

The “anchors” of the political spectrum, extreme right and left, include large percentages of people who are working, with 67% of the extreme left and 66% of the extreme right reporting steady employment (Pew Research Center, 2022). Alongside this, research has shown that owners of small and medium-sized businesses are more likely to hire candidates who are members of the same political party/leaning toward their preferred party. It can even be the case that workers who are not a part of the same political affiliation can receive lower pay, get fewer promotions, and have shorter tenures at the job on average. Political polarization in the workplace is real and can affect people of every socioeconomic status.

Political Typology’s Effect on Voter Turnout

The extreme right and left have the highest rates of political participation, with liberals at 82% and conservatives at 80%. However, when it comes to the graying areas of Democratic-leaning and Republican-leaning ideologies, the attention to politics and government activity begins to lessen, with bordering Democrats being the least likely to follow proceedings at 43% (Oxford Economic Papers et al., 2022). These graying areas on the political spectrum are the same people who report less financial satisfaction and lower unemployment rates.

Similarly, the extreme groups on both the right and the left report that they are very invested in elections and who controls Congress, whereas leaning-oriented groups on the political spectrum are less inclined to have an opinion on whether or not elections matter. In the same vein, 39% of the extreme left say they have attended a political event, rally, or organized protest, making them twice as likely as any other group to engage in this kind of political activity. 32% of the extreme right is more likely to make financial contributions than any other group on the political spectrum and also reports contacting elected officials/candidates at higher rates (38%). The lowest voter turnout/political participation and awareness group out of any on the political spectrum is the leaning-Democratic oriented group, 43% say that voting gives them a voice in how the government runs. At the same time, 54% say that voting by people like them doesn’t affect the way the government works (Oxford Economic Papers et al., 2022).

Solutions

Like most things, getting people to understand the importance of their political participation, stance in the job market, and financial understanding comes with education. For people to become politically aware, they must be exposed to events and occasions. This exposure can come from different educational and provisional groups, such as the National Democracy Institute, which reaches out to marginalized groups and seeks to teach them more about their local and national politics. However, the onus can not solely be on the people to become more politically adept. It must also come from politicians who are willing to reach out to lower-income communities and spread their messages. In this way, those who are deemed financially insecure feel more of a connection to politics in their area and are armed with knowledge of how to navigate the political spectrum based on their formed ideals.

Conclusion

The common misconception that Democrats and Republicans are two separate ends of a spectrum with little to no middle ground has been founded by our politicians and those who seek to divide the country. However, it is always important to remember that some things lie in between; there are citizens of this country who experience things that are not exclusive to either Republicans or Democrats. Historically, more people indeed claim to be “financially insecure” registering as Democrats, which creates a spillover effect of more Liberal-leaning citizens feeling as if they have little to no power both over their daily lives and in the voting booth. It is not as if Republican and Conservative-leaning citizens do not have, in their midst, those who suffer under the burden of similar ill-thought.

Legal Impediments

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Racial Bias in U.S. Legilsation

In the U.S., about a third of Black Americans (32%) say the country has made little to no progress on racial equality in the last 60 years. This is larger than the shares of Hispanic (19%), White (11%), and Asian (11%) Americans who say the same (Hurst, 2023). This section explores how racial discrimination has been a fundamental driver of economic inequality in the United States and discusses potential solutions to address this issue.

A History of Discrimination

Discrimination has historically been a powerful force in creating and perpetuating economic inequality in the United States. Laws and policies, both historical and contemporary, have systematically disadvantaged racial groups, particularly African Americans, Native Americans, and Hispanics, reinforcing economic disparities.

Black Codes. The Black Codes were laws passed by Southern states after the Civil War during the Reconstruction era to restrict the freedom and economic mobility of African Americans. These laws sought to preserve the pre-war racial hierarchy and ensure a steady supply of cheap labor. While the Black Codes themselves are no longer in effect, their influence persists through systemic racism and institutional practices that continue to restrict the economic mobility and freedom of African Americans. Comprehensive reforms in the criminal justice system, labor market, housing policies, and education are essential to dismantling the enduring legacy of the Black Codes.

