Poverty is a multifaceted concept. You can't blame any one policy or find a particular reason for that. There are a variety of reasons and lack of many inefficient policies that cause or intensify poverty, even now, to exist largely, that make us believe more and more we are living in a cruel world.
Almost half the world — over 3 billion people — live on less than $2.50 a day.
The level of poverty differs in different countries. Some are deeply drown in it (developing or under-developed countries) while others can handle it much easier. And that is why having an income which seems to be very negligible in a developed country, may be even considered as a high income less developed one. For example, you are considered to be poor if you can't afford to buy a car in USA while middle class families own two to three cars easily. On the other hand, there is not the same perception about you in India, while there are many people in backward regions who are suffering from chronic hunger.
The World Bank and international community usually regards $1/day as the standard for those living in poverty, per year this would be $365 USD.So the poverty line can vary largely in countries because they set different priority to alleviate or manage poverty. Nevertheless, we can't deny the importance of principles of social justice and equal opportunity (the most important concept we learned from socialist ideas) on any circumstances. To apply these ideas, countries have to take action face poverty (where-ever it is) and improve the living condition of the poor.
The first thing we do to reduce poverty, is to provide minimum material means for surviving (such as food, shelter, clothes and healthcare) and then provide them jobs and education to give them more economic freedom.
"Poverty trap is a spiraling mechanism which forces people to remain poor." The economic timesPoverty trap continuous when we fail to provide equal opportunity to people to lift themselves out of poverty when they utterly deserve it.
So how to break poverty trap? I remember once Milton Friedman in support of reduction in government spendings including spendings in welfare programs said that if we distributed all the budget allocated for poverty reduction equally among the poor people, they simply would have been rich.
Regardless of the fact that he wasn't serious there, any additional concentration of spendings in materialistic helps not only doesn't give poor more opportunity but also closes all the doors to them when they make efforts to have a better economic life.
An example of the poverty trap at the individual level is the situation where an unemployed person refrains from taking a job because their earnings will disqualify them from claiming unemployment benefits or raise their tax liability, and, as a result, their net income will fall.
