Poverty Profiteering: Exploitation Creates Cycles of Homelessness

Poverty, poverty profiteering

“Money made slums because slums made money.”

– Professor of Sociology Matthew Desmond

We’ve made many industrial advancements in the United States of America, but progress is a far cry from reality. For every bayside property with a meticulously crafted garden and wraparound infinity pool, there is a roadside tent flapping in the wind beside an interstate that somebody calls their home.

Homelessness is one of those issues that force us to face hard truths mostly because those truths are staring back at us behind the eyes of our fellow human beings.

For decades, a thinly veiled narrative has implied that homelessness stems from individual moral failings. However, the data does not support this theory.

Studies show that homelessness is a structural issue heavily rooted in inequities sewn into the very fabric of modern society. One of those structural issues is poverty, the third-leading cause of homelessness in America.

Poverty Is the Third-Leading Cause of Homelessness

Like homelessness, poverty is a persistent problem that never seems to go away, no matter how much money is thrown in its direction.

In a recent exclusive interview with Decriminalization Director for the National Homelessness Law Center, Will Knight, we discussed something Knight called poverty profiteering. Essentially, poverty profiteering is lining the pockets of the rich with the blood and tears of the working class through a process bent on deception and exploitation.

In a telling New York Times article, Professor of Sociology Matthew Desmond also discussed exploitation and its role in keeping poverty at barely wavering levels for five consecutive decades.

At first glance, poverty appears to result from political aloofness or inaction. It’s easy to see how the elite class might conveniently avoid addressing the issue. However, further digging reveals that this is not the case.

For the past 50 years, anti-poverty programs abound. Some of the most well-known include:

  • SNAP
  • TANF
  • Medicare
  • Medicaid
  • Unemployment
  • Social security
  • Head Start

This is just to name a few. A clear and vested effort has been made to combat poverty and foster a flourishing middle class. Yet, despite all of this force behind the movement, anti-poverty programs have failed to reduce the destitution that millions of Americans fall prey to.

Sociologists, academics, and some political leaders point to the exploitation of low and middle-income laborers as the reason poverty persists.

Poverty Profiteering is a Multi-Billion Dollar Business

Poverty and homelessness are two structural problems that often go hand-in-hand. Not only do they feed into one another and promote a cyclical, almost symbiotic relationship, but they also share similar features. One of the common denominators seen in both poverty and homelessness is an absence of choice. A world abundant with options is useless to the person who cannot afford to choose.

For example, better education is a commonly referenced exit from poverty. Still, someone who cannot afford to move to a neighborhood in a top-rated school district cannot access this option. For them, it might as well not exist at all.

People with fewer options are already vulnerable to exploitation. In the U.S., taking advantage of the millions of poor people who cannot access better options has become a multibillion-dollar business. If this persists, poverty and the homelessness caused by it will forever be embedded into our national landscape.

Examples of poverty profiteering abound in multiple industries, from banking to lending, housing to employment.

Basically, if there’s a necessity that poor people can be charged extra to access, there’s likely an industry built entirely around doing just that.

The banking industry rakes in a whopping $11 billion in overdraft fees each year by charging people extra because they can’t afford to maintain a demanded minimum balance. Another $1.6 billion is funneled out through fees related to check cashing and payday loans, which are alternatives used out of necessity. Furthermore, food costs are found to be even more expensive in low-income neighborhoods, but that’s not all.

Corporate landlords are also heavy-handed in the practice of poverty profiteering. Their engagement happens by way of rent exploitation. To give a general idea of how rent exploitation works, landlords in poverty-stricken neighborhoods make double the profits of landlords in wealthy neighborhoods. This inequity drives rent burden, homelessness, and, of course, even more poverty.

Legislation Fails to Address the Issue of Exploiting the Poorest Members of Society

In the words of Desmond, “When we ignore the role that exploitation plays in trapping people in poverty, we end up designing policy that is weak at best and ineffective at worst. For example, when legislation lifts incomes at the bottom without addressing the housing crisis, those gains are often realized instead by landlords, not wholly by the families the legislation was intended to help.”

For so long as rent exploitation exists, poverty will be present as a cause or a byproduct of homelessness. For at least the past ten decades, we have been overcharging poor people for the perceived “crime” of being unable to escape the very poverty that pigeonholes them into lower levels of education and economic despair. The outcome of this is often homelessness.

Now, politicians are taking this failed model one cruel step further by charging poor people who can’t afford skyrocketing rents for the perceived “crime” of becoming homeless. This is happening in the form of forced-sanctioned encampments and imprisonment.

Talk To Your Local Legislators About Making Housing a Human Right

The price of poverty was once our homes. Now, it is our freedom. There’s never been a more vital time to advocate for housing as a human right. Talk to your local legislators today.

Cynthia Griffith

Cynthia Griffith


Cynthia Griffith is a freelance writer dedicated to social justice and environmental issues.

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