Poverty is exacerbated by inflation in two ways. The inflation tax, for starters, can lower disposable income. Second, workers’ real income will fall if nominal wages rise less than the price of items consumed by wage earners.
Is inflation a source of poverty?
Smetters explained that “what they happen to be buying has been hurt worse by the supply crunch.” “It’s a more broad-based approach than in the past.”
The findings are consistent with Harvard Business School economist Alberto Cavallo’s examination of credit and debit card data at the onset of the pandemic. He demonstrated that low-income consumers saw price increases about double those of higher-income consumers.
According to a joint analysis from Columbia University and the London School of Economics published in 2019, around 3 million more people would be considered poor if their wages were adjusted for inflation rates.
As pandemic-related federal benefits phase out and President Joe Biden’s big social investment package languishes in Congress, experts predict that poverty could soar in early 2022. The cessation of monthly payments of the child tax credit, which provided families with $300 per month for each child under the age of six and $250 for older children, is of special concern.
What relationship exists between inflation and poverty?
The term “inflation” refers to a rise in the cost of goods and services. Poverty and inflation are linked in the sense that a country with high inflation is also likely to have high poverty rates. The annual change in the price of goods and services is measured by the inflation rate. Inflation is a major issue in many countries. Inflation has been a problem for most countries at some point in their history. For nearly a decade, the United States, for example, has maintained an inflation rate of roughly 0% to 3%. During World War I, however, the United States saw a nearly 20% inflation rate. Some countries now have negative inflation rates, while others have rates that are above 100%.
Highest Inflation Rates in the World
The top ten greatest inflation rates in the globe as of August 2020 were as follows:
*Expert estimates differ because higher-rate inflation is difficult to assess.
Consequences of High Inflation
Dr. Ellis talked on his own inflation experience in Ghana, where he grew up. “I recall my mother having a store at my house, similar to a convenience store… And we used to sell basic necessities like bread, rice, and milk, among other things… Every week, our prices change… She visits a wholesaler… They alter the price, for example, the price increases by 20%. We’ll have to alter it by 20% as well.” This, predictably, irritates customers. Consumers may expect an item to cost the same as it did last week when they go to the store. Of course, this isn’t always the case, and they may find themselves unable to purchase the goods.
Causes of Inflation
The phrase aggregate demand is used by economists to define the overall quantity of demand in a given economy. The aggregate demand for a country’s production might sometimes expand too quickly. Prices rise as a result of the high demand for products and the scarcity of supplies. Demand-pull inflation is the name for this form of inflation. The rapid expansion of the money supply by central banks typically results in demand-pull inflation.
Cost-push inflation is another type of inflation. A decline in aggregate supply causes this sort of inflation. The total amount of commodities or services sold in a given economy is referred to as aggregate supply. Cost-push inflation occurs when the cost of inputs (resources used by a producer to create the final product they sell) or wages rises fast. In Dr. Ellis’s narrative about his mother’s store, this form of inflation was taking place. This form of inflation, according to Dr. Ellis, is typical in emerging countries because they “rely too much on international markets.” In fact, the majority of the resources used for production in emerging countries are imported from other countries. If the price of international commodities rises, a developing country that depends on them will see a significant decline in aggregate supply.
How Inflation Contributes to Poverty
Poverty and inflation are linked because money has a monetary worth that can increase or decrease. Poverty is defined as a lack of financial resources that makes it difficult to meet fundamental demands. In other words, as the cost of basic necessities rises, so does the quantity of financial resources required to meet those demands. This is referred to as “buying power” by Dr. Ellis. He emphasized how rising expenses result in a reduction in purchasing power. If a person’s income does not increase at the same rate as inflation, they will become impoverished.
Poverty and Inflation Inequality
One of the problems with poverty and inflation is that high inflation has a disproportionately detrimental impact on those who are poor. Inflation inequality refers to the differences in how inflation affects the middle and upper classes vs the lower classes. Inflation impacts persons with lower incomes more than those with higher incomes for a variety of reasons. One of the key reasons is that these two groups of people have different types of professions. Lower-income persons rarely have the option to bargain for better pay. When prices go up, these people’s incomes tend to stay the same for a while. As a result, their purchasing power decreases. People with higher incomes, on the other hand, are more likely to have jobs with inflation-adjusted benefits. When inflation happens, these benefits help to keep people’s purchasing power from dwindling. Because of this mismatch, income discrepancies expand during inflationary periods.
Lessening the Effects of Inflation
There are two major strategies for businesses to mitigate the harmful consequences of inflation.
