POVERTY

POVERTY

1. Poverty is not having enough money or income to meet basic essentials like food, clothing and shelter

   • e.g. Shaun Lloyd in his council flat
   • Absolute Poverty
     • Lack of basic needs like food, water, clothing, health, and shelter
   • Relative Poverty
     • When income is below a specified proportion of average income e.g. below 60%

2. Causes of Poverty

   • Old age
     • Old people are no longer able to work, and thus rely on the state pension, which may not be enough to live on (relative)
       • Can be fixed by Behavioural Economic policy to encourage private pensions
   • Unemployment
     • Higher unemployment leads to poverty because people are out of work
       • They may be relying on govt welfare benefits, however this is less than that would be received by working, thus named relative poverty
         • Can be fixed by higher economic growth, leading to higher job creation
   • Low wages
     • Hourly wages may be too low to live on.
       • Can be fixed by providing welfare benefits, as well as a NMW system

3. Effects of Poverty UK

   • Health deprivation
     • Lack of basic health needs to live a decent standard of living. If someone is in absolute poverty, they may not be able to afford treatment if they become ill.
     • Higher risk of illness and death. Children from low income families are more likely to die at birth than richer families
   • Education deprivation
     • Poorer children lag at all stages of education compared to richer.
       • Statistic: By the age of 16, children from poorer backgrounds achieve 1.7 grades lower at GCSE than those from richer backgrounds
   • Effect on Community
     • Children living in poverty may not have a good background - could lead to physical and mental issues
       • Less educational achievement, which can reduce LRAS because there are more workers who are unskilled.