Solutions to Poverty

Subscribe to the center for economic security and opportunity newsletter, isabel v. sawhill isabel v. sawhill senior fellow emeritus - economic studies , center for economic security and opportunity @isawhill.

April 26, 2007

Thank you for inviting me to testify on what might be done to reduce poverty in America. As a Senior Fellow and Co-Director of the Center on Children and Families at Brookings, I have done extensive work on these issues; although I should note that the views I will express are my own and should not be attributed to other staff, trustees, or funders of the Brookings Institution. Let me first summarize my testimony.

First, I strongly believe that reducing poverty requires a focus both on what government needs to do and on what individuals need to do. We need a combination of responsible policies and responsible behavior.

Second, although there are many things that might be done to reduce poverty in the U.S., I want to argue for a focus on three priorities: getting a good education, not having children before you marry, and working full-time. Government should expect people to make real efforts to comply with each of these norms. When they do, then government should reward such behavior by making sure that those who play by the rules will not be poor. The analysis we have done at Brookings shows that individuals who play by these rules are much less likely to be poor than those who don’t.

Third, one of the most effective policies we could put in place to ensure that everyone gets a good education would be to provide very high-quality early education to all children from low-income families. Many people believe that education in the preschool years only affects young children. In fact, the evidence from both neuroscience and from carefully done program evaluations shows that preschool experiences have long-lasting effects and may be the most cost-effective way to insure that more children are successful in the K-12 years, graduate from high school, go on to college, and earn more as adults. The federal government could further this goal by providing matching funding to states that are willing to invest in high-quality early education for those living in low-income neighborhoods, starting in the first year of life.

Fourth, too many of our teens and young adults are having children before they are married and before they are ready to be good parents. In my view, the solution to this problem resides as much in the larger culture-in what parents, the media, faith communities and key adults say and do-as it does in any shift in government policy per se. However, government can help by providing resources to those fighting this battle in the nongovernmental sector, by insuring that its own policies do not inadvertently encourage childbearing outside of marriage, and by supporting programs that have had some success in reducing early, out-of-wedlock childbearing.

Finally, encouraging and rewarding work is also very important. I support the idea of work requirements in welfare, and perhaps in other programs as well, but I fear that the kind of increased employment we’ve seen among welfare mothers will be a Pyrrhic victory if we don’t find ways to provide more assistance in the form of a higher minimum wage, a more generous EITC, and additional child care and health care assistance. In my testimony today-at the suggestion of your staff-I will focus especially on preschool education and on the need to decrease childbearing outside of marriage and increase the share of children growing up in two-parent, married families. But I have written elsewhere about the importance of providing additional work supports for low-income working families.

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Poverty Essay for Students and Children

500+ words essay on poverty essay.

“Poverty is the worst form of violence”. – Mahatma Gandhi.

poverty essay

How Poverty is Measured?

For measuring poverty United nations have devised two measures of poverty – Absolute & relative poverty.  Absolute poverty is used to measure poverty in developing countries like India. Relative poverty is used to measure poverty in developed countries like the USA. In absolute poverty, a line based on the minimum level of income has been created & is called a poverty line.  If per day income of a family is below this level, then it is poor or below the poverty line. If per day income of a family is above this level, then it is non-poor or above the poverty line. In India, the new poverty line is  Rs 32 in rural areas and Rs 47 in urban areas.

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Causes of Poverty

According to the Noble prize winner South African leader, Nelson Mandela – “Poverty is not natural, it is manmade”. The above statement is true as the causes of poverty are generally man-made. There are various causes of poverty but the most important is population. Rising population is putting the burden on the resources & budget of countries. Governments are finding difficult to provide food, shelter & employment to the rising population.

The other causes are- lack of education, war, natural disaster, lack of employment, lack of infrastructure, political instability, etc. For instance- lack of employment opportunities makes a person jobless & he is not able to earn enough to fulfill the basic necessities of his family & becomes poor. Lack of education compels a person for less paying jobs & it makes him poorer. Lack of infrastructure means there are no industries, banks, etc. in a country resulting in lack of employment opportunities. Natural disasters like flood, earthquake also contribute to poverty.

