The Economics of being poor
If you’ve ever thought of yourself as being poor, or even “not rich”, think again. Most of us define poor or rich with reference to what we see and know around us. And make comparisons based on these benchmarks. If the point of reference is Bill Gates or even the classmate who earns a quarter of a million a year - then yes, the poor or not-rich assessment seems reasonable.
Let’s look again, from two other frames of reference.
The poverty threshold defined by the US Census bureau for 2004 ranges between $9,000 to $40,000, depending on the number of members including children in the family. And various estimates found on the web, that between 13 million to 30 million people, qualify as being poor. While there may be some reservation about whether all qualify, depending on what they have by way of assets and whether this is a temporary income condition, it seems reasonable to assume that an income level below $10,000 sustained over years, for an adult with dependent family, should qualify for the definition of poor.
But then, there are programs for the poor. Social Security, employment programs, charitable donations and so on. Surely that should take care of these problems?
The reality is that the poor get picked on, and ripped off. Even where there are programs, most of these come with strings attached. In some cases, well-meaning strings; but still, strings. And in some cases, not so well meaning. Which includes payments to qualify. Splitting the rewards. Or getting something not really worthwhile, like old clothes two sizes too small or big.
The other side, where the charitable programs end. There’s many sources of information on this available on the web. The Annie E Casey Foundationhas a number of published reports and initiatives. So do many others.
Lots more out there. Go take a look.
On to another frame of reference. I’d like to thank Nicolas Roope and his colleagues at Poke. For an interesting website and additional information they’ve shared on the web. And for additional insights in response to an email query.
If you visit the Global Rich list, you won’t find a list of wealthy people. What you will find is a calculator. That places you in relation to the rest of the world, based on your income.
If you’re earning $48,000 a year or more, welcome to the top 1%. That’s $4,000 a month.
Compare the “poor” definition of $10,000 per year. That’s within the top 15%.
To reach the midway mark, you need to go down below $900 per year. $868 to be exact. That’s less than two and a half dollars a day.
Three billion people live on less than $2 per day while 1.3 billion get by on less than $1 per day. Seventy percent of those living on less than $1 per day are women.
Tha’s just one of the nuggets from the site, under the “Did you know?” heading.
So how do these people survive? It isn’t living. It’s survival.
The lucky ones get some semblance of an education. Or a training in skills. To work at a sweat shop, earning a dollar an hour or less. With a 12 hour workday, 365 days a year, they’d catapult to the top 15-20% worldwide.
And they are “lucky”. So the next time someone talks about banning sweatshop imports, think of what would befall these people if they didn’ t have this option.
Sell their bodies. Like this mother, who offered to sell an eye if it would bring her some monetary relief. Not a great amount either. $1,000 or thereabouts.
Or the bunch of mail order brides you’d find on the web. From Russia to Vietnam and around the world.
Sell their children to be adopted, or into child labour. Not from greed, but because they hope that the children might get a better life if they’re away from the parents. Because the parents don’t have a life anyway.
And in the desperation to find an opportunity, they fall prey. Prostitution, child sex, pornography, exploitation, bonded slavery, drug running, smuggling, crime and violence, terrorism. Opportunities provided by an exploiter, who keeps the rewards while feeding them a pittance.
When I asked Nicolas if he wanted me to communicate anything through this blog, I didn’t expect the reply he sent.
the big thing to mention is that the WTO is meeting in two weeks to discuss trade arrangements with developing countries. if they reach
another stale-mate it is likely that the WTO won’t be a vehicle to resolve economic issues for developing countries so their development will probably be a lot slower.
That’s true. And brought yet another realisation.
The speakers and participants at the WTO meet are probably all within the top 1% of the world by income. Anyone connected with it, whether as a organiser, support staff or even service provider including janitorial and cleaning services is probably within the top 20%. The bottom 80% won’t be directly represented there. Will their voices even be heard?
But these decisions will impact them. And all of us, in time. Since these things go around in circles.
As someone who got hit in the aftermath of September 11, 2001. Who got affected by the collateral economic damage of the WTC, even though living thousands of miles away. I hope the voices are heard.
Because the root cause of why people turn to religion, and fall prey to terrorists and zealots, is in hope of a better afterlife. Since the current one isn’t worth anything.
Written by 2cworth on November 18th, 2005 with
8 comments.
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#2. November 24th, 2005, at 1:28 PM.
Olivier
Thanks for the reference to the article - and best wishes with the “christmas shopping” match. Every little bit helps to ease the situation.
I had noticed the quote re the 225 wealthiest people on globalrichlist, but chose not to quote that because it then becomes a rich versus poor debate which doesn’t ultimately serve the purpose. Yes, it does seem unfair that some have billions while others don’t even have thousands. But if you choose to take away the estimated 1 trillion of the wealthiest and redistribute it equally among the poorest 2.5 billion, that’s about $400 per person - which doesn’t really change their situation all that much.
More important - most wealthy people do choose to share through philanthropy to benefit those less fortunate. And most wealthy people have generated wealth through growing the pie. Sure, they get paid huge amounts - but in the process, they’ve also provided income to many more people through jobs created.
The need is to increase the pie - just reapportioning it doesn’t help beyond a point. Like it’s said, teach a man to fish, rather than just giving him a fish dinner.