Jim Crow Law. Jim Crow laws, enacted in the late 19th and early 20th centuries, enforced racial segregation in the Southern United States. These laws mandated separate public facilities and services for Black and white people, creating a system of profound economic and social disadvantage for African Americans. By enforcing segregation in schools, workplaces, and public spaces, Jim Crow laws severely limited Black Americans’ access to quality education and employment opportunities, contributing to long-term economic disparities (History.com, 2010).

The effects of these laws still prevail as disparities in education, employment, housing, healthcare, and the criminal justice system can often be traced back to the institutionalized racism of the Jim Crow era. Racial prejudices and stereotypes that were propagated during that time continue to affect the perceptions and treatment of African Americans.

Redlining and Housing Discrimination. The discriminatory practices of redlining, which were supported and institutionalized during the Jim Crow era, denied Black families access to mortgage loans and homeownership in specific neighborhoods. This practice has had long-term effects on the ability of Black families to build and pass on wealth through home equity​. Although redlining was officially outlawed by the Fair Housing Act of 1968, its effects persist. A 2018 study by the National Community Reinvestment Coalition found that neighborhoods that were redlined decades ago continue to suffer from lower property values and reduced investment compared to non-redlined areas​ (Hurst, 2023)​.

The Fair Housing Act 1968. The Fair Housing Act of 1968 prohibits discrimination by direct providers of housing, such as landlords and real estate companies, as well as other entities whose discriminatory practices make housing unavailable to persons because of race or color, religion, sex, national origin, familial status or disability (the U.S. Department of Justice, 2023) However, even after the law was enforced, housing providers tried to disguise their discrimination by giving false information about the availability of housing, either saying that nothing was available or steering home seekers to certain areas based on race.

Law enforcement pushed the diverse communities to live in only certain parts of the country. The 2024 population stats of the United States show that the city with the highest black population is the District of Columbia (48.49%), while the city with the lowest population is Montana (1.05%) (World Population Review, 2024). It has been reported that African American professionals do not want to live in well-to-do white neighborhoods because they will be harassed by the police, who are suspicious of any black person driving through the area.

Historical and contemporary laws like the Black Codes, Jim Crow laws, and redlining have systematically disadvantaged racial minorities, particularly African Americans, by restricting their economic mobility and access to quality housing, education, and employment opportunities. Although these practices have been legally abolished, their legacy persists, manifesting in ongoing systemic racism and economic disparities.

The Prevailing Issues

For Black households, the probability of experiencing a housing cost burden rose from 1980 to 2017, even after controlling for household, neighborhood, and metropolitan covariates. This suggests that unobserved variables like racial discrimination, social networks, or employment quality might explain the increasing disparity in cost burden among Black and White households in the U.S. (Hous Stud. 2022). Over one in five of all renting families in the U.S. spend half of their income on housing (Desmond, 2017).

Studies on residential attainment have consistently noted a disparity between Black and White households in terms of their chances of moving into and out of high-poverty neighborhoods. Additionally, the proportion of renter households experiencing cost burdens has increased steadily, from about 24 percent in 1960 to nearly 50 percent in 2016 (Fernald, 2018). Unsurprisingly, housing cost burdens are not evenly distributed throughout society. Among low-income households earning less than $15,000 per year, over 80 percent face housing cost burdens (Hous Stud. 2022). This uneven distribution of housing costs underscores the intersection of economic inequality and racial disparities, as minority households are disproportionately represented among low-income earners.

The increasing housing cost burden for Black households and the steady rise in renter households’ cost burdens reflect deep-seated issues of racial and economic inequality. These trends highlight the need for targeted policy interventions to address both the economic and racial dimensions of housing inequality.

