Running head: WEALTH AND POVERTY 1

Wealth and Poverty

Stephanie Nekoba

Brigham Young University-Idaho

WEALTH AND POVERTY 2

Abstract

Wealth and Poverty are two major issues America struggles with on a daily basis, the latter more

than the former. Wealth is an issue that can lead to poverty if not handled correctly, whereas

poverty is a lack of wealth that results in a poor lifestyle. While poverty is a big struggle for

many American, it can be maintained/ eradicated. Do our circumstances affect who we will

become financially, or do we control our circumstance? The issue at hand is whether or not

poverty can be controlled or if it is our destiny

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Nelson Mandela once wrote, “Poverty is not an accident. Like slavery and apartheid, it is

man-made and can be removed by the actions of human beings.” According to Elizabeth B.

Goldsmith, author of Resource Management for Individuals and Families, poverty can be defined

as “the state of being poor and lacking adequate means to provide for basic material needs and

comforts”; while on the other hand, wealth is defined as “the state of being rich and having high

net worth” (Goldsmith 2013 p.251). Though these two states of being have strikingly different

definitions, there is really only one thing that separates the two, and that is values.

Values are “principles that guide behavior and form the foundation for behavior,

including goal-seeking behavior” (Goldsmith 2013 p.68). What we value will essentially

determine where we end up in life, and what goals we will have achieved. Examples of values

include change, family, materialism, and education. Each of these values will now be discussed

and how the possession or lack of them relates to poverty and wealth.

First let us discuss the value of change. The denotation of the word change is “to make or

become different”. There is a widespread debate known as the nature vs. nurture debate, in which

some people argue that our biology affects who we are predisposed to be, whereas other people

argue that the environment we are brought up in affects who we will become. To tie this into

poverty, many people who are born into poverty believe that this is their kismet. They choose to

victimize themselves by arguing that their circumstance prevents them from becoming better or

overcoming their unfortunate situation. This argument can be challenged by that of one of our

founding fathers, Alexander Hamilton. Hamilton was born into poverty, but rather than

succumbing to social beliefs, he “defied all of the laws of social science and took hold of his

destiny at a young age” (Lewis 2015 p.7). Hamilton was quick to realize that change started with
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him, and so he pursued educational endeavors so that one day he could provide more for himself.

He studied many things such as business management, law, military matters, and finance. All

this studying granted him success in college, which would eventually lead to his political success

and emergence from a once impoverished life. So the lesson to be learned here is that just

because circumstance permits it, does not mean we should accept it. Just because we are born

into poverty does not mean that we are doomed to forever remain in poverty. It is our job to

value change, and implement it in our lives so that we can overcome our contingency.

The next value to consider is family. People who value family tend to represent the lower

percent of married people who are not divorced. According to an article entitled Effects of

Family Structure on the Economy, “family structure and economic well-being are correlated.”

Statistics show that “Poverty is principally the problem of non-intact family structures.

Compared to married families, six times as many female- headed families are impoverished.

Data collected in 2001 shows that more than two-thirds of children in never-married families live

at or under official levels of poverty compared to 12 percent of children living in two-parent,

married families” (Effects of Family Structure on the Economy). As of 2016, about 40 to 50

percent of Americans are reported to have been divorced. This means that more than half of our

nation is comprised of broken/non-intact family structures. “The people who consistently rank in

the worst financial trouble are united by one surprising characteristic. They are parents with

children at home. Having a child is now the single best indicator that a woman will end up in

financial collapse” (Goldsmith 2013 p. 251). About 20 percent of U.S. children, or 14.7 million,

lived in poverty in 2013 (Lemons 2015 para.13). Because of divorce rates being on the rise, the

percentage of poverty is also rising. As people divorce, more and more women are being left

alone to provide and care for children, with only one source of income. Keeping in mind that she
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may also have lost a great deal of money in the divorce, it is now extremely difficult for her to

provide for her family with now significantly less money and income. By breaking off a

marriage, people are taking away a child’s right to live in a financially stable home. People who

don’t value family are likely to put themselves in a situation to destroy theirs and essentially

cause poverty amongst themselves or their children. Those who do value family are further able

to save their money and eventually become part of the wealthy class because of their particular

lifestyle. Family is an important value in that it is essential for creating the “best economic

environment for children and they experience more economic mobility and less poverty” (Rector

and Johnson 2004 para.4).

