The world today has two sides. On one, the rich of the World, earn millions of dollars in a year. On the other, people in countries like Somalia cannot even get access to two meals a day. Poverty is evident from countries like the U.S. itself but goes into extreme proportions in other areas of the world. The gap between the have and have not’s have been increasing and a reason is perhaps that’s how the present economic system is meant to work. In the last few decades, most of the U.S. population have seen their money falling while the 10% have got extremely rich. Between 2000 to 2012 itself, the poverty percentage has increased from 12.2 per cent to 15.9 per cent, according to the Census carried out. More than 3 billion people live at around just $2.50 per day.
What is Poverty?
Different countries define property in their own way. The U.S. defines property by its Property Threshold. It’s been in existence for over five decades. U.K. and other European countries have the system of Property Threshold as well where they look at 60% of the median household income to determine poverty. The estimate is that any earning less than 60% of the median household income would be facing hardships.
Other countries like India adopted a much more stringent definition of poverty, where only those earning below as less as $1.25 a day were considered to be poor, the nature of poverty line denoting those who cannot even meet their basic sustenance needs. More worrying is the fact that countries seem to define property in such a way that makes the poor look better than they actually are, perhaps a reason that the countries want to hide the number of poor they have and yet, the number keeps on increasing with time.
What Causes Poverty?
There are limited resources on the planet. And then there is capitalism. The fact that capitalism is a contributor to poverty has been discussed for long. Capitalism focuses on the greed of a few versus the society at large. The fact thus means that the groups who can weed out money do so, at the expense of those who cannot. The biggest myth of capitalism is perhaps that the money will eventually trickle down to the majority. Employers pay low to their employees to increase their profits.
The other reason that can cause poverty is unfair trade itself. Countries look forward to trading with more and more countries. While this can prove beneficial for some countries, it can be the opposite for others. Let’s say Country A is great at producing a particular set of goods that Country B needs. Country B will have to buy those goods even at a trade deficit and without the right policies, can be detrimental to Country B. Right and fair trade policies are a must so that there is a level playing field. True, trade can be of interest to countries as it helps bring in the investment needed to boost an economy. Asian countries like India and China are focusing more on trade to boost their economy, possible in the wake of globalization. On the other hand, countries like Somalia that have not been able to integrate themselves as much into the world economy haven’t benefitted with trade and instead lost out.
In addition, free trade hasn’t in anyway reduced the poverty inequality that we see. Instead, it has just enabled two countries to do trade with each other. This is because people of the countries who do trade with each other are from the well off class or those who have money. People or corporations only trade with each other when they have money and though it can aid in adding in to the nations wealth, the fact remains that most of the money goes only into the pockets of a few. The only exception that we see is that of China, where regulations are strict and the Government is anything but capitalistic in nature.
The per capita income of many countries including developing countries like India remains extremely low. Without access to resources and basic human necessities like shelter and clothing, and Government policies unable to let people come out of the poverty rut, people often find it hard to survive.
Another interesting fact is that the rich are buying more and more of services. For instance, if there are 100 unites available, one rich person can buy in ten units. This means that the other 90 remain to be purchased by others and according to the supply and demand principle, the cost of the 90 will shoot up. This is the reason that the value of money for the poor is decreasing with time.
Poverty is an ever-growing loop. In other words, if you fall below the poverty threshold, it’s harder to climb up the ladder. People need money for education and living and it’s just that bit harder to do everything when you’re out of money. A family of four can live on just $23,000 a year and not be poor and there can be higher education costs of $50,000 a year alone that you need to complete to get a better job. There seems to be very less ways by which you can climb back the ladder once you’ve fallen into the trap. Government subsidies are the best ways that you can sustain yourself but they aren’t enough to let you have the money to do what you need.
What do we need to do?
The time has come for a radical change. The way we look at money needs to be changed and the betterment of the society at large needs to be put into perspective. The United Nations Development Report, released in July 24 last year stated that as many as 2.2 billion people are either living or on the verge of living in poverty. It’s time to accept that somewhere we’ve been going wrong to focus on what we can do right.
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About the Author
He is the founder of Icy Tales, and an entrepreneur by heart. While he is not freelancing for organizations across the globe, he is taking care of the daily affairs here. With a law degree in his bag, along with Majors in Economics and Minors in Sociology and Political Science, he loves writing in different niche.
He mostly writes on the tech and business content being associated with a number of companies but contributes to a number of magazines and online sites from time to time. You can know more about him on his LinkedIn profile — https://www.linkedin.com/in/soubhikchakrabarti. Add him on www.facebook.com/soubhik.chakrabarti
References:
http://www.poverty.ac.uk/definitions-poverty/income-threshold-approach
http://rdwolff.com/content/capitalism-and-poverty
http://www.occasionalplanet.org/2014/03/06/is-capitalism-really-the-best-economic-system/
https://www.fas.org/sgp/crs/misc/RL33069.pdf
https://www.census.gov/prod/2013pubs/acsbr12-01.pdf
https://www.wto.org/english/news_e/pres00_e/pov3_e.pdf
http://repository.cmu.edu/cgi/viewcontent.cgi?article=1354&context=philosophy
http://rdwolff.com/content/capitalism-and-poverty
Source: https://www.icytales.com/special-why-do-we-live-in-poverty-in-a-world-of-plenty/