Solutions

Offering grants, loans, and support services to minority-owned small businesses to help them thrive and create jobs within their communities. Empowering communities through grassroots organizations and advocacy groups to demand and implement changes at local and national levels.

Policy Interventions. To address the economic inequality caused by racial discrimination, comprehensive legal and policy reforms are necessary. Implementing inclusionary zoning policies that require a percentage of new housing developments to be affordable for low- and moderate-income families and access to resources can help create a more economically diverse community.

A pertinent example of a policy intervention aimed at addressing racial economic inequality is California’s Proposition 209 Repeal Efforts, passed in 1996, which banned the use of affirmative action in public employment, education, and contracting. This meant that state institutions could not consider race, sex, or ethnicity in their hiring, admissions, or contracting decisions (Taylor, 2020). The initiative helps eliminate discrimination against individuals who are not part of historically underrepresented groups, ensuring that everyone has an equal opportunity to compete for jobs, contracts, and educational opportunities.

Education and Training. Enhancing funding for public education, particularly in underserved communities, and expanding access to higher education and vocational training can help minorities access better work conditions. Moreover, implementing student loan forgiveness programs to alleviate the burden on minority graduates can help them access proper education.

Workplace Equity. Raising the federal minimum wage and supporting labor rights can improve economic security for minority workers. Enforcing equal pay laws and ensuring transparency in pay practices can help reduce the pay gap present between the major and minor communities. According to the Economic Policy Institute, raising the federal minimum wage to $15 an hour would benefit 38.6% of Black workers and 33.1% of Hispanic workers, compared to 23.2% of white workers, highlighting its potential to reduce racial economic disparities (Economic Policy Institute, 2021). The Institute for Women’s Policy Research reports that closing the gender and race pay gap could cut the poverty rate for working women and their families by more than half and add $512 billion to the U.S. economy (IWPR, 2020).

Moreover, the Crown Act, which prohibits discrimination based on hair texture and protective hairstyles commonly associated with race, is essential in promoting workplace equity. This legislation, enacted in several states, ensures that individuals are not discriminated against in professional environments based on their natural hair or cultural hairstyles, thus fostering a more inclusive and equitable workplace (The CROWN Act, 2023).

By implementing these solutions, we can work towards reducing economic disparities and promoting a more just and equitable society.

Conclusion

Comprehensive reforms, including support for minority-owned businesses, raising the federal minimum wage, and enforcing anti-discrimination laws, are necessary to ensure equal economic opportunities for all racial groups. By addressing these issues through targeted policies and community empowerment, it is possible to reduce economic disparities and promote a more just and equitable society. Ensuring equal access to opportunities and resources is not only a moral imperative but also vital for fostering a healthy economy and cohesive society.

The Criminal Justice System and its Effect on Economic Equality

It is much more difficult for an individual with a criminal record to find a safe home and a stable, well-paying job. These negative impacts disproportionally affect people of color, as they are over-represented in the legal justice system. As of 2021, the national average for Black imprisonment rates was six times the white imprisonment rates (Wang, 2023). After release from prison, there is an undue burden put on the people of color as they struggle to achieve the levels of housing, employment, and civic engagement that are afforded to their predominantly white, non-incarcerated fellow citizens. This paper examines the underlying factors contributing to the disparate impact on people of color within the criminal justice system. By exploring these systemic issues, we aim to identify the ways in which racial disparities in incarceration contribute to long-term challenges in housing, employment, and civic engagement for individuals post-release. Addressing these disparities is essential to promoting equity and reducing the socioeconomic barriers that hinder successful reintegration into society.

Disparate Impact for People of Color in the Criminal Legal System

For every 100,000 Black individuals, 911 are incarcerated (Carson & Kluckow, 2022). Additionally, American Indians or Alaska Natives and Hispanics have second and third highest rates of incarceration, respectively. (Carson & Kluckow, 2022). In comparison, the incarceration rate for Caucasians is 188 per 100,000 individuals (Carson & Kluckow, 2022). This data clearly illustrates the significant racial disparities in incarceration rates, highlighting the systemic issues that disproportionately affect people of color.

