Traps+of+Poverty

=__The Traps of Poverty__= Some families are unfortunate to be in poverty. They lack the skills or are too unhealthy to escape it. This forces them to send their children to work. Being forced into work, the children lack the opportunity gain a proper education which is needed to be successful in today's world. When these children grow up without an education it is most likely that their jobs will not provide necessities needed to support a healthy family which causes them to send their own kids to work. This process causes poverty to be transmitted across generations. It has been estimated by the World Bank, in 2003, that over 100 million children were unable to attend school due to their poverty. (Smith, 2005) Some parents of children are illiterate and unable to attend schools themselves. Instead of sending their kids to work they may want to send them to school. This may be a problem for parents because their income may not produce enough to be able to afford transportation, school uniforms, or school fees. If money could be borrowed for school their children could then become literate and find higher paying jobs to pay back the loans borrowed. But, if the poor lack the access to this credit they will not be able to get the loans needed to finance schooling for their children. (Smith, 2005)
 * Family Child Labor Traps**
 * Illiteracy Traps**
 * Illiteracy Traps**

Credit is needed for anyone trying to produce a positive income. People in poverty though can sometimes be pulled into horrible debt. This is because untrustworthy moneylenders create loan amounts and interest payments to guarantee that a family can never overcome debt. Many times people in poverty have low paying income jobs and when working for their creditors they are unable to pay back the interest they owe. This can be seen through bonded workers wages where they make enough to survive, but all there surplus income goes to their moneylender. In this relationship between worker and lender, terms are created so that the more work and wage produced creates more pay to the master. Bondage labor keeps people in poverty, but in essence it is just another name for slavery. (Smith, 2005)
 * Debt Bondage**

The lack of access to information to better the lives of many who are impoverished, is a key reason people in poverty do not advance in their lives. The conditions that the poor are put in also prevent them from gaining the knowledge of this information that could help them escape the poverty they are in. Examples of this are the day laborers who are some of the lowest paid workers in the world. Employers have laborers working long hours for low pay and minimum meals. These long working days prevent the laborers from being able learn about possible higher paying alternatives. Employers are also not helping these impoverished day laborers, access the information needed for better opportunities. People who are not poor can look at their own situations and relate to this information trap. Many times people of first world countries go about their lives in a routine whether it is at home, work, or school. They do not take the time to look at alternatives that may be more beneficial to their lives, than the regular routine they are living. If this happens to many people in first world countries imagine the affects it has on the third world domestic workers who do not get the opportunity to access the outside of their villages. (Smith, 2005)
 * Information Traps**

Some youths in poor regions of the world do not have access to a proper education. They do not see the benefits of legitimate work and instead of going to school they turn to gangs, drugs, and other acts of criminality. These youths go through emotional pains, of friends and family members dying, and the scars from these incidents keep the trend of criminal activity going. It causes them to want gain payback and honor the deceased by retaliation. The resulting criminal activity pours over into the local community by raising the amounts of thefts, destroying assets, and taking the lives of innocent able-bodied young men. The more economic and social situations worsen the more it draws people into criminal activity that reinforces poverty. (Smith, 2005)
 * Criminality Traps**

Having little credit plays a large part in poverty traps. In a working capital trap small entrepreneurs must try to make income with the little supply they have. This also means that their total income will be to small for a larger inventory in the future. An example of this, is a women in Ecuador who was trying to sell American jeans with only three pairs to offer because that was the most she could afford. This caused it to be nearly impossible to match sizes and styles that customers wanted. Therefore she was unable to make enough income to buy a larger inventory. These situations are happening all over the world and even with microfinance institutions (MFI's) becoming popular and making small loans to the poor they are still only serving just 11percent of the world's poorest families. This statistic proves that working capital traps are still occurring at constant rates. (Smith, 2005)
 * Working Capital Traps**

Source: Smith, S.C. (2005). //Ending global poverty//. New York, NY: Palgrave Macmillan.