1.  Safety Nets Can Create a “Benefits Cliff.”

• Many assistance programs (housing vouchers, SNAP, Medicaid) phase out abruptly when income rises.
• A slight pay increase can cause someone to lose thousands in benefits, making advancement financially irrational.
• Example: A family earning $28,000 may receive $12,000 in benefits.
• If income rises to $32,000, benefits could drop to $3,000—net loss after taxes.

2.  Low-Risk Stability vs. High-Risk Mobility

• Moving out of poverty often requires risk-taking—changing jobs, relocating, investing in education.
• For those living paycheck to paycheck, risk feels dangerous.  Stability, even at a low level, can feel safer than uncertainty.

3.  Informal Economy and Cash-Based Work

• Some individuals earn untaxed income through side hustles, gig work, or under-the-table jobs.
• Staying officially “low-income” can preserve eligibility for benefits while supplementing income informally.

4.  Debt Forgiveness and Subsidies.  Specific programs forgive utility bills, medical debt, or student loans for those below income thresholds.

• Remaining in poverty can mean avoiding aggressive collections or qualifying for hardship programs.

5.  Psychological and Cultural Factors

• Generational poverty can normalize low expectations.
• Communities where most people are poor may reinforce the idea that upward mobility is unrealistic or unnecessary.
• There is a dynamic about this subject that warrants its own independent article.
• What are the dynamics that cause people to rise to the tasks of breaking out of systemic mental and economic poverty?

6.  Lack of Access to Capital

• Without savings or credit, investing in education or starting a business is nearly impossible.
• Poverty becomes a “trap” because the cost of escaping exceeds available resources.

7.  Structural Barriers

• Childcare costs, transportation, and healthcare expenses often rise faster than wages.
• Even with a better job, net disposable income may not improve significantly.

8.  Exploitation of the System

• Some individuals learn to legally optimize benefits—stacking housing assistance, food aid, and tax credits.
• While rare compared to the stereotype, this creates an incentive to remain under income thresholds.

Bottom Line

It’s not that poverty is truly “comfortable”—it’s that the system creates perverse incentives where moving up can feel like moving backward.  Breaking this cycle requires policy reform to smooth benefit cliffs, expand affordable childcare, and create pathways for upward mobility without penalizing progress.