In some countries, especially African countries like Somalia, a long period of civil war has made poverty widespread. This is because all the resources & money is being spent in war instead of public welfare. Countries like India, Pakistan, Bangladesh, etc. are prone to natural disasters like cyclone, etc. These disasters occur every year causing poverty to rise.

Ill Effects of Poverty

Poverty affects the life of a poor family. A poor person is not able to take proper food & nutrition &his capacity to work reduces. Reduced capacity to work further reduces his income, making him poorer. Children from poor family never get proper schooling & proper nutrition. They have to work to support their family & this destroys their childhood. Some of them may also involve in crimes like theft, murder, robbery, etc. A poor person remains uneducated & is forced to live under unhygienic conditions in slums. There are no proper sanitation & drinking water facility in slums & he falls ill often &  his health deteriorates. A poor person generally dies an early death. So, all social evils are related to poverty.

Government Schemes to Remove Poverty

The government of India also took several measures to eradicate poverty from India. Some of them are – creating employment opportunities , controlling population, etc. In India, about 60% of the population is still dependent on agriculture for its livelihood. Government has taken certain measures to promote agriculture in India. The government constructed certain dams & canals in our country to provide easy availability of water for irrigation. Government has also taken steps for the cheap availability of seeds & farming equipment to promote agriculture. Government is also promoting farming of cash crops like cotton, instead of food crops. In cities, the government is promoting industrialization to create more jobs. Government has also opened  ‘Ration shops’. Other measures include providing free & compulsory education for children up to 14 years of age, scholarship to deserving students from a poor background, providing subsidized houses to poor people, etc.

Poverty is a social evil, we can also contribute to control it. For example- we can simply donate old clothes to poor people, we can also sponsor the education of a poor child or we can utilize our free time by teaching poor students. Remember before wasting food, somebody is still sleeping hungry.

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Poverty as a Social Problem

This free essay on poverty as a social problem looks at a grave problem that exists in America and in the world. It provides reasons why people are experiencing poverty as well as some solutions.

Introduction

Literature review, poverty as a social problem: reflection, solutions to poverty as a social problem, social problems: poverty essay conclusion.

Society often perceives poverty as an individualistic issue, believing it is a consequence of bad decisions. That is, people themselves are responsible for the level of income and financial stability of households. However, the subject is much more complex as poverty also results from inadequate structuring of the country’s economy, distribution of goods, and other sectors, making it a social problem. Failure to build a system that would help citizens become financially stable results in various issues associated with crime levels, education, health care, and others. The government is the one that should work to solve them.

There are numerous studies and publications researching the reasons behind poverty. E. Royce (2019) tries to explain in his book how the existing economic system in the United States prevents citizens from reaching an adequate level of income and financial support. The main idea is that the current structure of how goods are distributed across the population does not benefit a large portion of it. Few rich individuals grow wealthier yearly, while millions struggle to find a stable job with a minimum wage.

The inequality created by the government’s failure to build a fair economic system results in a range of social problems. The idea of a poverty line as a measure of well-being has not changed much since the 1960s despite the obvious changes in consumption patterns (Royce, 2019). It is calculated as the sum required for purchasing essential items for living, which does not include modern commodities such as computers, mobile phones, and others.

As a result, low-income people become socially isolated since they do not possess things essential for the modern lifestyle, like social networks. They may be excluded from a community for not corresponding with the public image of active individuals. These mechanisms, combined with the dominant idea of the necessity to achieve success, push poor people away from social life. This factor comes together with the inability to receive proper health care and education services.

The literature also contains studies on how poverty affects the behavior of individuals. For instance, children exposed to life in a low-income household are more likely to develop adverse reactions in the future due to strain resulting from the inability to receive wished items (McFarland, 2017). When placed in a densely populated neighborhood, they may later cause legal problems, creating delinquent areas.

It is easy to predict the social issues that poor people face daily. They cannot receive proper health care services as they are usually costly. Moreover, many commercial organizations offering low-paid jobs traditionally based on customer service may prevent employees from taking sick leaves. As a result, people suffer from various illnesses without attending a hospital, fearing to lose a work placement.

Another issue is the inability of poor people to send their children to high-performing schools, which are expensive as a rule. This factor causes youth to continue living with the same income level as their parents since the absence of quality education prevents them from receiving a decent job. Moreover, children who cannot acquire goods valued by their peers are likely to adopt criminal behavior to achieve success since community norms and morals do not help this purpose.

