We Just Debunked 10 Myths About Poverty

Poverty is misunderstood at best. Here are ten of the most common myths.

Author:: Eric Reed
Publish date:: Aug 11, 2017 2:26 PM EDT

People mythologize the poor.

Some of these stories are harmless. The old caricature of a hobo with his bindle really only affects lazy animators, If the worst that comes from their afternoon is an unrealistic belief in the cargo capacity of bandanas, that's not so bad.

Most of these stories, though, are not, and they affect people's lives. When politicians see poverty as under control they might move to cut the very programs people depend on to keep their heads above water. Believing that poverty is a choice can lead to the same consequences.

The truth about poverty is that it's widely misunderstood, and often for very good reason. This is a complicated subject. There's almost never one clear reason why someone is poor, and most people want to believe that financial desperation could never happen to them.

Which is how we get these ten myths about life in poverty.

It seems reasonable to think that being poor means finding the least expensive way to get through life, and to a certain extent that's correct. However, to a very real degree, it's also terribly wrong.For the poor, life comes with a bundle of hidden expenses, fees and costs that wealthier people almost never have to pay. Life without money or credit often leads people to overdraw their checking account, for example, forcing them to pay high overdraft fees for access to cash. Those who can't afford a checking account at all rely on check cashing and payday loan industries, both very expensive alternatives to a traditional bank.Running late on bills adds fines, not being able to drive eats up hours, basic goods often cost more in low-income neighborhoods. Life in poverty is anything but cheap.

The current U.S. poverty line is $12,060 for a single individual and higher for family households. But judging who is actually poor against that poverty line is a tricky thing, because costs of living vary so much from place to place. As a 2008 study from the Brookings Institute found, "the percentage, number, and distribution of families that are considered poor under federal poverty guidelines would change dramatically in many central cities if regional differences in the cost of living were recognized." In fact, the authors concluded, eligibility for Head Start alone would leap 29% if local costs of living were taken into account.The experience of making $20,000 in Manhattan is entirely different from that same income in the Adirondack Mountains.

There is some truth to this belief. At its core, poverty is a simple phenomenon: this is about people who don't have enough money. At the same time, it's far more complicated than that. Poverty is about instability. It's not just about paying the rent this month but about never knowing for sure if you'll have the money to pay it again in four weeks. It's about knowing that a flat tire or a sick day could ruin you because, even if you made ends meet today, you're holding it all together so tenuously.As Barbara Ehrenreich wrote for The Atlantic, "[t]o be poor - especially with children to support and care for - is a perpetual high-wire act… No amount of training in financial literacy can prepare someone for such exigencies - or make up for an income that is impossibly low to start with."

This may be one of, if not the most, widespread beliefs about the poor: that they just don't want to work. The reality is that the "working poor" make up a very large segment of society. According to one study from the University of California, of people in poverty nearly 40% are employed either full or part time. They typically hold low-wage jobs, where even a 40 hour work week isn't enough to lift someone above the poverty line, forcing them to struggle just to keep up.

In one of the most infamous studies on poverty, a Stanford researcher in the 1960s presented children with the chance to eat a marshmallow. They could take it right now, he said, or they could hold off and eat two later. It has become famously known as the Marshmallow Test, and among its results is that children who grow up in poverty rarely wait for the second marshmallow. This is often read as proof positive of the cycle of poverty: children who grow up poor never learn to delay gratification, which causes them to make bad decisions which causes them to stay poor as adults.This is increasingly seen as the wrong conclusion. Today psychologists argue the exact opposite point. Children who grow up poor learn about instability. They learn that anything can vanish in an instant, so they should eat the marshmallow that's in front of them. It may well be that the marshmallow test says a lot more about life in poverty than the children themselves.

