Abstract
Poverty is defined as the deprivation of basic needs that comprises of foods, shelter. Poverty is known as an exceptional complex social phenomenon whereby trying to discover its causes might be equally complicated. Certain class of theorists has tried to characterize the poor as fatalists who have resigned themselves to a philosophy of poverty in which there is nothing that might be undertaken in order to alter their economic outcomes. Currently, more than 35 million U.S citizens, approximately 14% of the entire population live in poverty. Social norms in customarily rural-based cultures normally support the value of big families. The aspect of immigration has greatly worsened the issue of poverty. Despite poverty allowing society’s dirty work to be done, assisting the affluent employees in reaching their career goals and objectives thereby creating a number of jobs, the social causes of poverty outweigh the positive impacts. The neoclassical economic theory is based on the denial of the Marxian concept of exploitation. The monetary approach assumes the income is reliant on the peripheral productivity. The housing is the asset which is valuable and it is less liquid thus ineffective in the event of coming across income shock. People experiencing poverty requires that they are provided with access to low-cost credit markets which is capable of protecting them against the income shock.
Introduction
Poverty is defined as the deprivation of basic needs that comprises of foods, shelter, sufficient cloth, pure drinking water, adequate health care, education, as well as proper sanitation facilities. Notably, poverty has been known as a global phenomenon. Additionally, there are a number of reasons that are behind the aspect of poverty. According to the World Health Organization (WHO), if an individual’s daily income is less than 2 dollars; such an individual is considered as poor. Globally, many people usually live under the poverty line. Poverty is known as an exceptional complex social phenomenon whereby trying to discover its causes might be equally complicated. There is the existence of stereotypic explanation that the deprived usually cause their own poverty. This is basically founded on the perception that everything is possible in some countries such as the United States of America.
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In some occasions, several theorists have blamed the deprived of having little or no concern for their future but prefer living for the time being. In some other situations, a great number of theorists have accused the poor of engaging in self-defeating behavior. Moreover, another class of theorists has tried to characterize the poor as fatalists who have resigned themselves to a philosophy of poverty in which there is nothing that might be undertaken in order to alter their economic outcomes. The research paper would critically analyze the aspect of poverty; examine social factors that cause poverty by examining various aspects attributed to it among other facets.
The Sociological Aspect of Poverty
Poverty is known as a global phenomenon that greatly affects individuals’ lifestyles. Recently, many sociologists have emphasized on several other poverty theories. One of the theories concerns the fight of the mid class, comprising of employers, from the metropolises as well as into its environs. This aspect has restricted the prominent opportunities associated with inner-city deprived to be capable of finding adequate jobs. Another theory highlights that the poor would prefer receiving welfare payments instead of working in demeaning positions in fast-food hotels or as maids (Mavrich, 2017). Due to this perception, the welfare system has come under increasing attack in current years. Any discussion regarding social class and mobility will definitely be incomplete without discussing the issue of poverty. Poverty is demarcated as the lack of minimum shelter and food that is essential for maintenance of life. Such a condition is known to be absolute poverty. Currently, more than 35 million U.S citizens, approximately 14% of the entire population live in poverty. In America, other estimates in regard to poverty range from 10% to 21%. This is why numerous sociologists prefer a relative rather than an absolute connotation of poverty. Notably, relative poverty is a situation where the poor are the persons lacking what is required by a great number of America citizens to live decorously since they receive less than 1/2 of the state’s median revenue.
Despite the fact that a number of individuals blame poverty on the poor, social attributes have increased this aspect significantly. According to Alex, relative poverty is a condition of deprivation that results from having less compared to what the majority of persons have. Various social factors have contributed to poverty among many nations globally. According to Anup Shah, almost half of the children in the world are living in poverty. Evidently, single-parent families tend to be more likely compared to two-parent families to be living under the poverty line. Certain studies carried out by Haskins indicated that the rate of poverty among children in families that were headed by females was 44.3% while those in married-couple families; the poverty rate was 11%. Additionally, Wesley Richards’s points out those children who are born and raised outside marriages have a greater likelihood of living in poverty compared to those who are born and raised by a married couple.