Summarizing all the above said, it becomes evident that changing the existing economic structure on the governmental level is the most appropriate solution to the issue of poverty. There should be a strategy covering all the aspects affected by this problem. The goal is to increase the level of financial support for disadvantaged groups and give more opportunities for people to grow their income.

Firstly, the social sector should be transformed to meet the needs of all citizens. The government should increase the financing of schools so that all children will have access to quality education. Also, various programs should engage youth in activities after classes. Another step is to make health care affordable for everyone, and there should be no pressure on workers when they decide to take sick leaves.

Secondly, the structure of budget spending should be redesigned. It is evident that social support programs require much financing from taxes. One of the possible strategies is to make the government spend less on other sectors. Also, solving the issue of delinquent behavior among youth by advancing social support may cut costs on police functioning as there will be a lower need for services such as patrolling.

Poverty is a structural problem resulting from a country’s inadequate economic system. It creates various social issues associated with poor health care services, low-quality education, criminal activity, and others. Poverty is a complex subject that cannot be resolved shortly. However, one of the possible strategies is to provide better financial and social support for the population, which will create more opportunities for people to increase their income level.

McFarland, M. (2017). Poverty and problem behaviors across the early life course: The role of sensitive period exposure. Population Research & Policy Review , 36 (5), 739-760.

Royce, E. (2019). Poverty and power: The problem of structural inequality (3rd ed.). Lanham, MD: Rowman & Littlefield.

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Poverty - List of Free Essay Examples And Topic Ideas

Poverty, a state of deprivation of basic human needs and economic opportunities, is a pervasive issue across the globe. Essays could explore the systemic causes of poverty, its impact on individuals and communities, and the various strategies employed to alleviate poverty. Additionally, discussions might delve into the role of international aid, the impact of globalization, and the ethical responsibilities of affluent individuals and nations toward poverty reduction. A substantial compilation of free essay instances related to Poverty you can find at PapersOwl Website. You can use our samples for inspiration to write your own essay, research paper, or just to explore a new topic for yourself.

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Impact of Poverty on the Society

This is a very challenging question because nearly every ""pressing problem or social issue"" has underlying factors and historical influences. So I will try to explain my understanding of these topics. There are two important lenses from which to consider this issue; first, from the individual circumstance and second, from specific community conditions. The inability of individuals to earn enough money to afford to meet their basic needs and maintain a healthy lifestyle is, in my opinion, the most pressing […]

Poverty in the United States

Poverty is a major issue in our world today, it is when people are not able to afford a minimum standard of living to survive. Poverty is the removal of financial stability to afford necessities. Bill Fay, veteran journalist defined poverty as a pervasive human condition of being unable to obtain or provide a standard level of food, water, and shelter. In 2015, a study was done and reported that 60% of people will experience at least 1 year of […]

Unemployment a Major Cause of Homelessness

Homelessness or known as extreme poverty can be interpreted as a circumstance when people have no place to stay with the result that they end up live in the street, under the bridge even at the side of the river. There are 3.5 million Americans are homeless each year. Of these, more than 1 million are children and on any given night, more than 300,000 children are homeless. They who do not have an occupation are the one that is […]

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One of the reasons the rich get richer, and the poor get poorer, is because of the lack of not knowing and ignorance hindering half the world, allowing the cycle of poverty to continue. Poverty trap is as a spiraling mechanism, that forces people to remain poor binding many to no hope of escaping. The poverty trap has been an ongoing cycle within generations even those close to me, that has tremendously taken a negative toll on society and my […]

Childhood Poverty

Abstract Poverty is viewed throughout the world as a large social problem that continues to advance with time. Since 1960, poverty has continued to flourish into a problem that has affected a large majority of the population, including our children. Childhood poverty affects the psychological and biological development, as well as three main levels of social systems: micro, mezzo and macro. Even though there has been active research on poverty, generational poverty and childhood poverty, no active changes have been […]

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Homelessness is a social problem that has long plagued the United States and surrounding Countries for centuries. It is an economic and social problem that has affected people from all walks of life, including children, families, veterans, and the elderly. Kilgore (2018). States homelessness is believed to have affected an estimated amount of 2.5-3.5 million people each year in the United States alone. Recent evidence suggests economic conditions have increased the number of people affected by homelessness in the United […]

