Poverty reduction requires us to be clear about what we mean by poverty, who are the poor and what is the best way to help people escape poverty. Discuss with reference to the multi-dimensionality of poverty?
Poverty is a term used to refer to the poorer people of society; local, national and global, whether this is relative poverty, where people in that society suffer due to the cost of living and lack of income or absolute poverty, where people struggle with acquiring even the most basic of needs. There is huge debate about what is regarded as poverty as within the context of multi-dimensionality of poverty, people may be regarded as relatively poor in one country but relatively wealthy in other countries. Defining who is poor and who is not poor is no easy task. (Worldpoverty, 2010) tells us that originally, everyone was poor, but with technological developments, some people gained wealth, which was not being distributed effectively, which caused a growing division between the wealthy and the poor. However, the main issue is that the countries that have the wealth, relative and absolute poverty still exist. Taking the USA as an example, it is estimated that despite being one of the richest countries in the world, up to 25% of the population are considered to be in relative poverty because they do not have the same level of wealth as others. Out of the 25%, a further 3% are estimated to be in absolute poverty, meaning they cannot afford even the most basic of goods, such as a roof over their heads or food (Worldpoverty, 2010). Those in poverty in the USA are proportionately poor to those in the same situation as people who live within less developed countries, not only because they are the poorest, but because of the cost of living in different countries differs greatly (Davis, 2008). Despite this, people who reside in the USA are still considered to be richer than people in some African countries, where people live on less than $1USD a day (UNDP, 2008). This informs us that people in absolute poverty in more developed countries are arguably better off than people in less developed countries; this adds to the varying dimensions about what people regard as poverty. Although not an official term for this situation, these people are living in True Poverty, where they are the poorest people in the world and are not better off than anyone else in the world. We can see that when comparing the poor in different countries although some may earn more than others, the cost of living has to be taken into account, which is why it is harder to escape poverty in richer countries due to the high costs of basic goods. Nevertheless, given this variability, clearly, this is just one element of what is acknowledged as part of the multidimensionality of poverty.
We already know that people in poverty do not have the means to purchase all the basic goods for a suitable lifestyle or cannot afford even the basics, but how do we actually determine the point where someone is in poverty and how is it shown. This can mainly be shown in the form of economic modelling. (Sloman & Wride, 2009) demonstrates the Lorenz curve and the Gini-Coefficient to discuss the definition of poverty on a national scale. The ideal situation would be where everyone has the same level of wealth, which would represent the perfect income distribution line (45 degrees). However, this will never be the case, as there will be some people with more wealth than others and therefore it would be highly impractical since some people will inevitably consume more than others. The Lorenz curve shows the distribution of the national income as a proportion of between the rich and the poor. Because a relatively low proportion of rich people have more of the national wealth, this makes the curve steep towards the end. This results in a smaller amount of national wealth being distributed between the poorer people. The Gini-Coefficient shows the inequality between the Lorenz...
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