Why are people poor and others rich? Are poor people just lazy idiots who lack intelligence, motivation, and have a bad work ethic? And are people rich simply because they are smarter and harder working than everyone else?
The topic of poverty and wealth is a difficult topic. And it’s one we all probably come to the table with a lot of preconceived notions about why poor people are poor and rich people are rich.
A lot of this has to do with our own personal experiences mixed with larger narratives that we’ve found helpful in explaining our own place in this world and the degree of wealth we have.
Some of us have boot-strap stories, where through grit, hard work, and determination, we made something of ourselves without help from anyone else. We are “self-made” and share with others our “rags to riches” story.
Many others cannot relate to this story. Try as hard as they might to work, they just never get ahead. They apply to a million different jobs but never get called back for an interview. They have transportation issues. They have medical issues. They have family issues. And all the random troubles of the universe seem to just constantly fall in their lap. Murphy’s law seems to constantly target them. And everything that can go wrong seems to always go wrong. Every day is a battle, and they are struggling to not drown.
Dave Ramsey’s “Hot Take” On Government Assistance During COVID-19
Enter Dave Ramsey. I’m only picking on Dave Ramsey in today’s podcast, because I believe he makes for a good case study, and represents a deficient perspective on poverty and wealth held by many that needs to be wrestled with.
Recently self help financial guru Dave Ramsey made a splash for criticism he made on Fox News about poor people needing government stimulus checks. Ramsey said if $600 or $1400 is going to change life, then you have bigger issues going on probably involving mental health, the lack of job skills, lack of character, or some other personal hang up.
(See the video here where he doubles down on his rhetoric later in the day on Dave Ramsey’s own show).
Obviously this rubbed a lot of people the wrong way. AS IT SHOULD.
It’s a heartless, unmerciful, uncharitable, tone deaf, jerk like thing to say. Dave Ramsey should be ashamed of himself for saying such comments, not only as a Christian, but as a guy that claims to want to help people win when it comes to their personal finances. This is NOT the attitude of someone who loves Jesus and other people, nor is it the attitude of someone that plays the role of a financial counselor.
Not only is Dave Ramsey’s perspective on wealth and poverty theologically deficient (as we’ll talk about more later), it’s also out of touch with a basic understanding of economics. .
The Struggle Is Real: Paycheck to Paycheck Living Is The Norm
Over the years I’ve known plenty of people for whom $600 or $1400 would be a huge windfall of money that would make a big and tangible difference in their lives. Heck, I’ve been that person.
As I talked about in a prior podcast, there was a time in my life where I was “Lucky To Be Broke.” That is, it was a good month for me was when the bank account said I had a zero balance, as there were months it said negative. I worked 2 jobs, more than 60 hours a week, and frequently had to rob Peter to pay Paul. With all that, I didn’t even make $30k a year!
At that time of my life, a government stimulus check would have had a major impact on my life. Even now, while $600 or $1,400 is no longer a life changing sum of money for me, as my wife and I live a very comfortable middle class lifestyle, I still don’t find it a trivial amount of money to sneeze at. That’s “real money” for most folks.
According to reports on the issue, 63% of Americans live paycheck to paycheck, and the median household income is only $68k per year. That means a government stimulus check would be about the equivalent of an extra week of pay for a lot of Americans. With most people in our country living paycheck to paycheck, that’s certainly nothing to sneeze at.
Especially for those who have careers in industries that have been adversely impacted by shutdowns related to COVID-19. At the peak of the crisis of the past year, unemployment was at 14.8%, That’s 1 out of 7 people. And while things have improved some, the unemployment rate is at 6% in America, and there are still millions of people who are attempting to recover from the economic fallout of the past year.
So, whether or not you are in favor of government stimulus or bailout type programs is beside the point. I personally have mixed feelings about the entire thing. The point is there are still tens of millions of Americans for whom any windfall of money, no matter how trivial to Dave Ramsey or you find it, would still be a huge deal for a lot of folks that are really hurting.
