Poverty as a Social Problem: Causes, Effects & Policy Solutions

Introduction: Defining Poverty and Its Global Scope

Poverty is the condition in which an individual — whether due to insufficient income or ill-advised expenditures — cannot sustain a standard of living adequate to provide for his or her physical and psychological well-being, or to enable themselves and their children to function at the standards generally expected by society (Sharma, 1997). According to Ball and Tepperman (2016), social inequality can be defined as uneven access to rewards or opportunities for individuals within a group or groups in a societal context. Inequality exists in any society when individuals have different amounts of income, wealth, and social power. Canada is considered to be in the middle range in global rankings for social inequality (Tepperman and Curtis, 2003).

Poverty has long been one of the most severe social problems not only in the United States but also worldwide, with particularly acute conditions in many nations. In contemporary society, statistics indicate that one out of every eight Americans is experiencing poverty. From a quantitative perspective, approximately 10.7 percent of the world's population lives below the poverty line — that is, on less than $1.90 a day — a figure equivalent to roughly 767 million people across the globe. From a qualitative perspective, 50 percent of the extreme poor reside in Sub-Saharan Africa. The vast majority of the internationally poor live in rural areas, have limited education, and are largely employed in the agricultural sector (UNESCO, 2017).

Poverty is further understood qualitatively as either absolute or relative. Absolute poverty is measured in relation to the amount of money required to meet basic needs such as shelter, food, and clothing, without taking into account broader quality-of-life issues or general levels of inequality within society. Evidence shows that more than 50 percent of populations in low-income nations cannot afford basic necessities and are therefore considered to be in absolute poverty. Relative poverty, by contrast, defines poverty in relation to the economic status of others within the same society — individuals are considered poor if they are living below the prevailing standard of living in a given social context. Relative poverty can be observed worldwide through inequities in the social order. Within the workplace, for example, even where a set income exists, some people earn at a significantly lower level than others (UNESCO, 2017).

Causes and Social Roots of Poverty

One of the key causes of poverty is discrimination and social inequality. According to the United Nations Social Policy and Development Division, inequalities in the distribution of income and access to productive resources, opportunities, basic social services, markets, and information have been increasing across the globe, frequently giving rise to and worsening poverty. These inequalities often stem from the belief that certain individuals are worth less than others on the basis of religion, gender, ethnicity, race, or sexual orientation. Such discrimination produces a two-tier social order in which those who experience prejudice do not enjoy the same opportunities as those who are privileged, and as a result often end up living below the poverty line (Dabla-Norris et al., 2015).

Another root cause of poverty is poor education. Low levels of education and skills limit people's ability to access adequate employment, to develop themselves, and to participate fully in society. A faulty education system compounds this problem, leading not only to a lack of technical skills but also to unemployment. The high cost of education and the scarcity of scholarships and financial aid further restrict educational attainment among low-income populations (Sharma, 1997).

A third significant cause is rapid population growth. High rates of population growth reduce the flow of benefits intended to help poor people improve their lives, since faster population growth translates into slower improvements in living standards. Population increases also affect poverty by intensifying pressure on land in rural areas and on labor markets more broadly. High growth rates contribute to an oversupply of unskilled labor and slow the pace at which skills are acquired among the poor, compounding the difficulties of escaping poverty (Ahluwalia, 1990).