Chapter
POVERTY AND INEQUALITY
Learning Outcomes:
1. Define poverty.
2. Identify and explain the different approaches in understanding poverty.
3. Discuss what it means by culture of poverty.
4. Identify the different ways of measuring poverty and inequality.
According to the noble Prize winner South African leader, Nelson Mandela-
“Poverty is not natural, it is manmade.”
Do you AGREE or DISAGREE with this statement?
Lesson 1: Definition of Poverty
The definition of poverty and how it is measured has undergone different perspectives through
the years (Kablin, 2001).
Income Levels. In 1960’s poverty was tied to the idea of growth of the economy. Accordingly, it
was measured in terms of the level of income – per capita incomes as well as GNP.
Relative Deprivation. In the 1970s, poverty was seen against the concept of relative deprivation.
Poverty was the chronic inability to meet the prevailing standard of living. Poverty is a deprivation of
essential assets and opportunities to which every human should be entitled.
Powerlessness, vulnerability. In the1980s, the concepts of powerlessness and isolation were
added to the dimensions of poverty. Hence, there was a need to provide opportunities for participation by
the poor. A concept related to powerlessness was vulnerability.
The concept of vulnerability draws attention not only to those who are actually poor but also to
those who are potentially poor, meaning they are at risk of falling into poverty as well as to the high-risk
poor – the poor people who will sink into deeper poverty when crisis occurs.
Feminization of poverty. The 1980s also focused attention on gender issues of poverty. In fact,
the UNDP described poverty as having “a woman’s face”: of 1.3 billion people in the world living in
poverty, 70 percent are women. Similarly, the phrase, “feminization of poverty’ gave an importance to the
trend that women experienced higher poverty incidence and that their experienced poverty was more
severe than the men’s experience.
Well-being. In the 1990’s poverty was further redefined to include the concept of well-being and to
how the poor viewed their situation. The concept of social exclusion was also introduced to capture not
only the aspect of deprivation but also the process of how it occurred (Lumavas-Tio,2011).
Poverty is a state or condition in which a person or community lacks the financial resources and
essentials for a minimum standard of living. Poverty means that the income level from employment is so
low that basic human needs can't be met (https://www.investopedia.com).
The World Bank Organization describes poverty in this way:
“Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a
doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having
a job, is fear for the future, living one day at a time.
Poverty has many faces, changing from place to place and across time, and has been described in
many ways. Most often, poverty is a situation people want to escape. So poverty is a call to action
-- for the poor and the wealthy alike -- a call to change the world so that many more may have
enough to eat, adequate shelter, access to education and health, protection from violence, and a
voice in what happens in their communities.”
Lesson 2: Approaches to Understanding Poverty
The prevailing literature on poverty causation seems to divide broadly into two camps. There are
researchers who emphasize the structural causes of poverty and others who favor behavioral or cultural
explanations for poverty.
v Structural Causes
The structural approach points to systematic reasons for poverty: such as things as racial and
gender discrimination embedded in our markets and institutions; the profit motive and consequent
low wages making it difficult for some families to escape poverty; and the failure to invest
sufficiently in education, health care and social insurance.
According to this view, all of these factors to reduce opportunity and increase economic
insecurity.
v Behavioral or Cultural Causes
- Culture, behavior, and personal differences as the source of much of the poverty
that we observe in modern societies.
- There is a poverty culture or a set of attitudes and behaviors that tends to get
passed along from parents to children and tends to perpetuate bad, self-defeating
decisions, and hence poverty. Those attitudes (fatalism and the rejection of
common societal norms like hard work, rationality, and non-violent dispute
resolution) make many of the poor less attractive in the labor and marriage market
and less capable parents.
- This perspective does not suggest that it is easy for low-income people to resist
these attitudes, bit insists thateach person has free will and is ultimately
responsible for their own life. The behavioral or cultural approach in explaining
poverty is typically favored by those who describe themselves as conservative or
libertarian (Sario, 2019).
Factors that lead to impoverished conditions.