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Introduction A. (Opening Device) How many of you ever had to think or worry about your next meal? Most of us, we don't have to think about that, we don't think about where we having that meal. But in developing countries people have to think about everything they do in daily life, The goal for the day is to have meal with family and have a shelter, or to live in a house to hope for better lifestyle. To make […]

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Looking around the campus of an Ivy League schools, one wonders how students from such diverse backgrounds ultimately wound up at the same place. From having a mother who works in admissions, I grew up hearing that no matter where you came from, your socioeconomic status, and even sometimes your grades, all kids have the potential to attend a prestigious university. However, I find that hard to believe. With a combination of taking this class on homelessness this semester, growing […]

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In our current society, poverty is an issue that plagues third world nations. All countries are interwoven with one another because of everyone needing each other for certain resources. When one country is in need, it interrupts a process that all countries have with one another. Poverty is an issue that everyone should pay attention to even if it does not occur where we live or does not affect us directly as much as it does other nations. Not only […]

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CHAPTER ONE INTRODUCTION 1.1 Background of the study Needless to say, poverty is a global problem; however, the menace of poverty is most devastating in the developing countries of the world. Food production has hardly kept pace with population size, and the quantity, as well as quality of health, has also massively deteriorated. According to the World Bank Development Report (2013), about 10.7 percent of the world's population lived below poverty line (US $1.90 a day). Poverty is one of […]

What is Poverty?

Poverty is a pervasive human condition of being unable to obtain or provide a standard level of food, water, and/or shelter (Fay, n.d.). The United States has the highest rate of poverty among wealthy countries. The official poverty line is based on what the federal government considers to be the minimum amount of money required for living at a subsistence level (Kendell, 2018). Sociologists define poverty in two ways: absolute and relative. Absolute poverty is when the household income is […]

Increasing Federal Minimum Wage

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How does poverty affect the people in the United states today? Poverty is currently affecting 16.3 percent of women, 13.8 of men, and 21 percent of all children in America. The highest poverty rate by race is found among Native Americans, which is 27.6 percent. African americans have 26.2 percent poverty and Hispanics having 23.4 percent. How do these families provide for their children and help them succeed if they can barely even pay the bills? Families all over the […]

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Poverty in America

Poverty has been a ongoing, social issue that throughout the years has changed its meaning. Poverty is defined lacking basic necessities such as water, food, shelter, wealth, etc… About fifty years ago, war was declared on poverty by President Johnson hoping that it would end, but fast forward today, it is one of the biggest social issues America is dealing with. We don’t really know why poverty is still occurring, because the reasons seem to always be changing. The reasons […]

Poverty Life in the Industrial Age

Tenement Housing Tenement housing was cheap, unsanitary, and extremely crowded. They were placed by factories, so the air and water became very polluted and unsafe because of all the fumes and such from the factory. Most didn’t have indoor plumbing or proper ventilation which caused tons of health issues. At night the only light they had was from the streetlights so of course the only level of the housing that had light was the level that was level with the […]

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Ever since the emergence of civilization several hundreds of years ago, social inequality has been a prevalent aspect of many societies across the world. This social structure developed as a result of several factors, amongst them political and economic status in the society. During the early stages of civilization, social and political status was closely related whereby the few powerful political leaders tended to be wealthier than the lesser politically influential majority. Although this dynamic is still prevalent in developing […]

Poverty and Homelessness in America

Poverty and Homelessness in America is a daunting subject which everyone recognizes but do not pay attention to. A homeless person is stereotypically thought to be a person who sleeps at the roadside, begging for money and influenced by drug with dirty ragged clothes and a person who is deprived of basic facilities in his or her life such as; education, electricity, proper clothes, shelter, water with a scarcity of balanced diet is termed as person living under the line […]

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Abstract Haiti is a Latin American country that is often ignored. People do not hear much about it, except if a natural disaster such as the earthquake in 2010 happens. It was once the richest colony of the Caribbean and nowadays is known as the poorest country of the Western Hemisphere. Haiti has been facing a cycle of poverty since it became independent. Haiti’s location and deforestation have contributed to make the situation worse. More than half of the population […]

