Poverty

By: Javier Ng

Poverty is the state of one who lacks a certain

amount of material possessions or money. It refers to the deprivation of basic human

needs, which commonly includes food, water, sanitation, clothing, shelter, health care and education.

What is Poverty?

Health Hunger Housing and utilities Violence

Characteristic

One third of deaths – some 18 million people a year or

50,000 per day – are due to poverty-related causes: in total 270 million people, most of them women and children, have died as a result of poverty since 1990. Those living in poverty suffer disproportionately from hunger or even starvation and disease. Those living in poverty suffer lower life expectancy. According to the World Health Organization, hunger and malnutrition are the single gravest threats to the world's public health and malnutrition is by far the biggest contributor to child mortality, present in half of all cases. Almost 90% of maternal deaths during childbirth occur in Asia and sub-Saharan Africa, compared to less than 1% in the developed world.

Health

Rises in the costs of living making poor people less

able to afford items. Poor people spend a greater portion of their budgets on food than richer people. As a result, poor households and those near the poverty threshold can be particularly vulnerable to increases in food prices. For example, in late 2007 increases in the price of grains led to food riots in some countries. The World Bank warned that 100 million people were at risk of sinking deeper into poverty. Threats to the supply of food may also be caused by drought and the water crisis.

Hunger

Poverty increases the risk of homelessness. Slum-dwellers, who

make up a third of the world's urban population, live in a poverty no better, if not worse, than rural people, who are the traditional focus of the poverty in the developing world, according to a report by the United Nations. There are over 100 million street children worldwide. Most of the children living in institutions around the world have a surviving parent or close relative, and they most commonly entered orphanages because of poverty. Experts and child advocates maintain that orphanages are expensive and often harm children's development by separating them from their families. It is speculated that, flush with money, orphanages are increasing and push for children to join even though demographic data show that even the poorest extended families usually take in children whose parents have died.

Housing and utilities

According to experts, many women become

victims of trafficking, the most common form of which is prostitution, as a means of survival and economic desperation. Deterioration of living conditions can often compel children to abandon school in order to contribute to the family income, putting them at risk of being exploited. For example, in Zimbabwe, a number of girls are turning to prostitution for food to survive because of the increasing poverty.

Violence

Health care and education Controlling overpopulation Increasing personal income Financial services

Reduction of Poverty

Nations do not necessarily need wealth to gain health.

For example, Sri Lanka had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It reduced it to 0.5–0.6% in the 1950s and to .06% today while spending less each year on maternal health because it learned what worked and what did not. Cheap water filters and promoting hand washing are some of the most cost effective health interventions and can cut deaths from diarrhoea and pneumonia. Knowledge on the cost effectiveness of healthcare interventions can be elusive and educational measures have been made to disseminate what works, such as the Copenhagen Consensus.

Healthcare and education

Some argue that overpopulation and lack of

access to birth control leads to population increase to exceed food production and other resources. Empowering women with better education and more control of their lives makes them more successful in bringing down rapid population growth because they have more say in family planning.

Controlling overpopulation

Income grants are argued to be vastly more efficient in

extending basic needs to the poor than in-kind subsidies. In some countries, fuel subsidies are a larger part of the budget than health and education. Additionally, most of the beneficiaries of in-kind subsidies are those who are not poor, such as by those who consume the same subsidized fuel, thus hampering the subsidies' effectiveness . A 2008 study concluded that the money spent on in-kind transfers in India in a year could lift all India’s poor out of poverty for that year if transferred directly. Similarly, the famine relief model increasing used by aid groups calls for giving cash or cash vouchers to the hungry to pay local farmers instead of buying food from donor countries, often required by law, as it wastes money on transport costs.

Increasing personal income

Those in poverty place overwhelming importance on having a safe

place to save money, much more so than receiving loans. Also, a large part of microfinance loans are spent on products that would usually be paid by a checking or savings account. Lack of financial services, as a result of restrictive regulations, such as the requirements for banking licenses, makes it hard for even smaller micro savings programs to reach the poor. Mobile banking utilizes the wide availability of mobile phones to address the problem of the heavy regulation and costly maintenance of saving accounts. Safaricom’s M-Pesa launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits in cash and translate these onto a virtual account on customers' phones. Cash transfers can be done between phones and issued back in cash with a small commission, making remittances safer.

Financial services

In economics, the cycle of poverty is the "set of factors or

events by which poverty, once started, is likely to continue unless there is outside intervention."

The cycle of poverty has been defined as a phenomenon were poor families become trapped in poverty for at least three generations, i.e., for enough time that the family includes no surviving ancestors who possess and can transmit the intellectual, social, and cultural capital necessary to stay out of or escape poverty; in calculations of expected generation length and ancestor lifespan, the lower median age of parents in these families is offset by the shorter lifespans in many of these groups.

Cycle of poverty

Family background Culture of poverty

Cause of cycle

A 2002 research paper titled "The Changing Effect of Family

Background on the Incomes of American Adults" analysed changes in the determinants of family income between 1961 and 1999, focusing on the effect of parental education, occupational rank, income, marital status, family size, region of residence, race, and ethnicity. The paper outlines a simple framework for thinking about how family background affects children’s family and income, summarizes previous research on trends in intergenerational inheritance in the United States, describes the data used as a basis for the research which it describes, discusses trends in inequality among parents, describes how the effects of parental inequality changed between 1961 and 1999, contrasts effects at the top and bottom of the distribution, and discusses whether intergenerational correlations of zero would be desirable.

Family background

Another theory for the perpetual cycle of poverty is that poor people have

their own culture with a different set of values and beliefs which keep them trapped within that cycle generation to generation. This theory has been explored by Ruby K. Payne in her book A Framework for Understanding Poverty. In this book she explains how there is a class system in the United States where there is a wealthy upper class, a middle class, and the working poor class. These classes each have their own set of rules and values which differ from each other. In order to understand the culture of poverty and how the poor class’s set of rules tend to keep them trapped in this continual cycle Payne describes these rules and how they affect the poor class. Time is something that is treated differently by the poor; they generally do not plan ahead but simply live in the moment which keeps them from saving money which will help their children escape poverty. Payne expresses how important it is when working with the poor to understand their unique cultural differences so that one does not get frustrated but instead tries to work with them on their ideologies and help them to understand how they can help themselves and their children escape the cycle.

Culture of poverty

The end