To further demonstrate the disproportionate impact of the justice system on people of color, Black arrestees are much more likely to initially face a charge carrying a mandatory minimum when compared to their white counterparts; furthermore, Black arrestees are more likely to be convicted of such charges when compared to white arrestees (Starr & Rehavi, 2014). In the same study, researchers found that black male federal arrestees ultimately face longer prison terms than their white counterparts arrested for the same offenses with the same prior records (Starr & Rehavi, 2014). The racial disparity in incarceration further exacerbates the challenges already faced by people of color in society as a result of added stigma, leading to greater difficulty finding housing and securing employment.

In 2014, incarcerated individuals had a median income of $19,185 before incarceration; this represents 41% less total income when compared to non-incarcerated individuals of similar age (Rabuy & Kopf, 2015). “Policing efforts are often focused on low-level offenses and maintaining systems of money bail, fees, and fines, the United States’ criminal justice system punishes individuals for being poor” (Borelli, 2023, 294).

Another study finds that adults in poverty make up 11% of our population; however, it is three times as likely for individuals in poverty to be convicted than those above the poverty line (Gray et al., 2019). Furthermore, the top three racial groups living in poverty are people of color — 24.5% of the American Indian or Alaska Native population, 21.4% of the Black population, and 16.7% of the Hispanic population. (Kaiser Family Foundation, 2022). In comparison, 9.5% of the white population is living in poverty (Kaiser Family Foundation, 2022). An individual’s socioeconomic status is connected to the rate of incarceration, and it compounds the effect of racial disparity in the criminal legal system that already exists. Because of this, people of color are further burdened by the criminal legal system that perpetuates the cycle of poverty.

Effect on Housing After Release

One’s race and income level impact their involvement in the criminal justice system. Having a criminal background makes it challenging for them to find housing, and they are more likely to fall into homelessness.

Increased Levels of Homelessness. In 2008, for every 10,000 members of the general US public, 21 experienced homelessness (Couloute, 2018). In comparison, those who have been incarcerated once have a homelessness rate of nearly seven times more than the general US population, and individuals who have been incarcerated more than once have a homelessness rate that is thirteen times higher than the general US population (Couloute, 2018). The recent Supreme Court decision on Johnson v. Grand Pass will make it even more challenging to escape homelessness and perpetuate a vicious cycle of poverty and instability (Corporation for Supportive Housing, 2024).

Discriminatory Background Checks. In a typical housing application process, landlords and property management companies often conduct credit and background checks before deciding to rent to someone (Civil Rights Department, 2022). For an individual with a criminal history, it is very hard to pass the background check during the housing application process, which severely limits their housing options. An example of an individual who has experienced this is Melvin Lofton, who told his story to a reporter: “I was at work, and the guy called me and told me to come pick up my keys. So I was happy. I got a place to stay… 45 to 50 minutes later, he called and said, ‘Is there something you’re not telling me?’ and I say, ‘No, what is there?’ And he says, ‘You didn’t tell me you had a background,’ “ (Domonoske, 2016, para. 9). Lofton was 51 years old when this happened, and his last conviction was when he was 20 years old (Domonoske, 2016). Despite the length of time that has passed, an individual like Lofton continues to face housing barriers.

Because renters with criminal justice histories have limited housing options, ultimately, many individuals with criminal records are pushed to rent substandard homes that are dilapidated and lack proper maintenance (McAleavy, 2021). “Individuals living under poor housing conditions… come to internalize negative perceptions of their home environment. In this way, substandard housing could contribute to lower levels of self-esteem and, as a consequence, poorer mental health outcomes” (Burdette et al., 2011, para. 5). Furthermore, living in substandard housing harms physical health as well. A study has shown that substandard housing negatively impacts children and individual’s health outcomes. (Krieger & Higgins, 2002).