Overpopulation is another social factor that is attributed to poverty. This is the state of having a great number of persons with extremely insufficient resources together with too little space. It might result from a high populace density or from low extents of resources or even both. A populace that is extremely high tends to pressurize the available resources since the resources could only support a given number of persons. The aspect of poverty might also depend on the nation’s mix of population density as agricultural productivity. A large population might engage in low productivity farming practices thereby contributing to the county’s high poverty levels. Such a state is common in developing countries that lack advanced technologies to meet their population basic needs. Social norms in customarily rural-based cultures normally support the value of big families. Additionally, governments from less developed nations do not offer any assistance either financially or even politically for family planning. Again, various families might fail to know much about family planning since they lack an adequate education. As a result, several less developed countries have high population growth rates despite the fact that they have limited resources and this contributes to excessive poverty incidences.
Consequently, the lack of adequate education is another social factor that is linked to high poverty rates. The issue of illiteracy and dearth of sufficient education are common in less developed and poor countries. Notably, governments of less developed countries habitually cannot afford to provide adequate and modernized educational systems for public institutes and especially those in rural regions. While essentially all children in developed nations are accessible to education, only around 60% of them in less developed countries even attend basic schools. Patently, poor persons also forego education so as to focus on making a marginal living (Sakif, 2015). Furthermore, less developed countries have minimal employment opportunities, especially for women. Due to this aspect, many people do not or see very little reason for going to school. A research carried out in Yemen implied that 41% of the country’s rural populace survives on less than 2 dollars daily. Also, 85% of the countries deprived populace lives in rural regions where about 47% of its population are uneducated and this leads to high incidences of poverty.
Moreover, the aspect of immigration has greatly worsened the issue of poverty. The United States of America is one of the nations that immigrants come to. According to Ron Haskins, many immigrants have no elementary education. The dearth of education amid these immigrants make them to only be capable of holding minimum paying jobs where they cannot earn enough money that would enable them to lick properly and live above the poverty line. According to Haskins, the rate of poverty among immigrants is higher compared to that of Native Americans. Studies have shown that in 2009, the rate of poverty among the immigrants was 19% which was more than that of Native born America that was 13.7%. The higher poverty rate among immigrants has led to higher rates of poverty within the nation. Most immigrants would have lower living status as well as lower paying jobs since them lack adequate education in addition to their race.
Race, as a social factor is interrelated with poverty since is it is tangled to other subordinate elements of honor and impact that makes it a fundamental feature in poverty. Particularly, race together with wealth share a sturdy connection that leads specialists to debate if there is any causal correlation amid the two that subsists, tricking participants of a certain race in poverty one generation after the other. According to certain experts, the correlation that exists between race and poverty designates that certain races are termed to be substandard to others when regarding issues to do with financial administration (Sakif, 2015). Besides, other specialists especially sociologists point out those rich families that are mostly restrained to a single race are capable of bequeathing their resources to succeeding generations thereby certifying a race-wealth divide. In American, society has impeded that whites are dominant and therefore every other race is termed to be inferior. Other races apart from the whites have issues while earning jobs and a fair amount of pay. In this connection, many employers would not hire employees because of their diverse race or other pay them less amounts because of their skin color. This discrimination increases the incidence of poverty among other races that are considered inferior in society.
Accordingly, from a sociology perspective, Alex Thio points out that society is responsible for the creation and maintenance of poverty. To him, poverty is actually what allows dirty work of society to be done. Affluent business persons and professionals are capable of realizing their career goals with the help of poor persons in society who work as maids and servants. Despite poverty allowing society’s dirty work to be done, assisting the affluent employees in reaching their career goals and objectives thereby creating a number of jobs, the social causes of poverty outweigh the positive impacts. Individuals would blame the aspect of poverty on the deprived although the poor are against operating and are not basically lazy. Clearly, the social facet regarding poverty is, therefore, the factual reason why there is an increased incidence of poverty in the entire world.
