Poverty Inequality And Economic Growth

Many individuals all over the world are affected by poverty. In order to completely understand the cause, the effect, and the solution to ending poverty, we must first understand the meaning of poverty. Poverty is the condition where an individual’s basic needs for food, clothing, and shelter are not being met (business dictionary). According to the World Bank Organization, poverty is also the lack of healthcare, education, information, and jobs. There are two general types of poverty: Absolute and Relative. Absolute poverty occurs when individuals cannot obtain adequate resources to support a minimum level of physical health. Relative poverty occurs when individuals do not

Global discourse around the issue of growing inequality and specifically inequality of opportunity has come to the fore in recent years driven by violent public action witnessed in the spring of 2011. A little southern town in Tunisia known as Sidi Bouzoid in December 2010 took global centre stage in the push for economic emancipation. Mohamed Bouazizi, a fruit vendor vented his frustration with the local corrupt municipality by setting himself ablaze which inadvertently sparked a series of protests across the Arab world. Enter the ‘Arab Spring’ led by disenfranchised youth. Researchers in attempts to diagnose the inspiration for the ensuing revolutions hypothesised stark inequality between economic and political elites and the larger population, as the fuel behind the flame.

Poverty is a complex societal issue, no matter how it is defined, it can be agreed that it is an issue that requires everybody’s attention. There are two types of poverty: absolute poverty and relative poverty. Absolute is the deprivation of basic human needs such as food, shelter, clean drinking water, etc. It is measured in relation to the poverty line and serves as a minimum standard below which no one should fall regardless of where they live. Relative poverty on the other hand, is more country specific and is defined as not being able to afford the goods and services needed to fully participate in mainstream society.

Income inequality has been a major concern around the world, and it mainly links to how economic metrics are distributed among individuals in a country. Economists generally categorise these metrics in wealth, income and consumption. Wilkinson and Picket (2009) showed in their studies that inequality has drawbacks that lead to social problems. This is because income inequality and wealth concentration can hinder or delay long term growth. In 2011, International Monetary Fund economists showed that less income inequality increased the duration of countries’ economic growth spells more than free trade, low government corruption, foreign investment or low foreign debt (Berg and Ostry, 2011).

“Income inequality has no necessary connection with poverty, the lack of material resources for a decent life, such as adequate food, shelter, and clothing. A society with great income inequality may have no poor people, and a society with no income inequality may have nothing but poor people” - Robert Higgs. When people think of income inequality they picture poverty and people not having basic necessities. However income inequality is not just a connection to the poor. Income inequality is strongly affected by education attainment, technology, and gender.

Economic and income equality have risen significantly in the United States over the years. In 2013, the top 1% accounted for roughly 20% of America’s income, before taxes. According to the Congressional Budget Office, the average income of the top 1% of America’s population has “grown by 275 percent between 1979 and 2007,” even after taxes. In stark contrast, the middle class has experienced growth of about 40 to 60% and the lowest income population has only experienced growth of about 18%. This resulted in the richest households nearly tripling their share of the country’s income while the majority struggled to keep up.

When discussing ways to combat poverty, it is important to know that poverty is not a singular phenomena. American poverty is particularly unique because it takes shape in two forms, both absolute and relative. This paper will explore the absolute and relative poverty-related problems within America and analyze whether these forms of poverty can be completely solved through economic growth alone.

Currently the United Nations Educational, Scientific, and Cultural Organization defines poverty in two ways. The first is absolute poverty which “measures poverty in relation to the amount of money necessary to meet basic needs such as food, clothing, and shelter” (Poverty). However, this is not comprehensive as it says nothing of the cultural or political context, and hence, “relative poverty defines poverty in relation to the economic status of other members of the society” (Poverty). Ernest-Marie Mbonda describes in her article “Poverty as Violation of Human Rights: Towards a Right to Non-Poverty” that not only does this require that the basic needs of each individual is met, but it also necessitates that the person is able to live in a state with a certain amount of dignity (Mbonda 2). Poverty surely exists everywhere and in every country, but the world’s most destitute populations are concentrated in three regions: Sub-Saharan Africa is home to 46.4% of the world’s poor people, Southern Asia has 29.9%, and Eastern Asia has 16.6% (Pathak 89). This reflects the growing pattern of global inequality, where the developed world and the developing world have very different

Socioeconomic status has been known to have a great effect on people. It’s a well-known fact that poverty and inequality affect the well-being and opportunities for families and their children. It is a common fact that people who have accumulated much wealth occupy the top echelons of society and enjoy almost all privileges brought about by their money and social status while the poor have little or no access to these privileges and are often marginalized in terms of education and social services. There are many forms of socio-economic inequality due to racial discrimination in Canada, for example some of the studies I mentioned in this paper show that a wage gap exists between White Canadians and other visible minorities. Despite pay equity

Ravallion, M. discusses in “The Economics of Poverty: History, Measurement, and Policy” (2016) the changing ratio of those living in absolute and relative poverty. He discusses the phenomenon of economic growth resulting in fewer people living in absolute poverty which relative poverty rates rise.

This definition can be used throughout the world to define absolute poverty because basic needs are the same for all humans. A fixed income is often used to define absolute poverty throughout the world; living on less than $1-2 per day (Palmer, G, 2010). The difficulty with this figure is that in richer countries it will still be impossible to obtain the basic needs on that amount of money whereas in poorer countries it may be possible to live on such a low sum, albeit with great difficulty. This illustrates the problem that placing a figure of money to define poverty creates and shows why the different term, relative poverty, is often used.

Poverty for centuries has been a very severe issue that has troubled many nations while impeding economic developments and progress. Poverty stricken countries are majorly concentrated in the continents of Africa and Asia. Continents like the Americas and Europe have globally been recognized as been wealthier yet still many parts of these ostensible countries face massive cases of poverty. Most at times, countries with high populations owing to high birth rates face the most cases of poverty. The definition of poverty can be boundless in the sense that poverty entails so many subsections as it sometimes gets complicated to group everything under one umbrella. Society tends to focus more on the tangible aspects of poverty because many people associate poverty with lacking money and it makes sense because poverty in terms of lacking money is a major problem affecting almost every country in the world. Even though it is debatable that poverty can be physical, intellectual, spiritual and even emotional, it is best to talk about the lack of money and economic developments in this essay. With reference to the oxford English Dictionary, poverty is state of being extremely poor and the state of being inferior in quality or insufficient in amount. Reflecting on this definition given, I deduced that malnutrition and hunger can define poverty. In the light of this, I think poverty is lacking a comfortable place of shelter, being ill and not having access to a better

The purpose of this review is to investigate the claims made by economists on why poverty is a reoccurring factor in developing areas, and whether or not that particular claim is indeed one of the reasons that these areas suffer from poverty. Poverty traps are one of the prominent factors in the reasoning behind poverty in developing areas; however, there are also many other supporting factors that reinforce poverty. Shepherd (2007) believes there is a point of equilibrium in

“Proponents and analysts of SD [sustainable development] need to clearly reject the attempts to focus on economic growth as a means to poverty removal and/or environmental sustainability” (Lele 1991: 618). Do you agree with this statement? Explain your position.

This paper will discuss poverty, the different types of poverty and their definitions and who is affected by each type of poverty. It will look at the some of the major reasons why poverty exists and what causes poverty, like such things as inequality, stratification and international debt. Some of the impacts of poverty will also be analyzed from a national and global perspective; things like education, literacy rate, and crime. This paper will demonstrate that poverty affects almost everyone in some form or another and exists because those with power and wealth want and need poverty to exist to force a dependence on the wealthy. A few of the main