Limited Public Assistance. Section 8 Housing Choice Voucher program is a program administered by the Department of Housing and Urban Development that provides rental subsidies to low-income individuals and families, the elderly, and the disabled to afford housing in the private market (U.S Department of Housing and Urban Development [HUD], n.dmau However, individuals with a history of specific crimes are prohibited from participating in the Section 8 Housing Choice Voucher program, which exacerbates their chances of entering homelessness and experiencing housing instability.

As shown in this section, an individual’s criminal record impacts one’s housing outcome on various fronts. With the racial disparity in the criminal justice system, people of color are more vulnerable to poor housing outcomes, therefore allowing these individuals a slim chance to rise out of poverty.

Effect on Employment After Release

Similar to housing obtainment, one’s criminal record negatively impacts their ability to obtain employment. The unemployment rate of the general US public is 5.2% (Couloute & Kopf, 2018). In comparison, the unemployment rate for those who have been formerly incarcerated is five times higher than the general public (Couloute & Kopf, 2018).

Unemployment Rates. When race comes into play, the unemployment rate for formerly incarcerated Black males is 35.2% (Couloute & Kopf, 2018). Comparing these statistics to their white counterparts, formerly incarcerated white men have an unemployment rate of 18.4% (Couloute & Kopf, 2018). Similar to finding housing, one barrier to finding employment is a criminal background check. Employers often conduct background checks on potential employees, and many individuals with criminal histories are unable to locate employment as a result of this practice (Mauer & Ghandnoosh, 2014). This suggests that even though all races face stigma from incarceration, people of color, especially the Black communities, are much more likely to suffer from employment discrimination post-release.

Wage Disparities. Unemployment is not the only major issue in the discrimination of those with criminal records in the workforce. Wage disparities are another major issue. “It is estimated that people with criminal records earn 10–20% less than those with equivalent education backgrounds and levels of experience” (Mcspadden, 2024, para. 2). This level of decrease in income affects their life in a major way. A higher percentage of their income would have to go to rent or mortgage, utilities, and food, which means smaller sums of money can go towards savings, leading to lengthy debt repayment and limited emergency funds. All of these have a detrimental impact on an individual if not fulfilled. Hence, wage disparity as a result of criminal records continues to impact the livelihood of formerly incarcerated individuals.

Effect on Civic Engagement After Release

In 1985, the Supreme Court ruled in a unanimous decision in the case Hunter v. Underwood that States have the right to disenfranchise criminals if it is without a racial intent. Without the ability to vote, one does not have a voice and the ability to positively impact their own life. As mentioned in previous sections, people of color face longer sentences, higher conviction rates, and higher poverty rates as compared to their white counterparts. This means that the inability to vote disproportionately affects people of color, leading to many in this population not having the ability to express their voice. The U.S. Commission on Civil Rights suggests that being disconnected from social institutions results in high recidivism rates (Middlemass, 2022). Ultimately, it becomes a vicious cycle that gives people in power unlimited control of the communities of the impoverished, with the end goal of keeping themselves wealthy.

Possible Solutions

Reentry programs are key to helping individuals reenter society. Creating and expanding reentry programs along with strong supportive services, such as vocational training and case management counseling services, will positively impact formerly incarcerated individuals by providing safe housing and a vision for their future. An example of this is the Michigan Vocational Village Program. This program offers training in fields such as carpentry, plumbing, and electrical work (National Conference of State Legislatures [NCSL], n.d.). In addition, individuals partaking in this program live together, acting as a therapeutic environment (National Conference of State Legislatures [NCSL], n.d.). When their training is complete, individuals will receive state and nationally-recognized certifications in their trade (National Conference of State Legislatures [NCSL], n.d.). This program addresses two of the major concerns discussed in the previous sections; finding a way to replicate this program on a broader level could help more people reenter society.

