Poverty and Inequality Flashcards
What did Oxfam report?
Just 8 men own the same wealth as poorer half of world population.
Absolute poverty
Earning less than $1.90 a day. Being unable to afford basic necessities e.g food water shelter
Relative poverty
Earning less than a particular % of a country’s average income. In the UK it is earning less than 60% of a average
Causes of poverty
Infrastructure
Education
Aid
Poor infrastructure as a cause of poverty and example
Poor infrastructure>Geographical immobility of labour>Decreased productivity>Incomes remain low>Poverty increases
South Korea in 1960s, poor land couldn’t grow as many crops, poor infrastructure meant harder to sell, no roads, had to cross bridges etc
Poor education as a cause of poverty
Low human capital>Productivity>Incomes fall>Poverty increases.
Poor health as a cause of poverty
Low productivity
How much did Somalia receive in aid, and what % went to corruption? And what year
$1.3bn. 70% went missing in 2011
Income inequality
Income inequality occurs when the best paid workers take home more income than the rest of a country’s workers
What are the 2 axis for the lorenz curve
X-cumulative % of population
Y-cumulative % of income
Factors influencing inequality
Minimum wage rate
Assortative mating
Minimum wage rate on inequality
The introduction of a minimum wage will increase wage costs or a business. This will increase their profits, which may mean that the manager will receive a lower salary. This will then decrease income inequality.
Assortative mating
Assortative mating is when talented, successful and women get married to and have children with talented, successful, rich men or women. The children are likely to receive an education and lifestyle that sets them up to be even more talented, successful and rich than their parents.
Social benefits and tax
Progressive tax means that the rich pay a higher percentage of their income in tax and the poor pay a lower percentage of their income in tax. This makes the rich poorer and the poor richer and so it will increase income equality. Revenue can be spent on benefits to help poor, decreasing inequality further
Social benefits and tax
Progressive tax means that the rich pay a higher percentage of their income in tax and the poor pay a lower percentage of their income in tax. This makes the rich poorer and the poor richer and so it will increase income equality.