Theory Presentation
The neoclassical economic theory is based on the denial of the Marxian concept of exploitation. The theory applies the idea that supply of the social properties produced by marketplace exchanges is distinctively fair and just. The neoclassical theory strains the protagonist of the unequal preliminary endowment of the capital, skills, and talents which regulate the output of a distinct in causing poverty inside a market-based viable economic structure. The market fiascos such as moral peril, externalities, and adverse actions are seen as the aggravators of poverty (Davis & Sanchez-Martinez, 2015). This may hesitantly play a key role in triggering poverty because the people in scarcity are more susceptible to tremors of their well-being such as family breakdown.
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The skepticism concerning the role of government is evident in neoclassical theory through market failures. For instance, credits unions are viewed as potentially treasured from the pure commercial point of view. This is because credits unions are able to overcome the protagonist of the moral hazard in loaning to poor people. This issue of the moral hazard results in the limited convenience of credit and high social costs. The neoclassical theory typically agrees in utmost practical scenarios a goal of full pay equality. For instance, the efficiency must be incurred at a higher cost. However, most of the thinkers in neoclassical never view the poverty mitigation as a dominant economic objective. The poverty reduction is seen as desirable when there is augmented efficiency in the apportionment of the resources amongst the entire population (Foulkes & Schafft, 2010). There are different approaches to the neoclassical theory on the causes of poverty.
First, the monetary approach reflects the essential elements in the neoclassical prose slightly precisely. It is viewed as the companionable with the effectiveness maximizing behavior which indicates it is measurable through consumption. Concurrently, the consumption and income take the center stage in the establishing the key variables of the welfares and main units of the measurement used in poverty analysis. The approach assumes the income is reliant on the peripheral productivity. The chief assumption is that the even monetary metrics can magnificently capture all the appropriate heterogeneity crossways the situations and the individuals. However, the income should be the main consideration since it gives the people the purchasing power in the alleviation of poverty. This is because of providing access to the resources which were not available (Deardorff, 2011). Thus, it enables the people living with poverty to buy or receive free goods. Through this approach, the chief appeal of the monetary dimensions of the scarcity is that well-being can be enumerated as the total ingesting of the individual by either the income or expenditure data.
The poverty is demarcated as the shortfall below the lowest level of the possessions given by the explicit poverty line. The most notable feature of the poverty conceptualization is the credence that it is impartial by the fact it is founded on the external valuation. This monetary approach has some criticism such as the validity of the approach which hinges on the assumption as expressed in the consumption reliability. The other criticism is the volatility whereby, it depends on the income sources diversification and investing in other forms of capital. The theory is concerned on the individual data at a household level whereby the distribution may be uneven (Saad-Filho, 2010). The monetary approach outlines the poverty barely in terms of ingesting derivable from recent income. It assumes the individual is indistinguishable in terms of desires and predilections by taking a virtuously individualistic standpoint.
Second, the other approach is the income or financial approach which has been broadly cited in the occurrence of the asset shortage. This approach holds that households that people who have a satisfactory level of the resources are less affected by the pay fluctuation meanwhile the asset property can be varied. Thus, the risk of charming poor is lower than asset-poor households in case of the negative income shock. The failure to diversify the incomes brings about the holding of few assets hence leading to the poverty episodes when there are job insecurities and the family internal condition is susceptible to instability. The inability to accumulate the private assets leads to the poverty increase. The housing is the asset which is valuable and it is less liquid thus ineffective in the event of coming across income shock (Szyszka, 2011). The people living with poverty find it difficult to save hence may lack bank accounts which discriminates them in financial markets. To reduce the asset poverty, an individual must implement the individual development account which matches savings account to the people living with poverty.
People experiencing poverty requires that they are provided with access to low-cost credit markets which is capable of protecting them against the income shock. This situation will enable them to self-reinforce the process of accumulating the assets thus leading to a sufficient level of wealth in case they experience income fluctuation (Deardorff, 2011). It is important for vulnerable groups to own pension schemes or life assurance with respect to poverty. This accumulation of the insurances with government subsidies ensures that the prevention of poverty amongst the retirees who live with poverty. Lacking life insurance leads to poverty amongst poor retired households. Thus, it is wise for people with low income to save for the future to avoid the risks.