- Using the currency of another country In countries with exceptionally high inflation rates, the currency loses almost all of its value. “What happened to Zimbabwe’s currency, for example, is that it is now worthless. “Now they’re using the currency of the United States,” Dr. Ellis explained. Using a foreign currency is only a short-term solution. This strategy is ineffective in the long run since different countries have different economic systems and ways of operating.
- Payments that are inflation-adjusted Dr. Ellis also mentioned that government payments, such as Social Security, are occasionally adjusted for inflation. Inflation-adjusted pay are also common among employers. These policies do not reduce inflation; instead, they increase the quantity of money available to consumers, hence raising their purchasing power.
In order to find long-term solutions to excessive inflation, fiscal and monetary policy must be drastically altered. Countries struggle to control inflation for a variety of reasons, including political instability, reliance on foreign nations, and unwanted side effects. Hyperinflation, on the other hand, can be overcome. Germany after World War I is one of the most well-known examples of this. Germany’s prices quadrupled per month for 16 months. Germany now has an annual inflation rate of just under 2%.
What are the five factors that contribute to poverty?
The lack of education is the second underlying cause of poverty. Poverty is a cycle, and those who lack education are unable to improve their circumstances. According to the United Nations Educational, Scientific, and Cultural Organization (UNESCO), approximately 170 million people could be lifted out of extreme poverty if they just had basic reading abilities. People, on the other hand, are not getting educated in many parts of the world. The causes for this differ. Families often require their children to work, there aren’t any schools nearby, or girls aren’t being educated due to sexism and discrimination.
What are the seven reasons for poverty?
1. Rapid Population Growth:
Over the last 45 years, the population has grown at a pace of 2.2 percent per year. Every year, 17 million people are added to the country’s population, significantly increasing demand for consumer goods.
2. Agriculture’s Low Productivity:
Agriculture production is low due to subdivided and fragmented holdings, a lack of capital, the use of traditional farming practices, illiteracy, and other factors. This is the country’s primary source of poverty.
3. Resources that are underutilized:
What are the world’s most common causes of poverty today?
Around 8% of the global population is living in extreme poverty, but do you know why? We examine 11 of the most significant causes of world poverty.
Living on less than $2 a day may seem impossible, but it is a reality for approximately 600 million people around the world today. Approximately 8% of the world’s population lives in extreme poverty, which is typically defined as surviving on less than $1.90 per day.
There is some positive news: that number was 1.8 billion people in 1990, indicating that significant progress has been made. While many people doubt that extreme poverty can be eradicated, we at Concern believe it is not only achievable, but also within our lives. There isn’t any “Although there is no “magic bullet” solution to poverty, recognizing its causes is a solid start. Here are 11 of them, completely updated for 2020.
1. MARGINALIZATION AND INEQUALITY
“Inequality” is a simple, but sometimes misleading phrase for the systematic hurdles that prevent some groups of people from having a voice or being represented in their community. All groups must be included in the decision-making process for a population to overcome poverty especially when it comes to having a say in the things that determine your status in society. Some of these may be visible, while others may be more subtle.
Gender inequality, caste systems, and marginalization based on race or tribal affiliations are all economic and social disparities that imply a lack of access to the resources necessary to live a full and productive life. When these factors are added to the many combinations of vulnerability and hazards that make up the rest of this list, a marginalized community may become even more prone to the poverty cycle.
2. DISPUTE
Conflict is one of the most common types of risk that contributes to poverty in today’s world. Large-scale, long-term violence, such as that seen in Syria, can bring society to a standstill, destroying infrastructure and forcing people to flee (often with nothing but the clothes on their backs). Syria’s middle class has all but vanished in the tenth year of conflict, and more than 80% of the population now lives in poverty.
However, even minor acts of violence can have devastating consequences in already troubled communities. Farmers, for example, will not invest in planting if they are concerned about their harvests being stolen. Women are also the ones who bore the brunt of conflict, which adds another element of inequity to the equation: Female-headed households become highly common during moments of conflict. Women and their families are particularly susceptible since they often have trouble finding well-paying work and are frequently excluded from community decision-making.
HUNGER, MALNUTRITION, AND STUNTING are three things that come to mind when thinking of hunger, malnutrition, and stunting.
You may believe that hunger causes poverty (and you would be correct! ), but hunger is both a cause and a maintainer of poverty. If a person doesn’t eat enough, they won’t have the strength or energy to work (or their immune system will weaken from malnutrition and leave them more susceptible to illness that prevents them from getting to work).
