Barriers to Escaping Poverty

People who live in poverty, or who regularly have insufficient income to meet their basic needs, face a number of systemic and practical barriers to achieving financial stability. 

Poor health and poor nutrition are closely associated with lower educational and job performance outcomes which makes it more difficult for people to advance in school or in a job to a wage that is self sustaining. 

Low income people, especially those living in concentrated low income neighborhoods, are likely to pay more for basic goods and services than people in middle and high income neighborhoods. 

For example, in King County low-income drivers tend to pay higher auto insurance prices because of where they live, their credit scores, educational attainment, and occupations.  According to a Brookings Institution Report on the High Cost of Being Poor, households with incomes less than $30,000 pay $614 or $50 more for the same insurance policy than do households with incomes between $60,000 and $90,000.^[1] 

This “poverty effect” on prices means that low income people are likely to pay more for financial services, groceries, housing, transportation and other basic goods and services that they need to get by. 

The cumulative effect of being forced to pay high costs for necessities further reduces the spending power of those most in need. 

^[1] “The Poor Pay More in Seattle: Expanding the Envelope of Working Family Initiatives.”  Brookings Institution, 2006.