The third value to be considered when discussing poverty is America’s value of

materialism. “Consider the images of starving children in Africa, Asia, or Latin America

accompanying appeals for humanitarian aid. It is not difficult to understand why people deprived

of the most basic material necessities for subsistence--adequate food, clean water, shelter from

extreme heat or cold--would suffer high rates of preventable disease, disability, and premature

death. Poverty in developing countries is often defined as living on less than $2.00 per person per

day. By those terms, very few people in the United States would be poor. The official U.S.

poverty guideline in 2005 was an annual income of $19,350 for a family of four, which would

represent wealth in many poor countries” (Braveman 2007 para.1). Living in America, we place

high value on materialistic things and who has what, when, and how. We want the latest gadgets,

the fancy cars, or the high-end clothing, but we are never satisfied. We always want more. A lot

of the issues with money that occur in America are simply due to a lack of responsibility. People

are opening credit cards and spending money that they don’t have, and thus they end up in a

position where they have to choose whether they will eat or pay their electricity bill. Minimum
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wage prices are going up and somehow poverty rates are increasing as well. This most likely

indicates human error. Even if people living in poverty generally have families, they still could

be doing more to try and make ends meet. Here in America, we take a lot of things for granted

and we are very selfish. We take what little money we do have and we waste it on useless things

rather than saving it up so that we can one day be considered wealthy. The Stanley and Danko

study about wealthy people provides a lot of valuable insight that we can learn from. Even if we

are only middle class, we can still learn an important lesson from the wealthy, and that is to live

frugally. We need to learn to be satisfied with what we have and not be greedy and constantly

want more. If we do this the poverty rate will purportedly decrease immensely.

Another factor linked to poverty is education, and the lack thereof amongst many of the

impoverished. Studies show that the level of education one has is proportional to how much their

income is. The lower your education level, the smaller your income. “The 2011 poverty rate for

all associate degree recipients was 8%, compared to 11% for individuals with some college but

no degree, and 14% for high school graduates with no college experience” (Education Pays 2004

p.17). Many people opt not to pursue some form of higher education because they fear they

cannot afford it. In making this choice, you are actually hurting yourself rather than helping.

“The cost of college is high, but the cost of foregoing college is much higher still” (Lewis 2015

p.125). While college can be expensive, it will essentially be worth the cost in the long run.

Things like scholarships, grants, and financial aid are all resources available to those who simply

cannot afford to attend college, but would like to break the poverty cycle. Just because you are

born into poverty does not mean you are doomed to a life of poverty. You have the choice to

overcome it by pursuing higher education using any means necessary. By utilizing all the

financial resources available to you, you are opening more doors to a financially stable life than
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you would without receiving higher education. By pursuing higher education, you are increasing

your chances of being financially stable/wealthy, but by choosing not to attend college you are

setting yourself up for failure because you will most likely only be able to hold a minimum wage

paying job. Education is important in ensuring that poverty rates decrease as the work force

increases.

Despite all the above stated reasons for existing poverty, researchers continue to argue

that poverty is a state of being that has very little chance of being overcome. Studies indicate that

“children from low-income households are significantly less likely to be successful than their

middle and upper class counterparts. Studies have repeatedly shown that family income is one of

the strongest predictors available for measuring success, both in the classroom and later in life”

(Hillestad 2014 para.1). This point of view once again ties into the nature vs. nurture debate. The

nature side of this argument is that because of the circumstance you are raised in, your success is

life is very low from the get go; because your family is amongst the impoverished, your chance

at overcoming poverty and being successful is slim to none. The poverty trap, a “phenomenon in

which people living in poverty cannot rise up due to scarce resources, depression, lack of

opportunity and other issues” (Hillestad 2014 para.12), is believed to be true because of many

instances that have been recorded throughout history. However, the nurture side of this

argument shows that circumstance has nothing to do with our outcomes; if anything, it is a

motivator for us to become great. If we don’t like our situation, we can change it. We have the

power to say “You know what, I am going to do everything I can to create a better life for

myself.”

Many people amongst the impoverished have proved this study to be true, so it is

understandable why this is a widespread belief amongst many. Many people choose to remain in
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their unfortunate circumstances because it is easier and they don’t know what it’s like to live a

better and wealthier life. It is the few that do choose to overcome their situations that are the

reason this argument is flawed. Consider people like Steve Jobs or Oprah Winfrey. Both grew up

in poverty and look where they are now. They made the choice to overcome it, and that is the

key to escaping the poverty trap.

It is easy to victimize ourselves in certain situations, but despite all of our hardships and

challenges, we must still choose to rise up and face adversity with great strength and courage. It

is the proactive attitude that will essentially prevail us or defeat us. Will you let poverty

overcome you, or will you overcome poverty? The choice is yours.

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References

Baum, S., & Payea, K. (2005). Education Pays. Retrieved February 08, 2017, from

http://www.collegeboard.com/prod_downloads/press/cost04/EducationPays2004.pdf

Braveman, P. (2007, Oct). Do we have real poverty in the united states of america? Preventing

Chronic Disease, , 1-4. Retrieved from http://sks.sirs.com.byui.idm.oclc.org

Effects of Family Structure on the Economy. (n.d.). Retrieved February 08, 2017, from

http://marripedia.org/effects_of_family_structure_on_the_economy

Goldsmith, E. B. (2013). Resource Management for individuals and families (5th ed.). Prentice

Hall.

Hillestad, S. (2016, February 16). The Link Between Poverty and Education. Retrieved February

08, 2017, from http://borgenproject.org/link-poverty-education/

Lemons, J. (2015, July 17). Fighting urban poverty. CQ Researcher, 25, 601-624. Retrieved

from http://library.cqpress.com.byui.idm.oclc.org/

Lewis, H. (2015). American Foundations Politics, Economics, Culture. Provo, UT: BYU

Academic Publishing.