The Culture of Poverty (Lumabas-Tio, 2011)
The poor are poor because they are poor. Poor parents beget poor children who in turn produce
poor progeny. In other words, poverty is transmitted from one generation to another. This is the thesis pf
the culture of poverty. Just as cultures are transmitted from generation to generation so too is poverty so
transmitted as poverty has its own unique culture. There are common behaviors, traits, attitudes, and
ways of life that make them distinctly different from other social classes and which keep poor people
poor.
Oscar Lewis did extensive studies on the culture of poverty. His studies show that these cultural
characteristics are universally shared by poor people and cover social and demographic, economic, and
behavioral dimensions.
v Social and demographic attributes of poor people:
- Low life expectancy and high death rates
- Higher proportion of younger age group
- Low levels of literacy and education
- They are neither organized into unions nor are they members of political parties
- Social security schemes such as medical care does not exist for them
- They make little use of the cities’ hospitals, department stores, museums, etc.
v Economic characteristics
- Constant struggle for survival
- Unemployment and underemployment
- Low wages for unskilled occupations
- Child labor
- Absence of savings
- Chronic shortage of cash
- Absence of food reserves in the home, resulting in frequent buying of small
quantities of food as the need arises
- Pawning and borrowing from local moneylenders at exorbitant rate of interest
- Spontaneous informal credit devices organized by neighbors
- The use of secondhand clothing and furniture
v Behavioral Dimensions
- The culture of poverty also includes behavioral traits. Of necessity, the poor have
to live in crowded quarters resulting in a general lack of privacy. As a result,
gregariousness increases. There is high incidence of alcoholism and frequent
resort to violence in settling quarrels, training children and getting the wife to obey
the wishes of the husband
Lesson 3: Measuring Inequality and Poverty
Inequality
Ø Inequality refers to disparities and discrepancies in areas such as income, wealth, education,
health, nutrition, space, politics and social identity.
Ø Intersecting inequalities occur when people face inequality in multiple aspects of their lives.
Ø Vertical inequalities occur between individuals.
Ø Horizontal inequalities occur between groups.
Ø Inequality of outcomes refers to differences in what people achieve in life (e.g. level of
income).
Ø Inequality of opportunities refers to differences in people’s background or circumstances that
condition what they are able to achieve.
Ø Global inequality refers to difference in income between all individuals in the world rather than
inequalities between countries.
Inequality measures can be used to illustrate inequality between groups and within
groups. The choice of measurement can have different policy implications. Poverty is related to,
yet distinct from, inequality. Inequality is concerned with the full distribution of wellbeing; poverty
is focused on the lower end of the distribution only – those who fall below a poverty line.
Inequality can be viewed as inequality of what, inequality of whom and inequality over what time
horizon.
The World Bank Handbook on Poverty and Inequality suggests it is important to
measure poverty in order to:
§ keep poor people on the agenda;
§ identify poor people and thus be able to target appropriate interventions;
§ monitor and evaluate projects and policy interventions geared to poor people;
§ evaluate the effectiveness of institutions whose goal is to help poor people.
Most rich countries measure poverty using income, as it is comparatively easy to measure
(much of it comes from wages and salaries). Most poor countries use expenditure to measure
poverty. Expenditure is easier to track than income, which comes largely comes from self-
employment and/or irregular and informal sources. Some analysts argue that expenditure is a
better indicator of poverty because it shows more accurately whether a person has enough to meet
current basic needs.
GINI INDEX. It is the most widely cited measure of inequality; it measures the extent to
which the distribution within an economy deviates from a perfectly distribution. The indes is
computed as the ratio of the area between the two curves (Lorenz curve and 45-degree line) to the
area beneath the 45-degree line.
Lesson 3: Women and Poverty
READ:
https://ecampusontario.pressbooks.pub/womenintheworld/chapter/chapter-1-
women-and-poverty/
https://www.ifad.org/documents/38714170/39150184/women+and+rural+develo
pment.pdf/237c0bc9-f987-40fe-ab61-2740a05b76dd
Based from the reading material, discuss the following:
a. Why women experience poverty? Identify one reason/factor that leads to women in poverty.
b. Why focus on women in poverty?
c. What are the ways to lesson this situation/problem?
