The Pros And Cons Of Poverty

According to Murphy & Quinlan (2008), poverty refers to a situation where a person’s income or resources are so meager such that they inhibit them from attaining a standard of living that is deemed the least acceptable. Such persons experience disadvantages such as low earnings, unemployment, poor housing and inability to access quality health care and education, etcetera. The United Nation’s Copenhagen Declaration defined pverty as;

Lack of income and productive resources to ensure sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments and social discrimination and

According to the theories, the market is full of imperfections. In capitalist markets, the cost of labor is way below its actual value as a result of an increased risk of unemployment. In such a market, poverty levels are bound to be high and can only be checked by strict regulation, for example, by enforcing minimum wages. Other barriers to breaking the poverty cycle include discrimination and social status. As Little stated, discrimination denies disadvantaged persons an opportunity to prosper. Discrimination can be based on race, social status, level of education, etcetera. Prejudice and corruption make it hard for minorities to get jobs. They are therefore forced to live in communities where living standards and social amenities are deplorable. Due to their situation, they cannot penetrate the market as they even fear losing the little they have. In some cases, it becomes impossible for poor persons to exploit natural resources to turn them into more valuable products. For example, without initial capital, investing in technology for agricultural production becomes difficult, hence despite owning land, meeting its maximum potential becomes

The costs of living in poverty are magnified by adverse outcomes like increased crime in low income neighborhoods, limited access to healthcare facilities for the sick, low productivity, etcetera (Gwendolyn, 2012). This reduces the ability of poor people to participate in productive economic activities, while the burden on welfare facilities increases. Human capital development is essential for economic growth where an empowered individual contributes to economic development through increased productivity and innovation.

While the individualist ideology on poverty, to some extent, makes sense, poverty is much more of as a result of institutional failures than individual failures. Previously, efforts of poverty eradication have been focused on mitigating the effects of inequality. This explains why a number of welfare associations focused on giving handouts, which are seen to encourage dependence. The fact that capitalist markets contain imperfections that discourage fair competition cannot be disputed. The assumption by some economists that poverty is a trivial matter compared to the more serious market equilibrium theories is misguided. Some other, similarly misguided, economists believe that in a properly functional and competitive market, poverty is bound to be observed. However, with the current evidence that points to market imperfections being a major contributer to poverty,