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Without affordable housing there will be a continuous increase in minorities which also leads to a higher poverty rate. Poverty is the state of being extremely poor. Affordable housing helps decrease poverty in many ways than one. Affordable housing fulfills a human’s basic need for shelter as well as provides privacy for families. Those who receive affordable housing assistance and have children, benefit from better nutrition. Affordable housing would reduce poverty and should be available to those who are in […]

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Essay About Poverty It has existed for many years and still exists today, growing and intensifying. Today poverty remains one of the biggest. In Singer’s essay “The Solution to World poverty,” he suggests the Americans should donate all their money that is not required for necessities to help feed those that are less fortunate. This claim is not true due to the fact that Singer fails to mention how much people struggle and suffer from poverty in America alone, people worked hard for their money; therefore, they deserve to spend their hard-earned money, and how the economy depends on the Americans expenses, so if people don’t spend money on expenses, the economy will crash. Singer begins by comparing Dora, the woman who sells an orphan for a new television set. Singer then introduces Bob and how he chooses to save his expensive Bugatti from a train instead of saving a child’s life, he compares this story to Americans and their lack of donation and aids and how we “too have opportunities to save the lives of children” (2). In his essay, Singer’s aim is to target all Americans, implying that everyone should donate and help. But what he fails to mention is how even in America people also struggle and suffer from poverty. In the journal “Poverty in America: Trends and Explanations,” Hilary W. Hoynes, Marianne E. Page and Ann Huff Stevens state, “The official poverty rate is 12.3 percent, based on the U.S. Census Bureau’s 2017 estimates. That year, an estimated 39.7 million Americans lived in poverty according to the official measure. 18.5 million People reported deep poverty, which means a household income below 50 percent of their 2017 poverty threshold. These individuals represented an estimated 5.7 percent of all Americans and 46.7 percent of those in poverty.” There are so many people in America who are also in need, people that are also suffering. There are without work and without insurance, people whose homes are lose to fires, storms, and bankruptcy. The idea that individuals must help their own first before helping others is reasonable and rational. Though it could be great to help all those in need, American should aid their own first and end poverty in their own country before helping to others for there are times when it is just not possible. 

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  • The problem of Poverty

How would you define poverty? Is poverty an economic or a social problem? As you will learn in this explanation, there are many metrics that governments can use to determine whether someone is living in poverty or not. 

The problem of Poverty

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Do you know what the causes of poverty are and how governments deal with it? Even though it might sound like an easy and straightforward topic, the problem of poverty and its effects on society are complex.

Poverty in the world

A person is experiencing poverty when they are deprived of basic human needs such as food, clothing, shelter, safe drinking water, healthcare and sanitation, and minimal educational opportunities.

Worldwide statistics show that people born into poverty are likely to remain poor especially when the economic system of the country works against them with no access to healthy food, decent housing, and proper sanitation facilities. This is called the cycle of poverty . Therefore, the concept of poverty, whether absolute or relative, isn't simple. It doesn't only involve economics but it is also a social and political problem in nature.

Poverty is a state of an individual who lacks the financial means to cover basic living expenses. Individuals living in poverty don't have access to proper housing, medical care, drinking water, and nutritious food.

What is absolute and relative poverty?

Let’s study briefly the difference between absolute and relative poverty and why it matters.

Absolute poverty

Absolute poverty can be expressed in terms of the status of an individual whose material well-being is below the reasonable minimum level according to the standards of living of the society they belong to. The ‘standard of living’ is measured by the aggregate market value of the private goods and services the person consumes.

Because absolute poverty compares household poverty relative to the economic circumstances of a country, what absolute poverty looks like can vary from country to country.

Individuals living in absolute poverty are not exposed to their country's economic growth . That is to say that even if the economy grows, these people remain in poverty.

Relative poverty

Relative poverty occurs when a household earns less than 50% of the average household income level. These households have some money, but they can only cover the basic necessities and nothing else. This type of poverty is a result of changes in the economic conditions of a country and is essentially a problem of inequality of income distribution.

Relative poverty questions how far a household's standard of living is in comparison to the richest people and is sometimes described as relative deprivation. People in this category are not completely poor but their standard of living is different from the average individual or household in a country.

