Socio Economic Issue

Topics: Poverty, Economic inequality, Household income in the United States Pages: 26 (5180 words) Published: December 11, 2012


3.1 Overview socio-economic policies – briefly discuss poverty, inequality of income distribution, unemployment and pollution.

➢ Poverty and income distribution are two socio-economic problem faced by Malaysia.

➢ We have other socio-economic problem such as unemployment and distribution.

➢ Poverty still exist in urban, rural, any state, and among ethnic. It is related to underdeveloped area, lack of infrastructure and poor health condition.

3.2 Poverty-definition and incidences

➢ What is poverty?

- Some perceive poverty in terms of extremities which include serious malnutrition, starvation and extreme deprivation of basic necessities of life such as food, shelter and clothing.

- Other view poverty as a state of insufficiency in obtaining basic necessities.

- Basic necessities of life vary according to the level of development, thus their degree of poverty varies.

- Most often, poverty is a situation where the people lack of income needed to acquire the minimum necessities of life. In Malaysia, there are 3 types of poverty :

(i) Absolute poverty
(ii) Relative poverty
(iii) Absolute hardcore poverty

➢ Poverty Line Income (PLI)

- PLI is defined as an income separates those who are poor from those who are not poor. Those earning below that are regarded as being in the state of poverty.

- The PLI is used to count the number of poor households and the incidence of poverty. It takes into account the minimum requirements of a household for three components: food, clothing and footwear and other non-food components such as rent, fuel and power transport and communication, health, education and recreation.

- To reflect changes in the price level (inflation), the poverty line income (PLI) is adjusted annually by taking into account changes in the Consumer Price index (CPI) between Peninsular Malaysia, Sabah and Sarawak. PLI for Sabah and Sarawak are higher than Peninsular Malaysia.

- the higher the PLI, the large portion of poor family will be taken, and this will help more poor family.

➢ Absolute poverty

- The concept of absolute poverty is tied in with poverty line income ((PLI). It is usually measured by the incidence of poverty. A household or an individual is classified as poor if he is unable to obtain or enjoy the minimum basic need of life.

- It is a condition in which the gross monthly income of a household’s insufficient to purchase certain minimum necessities of life (less than PLI). A person is considered poor if his or her consumption or income level falls below some minimum level necessary to meet basic needs.

Table 5.1: PLI and Household sizes for Peninsular Malaysia, Sabah and Sarawak. | |1990 |1993 |1995 | | |RM |HS |RM |HS |RM | |Peninsular Malaysia |425 |460 |493 |510 |529 | |Sabah |601 |633 |667 |685 |690 | |Sarawak |516 |543 |572 |584 |600 |

➢ Relative poverty

- Relative poverty is linked to income inequality between groups. A group whose mean income is less than another group is in relatively poverty. For instance, there are income differences between races, between high and middle income earners, and between rural and urban households even though the rural households mean income exceeds the PLI.

- The saying that ‘poverty cannot be eliminated’ only...
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