Description and Effects
- Poverty is the situation when people have less money than is average or necessary for life.
- Causes lack of basic human needs such as fresh water, food and clothing in extreme cases.
- Poverty, alongside the lack of money, can cause insecurity, social exclusion and health issues.
Types of Poverty
Extreme Poverty
- Extreme poverty or absolute poverty is a situation where the minimum requirements for living are not met.
- Causes lack of basic human needs such as fresh water, food and clothing.
- Being in extreme poverty means that someone is living under the international poverty line set by the World Bank.
- An income less than $2.15 a day.
- This value is regularly adjusted with inflation.
- About 10% of the global population is living in extreme poverty.
- The number of people living in extreme poverty has halved in a few decades.
- Extreme poverty has been decreasing ever since the 20th century.
Relative Poverty
- Relative poverty means that a person has a lower standard of living than in the country on average.
- In the EU the level of income has to be less than 60% of the median household income to be considered relatively poor.
- Median is used instead of average as rich households could throw off the average values.
- People living in relative poverty have to spend the majority of their income on housing and have little opportunity to participate in economic, social or cultural activities.
Reasons for Poverty
- History, culture and environment can all affect poverty.
- Colonialism devastated a lot of countries while bringing little good.
- Artificial borders split ethnic groups or bunch them together, causing political instability.
- Rapid population growth.
- One sided (usually agricultural) economy.
- Vulnerable economy that depends on specific goods. These economies can be susceptible to climate change for example.
- Unfair trade policy.
- Weak educational system makes most people poorly educated.
- Weak healthcare causes high mortality rates and thus increased birth rates.
- Corruption and inequality.
- Conflicts can ruin the economy and industry of a country.
- Climate change can make farming and getting water difficult.
- Countries that have been historically poor have a hard time getting out of poverty due to lack of investments.
Solutions to Poverty
- Poverty can be reduced by improving the level of education and women's rights and by preventing conflicts and climate change.
- Improvements in international cooperation.
- Equality, innovation and improvements in industry.