When you use the relative approach to measure poverty, you also need to explore the concept of persistent poverty. This is when households receive 50-60% less income than the average every few years.

Causes and effects of poverty

Poverty has major consequences for children, their health, and their communities. Poverty is a vicious cycle passed down from generation to generation. It also has a number of negative consequences including illness, hunger, and inadequate sanitation.

The causes of poverty

Let’s explore some causes of poverty.

Wage inequality: people with lower skills and education find it hard to get a job. Even if they do, they are underpaid or exploited. This is harmful in economies that do not have a minimum wage level or unemployment benefits as it can add to the relative poverty index. The increase in more part-time and temporary jobs has decreased the demand and need for full-time jobs with proper skills. Hence, there is a divide in wages.

Unemployment : the rapid demand for more temporary jobs and part-time jobs has left individuals underemployed and has created a limit to potential income-earning opportunities. The changing structure of the UK economy as a result of deindustrialisation has resulted in the loss of jobs. The Covid-19 pandemic has made things worse: in the past years, the country has recorded the highest unemployment levels and the number of furloughed workers. This has resulted in structural unemployment and hysteresis.

Hysteresis occurs when someone is unemployed for a long time. This deteriorates their skills and makes it difficult for the person to find jobs. Ultimately, it leads to long term unemployment.

Economic inactivity: long term unemployment leads to economic inactivity as people who are unemployed would seek more government benefits to sustain themselves. In recent years, the percentage of people relying on state benefits has alarmingly increased, which shows an increase in the relative poverty index.

Regressive taxes: i ndirect taxes have potentially put a higher burden on the poor, therefore causing an increase in income inequality. Although the overall tax burden has remained unchanged, the indirect tax and VAT charged on certain goods such as petrol, alcohol and others extract a higher percentage of income from the low-income earners especially when they are affected by unequal wages.

Pensioners and old age: pensioners are more at risk of relative poverty as they earn significantly less than the average. However, pension poverty has seen a sharp decline due to the rise in the real value of state pension.

Inheritance: this allows wealth inequality to be passed on and multiplied from generation to generation.

Impact and effects of poverty

Poverty is a very dangerous issue in today's society and has effects that impact not only individuals but may result in destabilising whole economies. Some of the effects of poverty on individuals and the economy are listed below:

Health: high rates of poverty lead to lower life expectancy, poorer standards of health, and underdeveloped infants. Malnutrition has been an important issue of increasing poverty that affects children's cognitive development.

Poor sanitation: people living in poverty are not able to access basic safe sanitation, which makes them vulnerable to fatal diseases. This may relatively not impact as much but it shows how it affects their situation.

Education: reports mention people living in poverty often have to choose between eating a meal or getting an education. In certain economies with high poverty index, children are forced to work in order to support the family, which leaves them with poor literacy skills. This limits their ability as adults to escape the vicious poverty cycle.

Economy : without proper education, it is difficult to progress into a higher paying job with good opportunities. This hinders a country’s economic growth and productivity . Most developing countries are shown to have a high poverty rate which limits their rate of economic growth.

Poverty in the UK: an overview

The UK has long struggled with poverty. The last decade of public service cuts has pushed families farther into poverty across the country. Many people's lives were rendered even more difficult by the Covid-19 pandemic, as many were laid off, lost income due to the furlough scheme, and suffered higher living costs while in lockdown.

People on low incomes were anticipating a rough 2021–22 winter due to expected welfare cuts and rising heating prices. This meant that many people would be unable to purchase food and would be forced to rely on food banks . Some people also struggled to pay for household costs, transportation, or internet access.

The problem is not specific to unemployed people. In-work poverty reached a new high right before the pandemic, with experts blaming low wages, high rent, and meager benefit payments for the large number of families living in poverty despite working.

Prior to the Covid-19 pandemic, median household net income was finally increasing steadily again: it increased by 3% in real terms over two years from 2017–18 to 2019–20 according to the Institute for Fiscal Studies.

However, in the 12 years leading up to the previous recession, only 9% growth overall was recorded. If the pre-financial-crisis average of 2.2% annual growth had persisted since 2007–08, median income would have been about 20% greater by 2019–20 than it was.

