Poverty

Understanding Poverty: A Global Challenge

Poverty is a state or condition in which an individual lacks financial resources and essentials for a basic standard of living. It’s a complex issue with diverse environmental, legal, social, economic, and political causes and effects. Imagine if you were to walk into a world where the majority of people struggle just to meet their most basic needs—food, shelter, healthcare. That’s the reality faced by billions around the globe.

Measuring Poverty: Absolute vs Relative

Poverty can be measured in two ways: absolute poverty and relative poverty. Absolute poverty compares income against basic needs, while relative poverty measures it compared to others in the same time and place. The word ‘poverty’ comes from the old French word ‘poverté,’ meaning a state or condition of being poor. This definition is crucial because it helps us understand that poverty isn’t just about having less money; it’s about not having access to essential resources.

The Scale of Poverty

Most of the world’s population lives in poverty, with 85% living on less than $30 per day, 67% on less than $10 per day, and 10% on less than $1.90 per day. These numbers paint a stark picture of the global struggle against poverty. Governments and non-governmental organizations have experimented with various policies and programs to alleviate this issue. The international policy frameworks for poverty alleviation, established by the United Nations in 2015, are summarized in Sustainable Development Goal 1: ‘No Poverty.’ This goal aims to end all forms of poverty everywhere.

Effects of Poverty

Poverty can exacerbate social issues such as gender, disability, race, and ethnicity. It makes individuals more vulnerable to environmental effects, climate change, natural disasters, and other social problems. The UN emphasizes connecting poverty alleviation with other societal goals. For instance, a person living in relative poverty might be considered poor if almost everyone else lives in modern brick homes but not in small tents in open fields.

Measuring Poverty: Dollar-a-Day Line

The ‘dollar a day’ poverty line was introduced in 1990 as a measure of basic standards of living, adjusted for purchasing power parity and inflation. Experts disagree on a realistic poverty rate, with some arguing for levels of $7.40 to $10-$15 per day. The World Bank’s poverty line is set at $1.90 per day (updated 2015), while the International Food Policy Research Institute uses less than 54 cents per day as a threshold.

Factors Contributing to Poverty

Poverty levels are snapshot pictures that omit transitional dynamics between levels. Mobility statistics show that a large percentage of people leave or rise out of poverty over time. Factors contributing to secondary poverty include alcohol, gambling, tobacco, and drugs. Economic stability is crucial for poor households, which often struggle to balance healthcare needs with financial stability.

Global Trends in Poverty

The number of people living in extreme poverty has declined significantly since 1990. According to the World Bank, between 1990 and 2015, the percentage of the world’s population living in extreme poverty fell from 37.1% to 9.6%, falling below 10% for the first time. However, despite these improvements, there are still significant challenges. For example, Sub-Saharan Africa’s poverty increased despite population decline, while Central and Eastern Europe faced a sharp drop in income after the Soviet Union collapsed.

Impact on Health and Education

Poverty increases the likelihood of disability and negatively affects cognitive function, as financial worries divert mental resources from problem-solving. Poor people are more prone to severe diseases due to lack of healthcare and living conditions, often leading to a cycle of poverty as they must prioritize family care over education or income.

Gender Disparity in Poverty

The right to housing is considered a human right, with higher density and lower cost housing options reducing economic inequality. However, geographic concentration of poverty contributes to social isolation, gentrification, and increased risk of homelessness. Poor people often pay more for access to utilities such as water, sanitation, energy, and telecommunication services, which can exacerbate poverty.

Strategies for Reducing Poverty

Poverty reduction strategies can be broadly categorized as either increasing basic human needs or disposable income. Some strategies include building roads to improve access to urban markets, progressive taxation, wealth taxes, reduced payroll taxes, and increasing labor share. Improving technology through agricultural technologies and medical advancements is also crucial.

Increasing the Supply of Basic Needs

Agricultural technologies have increased food yields and availability, while medical advancements have improved healthcare outcomes, such as maternal mortality rates. State funding, like subsidies for essential goods, can provide relief. Solutions include corporate reporting requirements and debt relief from richer countries to avoid constraining government spending.

Addressing the Root Causes

Poverty is a complex issue with ideological disagreements between socialist and neoliberal views. Inequality can perpetuate itself through self-reinforcing behaviors, contributing to multigenerational poverty and civil unrest. Research suggests a link between good governance and poverty reduction, with some studies finding that economic growth has more impact in well-governed countries.

Global Efforts

The incomes of the poorest people in the world have increased since 1981, but poverty persists. Addressing global poverty requires a multifaceted approach involving governments, non-governmental organizations, and international institutions. The World Bank, International Monetary Fund, and United Nations play crucial roles in supporting poverty eradication efforts.

Addressing global poverty is not just about providing aid; it’s about creating sustainable solutions that empower individuals and communities to break the cycle of poverty. It’s a journey that requires collaboration, innovation, and a commitment to human rights and dignity for all.