Addressing the rules around access to housing can also help. Adding more restrictions to limit the landlords’ ability to exclude individuals with criminal backgrounds from accessing housing could open up more housing opportunities for more individuals. Furthermore, loosening Section 8 Housing Choice Voucher denial rules could allow more individuals to qualify and utilize this resource to obtain safe and stable housing.

Unemployment is a major issue that needs addressing. One solution could be providing licensing and education opportunities for the formerly incarcerated. Convictions often result in losing professional licenses, and an easier process to regain these licenses can help reduce unemployment rates. In addition, the employment background check reform will also be key to creating long-term employment for individuals. As an example, the California Fair Chance Act is a law that states that an employer with five or more employees is prohibited from asking a job candidate for a background check before making a job offer (Grant & Shabbar, 2024). This could help individuals more easily obtain employment

Recently, many states have been changing their disenfranchisement laws. In 23 states, voting rights are restored upon release from prison (United States Probation and Pretrial Services). In 15 states, felons’ voting rights are restored after payment of fines, fees, or restitution (United States Probation and Pretrial Services). However, in 10 states, certain serious crimes still result in permanent disenfranchisement (United States Probation and Pretrial Services). Reforming those disenfranchisement laws will allow individuals with criminal records to proactively engage in their community and reduce recidivism rates, all the while escaping the cycle of poverty.

Conclusion

An estimated 1 in 20 people will have been confined to state or federal prison during their lifetime (Bonczar & Beck, 1997). The homelessness rate for those with a criminal record is almost ten as much as for those without a criminal record. (Couloute, 2018). The rate of unemployment for those who have been formerly incarcerated is 27.3%, around five times as much as the unemployment rate for those without a criminal record (Couloute & Kopf, 2018). Safe housing and stable employment are two of the most basic necessities in today’s society, and being formerly incarcerated acts as an impediment to living a quality life. Since people of color are disproportionately impacted by the effects of the criminal justice system, they are more severely impacted by the effects on housing and employment obtainment as well as their ability to participate in civic engagement. Because of this, all solutions need to be constructed through the lens of addressing racial disparity in the criminal legal system. Doing so will ensure people of color have the best chance when reentering society by having equitable opportunities.

The Limitations of S0cial Saftey Nets
The ongoing debate surrounding social safety nets in America often overlooks a crucial aspect: the definition of poverty itself. Most safety nets rely on the Official Poverty Measure (OPM), which creates a cutoff each year based solely on household income. This method raises significant issues, especially for individuals with higher incomes who live in high-cost areas and may not qualify for necessary assistance. For instance, the Economic Policy Institute’s Family Budget Calculator reveals that a family of four in San Francisco needs $106,493 to live comfortably, whereas the same family in Brownsville, Texas, requires only $59,654 (Economic Policy Institute, 2024). Beyond income, factors such as healthcare, transportation, affordable housing, and education must be considered. A more comprehensive and accurate definition of poverty is essential for optimizing resource allocation and ensuring equity in social safety nets.

Measuring Poverty
The primary goal of social safety nets is to assist individuals in need. However, without a standardized and effective method to identify those suffering from financial instability, it becomes challenging to deliver appropriate assistance. To improve these mechanisms, it is crucial to examine how poverty is measured.

Absolute vs. Relative Poverty. The U.S. currently uses an absolute poverty system, which sets a strict threshold defining poverty. Anyone living on less than $12.50 per day falls below the poverty line (World Bank, 2024). While this provides a clear and concise standard for poverty, allowing for easy comparison over time and across nations, it fails to account for the cost of living and other variables, leading some to advocate for more subjective measures of poverty.