The first 1,000 days of a child’s life (from conception to birth) are critical in determining their future health and likelihood of avoiding poverty. If a mother is undernourished during pregnancy, her children may suffer from wasting (low weight for height) or stunting (low height for age). Stunting in children, both physical and cognitive, can have long-term consequences: Adults who were stunted as children earn 22% less than those who were not stunted as children. Stunting adds to GDP losses of up to 16 percent in Ethiopia.
ON AVERAGE, ADULTS WHO WERE STUNTED AS CHILDREN EARN 22% LESS THAN THOSE WHO WEREN’T STUNTED. STUNTING HAS BEEN LINKED TO GDP LOSSES OF UP TO 16 PERCENT IN ETHIOPIA.
4. ESPECIALLY FOR MOTHERS AND CHILDREN, POOR HEALTHCARE SYSTEMS
Extreme poverty and ill health are frequently linked. Malaria, diarrhea, and respiratory infections, which are easily avoidable and curable in nations with underdeveloped health systems, can be lethal, especially in young children. When people have to travel long distances to clinics or pay for medicine, it depletes already low-income households’ finances and assets, potentially pushing a family into extreme poverty.
Pregnancy and childbirth can be life-threatening for certain women. Access to high-quality maternity healthcare is limited in many of the countries where Concern works. When it comes to obtaining care, pregnant and breastfeeding moms confront a variety of obstacles, ranging from not being allowed to visit a clinic without a male chaperone to receiving substandard or even violent care from a doctor. This is particularly true for adolescent girls aged 18 and under, putting expectant moms and their children at danger of sickness and death.
5. ACCESS TO CLEAN WATER, SANITATION, AND HYGIENE IS LIMITED OR NON-EXISTENT
More than 2 billion people do not have access to safe drinking water at home. This means that every day, people (particularly women and girls) spend approximately 200 million hours walking considerable distances to acquire water. That’s valuable time that could be spent working or studying for a better position later in life.
Contaminated water can also cause a variety of waterborne illnesses, ranging from the mild to the deadly. Poor water infrastructure, such as sanitation and hygiene facilities, can exacerbate this problem or create additional barriers to escaping poverty, such as preventing females from attending school during their periods.
6. CHANGE IN THE CLIMATE
Climate change causes hunger, whether through a lack of water (drought) or a surplus (flooding), and its consequences contribute to the poverty cycle in a variety of ways, including disproportionately hurting women, causing refugees, and even influencing violence. Climate change, according to the World Bank, has the potential to force more than 100 million people into poverty over the next decade.
Many of the world’s poorest people feed and earn a livelihood through farming or hunting and gathering; Malawi, for example, is 80 percent agricultural. They frequently have barely enough food and assets to get them through the next season, with no reserves to fall back on if the harvest is poor. As a result, when climate change or natural disasters (such as the massive droughts produced by El Nio) leave millions of people without food, they are pushed further into poverty, making recovery even more difficult.
7. INADEQUATE EDUCATION
Not everyone who lacks an education lives in abject poverty. However, the vast majority of the severely poor lack access to education. Many obstacles to education exist around the world, such as a lack of funds for uniforms and books, a bias against girls’ education, or any of the other reasons of poverty listed here.
Education, on the other hand, is sometimes referred to as the great equalizer since it can provide access to jobs and other resources and skills that a family requires to not only survive, but prosper. According to UNESCO, 171 million people could be pulled out of poverty if they graduated from high school with basic reading abilities. Poverty puts education at risk, yet education can also assist to alleviate poverty.
8. POOR INFRASTRUCTURE AND PUBLIC WORKS
Consider the situation where you need to get to work but there are no roads to bring you there. Alternatively, torrential rains have flooded your road, making travel impossible. Rural towns can be isolated due to a lack of infrastructure, which includes everything from roads, bridges, and wells to light cables, cell phones, and the internet. Living off the grid frequently entails being unable to attend school, work, or visit a market to buy and sell products. Traveling longer distances for basic services not only consumes time, but it also costs money, trapping families in poverty.
Isolation limits one’s options. Many people find it difficult, if not impossible, to transcend extreme poverty when they lack opportunity.
9. LACK OF SUPPORT FROM THE GOVERNMENT
Many people in the United States are aware of the various social welfare programs available to them if they require medical or nutritional assistance. However, not every government can provide this level of assistance to its residents, and without that safety net, vulnerable families are more likely to fall farther into poverty. Ineffective governments contribute to numerous of the other reasons of severe poverty described above, as they are unable to provide vital infrastructure or healthcare, as well as maintain the safety and security of their inhabitants in times of conflict.
