EVERY year, on October 17th, the world comes together to observe the International Day for the Eradication of Poverty. This day sheds light on the millions of families worldwide who live in extreme poverty, facing an uphill battle against hardship, inequality and separation. The International Day for the Eradication of Poverty theme focuses on the intersection of poverty and human dignity, emphasizing the role of individuals and communities in addressing poverty issues at their core.
This year’s theme called for stronger social systems that prioritize family-based care and child protection to combat the root causes of poverty. Poverty is seen not just as a lack of financial resources but as a complex web of issues that leads to family separation, malnutrition, limited access to education and poor health outcomes. The link between poverty and education is particularly crucial; children from impoverished families are often denied the basic right to learn, further entrenching the cycle of poverty.
One of the main causes of poverty is inequality in access to opportunities, resources and education. Without proper systems to support them, families are often forced to make impossible choices, such as placing their children in orphanages. Poverty in the world is exacerbated by conflicts, climate change and inadequate social safety nets, affecting vulnerable populations, particularly children. When families lack financial stability, they struggle to provide food, healthcare and education, leading to further hardship and separation disproportionately.
It has been argued that there exists a poverty trap which explains why people (and countries) that start poor remain poor. A set of self–reinforcing mechanisms determine that poverty begets poverty. An early example of this kind of literature was developed after1950’sillustrating that low levels of income generate low saving and investment rates, trapping countries in poverty. The same scheme may be applied to individuals. Perhaps it is too early to draw general conclusions about the main consequences the COVID19 pandemic may have on income inequality and poverty. However, there are some clues of what they may be.
Historically, epidemics led to a decrease in population, an increase in mean income, higher wages (because of labour scarcity) and thus lower inequality. This time it is quite different. The pandemic has shown the vulnerabilities and fragility of the present socio-economic system based on human labour. This time it was the coronavirus pandemic, tomorrow it may be another yet unknown global virus pandemic. For this reason, large scale substitution of machines, robots and other digital technologies for labour in the production process will accelerate. Machines and robots do not get sick or stay home when there is a pandemic. Dependence on human labour will be reduced as far as possible. Technological unemployment will significantly increase.
On the other end, some reduced number of highly skilled workers will see their wages increased due to the high demand for their skills. Longstanding inequalities will exacerbate. The intensified use of capital and technology instead of human labour will have far-reaching consequences for developing countries. Low-wage countries will lose their main competitive advantage. This will make it even more difficult for them to provide jobs for their population; higher unemployment and lower wages for unskilled labour will be likely outcomes. Probably, inequality and poverty will rise together. The BC era world economy will not be restored.
On the contrary, saving labor will deepen existing trends, making income for the unemployed an urgent need. The time for universal basic income may have come, implemented alongside a progressive income tax to ensure those who don’t need it return the funds to the State. For decades, poverty wasn’t a priority for mainstream economists, as it was assumed poverty reduction would naturally follow economic growth. Recognized as a distinct research field only in 1969, the focus remained on growth rather than poverty alleviation.
The United Nations’ first Millennium Development Goal in 2000 targeted halving global poverty between 1990 and 2015. While those living on less than $1.25 a day fell from 36% in 1990 to 15% in 2011, the poorest remain left behind. The relationship between economic growth, income inequality and poverty is complex, raising key questions: Does growth reduce inequality or exacerbate it? Does inequality lead to rising poverty or can they coexist with poverty reduction? Contradictory empirical evidence underscores the need for further research to understand these dynamics better.
There are practical, sustainable steps that can be taken to address poverty issues and help families rise above their circumstances. Long-term solutions that empower families and break the cycle of poverty, therefore need to be taken, such as providing access to education and giving them the tools to break the cycle of poverty. Educated children grow up to become empowered adults capable of supporting their families and communities. Promote Family-Based Care by advocating for family reunification and preventing child separation, and ensuring that children are raised in loving homes rather than institutions. Strong families are the foundation of stable societies. Focus on their economic empowerment and providing them financial resources and vocational training to help families generate sustainable income, reducing their dependency on temporary aid. Give them access to healthcare which is a key factor in breaking the poverty cycle. Healthy families are better able to work, learn, and thrive.
Lastly, generous donations be provided to the Poor: Whether through financial contributions or volunteering, supporting poverty charities for Children can make a huge difference in the lives of struggling families. By directing resources toward families in need, one can help create a safety net that keeps them united.
—The writer is Former Civil Servant and Consultant (ILO) & International Organisation for Migration and author of seven books.
(mughal_rashid@hotmail.com)
