Poverty according to encarta dictionary, it has to do with condition of having insufficient resources or income. In its most extreme form, poverty is a lack of basic human needs, such as adequate and nutritious food, clothing, housing, clean water, and health services. Extreme poverty can cause terrible suffering and death, and even modest levels of poverty can prevent people from realizing many of their desires.
 Poverty has many causes, some of them very basic. Some experts suggest, for instance, that the world has too many people, too few jobs, and not enough food. But such basic causes are quite intractable and not easily eradicated. In most cases, the causes and effects of poverty interact, so that what makes people poor also creates conditions that keep them poor.
Primary factors that may lead to poverty include:
A. Overpopulation
 Overpopulation, the situation of having large numbers of people with too few resources and too little space, is closely associated with poverty. It can result from high population density (the ratio of people to land area, usually expressed as numbers of persons per square kilometer or square mile) or from low amounts of resources, or from both. Excessively high population densities put stress on available resources. Only a certain number of people can be supported on a given area of land, and that number depends on how much food and other resources the land can provide. In countries where people live primarily by means of simple farming, gardening, herding, hunting, and gathering, even large areas of land can support only small numbers of people because these labor-intensive subsistence activities produce only small amounts of food.

In developed countries such as the United States, Japan, and the countries of western Europe, overpopulation generally is not considered a major cause of poverty. These countries produce large quantities of food through mechanized farming, which depends on commercial fertilizers, large-scale irrigation, and agricultural machinery. This form of production provides enough food to support the high densities of people in metropolitan areas.

A country’s level of poverty can depend greatly on its mix of population density and agricultural productivity. Bangladesh, for example, has one of the world’s highest population densities, with 1,147 persons per sq km (2,970 persons per sq mi). A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the country’s extremely high level of poverty. Some of the smaller countries in western Europe, such as The Netherlands and Belgium, have high population densities as well. These countries practice mechanized farming and are involved in high-tech industries, however, and therefore have high standards of living.

At the other end of the spectrum, many countries in sub-Saharan Africa have population densities of less than 30 persons per sq km (80 persons per sq mi). Many people in these countries practice manual subsistence farming; these countries also have infertile land and lack the economic resources and technology to boost productivity. As a consequence, these nations are very poor. The United States has both relatively low population density and high agricultural productivity; it is one of the world’s wealthiest nations.

High birth rates contribute to overpopulation in many developing countries. Children are assets to many poor families because they provide labor, usually for farming. Cultural norms in traditionally rural societies commonly sanction the value of large families. Also, the governments of developing countries often provide little or no support, financial or political, for family planning (see Birth Control); even people who wish to keep their families small have difficulty doing so. For all these reasons, developing countries tend to have high rates of population growth.

Most developed countries provide considerable political and financial support for family planning. People tend to limit the number of children they have because of the availability of this support. Cultural norms in these countries also tend to affirm the ideal of small family size. Recently, however, some developed countries with declining population levels have begun experimenting with incentives to increase the birth rate. See also Population: World Population Growth and Distribution.

B. Global Distribution of Resources
 Many experts agree that the legacy of colonialism accounts for much of the unequal distribution of resources in the world economy. In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Some nations have become fairly wealthy, including the Republic of Indonesia, Malaysia, Singapore, South Korea, and Thailand. Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. They also often lack the infrastructure provided by, for example, transportation systems and power-generating facilities. Because these things are necessary for the development of industry, developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much.

Some social scientists argue that wealthier developed countries continue to practice a form of colonialism, known as neocolonialism. The affluence of these countries is based to a large extent on favorable trade with the developing world. Developed countries have been able to get inexpensive natural resources from poorer countries in Asia, Africa, and Latin America, including oil for power, ores and minerals for manufacturing durable goods, and manufactured goods made by low-wage workers in factories operated by multinational corporations. This practice contributes to the dependency of poorer countries while not raising their standards of living.