That Dave Ramsey doesn’t seem to recognize this, shows me he’s a bit out of touch with what the average person is facing (including those going through his program). He may scoff at the idea in his video that he’s out of touch. But the fact is, he’s so out of touch he refuses to recognize it. And it’s easy to be out of touch when you live in a mansion worth $15 million dollars (which is currently for sale).
Dave might not have been able to pay the banks back on the millions of dollars worth of leveraged debt he had. But Dave still had a job as a successful career as a real estate agent to fall back on. Things might have been tight for Dave Ramsey, but things weren’t exactly horrific. He might not have been able to own a Jag after the bank repossessed it, but he still had the ability to make a respectable living.
Dave Ramsey had a professional career that still paid the bills, just not the banks he owed millions of dollars to the banks. That’s why he was able to say in his clip that $600 or $1400 wouldn’t have been a life changing amount of money even when he was “broke.” Because the truth is, Dave Ramsey just went bankrupt. He’s never been truly “poor.”
Dave wasn’t exactly working a dead end job flipping burgers and making fries, wondering how he’d ever get ahead. He was born a child of privilege, born to a real estate developers, and has never had to worry about being destitute. He’s always had a lot to fall back onto. Many of millions of other people in America haven’t been so fortunate.
And don’t get me wrong, I’m not hating on Dave Ramsey for never knowing what it’s like to be poor. I’m simply saying, he’s out of touch.
And, unfortunately because of it, Dave Ramsey (and many others) continue to operate from a broken world view. It’s the view that if you are poor, it’s because there’s something wrong with you. It’s the view that you are poor because you must be dumb, unmotivated, or lazy!
And while there are certainly people who fit that mold that are poor, I’ve known wealthy people who were dumb, unmotivated, or lazy.
Why Are People Poor?
The truth is, the reason people are poor isn’t so simple.
How people become poor or how people become rich are often very complicated issues. And if you truly study the issue out, you’ll find that sometimes, your personal decisions have no bearing whatsoever on why you end up poor or end up being rich.
In the outstanding book “When Helping Hurts,” Steve Corbett and Brian Fikkert explore the complex reasons for why poverty exists, and how people can be lifted out of poverty. I highly encourage you to read their well researched book. They explore poverty from a theological perspective, as well as economic.
In their book Steve Corbett and Brian Fikkert outline four basic factors for understanding why material poverty exists, and explore in great detail what can be done to alleviate poverty in all of its forms.
The following are some outstanding quotes that I’d like to discuss from the book:
“Poverty is the result of relationships that do not work, that are not just, that are not for life, that are not harmonious or enjoyable. Poverty is the absence of shalom in all its meanings.”
That word shalom is a Hebrew word that has a variety of meanings. It can be a simple greeting, a word to describe peace, tranquility, or wholeness. Shalom is the sense of way the world should be.
Poverty exists because wholeness does not.
When humanity was originally created, Adam and Eve were placed in a paradise called the Garden of Eden. After their exile from Eden, they lived in a world where things were not as they should be.
Poverty is ultimately grounded in the reality of a broken relationship. We no longer live in the paradise God created for humanity because our relationship with God was fundamentally broken. And it’s from this broken relationship that all poverty ultimately flows.
“Stop and think: If poverty is rooted in the brokenness of the foundational relationships, then who are the poor? Due to the comprehensive nature of the fall, every human being is poor in the sense of not experiencing these four relationships in the way that God intended.”
Here are the four relationships that Steve Corbett and Brian Fikkert define and explore in more detail:
RELATIONSHIP WITH GOD: This is our primary relationship, the other three relationships flowing out of this one. The Westminster Shorter Catechism teaches that human beings’ primary purpose is “to glorify God and to enjoy Him forever.” This is our calling, the ultimate reason for which we were created. We were created to serve and give praise to our Creator through our thoughts, words, and actions. When we do this, we experience the presence of God as our heavenly Father and live in a joyful, intimate relationship with Him as His children.
