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What Is Poverty, And How Can We Fight It?

Economy
What Is Poverty, And How Can We Fight It?

A recent calculation released by Oxfam found that the richest 85 people in the world have as much wealth as the poorest 50 percent of the population. Not only that, but the richest one percent of the world has a combined total wealth of $110 trillion, or 65 times that of the bottom 50 percent. At least 80% of humanity lives on less than $10 a day. Some in poverty, some close to it. All of these numbers lead to a lot of social and economic debate, but they never really explain what poverty is, or what it is like to live in poverty.

Most of us certainly have a good idea of what poverty is, but it’s important to note that the “bottom” 50% is not necessarily only composed of people from developing nations. Poverty exists everywhere, and no country, no matter how modern and advanced, is free from it. No matter how extensive of a welfare net a state provides, there is going to be some poverty, or some people who live ‘below the poverty line,’ as we often say. But what does that mean? We say ‘below the poverty line’, but someone under the line in America surely isn’t as poor as the destitute of sub-Saharan Africa.

To that end, this article is meant to help us understand what ‘the poverty line’ is, and what it means to live below it. We’ll also look at some ways governments seek to battle poverty in a place often thought free from it: the developed world. Welfare programs and social securities are political and economic issues that could easily fill their own website, so we’re going to put that on hold and focus on just understanding poverty itself. We’ll leave the useless debates to traditional media.

What Is Poverty?

The term ‘poverty’ is a bit tricky because its definition really depends on where you are and what’s regarded as poor in that particular area, relative to culture, other people, and other factors. For example, people living in rundown homes on the outskirts of a major metropolis like New York may be poor in comparison to their suburban neighbours, but compared to the destitute masses living in the slums of developing nations, their lot might not be as bad.

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Whatever poor is ‘by definition’, we tend to stick to the general rule of thumb that poverty is the inability to act freely (at least most of the time) because of a lack of resources or opportunity to get those resources. What this means is that someone working two jobs around the clock in a city to pay for food and rent, and someone starving in India because of their low wages (or lack of wages) are both technically ‘poor’ because they can’t freely do what they want.

While both of those cases fall under the term ‘poverty’, it seems pretty obvious that the second one is far worse. That would be an example of “absolute poverty”, or the real lack of even the most basic of human needs: food, water, shelter, basic education, sanitation, and so on. Living in absolute poverty means you are just barely scraping through life.

According to the World Bank, although poverty is slowly going down, the number of people living below $1.25 (which is the new “less than a dollar a day”) poverty line in 2015 will be roughly one billion. This means that the student living in an apartment with three roommates, scraping together meals from noodles and peanut butter so that they can pay for their beer may feel, like, totally broke, but in perspective they don’t really qualify as poor. They’re actually very well off. Poverty isn’t a tight budgets; it’s a lack of freedom from not having enough.

Measurement: The Poverty Line

We’ve been throwing around the terms poverty line and absolute poverty, but how can we tell when someone has so little that they aren’t free? These sorts of measurements need some place to start, and based on that definition, we usually turn to the prices for basic needs. So for example: to create a poverty line, economists will determine how much it costs to buy the average number of daily calories a person needs in a given place. This price is now the poverty line, if someone is below it, we say they can’t afford to eat and so are living in poverty. The average poverty line in developing countries is about $2.

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Naturally, because things become more expensive and the value of money shifts, the monetary value that the poverty line represents also changes with time, place, and currency. For example, the poverty line for food in the US is $4.91, while the same line is $10.25 in Switzerland. This means that someone below the poverty line in Switzerland could be above the poverty line in the USA. Of course, it’s important that we don’t start comparing how badly off people are in this way because the person living below the poverty line in Switzerland is not ‘better off’ than the person is the USA – starving is starving, no matter how much money is in your pocket.

Where It Is And How We Deal With It

Before anything can be done about poverty, it helps to know where it exists. It really shouldn’t come as much of a surprise to most of us that poverty hits hardest in developing nations without modern economies, governments, or laws. The World Bank estimates that almost half of people living on less than $1.25 a day are in Sub-Saharan Africa. This can be just as hard as pinpointing a single poverty line figure as well, because it is hard to compare who has it worse and where. Poverty is hardly limited to just the developing world, as any resident of a city can attest, but it goes without saying that we in the developed world are generally better off.

How Poverty Is Fought Internationally

Once we know what poverty is and where it is, the only thing left to do, hopefully, is get rid of it. Because living below the line pretty much removes basic dignity, this is a frequent topic of debate in political circles. Some solutions seek to eradicate poverty entirely by changing the conditions in which it forms. On one popular, far end of the spectrum, many propose eliminating the system that breeds the inequality fueling poverty: capitalism. Far on the other side are arguments that capitalism merely needs to be more unrestricted and the money will find its way to those who need it.

These are hot button topics that often get far too emotional. A less controversial suggestion is that those who have the resources simply ought to help those who don’t. This welfare/charity path can be very complicated logistically, and often comes with some stigma, but at its core is quite simple and generally effective at reducing the worst effects of poverty, at least for a time. Organizations that seek to fight the effects of poverty provide healthcare, housing, and food subsidies to help those in low income situations at least stay above the poverty line. These don’t eradicate poverty, but at least they let people live without having to worry over food and shelter.

How Poverty Is Fought At Home

Developed countries aren’t immune from poverty. A good example of this is the very recent spike in the number of people in the US reliant on government food programs to stay above the poverty line. The global recession has led to huge demand for welfare programs, leading to the overhaul of the Food Stamp Program and creation of the Supplemental Nutrition Assistance Program (SNAP). The inefficiency and stigmas attached to the Food Stamp Program, in addition to the pressing need for greater efficiency as the recession hit, forced a change and SNAP is now the largest program of its kind.

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Since 2008, SNAP has used the new “electronic benefit transfer” (EBT) instead of traditional, physical food stamps. The EBT is like a bank card which is filled monthly based on the user’s needs (number of dependents, total income, household expenditures, etc.). When purchasing food, the user simply swipes their card, inputs a PIN, and the amount is removed from a monthly allowance.

The system is far from ideal, but has helped millions of Americans stay above the poverty line. In a perfect world, there would be no need for SNAP, and the problem remains that truly destitute countries like those in the developing world hardly have the means to implement such complex, modern systems. At the end of the day, 85 people have as much wealth as the bottom 3.5 billion. Without pointing fingers, there may be a clue to a solution in there somewhere.

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