Significant reductions in unemployment have driven up poor household earnings since 2007–08. The percentage of low-income people who live in a workless home has decreased from 45% in 2007–08 to 33% in 2019–20. This helped to enhance wages at a time when cuts to working-age benefit payments (since 2010) had the opposite effect.

Absolute income poverty has decreased over time, from 22% prior to the Great Recession to 18% in 2019–20. 1 This decrease was seen across all key demographic groups (children, retirees, and working-age non-parents), but it was minor in comparison to previous improvements in absolute poverty. There has also been a recent progressive decrease in material deprivation among children and retirees.

Is poverty an economic or a social problem?

The United Nations has stated that the problem of poverty is an ethical, social, economic and political imperative of mankind. It has suggested that governments across the globe address its root cause and provide solutions to ensure the people have access to productive resources such as credit, education, and a healthy standard of life.

A social perspective throws light on the problem of poverty in all its dimensions. This approach offers a different perspective on poverty eradication. It advocates the empowerment of people living in poverty and their full participation in all aspects of political, social, and economic life while also designing and implementing policies that affect the most vulnerable groups of society.

An integrated strategy towards poverty eradication requires implementing policies geared to a more equitable distribution of wealth , income, and social protection coverage. This social perspective should contribute to the debate on the effectiveness and limitations of current poverty reduction strategies.

From a socio-economic perspective, to understand poverty we require a thorough evaluation of the impact of economic and social policies on the poor and vulnerable groups of society. A Poverty and Social Impact Analysis (PSIA) serves as a tool to assess both economic and social impact reforms on the different social and income groups in society.

Solutions to the problem of poverty

The UN aims to eradicate poverty by 2030 as part of the Sustainable Development Goals and has already set in place a number of economic policies to tackle this problem.

Over the past decade, there has been marked progress in reducing poverty. The year 2015 recorded about 10.1% of the world's population living below the absolute poverty index and this number fell to 9.3% in 2017 according to United Nations Statistic Division.

Although the proportion of people who live on $1.90 has dropped by 52 million, the rate at which poverty has dropped has slowed down. Between 1990 and 2015, the rate at which poverty dropped was one percentage point annually, whereas it was half a percentage point between 2015 and 2017.

Policies to reduce poverty in developed economies

Let’s explore some of the proposed solutions to poverty.

Sustained economic growth

Promoting economic growth will result in more total income and more jobs and would also result in better distribution of income and wealth in society. However, it is also a concern that more economic growth may not lead to a trickle-down effect. Instead, it could widen the relative poverty rate because it benefits the highly skilled and wealthy class more than those at the bottom.

Unemployment reduction

Unemployment is a major cause of poverty leading to more dependents on state benefits. Poverty and unemployment are often geographical problems that affect specific depressed areas of a country. This can be solved through government policies and supply-side policies to build better infrastructure (transport and communication) and free training schemes that provide a stimulus to create new jobs.

Progressive taxes

Increasing progressive tax rates on income will take more income from the high-income earners, allowing for more tax revenue redistribution, and increase welfare benefits for the poor income earners. This can be an effective way to reduce relative poverty as it would allow for economic relief to those who need it the most.

National minimum wage

Another effective way to reduce poverty would be to increase the national minimum wage . This would eliminate the exploitation of those on the lowest incomes , thus reducing wage inequality. In the UK, the number of people working on minimum wage has increased to 2 million in 2020. 1

A potential problem of increasing the minimum wage is that it may cause unemployment due to firms' inability to afford labour. If the firms have monopoly power , then they may be able to afford higher wages.

Policies to reduce poverty in developing economies

To reduce poverty in developing economies, the focus may be on different policies.

Education: greater spending on education and training can enable a higher-skilled workforce.

Foreign aid: aid from developed countries can be used to invest in better health care and education. However, some argue aid can encourage dependency.

Diversification of economy away from agriculture to manufacturing: t his enables greater economic development but may be difficult to do without the right skills and infrastructure.

Poverty tourism and the problem of consent

Poverty tourism or slum tourism is a type of city tourism that involves visiting the impoverished areas of a city.

The purpose of 'ghetto tours' is to create an opportunity to visit 'non-touristy areas' of a country or a city.

