The unintended consequence of America's anti-poverty program is to penalize poor people for working. When you take into account the loss of means-tested benefits (e.g., cash assistance, food stamps, housing subsidies, and health insurance), and the taxes that people pay on earned income, the return to working is essentially zero for those in the lower two quintiles of the income distribution.
This chart (
Source) shows income after taxes and transfers as a function of earned income. Below about $38,000, income after taxes and transfers is roughly flat. Indeed, it could even fall. The bottom line: If you are poor, the government is ensuring that you have little incentive to try to improve your condition.
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