Economics is the study of how economic resources are used to produce goods and services to satisfy society’s needs and wants. All people need food, water, shelter, and clothing to survive; however, people usually want more than they need and this list can go to infinity for many individuals.
Scarcity of resources leads to resource allocation. This leads to inequality within society where survival of the fittest becomes the law of the land. One consequence of this is poverty.
What is Poverty?
Most people think poverty means not having enough money and having to struggle to pay the bills. Poverty goes beyond this – it infiltrates every aspect of people’s lives, causing a range of social problems from poor health to school failure.
Different types of poverty:
- Absolute poverty (Material Poverty) – not having the very basics to live. These basics are known as needs, for example: nutritious food, shelter, clothing, access to healthcare and education.
- Relative poverty (Social Poverty) – not being able to afford the standard of living considered to be acceptable by the majority of people.
When we talk about the poor, we think that there is a fixed body of people who live in poverty all their life. This is true for some, but the majority of people are more likely to be in poverty for certain period of their lives and may eventually climb out of it.
Generally, the groups of people more likely to be considered poor are: single-parent families, the unemployed, low-paid individuals, people with severe illness, people with disabilities, older people, and people from ethnic minorities.
Indicators of poverty (can take form in a class discussion – possible coursework idea):
- Levels of education – the lower the level of education, the more likely it is to be poor.
- Health Care – poor people tend to be less healthy than those who aren’t poor. This is because people with higher income have better access to health care and nutritious food.
- Type of employment – linked to level of education.
- Level of income – linked to level of education.
- Environment and housing – the area one lives in can also indicate poverty.