Originally these tours were focused on the slums and ghettos of London and Manhattan in the nineteenth century. However, it is now a prominent form of tourism in India, Brazil, South and East Africa, the Philippines, and the United States.

Poverty tours (actual visits as well as literary and cinematic versions) are contentious and have been a topic of debate for long time. The questions and concerns surrounding such tours are mostly based on morals and to what extent is it permissible for the financially privileged to visit the poor people in their habitat.

Some tours and researchers claim these tours aim to educate the tourists about poverty and incentivize for proper actions against poverty to be taken. However, these transactions between poor people and tourists are considered to be prone to the risk of exploitation.

The problem of Poverty - Key takeaways

  • Absolute poverty is when individuals are not able to consume the basic necessities needed to maintain a basic lifestyle.
  • Relative poverty is when households receive 50% less than the average household income level that covers the cost for the basic necessities, however not enough to afford anything above the basics.
  • Poverty is a result of various factors including unemployment, income and wealth inequality, regressive taxes and eventually economic inactivity due to the former reasons.
  • Poverty affects the health, sanitation and educational opportunities for the people which hinders economic development within the country.
  • Poverty can be concluded as a socio-economic problem that has numerous negative impacts on the people and needs integrated strategies and planning in order to eradicate this problem. The UN aims to eradicate poverty by 2030 as part of the Sustainable Development Goals and has already set in place a number of economic policies to tackle this problem.
  • Some policies include sustaining economic growth, increasing employment opportunities, maintaining a minimum wage rate and the re-introduction of progressive taxes.
  • Poverty tourism involves visiting the impoverished slums and ghettos in certain countries and cities, which brings up concerns about the consent and morality of such tours.

1. UK Parliament, National Minimum Wage statistics, https://researchbriefings.files.parliament.uk/documents/CBP-7735/CBP-7735.pdf

Flashcards in The problem of Poverty 15

What are the causes of poverty?

1. Unemployment: a large number of the population are either underemployed or in light of the recent pandemic have been made redundant or furloughed which has led to hysteresis or prolonged unemployment due to obsolete skills of the affected workers.

2. Inequality in wages: lower skills and education limits their opportunities to a better wage and hence, are exploited because there is no such policy to protect the minimum wage rate.

3. Regressive taxes: indirect taxes on certain goods extract a higher percentage of the lower-income earners especially when they are affected by unequal wages. 

4. Economic inactivity: long term unemployment leads to economic inactivity and more people become dependent on state benefits. This shows an increase in the relative poverty index.

How does wage inequality lead to poverty?

People with lower skills and education find it hard to get a matched job, and even if they do, they are underpaid or exploited.  This lowers their purchasing power and leads to more poverty.

How does unemployment lead to poverty?

When an individual is unemployed, they have no source of income. The higher the unemployment rate, the higher the poverty rate.

How do regressive taxes cause an increase in poverty?

Indirect taxes have potentially put a higher burden on the poor, therefore causing an increase in income inequality. Although the overall tax burden has remained unchanged, the indirect tax and VAT charged on certain goods such as petrol, alcohol, etc extract a higher percentage of income. 

Why are pensioners more prone to relative poverty?

Pensioners are more at risk of relative poverty as they earn significantly less than the average. However, pension poverty has seen a sharp decline due to the rise in the real value of state pension. 

What is absolute poverty?

Absolute poverty is when individuals are not able to consume the basic necessities needed to maintain a basic lifestyle. 

The problem of Poverty

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Frequently Asked Questions about The problem of Poverty

3. Regressive taxes: indirect taxes on certain goods extract a higher percentage of the lower-income earners especially when they are affected by unequal wages. 

What is an example of poverty?

An individual who isn't capable of paying his rent or doesn't have a roof over their house.

How to solve the problem of poverty?

Some policy solutions to poverty include sustaining economic growth, increasing employment opportunities, maintaining a minimum wage rate, and the re-introduction of progressive taxes.

Why is poverty the main problem of the world?

Poverty is a very dangerous issue in today's society that may result in destabilizing whole economies by leading in health problems, poor sanitation, lack of education, and lack of efficient human resources for the economy.

What is the social problem of poverty?

Poverty is a socio-economic issue with various negative impacts such as lack of education, cultural and religious discrimination, unemployment, overpopulation, and corruption.

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