Poverty

C

Latin America

In Latin America (Central America, South America, and the Caribbean), the poorest people are commonly Native American, people of African ancestry, and mestizos (persons of mixed Native American and European ancestry). People of European descent who live in Latin America generally have higher standards of living. Political instability has contributed to poverty in many Latin American countries, including Chile, Cuba, Nicaragua, and Panama. These countries have gone through long periods of military rule or dictatorship in which leaders have hoarded land and natural resources and impaired people’s ability to make an adequate living. For many years the Caribbean country of Haiti has suffered economically from the effects of both political upheaval and environmental degradation. Brazil has the greatest number of people living in poverty in all of Latin America. This is in part because of its size, but also because of encroachment by urban populations on the land and forest resources of its many native peoples. Large-scale urban poverty, marked by crowded and unsanitary slums, plagues cities such as Rio de Janeiro in Brazil and Mexico City. It is estimated that slightly more than 60 million people in this region of the world lived in extreme poverty in 1998.

D

Eastern Europe and Central Asia

Many countries formerly part of the Communist bloc (the Communist countries of eastern Europe), including those of the former Soviet Union, have relatively high levels of poverty. Historians and economists blame the legacy of Communism for much of the poverty in these countries. Communist governments owned and distributed most of their countries’ property and resources. Leaders of these governments proclaimed the benefits of this centralized system, but many people who lived under Communism experienced lower standards of living than people who lived in countries with democratic governments and free-market economies, such as the United States and the nations of western Europe.

Since the fall of Communism in 1989, poverty in much of eastern Europe and Central Asia has increased. The number of people living in extreme poverty in these areas grew from 1.1 million in 1987 to an estimated 17.6 million in 1998. The fall of Communism ended a political and economic system in which all people had been virtually guaranteed jobs and basic needs, such as food and housing. Sudden uncertainty about the future led to decreases in the value of currencies in all formerly Communist countries. Wars and instability ravaged many of these countries. In the most devastating conflict, the former Yugoslavia erupted in violent civil war in 1991 (see Yugoslav Succession, Wars of). In several formerly Communist countries, political and economic upheaval has led to a wide array of problems, including a dramatic increase in the number of orphaned children. The high number of orphans has stretched the capacity of orphanages, and many orphans live in extreme poverty and suffer from malnutrition, disease, and starvation.

VI

Poverty in Developed Countries

The nature of poverty in the developed world differs greatly from that in the developing world. In developed countries, the majority of people commonly earn over 200 times the per capita (per person) income of the poorest developing countries. For this reason, developed nations usually measure the income level of poverty as a portion of average income or as an amount below which a person or family cannot afford basic needs, including housing. For people with low or no income, poverty often takes the form of homelessness; those in less extreme poverty often live in substandard and sometimes dangerous housing. Many of the poor in developed countries are also exposed to high levels of violence associated with drug dealing, spouse or child abuse, and other crime.

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For reasons that are only partly understood, the United States has higher rates of poverty than most other developed countries. A study of 16 developed nations conducted in the early 1990s used a single measure for comparison: Poverty was defined as earning below half the median (middle) of all incomes. The results showed that about 19 percent of the U.S. population lives in some degree of poverty. The rates were between 10 and 15 percent in Australia, Canada, Ireland, Japan, Spain, and the United Kingdom. Many of the other countries of western Europe—including Belgium, France, Germany, Italy, the Netherlands, and the Scandinavian countries (Finland, Norway, and Sweden)—all had poverty rates of between 5 and 8 percent.

Poverty rates in some developed countries, including the United States and the United Kingdom, are higher among racial minorities. Indigenous people in developed countries also tend to suffer from very high rates of poverty. In the United States, many Native Americans live and work on economically depressed Native American reservations and experience high rates of joblessness and alcoholism. In Australia, many Aboriginal people live in similar conditions (see Aboriginal Australians).

A

The United States

In 2001 the Census Bureau reported about 33 million residents living in poverty in the United States, or about 12 percent of the total population. About 6.8 million families, or 9 percent of all U.S. families, lived in poverty in 2001. These poverty rates were similar to those of the 1970s, but were about half of the historically high rates of the early 1960s. While little seems to have changed in aggregate, or total, levels of U.S. poverty since the 1970s, the composition of the people living in poverty has changed significantly. That is, the probability of being poor has changed significantly across demographic groups, which are based on age, race, family status, and geographic location. Some groups of people are now much more likely to be poor than in the past while other groups are less likely to be poor.

The census divides the total U.S. population into three basic age groups: children (up through 17 years of age), prime-aged adults (18 years to 64 years), and the elderly (65 years of age and over). About 16 percent of children were poor in 2001, more than in any other age group. Poverty among prime-aged adults, who generally work, has fluctuated with changes in the U.S. economy. In 1996, when the economy was performing well, about 10 percent of prime-aged adults lived in poverty. The numbers of elderly living in poverty dropped dramatically between 1959 and 2001, from over 30 percent to around 10 percent.

An estimated 8 percent of whites of all ages (not including those of Hispanic origin) were poor in 2001. By contrast, more than one in five blacks (23 percent) and about the same proportion of Hispanics (21 percent) lived in poverty. Blacks and Hispanics are the largest U.S. minority groups, and most smaller groups, including Asians, experience less poverty. However, because of the different sizes of these groups in the United States, whites make up the largest percentage of the poor overall.

In 2001 about 6 percent of all married couples were poor. On the other hand, 35 percent of single-mother households lived in poverty at this time. Rates were even higher for Hispanic (43 percent) and black (42 percent) single-mother households.

Higher percentages of people are poor in the southern and western parts of the country than in the Northeast and Midwest. One reason for this difference may be that the South and West contain more, and more sparsely populated, rural areas, which have fewer higher wage jobs. Poverty is more prevalent in rural areas, and also in central cities, than it is in suburbs. Although pockets of high poverty exist, poor people live in all areas of the United States.

B

Other Developed Countries

There are many factors that might account for the differences in rates of poverty among developed countries. Some countries, such as the United Kingdom, have greatly imbalanced income distributions. In these countries, a relatively small proportion of the population has a large share of money, property, and other resources. This imbalance can make the overall median income fairly high, with the result that more people earn less than the median. In many developed countries, the wealthiest people have money and other resources that might otherwise be available to the rest of society. The great ethnic and racial diversity of countries such as Australia, Canada, and the United Kingdom may also contribute to high poverty rates because minority groups tend to have low social and economic status. The Scandinavian countries, which have the lowest poverty rates of all developed countries, have fairly homogenous populations.

Differences in the history and scope of social welfare systems among developed countries also may contribute to differences in their poverty rates. For instance Spain and Japan have welfare systems that are not well established or expansive; the poverty rates in these countries are moderate. On the other hand, most of the countries of western Europe and, in particular, the Scandinavian countries, have mature, large social welfare systems that provide a great deal of support for people who have inadequate income. The Scandinavian countries, whose unemployment rates are generally far higher than their poverty rates, have both substantial social welfare systems and relatively equal distributions of income. For example, in the mid-1990s, the estimated child poverty rate in the United States was about seven times the rate measured in Sweden.

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