10. JOBS OR LIVELIHOODS ARE IN SHORT SUPPLY
This may appear to be a no-brainer: People will confront poverty if they do not have a job or a source of income. Many traditional livelihoods are under threat as a result of dwindling access to productive land (typically due to conflict, overpopulation, or climate change) and overexploitation of resources such as fish and minerals. In the Democratic Republic of Congo (DRC), for example, the majority of the population lives in rural villages where natural resources have been plucked during centuries of colonial domination, and people have been forced away from their source of income and food due to land conflict. More than half of the population now lives in abject poverty.
11. INSUFFICIENT RESERVES
All of the above risk factors can be weathered if a family or community has reserves in place, from conflict to climate change to a family sickness. Unemployment caused by conflict or illness can be compensated for through cash reserves and loans. If a harvest is ruined due to a drought or natural calamity, proper food storage methods can help.
These resources are frequently unavailable to people living in extreme poverty. When a risk becomes a disaster, they resort to negative coping methods such as taking children out of school to work (or even marriage) and selling possessions to buy food. That may help a family get through one difficult season, but it will not help them go through another. The repeated shocks can push a family into extreme poverty and prevent them from ever recovering in communities that are regularly subjected to climate extremes or prolonged conflict.
Who is the most vulnerable to poverty?
Women and children are more likely to be poor than males, owing to women remaining at home to care for children more often than men, and women suffering from the gender wage gap. Because of the discrimination they endure, not only women and children are more likely to be affected, but racial minorities are as well.
Where is the most poverty?
This list of United States states and territories by poverty rate includes the 50 states, the District of Columbia, and the territory of Puerto Rico, as well as the poverty rate of their respective populations. American Samoa, Guam, the Northern Mariana Islands, and the United States Virgin Islands are the four additional inhabited US territories.
The main list’s data comes from the American Community Survey, a five-year survey conducted by the United States Census Bureau from 2016 to 2020. The American Community Survey is a massive annual demographic survey that uses mailed questionnaires, telephone interviews, and field visits from Census Bureau field agents to about 3.5 million households, regardless of legal immigration status.
Overall, 42.31 million Americans lived below the poverty line, according to the Census Bureau (or 13.15 percent of the total population). Mississippi (19.58 percent), Louisiana (18.65 percent), New Mexico (18.55 percent), West Virginia (17.10 percent), Kentucky (16.61 percent), and Arkansas (16.08 percent) had the highest poverty rates, while New Hampshire (7.42 percent), Maryland (9.02 percent), Utah (9.13 percent), Hawaii (9.26 percent), and Minnesota had the lowest poverty rates (9.33 percent ).
Introduction
Pollution is currently one of the most serious public health and human rights issues, hurting the poor and vulnerable disproportionately. Pollution is not only a concern for the environment; it also has an impact on the health and well-being of entire societies. Pollution has been undercounted and inadequately addressed in national policies and international development agendas, despite its enormous impacts on human health and the global economy and the ability to implement simple and reasonable solutions. Prioritizing and increasing investment in pollution cleaning and control gives a once-in-a-lifetime opportunity to save lives while also growing economies.
The Lancet Commission Pollution and Health report
On October 20, 2017, the Lancet Commission on Pollution and Health released its groundbreaking report. This is the first comprehensive study of all types of pollution, including their effects on health, economic consequences, and environmental and social injustice. The Commission’s objective is to reduce pollution in the air, soil, and water by explaining the enormous health and economic costs of pollution around the world, providing policymakers with effective solutions, and refuting the myth of pollution’s inevitability.
The Lancet, the Global Alliance on Health and Pollution (GAHP), and the Icahn School of Medicine at Mount Sinai have collaborated on the Commission on Pollution and Health. Many of the world’s most powerful leaders, academics, and practitioners in the fields of pollution management, environmental health, and sustainable development make up the Commission.
The results of The Lancet Commission on Pollution and Health will be live webcast from the Icahn School of Medicine at Mount Sinai in New York City and Maastrict University in Brussels at the first two launch events. Please see the bottom of this page for more information.
Pollution and poverty
Poverty and pollution are inextricably intertwined. Pollution-related mortality account for over 92 percent of deaths in low- and middle-income nations. Because modest exposures to pollutants in prenatal and early childhood can result in lifelong disease, disability, premature death, as well as diminished learning and earning capacity, children are the most vulnerable victims of pollution. Because of a lack of data collecting and scientific research on many contaminants, the health impact of pollution is likely to be far bigger than can be adequately assessed today.