Medium Article

Why is it so hard to escape poverty in 2023?

Explore the paradox of welfare programs, learn how they accidentally made generational poverty last longer & discover solutions to fix them.

Let’s Start with an example:

Imagine that you’ve been unemployed and seeking work for months.

Government benefit programs have helped you cover rent, utilities, and food, but you’re barely getting by.

Finally, you hear back about a job application. You receive your first paycheck in months, and things seem to be turning around.

But there’s a catch. Your new job pays just enough to disqualify you from the benefit programs, and not enough to cover the same costs.

To make things worse, you have to pay for transportation to work, and childcare while you’re at the office. Somehow, you have less money now than when you were unemployed.

Poverty and designing benefit programs are complex topics that come with their own set of challenges.

The idea of Basic Income, which has gained support from most political and economic activists, proposes that everyone should have an unconditional basic income. This could break the cycle of poverty by granting each person freedom while fighting poverty.

Let’s dive deeper into it!

Means-Tested Benefits: The Shortcomings

First What It Means-Test: A means-test is a determination of whether an individual or family is eligible for government assistance or welfare

Means-tested benefit programs are aimed at providing help to those with the least resources, but they have some serious downsides.

Means-testing can also discourage individuals from stopping from trying to earn more. to improve their economic situation.

As a result, resources may not reach those who need help the most.

A mix of different help programs, like universal benefits and basic income, might work better. It’s important to know that the way we design these programs matters in effectiveness.

Global Welfare Programs inclusive approach

welfare programs are better at reducing poverty than means-tested benefits.

These programs help everyone with things like healthcare, education, pensions, child care, and child allowances.

Through this money gets moved from the rich to the poor effectively, & people don’t feel bad for getting help.

Nordic countries have been using this system for long time, & works good for them. Some people fear that this means higher taxation, & makes some folks not want to earn.

But, this kind of help is good for the whole community. The program encourages health, education, & that everyone is okay, leading to a healthier economy.

“It’s more important now to have a program such helpfull for everyone & the importance of investing in universal welfare programs is at the top because of ongoing economic crisis”

The (OECD) is a big international group, that even released a policy brief in 2017, highlighting the need for universal welfare programs.

What’s Unconditional Basic Income Judgement?

Thinking of getting a monthly amount of money from the government regardless of your employment status — that’s basic income. This idea came a long time ago.

Sir Thomas More, an english writer and philosopher, wrote about something like it in his book “Utopia” in the 1500s.

People who like the idea like Bertrand Russell (An intelligent author), & Milton Friedman(a famous money expert) love this idea.

They thought it could help needy people.

Many see basic income as a way to end poverty. The UN even said that if every country gives their people a little bit it could destroy extreme poverty by 2030.

Moreover, a guaranteed income would free people to try new jobs or make new things without worrying about bills.

Countries like Finland, Canada, and Kenya have tried basic Income. For example in Finland, 2,000 unemployed people were given €560 ($630) every month without any condition, including job-seeking obligations.

Those people felt happier in general well-being and the desire to work. Also, Canada tried it & were less stressed & the people were able to have the freedom to pursue a dignified life!

The Need For A Balanced Approach To Designing Benefit Programs

Means-tested benefits and universal welfare programs have flaws so need more comprehensive approach to poverty reduction.

Combining all these with basic income we can share resources better and maybe end poverty.

But, the way we give benefits matters. However, People shouldn’t feel bad or unmotivated when they get help.

It is essential to design the program in such a way that people should feel good and encourage them to work if they can.

So, we need a plan that helps them without stopping them from wanting to work.

This means we should work with experts from different fields to make a good plan.

At last!

To break the cycle of poverty we need a smart plan. Some benefits targeting the needy, have their shortcomings of discouraging progress and carrying that stigma.

Others give to everyone spreading help widely. We need something like an idea called Basic Income, Which gives money & freedom.

At last, there must not be a corrupt government to eat money and we are good to go!

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