By Liam Cho, South Korea
Image: iStock
Introduction
Poverty is an issue all around the world that has been discussed/confronted for decades. Some places are better at handling this problem but generally, it is still a problem that must be discussed. Poverty has many significant effects on society including corruption, crime rates, education, unemployment, etc. From all these significant effects, this article will be purely focused on the impacts of poverty from an economic standpoint.
Causes and effects of poverty: 5 main factors
It is not possible to pinpoint one exact cause of poverty. Rather poverty is caused by numerous different factors. Mainly there are 5 factors that cause poverty; absence of good jobs(job growth), absence of quality education, Warfare/conflict, Social injustice, inadequate Government support. All of these are contributing factors to poverty. Furthermore, these factors add up to the problem of Economic Inequality. Economic Inequality is measured by the distribution of wealth. This concept is also called the Wealth gap. The uneven distribution of wealth results in many different economic consequences such as GDP, worse public health, enlarged political inequality, etc. GDP-Gross domestic product-will decrease when the wealth gap widens. Most times, when people discuss economic activity. When the GDP decreases, this indirectly indicates that there is less economic activity. These economic impacts might not directly impact our daily lives but will undoubtedly affect a county, or society in the long term.
Measures Being Taken
There are efforts to not necessarily solve the problem of poverty, wealth gap, and income/economic inequality, but to reduce the problem. According to Center for American Progress, they state the top 12 solutions to lower poverty in the United States. To summarize, they are expanding safety net programs, creating more job spaces, raising the minimum wage, and increasing child tax credit. There are many other adequate solutions. However, this raises a new problem. For example, the increase of minimum wages. Minimum wages were always a controversial topic. The increase in minimum wages causes inflation, causing companies to be less competitive. All of these leading to job loss. In simple terms, when the minimum wage increases, it will bring families out of poverty, however it would cause other low income families to become jobless because the companies would use less employees. From this we can conclude that making solutions is not hard but implementing it into society is a struggle as there are many factors that need to be taken into account.
Call to action
Though there is not one clear way to solve all of these problems, especially by the fact that all of them are related to economics, it is still important for us to see beyond what we see in our daily lives. Just because we can visually see poverty(or wealth gap) in our daily lives doesn’t mean that it exists. The problem of poverty is most likely going to stay as a problem for the rest of our lives. Pessimistically speaking, the problem of poverty is probably never going to be solved. However, if we just forget about it and move on with our lives the problem will get worse, speaking conflict. In conclusion, as students, it is crucial that we are aware about these topics and need to be willing to take action when required.
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