The other approach is market failures, incentives and access to the credit market. This approach is based on making the decision amongst the people in poverty contrary to their interests. For instance, they have very few resources to take care of their health and optimal diet which may entail obesity. The behaviors constraints such as self-control, procrastination and consumption bias may reflect the lack of information. The poor people are argued to be indulgent and lazy. The markets failures lead these symptomatic factors of information asymmetries rising to adverse incentives. These factors result in inadequate savings. People living with the poverty believe that the education returns are low at low levels hence keeping their children away from school when it is even is free. The issue of setting up businesses, choosing good nitration and birth control amongst the poor may improve their wealth (Davis & Sanchez-Martinez, 2015). However, this approach has a criticism of the undertaking the individual hitches rather small incomplete as compared to the comparative terms.
The mismatch of the skills in the labor market is related to market failure especially for low-income earners. Having the wrong skills in the job market can result in poverty. The children from poor backgrounds have a poor level of education hence inadequate skills (Saad-Filho, 2010). This later resulted in aggravation, by reducing demand for unskilled workforces. The factors of the regulating product market and labor serve as the solution to the market’s failure which may lead to poverty. However, excess regulation may halt poverty reduction because it may hamper private investments and worsen investment environment. This situation may lead to a decrease in economic activities and unemployment. The countries with heavy market regulation hurt the public interest and endorse poverty. The restrictive pro-worker regulations are associated with the poverty increase to low-income earners. Lack of access to credit facilities leads to poverty since the individual may not be able to start business activities which might otherwise eradicate poverty. This leads to a vicious circle of poverty since the individual may also lack economic assets.
The other approach is the immigration and ethnic minority group. The people from minority ethnic groups were generally low-income households (Foulkes & Schafft, 2010). This may be due to the discrimination or the attitude towards education. Immigrants may be susceptible to poverty as compared to the natives. The immigrants find it difficult to secure jobs and the entitlement to the state benefits as with natives. The misalignment of the skills demanded and labor market provided by the immigrants may lead to unemployment. The success in the labor market by the immigrants is determined by the level of education.
Conclusion
Finally, the neoclassical approach employs units of poverty dimension that are measurable and the policy remedies presumed from theory is usually accurate hence easy to put into exercise. The approach emphasizes on the individual aspect of poverty and focuses on the untainted material to eliminate poverty. The problem with this approach is the use of the narrow working classification of poverty. The approach also adopts discrete deportment towards poverty, money-centered and the inequality issues which might affect the poverty dimensions explicitly.
References
- Davis, E. P., & Sanchez-Martinez, M. (2015). Economic theories of poverty. Joseph Rowntree Foundation.
- Deardorff, A. V. (2011). Rich and poor countries in neoclassical trade and growth. In Comparative Advantage, Growth, and the Gains from Trade and Globalization: A Festschrift in Honor of Alan V Deardorff (pp. 295-313).
- Foulkes, M., & Schafft, K. A. (2010). The impact of migration on poverty concentrations in the United States, 1995–2000. Rural Sociology, 75(1), 90-110.
- Saad-Filho, A. (2010). Growth, poverty, and inequality: From Washington consensus to inclusive growth. New York, NY: UN.
- Szyszka, A. (2011). The genesis of the 2008 global financial crisis and challenges to the neoclassical paradigm of finance. Global Finance Journal, 22(3), 211-216
- Mavrich, B. (2017, September 29). Poverty. Retrieved October 31, 2018, from Social Factors That Contribute to Poverty: https://classroom.synonym.com/social-factors-that-contribute-to-poverty-12082828.html
- Sakif, T. A. (2015, April 27). INTRODUCTION TO SOCIOLOGY. Retrieved October 31, 2018, from The social cause of poverty: https://www.slideshare.net/TanvirAhmedSakif/the-social-cause-of-poverty
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