5.3 poverty Flashcards
Define absolute poverty
Inability to afford basic necessities needed to live
How is absolute poverty measured
Number of people below the poverty line - certain minimum income threshold below which people can’t afford the basic necessities
Define relative poverty
The condition of having fewer resources than others in the same society
How is relative poverty mesaured for one household/person
the extent to which a person’s or household’s financial resources fall below the average income level in the economy
How is relative poverty a measurement of income inequality
high relative poverty should indicate a higher income inequality
Causes of poverty
Unemployment
Low education levels
The size of family
Age
Poor government support
Poor health
Overpopulation
Minority group/ethnicity/migrants
Gender
Explain why size of family is a cause of poverty
more family members with only a few people earning, means more costs of living, pulling the family into poverty if they’re not earning much.
Explain why age is a cause of poverty
older people are likely to have more health problems and be less suitable for further employment, causing poverty. Young people are still employable and may find ways to earn an income.
Explain why overpopulation is a cuase of poverty
high population density will put pressure on scarce resource and the economy may not be able to produce and provide for everyone, causing poverty.
What are the policies to alleviate poverty
Expansionary fiscal and monetary policies - reduce unemployment
Progressive taxes - income redistribution
Minimum wage - ensure people are above poverty line
Increase quality and quantity of educaiton
Overseas aid - foreign govts and agencies. Includes food, technological, loans, debt relief, etc.
Removing overseas trade barriers to create jobs
Why is food aid needed
problems with it
Poor farming methods produce insufficient food
Free food supplies can force farmers out of business
Why is financial aid needed
problems
LEDCs lack capital to invest in an industrial base, modern machinery and infrastructure
problem: Loans have to be repaid sometimes with interest
Why is technological aid needed
problem
LEDCs lack access to modern machinery, equipment and knowledge of modern production methods
problem Most people lack skill to use modern technology;
Why is Debt relief needed
problems
Relieving LEDCs of debt will allow them to use money for economic development instead
May encourage LEDCs to borrow more money or money may be misused by corrupt governments
General problems with overseas aid
Too many strings and conditions attatched - govts who give aid often want the country to employ their firms and experts for various tasks (building new infratstructure, operate and maintain advance equipment provided)
this limits employment for the country itself.
Many LEDCs are poorly managed and do not have the skills to invest financial aid wisely. Aid providers also generally find it difficult to monitor how money is being used
Governments may be corrupt and overseas aid may be misused to live lavish lifestyles by government officials.