Like the image of pervasive laziness, another common myth is the poor as addicts, alcoholics and substance abusers. It's why many people push for drug tests as a condition for receiving government aid. This is generally untrue.Now, it is true that drug use can lead to job loss, wage loss and general economic instability. But, that just means that drug users are more likely to be poor, not the other way around. Among the poor overall, as the work of George Mason professor Paul Gorski found, "low-income people in the U.S. are less likely to use or abuse alcohol than their wealthier counterparts.""Similarly," he also wrote, "there is little evidence that low-income people are more likely than wealthier people to use illicit drugs. Drug use in the U.S. is distributed fairly evenly across all income levels regardless of age and other factors."Poor people abuse drugs and alcohol at about the same rate as everyone else.

This is a myth in that it's a half truth. First of all, it is completely accurate to say that education is a good idea. People with high school degrees are almost always better off than those without, and the same for people with college degrees and so on. The Bureau of Labor Statistics chart on unemployment and income by educational level shows a direct relationship between economic wellbeing and education. That said, a degree on its own is not enough.Family background matters enormously to lifetime income, and simply coming from poverty can depress someone's earnings for the rest of their life no matter how high they climb. What's more, a degree isn't enough. According to the Pew Research Center, among Millennials alone, 6% of college graduates live in poverty. Education is essential, but you can't just open a school and call the job done.

Americans believe in self-determination. Culturally, ours is a country that believes that anyone can succeed by their own merits and which is unlikely to agree with the statement that "success in life is determined by forces outside our control." But success is sometimes outside of our control, and so is poverty. Some people work hard and live well. Others, however, work equally hard and get laid off. Or they grow up in a town with no opportunities. Some people need to care for a family member with health problems or have health problems of their own.The explanations can go on and on. Yes, someone who makes bad decisions can end up in poverty, but so can someone born into a neighborhood with no employer but a Burger King, or who gets up every day and goes to work at a plant that closes.It isn't always a choice.

Beggars are probably the starkest face of poverty. Many people will never actually know a poor person other than the one who begs at the train station. Where the working and silent poor may be the most ignored part of this problem, panhandlers may be the most misunderstood. They are derided as scammers, drug users and alcoholics, an image so popular that one Fox News host actually dressed up as a homeless man to promote his idea that beggars are "freeloaders."But the truth is that this group, many of whom are mentally ill, is exactly what it seems to be: people begging for money to eat.About a quarter of them are veterans, according to work by GLS Research and, contrary to the findings from John Stossel's contemptible prank, they do not make much money. The average panhandler makes about $25 per day in a city. Less than half do spend some of this money on drugs or booze, but almost all of them also use it to buy some food.

America doesn't spend much combatting poverty. According to one analysis, in 2012 Congress spent about 0.47% of the federal budget on welfare spending. What we do spend, however, appears to be working.The earned income tax credit, for example, has been linked to better test scores, better childhood health and even higher college enrollment rates among low income families. Food stamps alone keep approximately 8 million Americans above the poverty line, and the full range of social programs is why America's true poverty and its effective poverty lines are so very different.In 2011, social programs lifted more than 40 million people out of poverty. There may still be a long way to go, but that's a pretty impressive win.More of What's Trending on TheStreet:Apple's iPhone Triggered Mind-Blowing Changes to How Investors Trade StocksAmazon Could Easily Own Whole Foods and Rite Aid or Express Scripts, This Top Analyst SaysThe 14 Worst Cruise Ships on the CDC's Sanitary Inspection ListWe Sent a 21 Year Old to a Dying Kmart Store and Couldn't Believe the Horrors She FoundThis Is the Japanese Version of FANG -- And the 'G' Is a Bit of a StretchAston Martin Takes on Tesla for Title of Fastest Electric Car -- Here Are the Other Challengers

10. It's cheap to be poor.

It seems reasonable to think that being poor means finding the least expensive way to get through life, and to a certain extent that's correct.

However, to a very real degree, it's also terribly wrong.

For the poor, life comes with a bundle of hidden expenses, fees and costs that wealthier people almost never have to pay. Life without money or credit often leads people to overdraw their checking account, for example, forcing them to pay high overdraft fees for access to cash. Those who can't afford a checking account at all rely on check cashing and payday loan industries, both very expensive alternatives to a traditional bank.

Running late on bills adds fines, not being able to drive eats up hours, basic goods often cost more in low-income neighborhoods. Life in poverty is anything but cheap.