Causes of Poverty

Causes of Poverty

In Chapter One of Essentials to Economics, we learned the basics of what poverty is. However, in Chapter Two, we got more into how it forms and why it is so difficult to solve. Poverty all over the world has always been an issue, but lately it seems to be rising. According to Global Issues, “Causes of Poverty”, statistics say there were nearly a billion humans who were not able to read or write when they entered the 21st century, over three billion people live on $2.50 or less every day, and there are children today who still don’t have clean water to drink, shelters to live in, or have died before the age of five due to living conditions. Obviously people are trying to combat poverty by rising together in groups to help raise money for children in poverty or by building homes for the homeless, but it is still not enough. Despite all of these actions, there are still billions who live in poverty and die from it. What are the causes of poverty? There are various discussed causes including bad government intervention, corrupt businesses with power and influence, social standing, and lack of responsibility.
Many people have often looked at our government with resentment, claiming that it is to blame for all of the bad things that happen to us. Honestly, that’s part of the truth. It’s called government failure, and this happens when the government intervenes with the economy and instead makes even more of a mess of things. One of the things that the government does that often causes harm to our economy is inflation; inflation is when the average price of goods and services are hiked up (Essentials of Economics 215). Usually this is combined with minimum wage, which is often either kept the same or increased. However, this creates an effect—when one ups the minimum wage, the worker is happy but the employer is not. So they look for the more skilled worker and hire less for the higher wage. This means a lot of people who are not as skilled are given the boot, creating massive unemployment. Unemployment is one of the major causes of poverty, and one of the more drastic ones too. There has been many times where the government has intervened and causes our economy to plummet even further. For example during the latest recession of 2008-’09, the government tried pumping more money into the system which only caused things to take a turn for the worse. Government intervention could also link to corrupt businesses as well.
Everyone knows there’s at least several different organizations and businesses that are definitely corrupt. Some of these businesses start off with honest intentions, but as the original leader steps down or dies, there will often be someone who is greedy for more money and will use the business name to gain more money. Some of these companies often gain success through bribery, bullying weaker companies or weaker countries, or just by conning their way to the top. For instance when it comes to globalization, businesses have been known to dominate smaller businesses and even governments in smaller countries which allows for the bigger business to dominate the area (Shah, Global Issues: Corruption). The United States government is even accused of corruption. According to Anup Shah the government has been accused of, “outsourcing many contracts without an open bid process” (Shah, Global Issues: Corruption). Corruption could be easier to fight against if it weren’t for the fact that many of these leaders hold incredible power, money, charisma, and social standing. For those that are in poverty, it seems like nothing can ever be done about it.
Social standing is another issue of poverty, though it’s not as crucial as other causes. There have been some individuals who have been able to rise from poverty and to the life of the rich and famous. For example there are Oprah Winfrey, Marshall Mathers (better known as Eminem or Slim Shady), Shania Twain, and even J.K. Rowling (Deane, From Poverty to Power). Of course, there are many others who have risen from poverty to having a pretty good life. So when some say that people can’t rise above their social status, this is not specifically true. However, for many it is difficult to be able to do some of the things that people of higher class can do because of where they were born, how much money they have, or simply because of where they live in the present time. People who are born into the lower class will often have less money and therefore not have the ability to access important things such as good education, healthcare services, or other needed services (Shah, Causes of Poverty). It is also hard for some to rise above poverty because those in the lower class are not as socially respected as those who are significantly wealthier (Shah, Causes of Poverty). However, for the wealthy it is easy to get a good education, gain respect from others, have access to better jobs, and other such things (Shah, Causes of Poverty).
There are many causes of poverty, and many ways that it could worsen as well. While government failure, corruption, and social statuses are just some of the causes of poverty, there are many other minor things that could cause people to go into poverty. Even though there are so many causes of poverty, there is still very little that can be done about it. It is hard to fight against as well, considering some of the causes are because of the government or higher ups who are pulling the strings behind the scenes. Poverty has also always been here no matter what the government or country. There has always been a low class and undoubtedly there will always be a low class.

Citations
Shah, Anup. “Causes of Poverty.” Global Issues. 24 Mar. 2013. Web. 18 Aug. 2013. <http://www.globalissues.org/issue/2/causes-of-poverty>.
Fisher, Gordan M. "The Development of and History of the Poverty Thresholds." Social Security, n.d. Web. 18 Aug. 2013. <http://www.ssa.gov/history/fisheronpoverty.html >
"Can Government Eradicate Poverty? | Reason For Liberty." Reason For Liberty RSS. Reason For Liberty, n.d. Web. 18 Aug. 2013. <http://www.reasonforliberty.com/employment/can-government-eradicate-poverty.html>.
Shah, Anup. “Corruption.” Global Issues. 4 Sept. 2011. Web. 18. Aug. 2013. <http://www.globalissues.org/article/590/corruption>
Deane, Michael. “From Poverty to Power: Celebrities Who Started With Nothing.” Investopedia. 25 Mar. 2010. Web. 18 Aug. 2013. <http://www.investopedia.com/financial-edge/0310/from-poverty-to-power-celebrities-who-started-with-nothing.aspx>
Woods, Thomas E. “Government Intervention for Economy Makes Things Worse.” The Daily Reckoning. 6 May 2009. Web. 28 Aug. 2013. <http://www.dailyreckoning.com.au/government-intervention-for-economy-makes-things-worse/2009/05/06/>
Schiller, Bradley R. Essentials of Economics. New York: McGraw-Hill, 1993. Print.

Citations: Shah, Anup. “Causes of Poverty.” Global Issues. 24 Mar. 2013. Web. 18 Aug. 2013. &lt;http://www.globalissues.org/issue/2/causes-of-poverty&gt;. Fisher, Gordan M. "The Development of and History of the Poverty Thresholds."  Social Security, n.d. Web. 18 Aug. 2013. &lt;http://www.ssa.gov/history/fisheronpoverty.html &gt; "Can Government Eradicate Poverty? | Reason For Liberty." Reason For Liberty RSS. Reason For Liberty, n.d. Web. 18 Aug. 2013. &lt;http://www.reasonforliberty.com/employment/can-government-eradicate-poverty.html&gt;. Shah, Anup. “Corruption.” Global Issues. 4 Sept. 2011. Web. 18. Aug. 2013. &lt;http://www.globalissues.org/article/590/corruption&gt; Deane, Michael. “From Poverty to Power: Celebrities Who Started With Nothing.” Investopedia. 25 Mar. 2010. Web. 18 Aug. 2013. &lt;http://www.investopedia.com/financial-edge/0310/from-poverty-to-power-celebrities-who-started-with-nothing.aspx&gt; Woods, Thomas E. “Government Intervention for Economy Makes Things Worse.” The Daily Reckoning. 6 May 2009. Web. 28 Aug. 2013. &lt;http://www.dailyreckoning.com.au/government-intervention-for-economy-makes-things-worse/2009/05/06/&gt; Schiller, Bradley R. Essentials of Economics. New York: McGraw-Hill, 1993. Print.