RELATIONSHIP WITH SELF: People are uniquely created in the image of God and thus have inherent worth and dignity. While we must remember that we are not God, we have the high calling of reflecting God’s being, making us superior to the rest of creation.
RELATIONSHIP WITH OTHERS: God created us to live in loving relationship with one another. We are not islands! We are made to know one another, to love one another, and to encourage one another to use the gifts God has given to each of us to fulfill our callings.
RELATIONSHIP WITH THE REST OF CREATION: The “cultural mandate” of Genesis 1:28–30 teaches that God created us to be stewards, people who understand, protect, subdue, and manage the world that God has created in order to preserve it and to produce bounty. Note that while God made the world “perfect,” He left it “incomplete.” This means that while the world was created to be without defect, God called humans to interact with creation, to make possibilities into realities, and to be able to sustain ourselves via the fruits of our stewardship.
”According to Nobel Laureate Amartya Sen, it is this lack of freedom to be able to make meaningful choices—to have an ability to affect one’s situation—that is the distinguishing feature of poverty.”
And because of these broken relationships, we often lack the decision making power to free ourselves from poverty. A deficiency in any of these four relationships can have a significant impact on whether or not one escapes poverty.
That is what makes the sting of poverty so oppressive for so many. It’s simply not always possible to just “boot strap” your way out of poverty. Sometimes the conditions that help foster poverty simply rob you of the opportunity to make the decisions necessary to escape poverty.
As a friend of mine once said, “Some people don’t even have boots! How are they supposed to bootstrap their way out of poverty when they don’t have boots?” And as a result, no amount of “working hard” or making good choices will ever free them from their poverty. For there are sometimes bigger issues at play.
So how does one escape poverty? Escaping material poverty is about people being able to make choices that ultimately allows them to thrive. And in the Christian understanding of the world, that begins with restoring broken relationships.
According to Steve Corbett and Brian Fikkert, “Poverty alleviation is the ministry of reconciliation: moving people closer to glorifying God by living in right relationship with God, with self, with others, and with the rest of creation.”
They state in their book:
“The goal is not to make the materially poor all over the world into middle-to-upper-class North Americans, a group characterized by high rates of divorce, sexual addiction, substance abuse, and mental illness. Nor is the goal to make sure that the materially poor have enough money. Indeed, America’s welfare system ensured that Alisa Collins and her family had more than enough money to survive, but they felt trapped. Rather, the goal is to restore people to a full expression of humanness, to being what God created us all to be, people who glorify God by living in right relationship with God, with self, with others, and with the rest of creation.
Material poverty alleviation is working to reconcile the four foundational relationships so that people can fulfill their callings of glorifying God by working and supporting themselves and their families with the fruit of that work.”
Helping people escape poverty requires us to address issues related to all four of our broken relationships.
Man needs to be brought into right relationship with God.
Our personal sins and shortcomings can negatively impact our lives. Choices have consequences, and sinful choices often have negative consequences that hurt our ability to thrive.
Our sins seldom just negatively impact us. They also negatively impact others. They impact our friends, our families, our churches, our communities, and our governments.
And when this happens, this can create systemic issues that oppress others and keep them from doing well. These systemic issues create injustices in the world that make it impossible for people to freely enter into contracts, trade, labor, and create value in the world for others to enjoy.
If a tyrant is in charge and there is no rule of law, and judges take bribes, the only people that will get ahead are those that are also dealing corruptly. Issues related to freedom, slavery, immigration, theft, racism/discrimination, unjust laws, and all sorts of societal ills must be addressed by people everywhere.
People can only escape poverty if they can operate freely in a healthy and high functioning system. If they aren’t able to work the system, and the system constantly breaks their knee-caps, then they are doomed to the poverty that has persisted throughout all of human history, and no amount of working hard and making good decisions will ever change their lot in life.
For their prosperity is dependent on a greater system to function. And if that system doesn’t function properly, and all these relational issues aren’t addressed, then you’ll never escape poverty, no matter how many times you take Dave Ramsey’s Financial Peace University program.