Understanding and preventing poverty

More thoughts, analysis and reflections on the nature of poverty and its prevention, taken directly from my management class notes, early part of the course. Students had to understand both poverty and wealth, their causes and their consequences, before they could reasonably discuss and understand wealth creation and poverty eradication.

Concerns about poverty stem from the growing gap in incomes and the contradictions of growth in both wealth and income inequality. Economic growth increases the income gap while decreasing the number of people living in absolute poverty.

The primary issues remain: What constitutes poverty? Is poverty a relative or an absolute term? Is poverty an absence of wealth, income, consumption or opportunity? Is poverty defined as near-starvation? or food uncertainty? Or is it the absence of an opportunity for education? Or lack of access to medical treatment?

1. Census data as far back as 1988 showed three essential behaviors that characterized American adults not in poverty. They finished high school, worked for one year, and married and stay married. For more perspective, Google “three causes of poverty.”

2. More than ten years later, the recommended strategy was similar. William Galston, an assistant to President Clinton, said, to avoid poverty, do three things: finish high school, marry before having a child, and produce the child after you are 20 years old. He noted that only 8% of people who do all three will be poor; of those who fail to do them, 79% will be poor.[1]

3. Poverty is relative and place-specific. A person considered ‘poor’ in the United States may appear wealthy to the poor in another country.

4. Robert Rector of the Heritage Foundation (link) noted these conditions of Americans defined as poor by the Census Bureau.

· 46% of all poor households own their own homes.

· 76% of poor households have A/C (30 years ago, 36% of U.S. had A/C).

· The average poor American has more living space than the average person in Paris, London, Vienna, or Athens.

· Nearly three-quarters of poor households own a car; 30 % own 2 or more.

· Ninety-seven percent of poor households have a color television.

· 78% percent have a VCR or DVD; 62 percent have cable or satellite TV.

1. [1] James Q. Wilson. The family way. Wall Street Journal. January 7, 2003.