C. High Standards of Living and Costs of Living

Because people in developed nations may have more wealth and resources than those in developing countries, their standard of living is also generally higher. Thus, people who have what would be considered adequate wealth and resources in developing countries may be considered poor in developed countries. People in the United States, for example, may expect to make, on average, about $30,000 each year. They also probably expect to rent an apartment or own a house with electricity and running water, to be able to afford to eat and dress well, and to receive quality health care. In addition, many people aspire to afford discretionary expenses—that is, purchases unessential to survival, such as cars, higher-priced foods, and entertainment.

In contrast, people in developing countries may consider themselves to be doing well if they have productive gardens, some livestock, and a house of thatch or mud-brick. In rural areas, people may be accustomed to not having plumbing, electricity, or formal health care. By the standards of developed countries, such living conditions are considered hallmarks of poverty.

Developed countries also tend to have a high cost of living. Even the most basic lifestyle in these countries, with few or no luxuries, can be relatively expensive. Most people in the United States, Canada, Japan, Australia, western European nations, and other developed countries cannot obtain adequate food, clothing, and shelter without ample amounts of money. In some areas, even people with jobs that pay the legal minimum wage may not be able to cover their basic expenses. People who cannot find or maintain well-paying jobs often have no spare income for discretionary or emergency expenses, and many rely on government welfare payments to survive.

D. Inadequate Education and Employment
“Great Society” Programs
This photograph shows a man reading to children in Coahoma County, Mississippi. During the 1960s a private corporation called Coahoma Opportunities, Inc. used federal funds to employ teachers—both black and white—to teach underprivileged children in the South. The project was part of President Lyndon Johnson’s “Great Society” program, which worked to improve education and reduce poverty and racism in the United States.
Encarta Encyclopedia
AP/Wide World Photos
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Illiteracy and lack of education are common in poor countries. Governments of developing countries often cannot afford to provide for good public schools, especially in rural areas. Whereas virtually all children in industrialized countries have access to an education, only about 60 percent of children in sub-Saharan Africa even attend elementary school. Without education, most people cannot find income-generating work. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition, developing countries tend to have few employment opportunities, especially for women. As a result, people may see little reason to go to school.

Even in developed countries, unemployment rates may be high. When people do not have work, they do not make any money; thus, high unemployment leads to high levels of poverty. Availability of employment also tends to fluctuate, creating periods of high joblessness (see Business Cycle). Countries such as Japan, South Korea, Singapore, Switzerland, and Luxembourg have managed at times to keep unemployment as low as 2 percent. Unemployment figures during the 1990s in the United States and most of Europe, on the other hand, ranged from about 5 percent to more than 20 percent. In countries with high populations, unemployment levels of only a few percentage points mean that millions of working-age people cannot find work and earn an adequate income. Because unemployment figures indicate only the number of people eligible to work who have no job but are seeking employment, such figures are not necessarily an accurate indicator of the number of people living in poverty. Other people may not be able to find enough work or may earn wages too low to support themselves.

E. Environmental Degradation
 In many parts of the world, environmental degradation—the deterioration of the natural environment, including the atmosphere, bodies of water, soil, and forests—is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter, and other essential resources. As forests, land, air, and water are degraded, people who live directly off these natural resources suffer most from the effects. People in developed countries, on the other hand, have technologies and conveniences such as air and water filters, refined fuels, and industrially produced and stored foods to buffer themselves from the effects of environmental degradation.

Global environmental degradation may result from a variety of factors, including overpopulation and the resulting overuse of land and other resources. Intensive farming, for instance, depletes soil fertility, thus decreasing crop yields. Environmental degradation also results from pollution. Polluting industries include mining, power generation, and chemical production. Other major sources of pollution include automobiles and agricultural fertilizers.

In developing countries, deforestation has had particularly devastating environmental effects. Many rural people, particularly in tropical regions, depend on forests as a source of food and other resources, and deforestation damages or eliminates these supplies. Forests also absorb many pollutants and water from extended rains; without forests, pollution increases and massive flooding further decreases the usability of the deforested areas.

