Why are the poor poor?

A question from Yahoo! Answers:

WHY the poor are poor?
simply because the rich are rih and have the power and authority yo beome riher and let the poor poorer.

The truth is, we don’t know (except for the obvious things like if “you are disabled, you can’t earn a living”). What we do know is that poverty and wealth are localized by some really strange ethnic and geographic criteria:

  • Urban counties in the “Boston-Washington corridor” have per-capita income about 80% higher than the average urban county.
  • Urban counties have higher incomes compared to rural counties.
  • The vast majority of poor Americans belong to one of five groups: (1) inner-city Blacks, (2) Blacks living in the Mississippi delta, (3) Native Americans living in the Southwest, (4) Hispanics living in the Southwest, and (5) Whites living in Southeastern Kentucky (the last one is quite a mystery; out of 20 poorest counties with mostly white population, 18 are in Southeastern Kentucky).
  • On average, Blacks, Hispanics, and Native Americans earn less than Whites, while Asian Americans earn more than Whites.
  • Americans of Austrian descent on average earn 25% more than Americans of Belgian descent.
  • On average, Iroquois earn almost twice as much as Sioux.
  • On average, Episcopalians earn about 31% more than Methodists.

Some of this is really easy to write off as institutional racism, but racism still does not explain why Iroquois earn more than Sioux or what sets the “Boston-Washington corridor” apart from the rest of urban America…

Other countries have even more extreme disparities. Before the breakup of Yugoslavia, Slovenia had per-capita income twice as high as that of Croatia and five times as high as that of Bosnia. Before its cessation from Ethiopia, Eritrea has a per-capita GDP three times the national average. In South Africa, Whites earn about 9.5 times more than Blacks, but at the same time, only in one province, Natal, there exists a 54-fold (!) income disparity between different tribes. In Mexico, the poor account for about 18% of white population and about 81% of indigenous population. In China, per-capita GDP in Shanghai is five times the national average, while in Guizhou it is only 50% of the national average…

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