Poverty
Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. It can have diverse environmental, legal, social, economic, and political causes and effects.[1] When evaluating poverty in statistics or economics there are two main measures: absolute poverty which compares income against the amount needed to meet basic personal needs, such as food, clothing, and shelter;[2] secondly, relative poverty measures when a person cannot meet a minimum level of living standards, compared to others in the same time and place. The definition of relative poverty varies from one country to another, or from one society to another.[2]
Statistically, as of 2019[update], most of the world's population live in poverty: in PPP dollars, 85% of people live on less than $30 per day, two-thirds live on less than $10 per day, and 10% live on less than $1.90 per day.[3] According to the World Bank Group in 2020, more than 40% of the poor live in conflict-affected countries.[4] Even when countries experience economic development, the poorest citizens of middle-income countries frequently do not gain an adequate share of their countries' increased wealth to leave poverty.[5][page needed] Governments and non-governmental organizations have experimented with a number of different policies and programs for poverty alleviation, such as electrification in rural areas or housing first policies in urban areas. The international policy frameworks for poverty alleviation, established by the United Nations in 2015, are summarized in Sustainable Development Goal 1: "No Poverty".
Social forces, such as gender, disability, race and ethnicity, can exacerbate issues of poverty—with women, children and minorities frequently bearing unequal burdens of poverty. Moreover, impoverished individuals are more vulnerable to the effects of other social issues, such as the environmental effects of industry or the impacts of climate change or other natural disasters or extreme weather events. Poverty can also make other social problems worse; economic pressures on impoverished communities frequently play a part in deforestation, biodiversity loss and ethnic conflict. For this reason, the UN's Sustainable Development Goals and other international policy programs, such as the international recovery from COVID-19, emphasize the connection of poverty alleviation with other societal goals.[6]
Definitions and etymology
The word poverty comes from the old (Norman) French word poverté (Modern French: pauvreté), from Latin paupertās from pauper (poor).[7][page needed]
There are several definitions of poverty depending on the context of the situation it is placed in. It usually references a state or condition in which a person or community lacks the financial resources and essentials for a basic standard of living.
United Nations: Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one's food or a job to earn one's living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.[8]
World Bank: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one's life.[9]
European Union (EU): The European Union's definition of poverty is significantly different from definitions in other parts of the world, and consequently policy measures introduced to combat poverty in EU countries also differ from measures in other nations. Poverty is measured in relation to the distribution of income in each member country using relative income poverty lines:[10] an EEC Council Decision in 1984 stated that for EEC purposes, "the poor" should be taken to "mean persons, families and groups of persons whose resources (material, cultural and social) are so limited as to exclude them from the minimum acceptable way of life in the Member States in which they live".[11][a] Relative-income poverty rates in the EU are compiled by the Eurostat, in charge of coordinating, gathering, and disseminating member country statistics using European Union Survey of Income and Living Conditions (EU-SILC) surveys.[10]
Measuring poverty
Absolute poverty
Absolute poverty, often synonymous with 'extreme poverty' or 'abject poverty', refers to a set standard which is consistent over time and between countries. This set standard usually refers to "a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."[15][16][17] Having an income below the poverty line, which is defined as an income needed to purchase basic needs, is also referred to as primary poverty.
The "dollar a day" poverty line was first introduced in 1990 as a measure to meet such standards of living. For nations that do not use the US dollar as currency, "dollar a day" does not translate to living a day on the equivalent amount of local currency as determined by the exchange rate.[18] Rather, it is determined by the purchasing power parity rate, which would look at how much local currency is needed to buy the same things that a dollar could buy in the United States.[18] Usually, this would translate to having less local currency than if the exchange rate were used.[18]
From 1993 through 2005, the World Bank defined absolute poverty as $1.08 a day on such a purchasing power parity basis, after adjusting for inflation to the 1993 US dollar[19] In 2009, it was updated as $1.25 a day (equivalent to $1.00 a day in 1996 US prices)[20][21] and in 2015, it was updated as living on less than US$1.90 per day,[22] and moderate poverty as less than $2 or $5 a day.[23] Similarly, 'ultra-poverty' is defined by a 2007 report issued by International Food Policy Research Institute as living on less than 54 cents per day.[24] The poverty line threshold of $1.90 per day, as set by the World Bank, is controversial. Each nation has its own threshold for absolute poverty line; in the United States, for example, the absolute poverty line was US$15.15 per day in 2010 (US$22,000 per year for a family of four),[25] while in India it was US$1.0 per day[26] and in China the absolute poverty line was US$0.55 per day, each on PPP basis in 2010.[27] These different poverty lines make data comparison between each nation's official reports qualitatively difficult. Some scholars argue that the World Bank method sets the bar too high,[28] others argue it is too low.