F. Economic and Demographic Trends

Poverty in many developed countries can be linked to economic trends. In the 1950s and 1960s, for example, most people in the United States experienced strong income growth. Taking inflation into account, average family income almost doubled during this period. However, between the early 1970s and the early 1990s typical incomes, adjusted for inflation, grew little while the cost of living increased. Periods of economic recession tend to particularly affect young and less-educated people, who may have difficulty finding jobs that pay enough to support themselves.

Changes in labor markets in developed countries have also contributed to increased poverty levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while the demand for workers in service- and technology-related industries has increased. Historically, people have learned the skills required for jobs that involve manual labor, such as those in manufacturing, either on the job or through easily accessible school vocational programs. As these jobs are replaced by service- and technology-related jobs—jobs that usually require skills taught at the college level—people who cannot afford a college education find it increasingly difficult to obtain well-paying work.

In many developed nations the number of people living in poverty has increased due to rising disparities in the distribution of resources within these countries. Since the 1970s, for instance, the poorest 20 percent of all U.S. households have earned an increasingly smaller percentage of the total national income (generally less than 5 percent) while the wealthiest 5 percent of households have earned an increasingly greater percentage (about 45 percent of the total). During most of this period, those in the middle and the bottom of the income distribution have become progressively worse off as the cost of living has risen.

Some researchers also cite demographic shifts (changes in the makeup of populations) as contributing to increases in overall poverty. In particular, demographic shifts have led to increases in poverty among children. In the United States, for instance, typical family structures have changed significantly, leading to an increase in single-parent families, which tend to be poorer. Single-parent families with children have a much more difficult time escaping poverty than do two-parent families, in which adults can divide and share childcare and work duties. In 1970 about 87 percent of children lived with both of their parents, but by the turn of the century this figure had dropped to 69 percent. The divorce rate in the United States more than doubled between 1960 and 1980, although it stabilized in the 1980s and fell somewhat in the 1990s. More importantly, perhaps, the proportion of children born to unmarried parents grew from about 5 percent in the early 1960s to more than 33 percent by 2000.

G. Individual Responsibility and Welfare Dependency
 There are differing beliefs about individual responsibility for poverty. Some people believe that poverty is a symptom of societal structure and that some proportion of any society inevitably will be poor. Others feel that poverty results from a failure of social institutions, such as the labor market and schools. These people feel that poverty is beyond the control of those who experience it, but might be remedied if appropriate policies were enacted. Other people feel that the poor intentionally behave in ways that cause or perpetuate their poverty. For instance, if people voluntarily choose to use drugs and this leads them to poverty, it can be argued that they are to blame for their situation. However, such an argument cannot completely explain cases in which poverty leads to drug dependence.

In addition, many people in developed countries blame cycles of poverty, or the tendency for the poor to remain poor, on overly generous welfare programs. Supporters of this position, including some politicians, argue against government spending and initiatives to help the poor. They believe that these programs provide incentives for people to stay poor in order to continue receiving payments and other support. This argument also suggests that welfare discourages work and marriage. In the United States and other developed countries, getting a job results in reduced welfare support; the same is true when a single parent gets married. However, cash welfare benefits for the typical poor U.S. family with children fell in value by half between the early 1970s and the mid-1990s, taking inflation into account. Such benefits may have been too meager to motivate people to stay on welfare or to avoid work or marriage.

In the United States, the belief that cash welfare assistance actually encouraged personal decisions leading to poverty dominated policy discussions of the 1990s. In response, in 1996 the U.S. Congress created a new welfare program called Temporary Assistance to Needy Families (TANF). This program ended the guarantee of cash benefits for poor families with children, shifted more control to the states, and established stricter work requirements for recipients. The numbers of poor families with children receiving cash welfare fell dramatically, from 4.6 million in 1996 to 2.1 million at the end of 2001. The poverty rate for children also fell during the 1990s, from more than 20 percent in the early part of the decade to about 16 percent by the end of the decade. Experts disagree, however, on what drove the reductions in both welfare caseloads and poverty: changes in welfare policy or the dynamic economy that prevailed during most of this period.

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