Economic Hardship

Economic Hardship refers to the difficulty that individuals face due to a shortage of money or resources required to meet their everyday basic expenses, including but not limited to transportation, employment, housing, etc. It tends to affect people’s mental health, calling for policies and social welfare programs to help take control of the situation.

Economic hardships cause financial instability and impact the well-being of families negatively. Therefore, The US government has introduced schemes to help individuals experiencing the hardship of finances handle their situations. F-1 foreign students in the USA can submit mandatory documents proving severe economic problems to USCIS and apply for an off-campus work permit. 

Economic hardship represents individuals' financial issues due to a lack of financial resources that help them fulfill their daily needs, including healthcare, housing and food requirements. It covers many difficult situations, like sudden artificial and natural disasters, low income, unemployment and improper policy formulation and implementation. These factors and conditions negatively and severely impact the livelihood, standard of living and purchasing power of families and individuals.

It usually arises out of unforeseen situations, like layoffs, significant rises in living costs, inflation, and medical emergencies. Such situations lead to a cycle of anxiety and stress, hampering one's mental health and causing financial destabilization. It has deep implications for individuals, families, and societies. It leads to school dropping, scarcity of food, frustration, social unrest, and mental health issues such as depression, madness and low self-esteem.

As per the family stress model, economic pressure can destroy family composition dynamics and create harsh parenting and conflict, affecting child development adversely. It also warns of wider social issues, such as reduced community harmony and increased crime rates. Any government can use financial hardship as a metric to create people's welfare schemes and social programs to deal with it. It also can play a vital role in alleviating poverty, financially uplifting vulnerable families, creating new infrastructure for financial inclusion, and enabling skilled people to get small jobs. 

States can also provide monetary assistance to pay rent, utility bills, ration, heating, cooling, internet and mobile payments to reduce its negative impacts. Moreover, economic hardship concerning the IRS can lead to the removal of levies causing hardships.

A proactive approach by the government leads to easing financial hardships and economic hardship deferment of the masses supported by communities and social organizations. 

There could be multiple causes of such hardships. Some of them include:

• Inflation, one of the basic causes that reduce purchasing power, causes financial strain.
• Disparity in income distribution in society has led to depriving opportunities and essential services.
• Unemployment can play a critical role in hardships faced by people.
• Healthcare costs have increased exponentially, reducing savings, causing debt, and worsening economic challenges.
• Pandemics, natural disasters, and economic downturns lead to tightening credit situations and lowered demand, adding to financial hardships.

Let us use a few examples inspired by real life to understand the topic.

Example #1 

A December 2024 article reported the approval of applications for the demolition of property due to the economic difficulties that owners have faced. It confirmed that the Denver Landmark Preservation Commission has finally given consent to the demotion requests, which it denied when applied for in June 2024, given its importance in showcasing homes of its kind in Colfax Ave. 

The approval relates to two historic homes at 1618 and 1600 Colfax Avenue, built in 1895, in the historic Wyman district. In the earlier instance, the authorities thought to restore and retain the properties, but it changed its mind, considering the high restoration costs involved. 

Example #2

Let us assume that a resident of Old York City, Oprah, faces extreme economic difficulties while raising her five kids, given the rising rent and sudden increase in medical bills. Because of the sudden loss of her job, her kids fail to attend school and miss vital educational opportunities. Her savings are on the verge of depletion, making her helpless to afford even the basic needs, like transportation, food and utility. 

The community supports her filing for government assistance related to economic difficulties. They help prepare and file all the necessary documentation with the appropriate authorities. Hence, within a month, the city's commission approves her financial aid worth $1000 per month.

The common effects of economic hardships, as reported by the Economic Hardship Reporting Project (EHRP), are as follows:

• Decreased social interactions and increased family frustration and anxiety.
• Minority groups suffer from excessive health and social effects constituting hardships.
• It causes major financial hardships for 61% of Americans. 
• It has also led to an increase in theft, violence, burglary and other anti-social activities.

In America, at least 30% of families living on twice below the poverty line incomes are asked to either evict from home or miss meals.

The most common ways of surviving financial hardships are to accumulate emergency funds, increase savings, control expenses, negotiate bills and subscriptions, properly use credit, etc. However, various government schemes can assist one with housing, bills, food and other expenses.

#1 - Food Assistance

Under this program, any individual in need of nutritious food can get it for themself and their family through D-SNAP, WIC for women, infant and children, the SNAP program (food stamps) and the Food Distribution Program on Indian Reservations (FDPIR) for native Americans.

#2 - Unemployment Benefits

Although there is no federally sponsored unemployment program for people losing jobs without fault, states have an unemployment insurance program.

#3 - Temporary Assistance or Welfare Benefits for Needy Families.

Temporary Assistance for Needy Families (TANF) is governed and funded by the federal government and run by state governments. TANF helps families monetarily if they face hardship, helping them with the following:

• Food
• Housing
• Home energy
• Child care
• Job training

#4 - Utility Bills Payment 

Under the Lifeline federal program, LIHEAP and WAP programs, one can ask for government payment for energy bills, phone and internet, heating, cooling and weatherization. 

#5 - Government House Repair Help Programs 

Various government economic hardship loans like HUD home improvement program loans help improve and repair homes.