There is disagreement among experts as to what would be considered a realistic poverty rate with one considering it "an inaccurately measured and arbitrary cut off".[29] Some contend that a higher poverty line is needed, such as a minimum of $7.40 or even $10 to $15 a day. They argue that these levels are a minimum for basic needs and to achieve normal life expectancy.[30]
One estimate places the true scale of poverty much higher than the World Bank, with an estimated 4.3 billion people (59% of the world's population) living with less than $5 a day and unable to meet basic needs adequately.[31] Philip Alston, a UN special rapporteur on extreme poverty and human rights, stated the World Bank's international poverty line of $1.90 a day is fundamentally flawed, and has allowed for "self congratulatory" triumphalism in the fight against extreme global poverty, which he asserts is "completely off track" and that nearly half of the global population, or 3.4 billion, lives on less than $5.50 a day, and this number has barely moved since 1990.[32] Still others suggest that poverty line misleads because many live on far less than that line.[26][33][34]
Other measures of absolute poverty without using a certain dollar amount include the standard defined as receiving less than 80% of minimum caloric intake whilst spending more than 80% of income on food, sometimes called ultra-poverty.[35]
Relative poverty
Relative poverty views poverty as socially defined and dependent on social context. It is argued that the needs considered fundamental is not an objective measure[36][37] and could change with the custom of society.[38][36] For example, a person who cannot afford housing better than a small tent in an open field would be said to live in relative poverty if almost everyone else in that area lives in modern brick homes, but not if everyone else also lives in small tents in open fields (for example, in a nomadic tribe). Since richer nations would have lower levels of absolute poverty,[39][40] relative poverty is considered the "most useful measure for ascertaining poverty rates in wealthy developed nations"[41][42][43][44][45] and is the "most prominent and most-quoted of the EU social inclusion indicators".[46]
Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income. This is a calculation of the percentage of people whose family household income falls below the Poverty Line. The main poverty line used in the Organisation of Economic Cooperation and Development (OECD) and the European Union (EU) is based on "economic distance", a level of income set at 60% of the median household income.[47] The United States federal government typically regulates this line to three times the cost of an adequate meal.[48]
There are several other different income inequality metrics, for example, the Gini coefficient or the Theil index.
Other aspects
.png)
≥ 0.900 0.850–0.899 0.800–0.849 0.750–0.799 0.700–0.749 |
0.650–0.699 0.600–0.649 0.550–0.599 0.500–0.549 0.450–0.499 |
0.400–0.449 ≤ 0.399 Data unavailable |
Rather than income, poverty is also measured through individual basic needs at a time. Life expectancy has greatly increased in the developing world since World War II and is starting to close the gap to the developed world.[50] Child mortality has decreased in every developing region of the world.[51] The proportion of the world's population living in countries where the daily per-capita supply of food energy is less than 9,200 kilojoules (2,200 kilocalories) decreased from 56% in the mid-1960s to below 10% by the 1990s. Similar trends can be observed for literacy, access to clean water and electricity and basic consumer items.[52]
Poverty may also be understood as an aspect of unequal social status and inequitable social relationships, experienced as social exclusion, dependency, and diminished capacity to participate, or to develop meaningful connections with other people in society.[53][54][55] Such social exclusion can be minimized through strengthened connections with the mainstream, such as through the provision of relational care to those who are experiencing poverty. The World Bank's "Voices of the Poor", based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty. These include abuse by those in power, dis-empowering institutions, excluded locations, gender relationships, lack of security, limited capabilities, physical limitations, precarious livelihoods, problems in social relationships, weak community organizations and discrimination. Analysis of social aspects of poverty links conditions of scarcity to aspects of the distribution of resources and power in a society and recognizes that poverty may be a function of the diminished "capability" of people to live the kinds of lives they value. The social aspects of poverty may include lack of access to information, education, health care, social capital or political power.[56][57]