Relative poverty, in contrast, adjusts according to the overall economic state, taking context into account. For instance, someone might be considered in relative poverty if their income is less than 40% of the median household income. Although countries like Sweden and the United Kingdom use relative poverty measures for social safety nets, the U.S. has yet to implement this approach significantly. The U.S. Census Bureau also measures poverty using the Supplemental Poverty Measure (SPM), a model that incorporates more relative criteria than the OPM. In 2022, the OPM classified 11.6% of Americans as impoverished, while the SPM reported a slightly higher rate of 13.2% (U.S. Census Bureau, 2023). Though this difference may appear minor, it impacts 1.6% of Americans, translating into millions of lives.

Multidimensional Poverty Index (MPI). The United Nations uses the Multidimensional Poverty Index (MPI), which provides a comprehensive view of poverty, acknowledging that it extends beyond income. The MPI assesses living standards, income inequality, health, education, crime, and employment opportunities to offer a holistic understanding of poverty (Alkire & Foster, 2011).

However, the MPI faces criticism for being overly complex, making it challenging to convey the state of poverty to government officials and the general public. Additionally, the MPI does not account for cultural differences across regions, failing to address contextual nuances of life. For example, a 2015 study in rural India demonstrated that altering the weight of specific metrics significantly changed poverty measurements (Alkire & Seth, 2015). In rural India, healthcare is valued more than education, directly impacting residents’ lives. The MPI does not make such distinctions, giving equal weight to all poverty markers.

Section 8 Housing Vouchers. Section 8 is a federal social safety net that uses absolute poverty to assist households earning less than 50% of the median household income (U.S. Department of Housing and Urban Development, 2023). Even if a family in a high-cost area qualifies for a voucher, they may still struggle to find affordable housing. In San Francisco, even individuals earning 80% of the median household income may face difficulties securing affordable housing (U.S. Department of Housing and Urban Development, 2023). Implementing a relative poverty assessment would provide a more nuanced and accurate reflection of a family’s financial needs.

Challenges with Relative Poverty. Relative poverty is not easily comparable across regions due to different social norms, which can render poverty rates meaningless in terms of comparison. A more straightforward absolute poverty system would be easier to measure and compare across regions. However, the economy of a nation can significantly shift from year to year, influencing income inequality even if the standard of living improves. This could result in an inflated poverty rate, as individuals who are not experiencing actual deprivation might be counted. Conversely, during economic decline, the poverty rate might decrease due to a drop in overall income, even if hardship persists (Gordon, 2017).

Policy Implications

It is evident that more effective ways to implement social safety nets exist than the current absolute poverty system. Even with its flaws, a relative poverty approach would be more accurate than the absolute model. The United Kingdom, which has fully implemented relative poverty measures, has seen a 5% reduction in poverty rates due to these safety nets (OECD, 2023). John Hills, a professor at the London School of Economics, argues that “relative poverty measures can better reflect the disparities in income distribution within society, leading to more targeted and effective welfare policies that address the needs of those most affected by income inequality” (Hills, 2004). To account for cultural differences across states and allow for comparison, relative poverty should involve uniform criteria nationwide but be measured at a state level.
Certain parts of the United States have already adopted relative poverty measures. For example, the Boston Rental Relief Fund uses relative poverty to determine eligibility and has successfully reduced housing instability (City of Boston Department of Neighborhood Development, 2023). A system similar to that of the UK or the MPI, with adjustments for the cultural context of America, seems to be the best approach. Issues like crime and education are particularly important to Americans, as supported by a 2020 study by the Pew Research Center.

Conclusion

Reforming the definition of poverty is essential to the effectiveness and fairness of social safety nets. Individuals living in high-cost areas should not be penalized for their living conditions. The success of relative poverty measures in countries like the U.K. and Sweden provides a compelling case for adopting similar approaches in the United States. Although only a small percentage of the population may be affected by this shift, that number still represents millions of people. By advocating for policies that reflect the complexities of modern life through a multidimensional analysis, we can create a safety net that truly supports all individuals facing poverty.

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