Relational poverty is the idea that societal poverty exists if there is a lack of human relationships. Relational poverty can be the result of a lost contact number, lack of phone ownership, isolation, or deliberate severing of ties with an individual or community. Relational poverty is also understood "by the social institutions that organize those relationships...poverty is importantly the result of the different terms and conditions on which people are included in social life".[58]
In the United Kingdom, the second Cameron ministry came under attack for its redefinition of poverty; poverty is no longer classified by a family's income, but as to whether a family is in work or not.[59] Considering that two-thirds of people who found work were accepting wages that are below the living wage (according to the Joseph Rowntree Foundation[60]) this has been criticised by anti-poverty campaigners as an unrealistic view of poverty in the United Kingdom.[59]
Secondary poverty
Secondary poverty refers to those that earn enough income to not be impoverished, but who spend their income on unnecessary pleasures, such as alcoholic beverages, thus placing them below it in practice.[61] In 18th- and 19th-century Great Britain, the practice of temperance among Methodists, as well as their rejection of gambling, allowed them to eliminate secondary poverty and accumulate capital.[62] Factors that contribute to secondary poverty includes but are not limited to: alcohol, gambling, tobacco and drugs. Substance abuse means that the poor typically spend about 2% of their income educating their children but larger percentages of alcohol and tobacco (for example, 6% in Indonesia and 8% in Mexico as of 2006).[63][needs update]
Variability
Poverty levels are snapshot pictures in time that omits the transitional dynamics between levels. Mobility statistics supply additional information about the fraction who leave the poverty level. For example, one study finds that in a sixteen-year period (1975 to 1991 in the US) only 5% of those in the lower fifth of the income level were still at that level, while 95% transitioned to a higher income category.[64] Poverty levels can remain the same while those who rise out of poverty are replaced by others. The transient poor and chronic poor differ in each society. In a nine-year period ending in 2005 for the US, 50% of the poorest quintile transitioned to a higher quintile.[65]
Global prevalence
According to Chen and Ravallion, about 1.76 billion people in the developing world lived above $1.25 per day and 1.9 billion people lived below $1.25 per day in 1981. In 2005, about 4.09 billion people in the developing world lived above $1.25 per day and 1.4 billion people lived below $1.25 per day (both 1981 and 2005 data are on inflation adjusted basis).[66][67] The share of the world's population living in absolute poverty fell from 43% in 1981 to 14% in 2011.[68] The absolute number of people in poverty fell from 1.95 billion in 1981 to 1.01 billion in 2011.[69] The economist Max Roser estimates that the number of people in poverty is therefore roughly the same as 200 years ago.[69] This is the case since the world population was just little more than 1 billion in 1820 and the majority (84% to 94%)[70] of the world population was living in poverty.
According to one study, the percentage of the world population in hunger and poverty fell in absolute percentage terms from 50% in 1950 to 30% in 1970.[71] According to another study the number of people worldwide living in absolute poverty fell from 1.18 billion in 1950 to 1.04 billion in 1977.[72] According to another study, the number of people worldwide estimated to be starving fell from almost 920 million in 1971 to below 797 million in 1997.[73] The proportion of the developing world's population living in extreme economic poverty fell from 28% in 1990 to 21% in 2001.[68] Most of this improvement has occurred in East and South Asia.[74]
In 1963, the Third World Food Survey[75] estimated that (at the end of the 1950s[76]) 10-15% of the world's population were undernourished and that up to half suffered from general hunger and malnutrition.[77] In subsequent decades, however, estimated levels of malnutrition and undernourishment steadily fell. From 1970 to 1990, the percentage of the world's population estimated to be suffering from malnutrition fell from 24.8% to 15.9.%.[78] From 1970 to 2015, the percentage of people in developing nations estimated to be undernourished fell from 34.75% to 12.90%.[79]
In 2012 it was estimated that, using a poverty line of $1.25 a day, 1.2 billion people lived in poverty.[80] Given the current economic model, built on GDP, it would take 100 years to bring the world's poorest up to the poverty line of $1.25 a day.[81] UNICEF estimates half the world's children (or 1.1 billion) live in poverty.[82] The World Bank forecasted in 2015 that 702.1 million people were living in extreme poverty, down from 1.75 billion in 1990.[83] Extreme poverty is observed in all parts of the world, including developed economies.[84][85] Of the 2015 population, about 347.1 million people (35.2%) lived in Sub-Saharan Africa and 231.3 million (13.5%) lived in South Asia. 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.[86]
During the 2013 to 2015 period, the