Poverty and its Consequences on Global Well-being EUSW Social Work Summer School Fachhochschule Vorarlberg University for Applied Science 19th July, 2007 Dornbirn, Austria Dr. Maria Michailidis, Associate Professor, INTERCOLLEGE, NICOSIA CYPRUS
General Questions on Poverty Outline The European Economic and Social Council definition of poor Sociological definition of poverty - Theory of Social Service -theme of poverty Current terminology - Measuring poverty - Indicators Message of the United Nations Former Secretary-General, Kofi Annan on the International Day for the Eradication of Poverty Declaration of the Millennium Summit and Poverty Statistics Social exclusion-categories raised in most recent reports on Poverty Case Study Poverty in Romania (papers on: Germany, Portugal, Italy, Spain, Cyprus, Romania and France)
Poverty Income poverty or human development? Sustainable livelihood or social inclusion? Current consumption or future security? Therefore Different concepts imply different interventions.
General Questions Why is Poverty a state for the majority of the world s people and nations? What are the causes of poverty and inequality? Is it enough to blame poor people for their own predicament? Have they been lazy? Have they made poor decisions? Are they solely responsible for their plight?
What about their governments? Have they pursued policies that actually harm successful development? Where has the increasing interconnectedness promised by globalization gone? Are decisions and policies typically influenced, or formulated by the rich and powerful? In the face of numerous enormous external influences, are the governments/people of poor nations often powerless? As a result, in the global context, are a few getting wealthy while the majority struggle?
The European Economic and Social Council in 1976 defined poor as : "the individuals and the families whose resources are so weak that they are excluded from the ways of life, of the normal practices and activities in which they live". Sociological definition of poverty is proposed by French, Serge Paugam: that poverty corresponds to a social status lower and devalued impregnating its mark on the identity of the people.
The representations of poverty are influenced by the representations which we have of the success and the richness. We also have the three following criteria as universal: social class, the status (related to the profession) and the capacity held (associate with the status). In the theory of Social Service the theme of poverty has been redefined as social exclusion While the English sociology speaks about poverty, orientated to analyzing the aspect of the individual and the distributive aspects (level of life and income), in most European Social Services the preferred term is social exclusion - appointing to people s personal relationships and their fragmentation.
In the tradition of the French sociological School (Robert Castel), social exclusion is perceived as a process of marginalization, caused by successive detachment between an individual and the society, when the living social and personal relations are broken down, often with no return: For example: People will be segregated due firstly to unemployment thus they loose their former life objectives, entering in a financial crisis, making it impossible to pay the housing mortgage or rent, then, it happens that family relationships break down, with the loss of affection, friends and social support
For the German sociologist George Simmel, poverty is the relationship of assistance which causes the emergence of the category of the poor: "it is not the lack of means which makes one poor. Speaking from a sociological point of view, the poor person is the person who receives assistance because of this lack of money" (G. Simmel, The poor, PUF, 1998, 1st edition 1908). Poverty is a term generalized in the Nineties, specially : exclusion. It is synonymous to move away with the factors of social and cultural disintegration. Thus, this would be the "in" and "out" of the social system.
In Martin Hirsch s, Poverty in Heritage, Edition R. Laffont, (2006), it is stated that poverty is an accumulation of difficulties which are related to: Unstable employment, expensive housing, degrading health, non-access to transportation difficulties in getting credit So, is poverty simply about the level of income obtained by individuals or households? Or, is it about lack of access to social services? Or, is it the inability to participate in society: economically, socially, culturally or politically?
Current terminology - describes poverty Income or consumption poverty Human (under) development Social exclusion Ill-being (Lack of) capability and functioning Vulnerability Livelihood unsustainability Lack of basic needs Relative deprivation
Measuring poverty is complex The complexity of measurement mirrors the complexity of the definition of poverty. Further, the complexity increases where participatory methods are used and people define their own indicators of poverty. The proliferation of concepts and indicators would matter less if the same individuals were being identified by all measures. Measuring poverty is not synonymous with understanding why it occurs. Thus it is agreed that Interventions need to tackle causes and not symptoms.
Indicators of Poverty The literature talks about setting up targets SMART targets, which are stretching: measurable, agreed, recorded, and time-limited. However, indicators should also be EASY: cost-effective (or economic), relevant (or appropriate), simple, and updated frequently.
However, different models of poverty imply different indicators. For example: Money metric models require information on income or consumption; Foster, Greer and Thorbecke, (F-G-T) measures enable a calculation to be made both of the headcount, i.e. the number of people below the poverty line, and the poverty gap, or shortfall of the poor below the poverty line; Vulnerability models use indicators of wealth and exposure to risk, as well as income; Models concerned with capability and functioning present indicators of life expectancy or educational achievement; Models of well-being or social exclusion include measures like the degree of social support.
For example, World Bank poverty assessments, concentrating on money metric measures, also provides evidence on health, education, physical isolation, and other so-called correlates of poverty. (Box 2)
When poverty is multi-dimensional, problems arise with the weighting of different components. Attempts have been made since the 1960s to identify indices which combine different elements. For example, a Physical Quality of Life Index was developed in the 1970s, combining information on life expectancy, infant mortality and literacy. Current work by UNDP on human development is heir to this tradition, (Box 2 identifies the main current measures used by UNDP, and their components).
Message of the United Nations former Secretary-General, Kofi Annan on the International Day for the Eradication of Poverty (17 October 2000): Almost half the world's population lives on less than two dollars a day, yet even this statistic fails to capture the: humiliation, powerlessness and brutal hardship that is the daily lot of the world's poor. Poverty on such a scale is unacceptable, not least because globalization has opened up vast avenues of wealth creation. Globalization can be a strong force in the fight against poverty.
But globalization must mean more than creating bigger markets, and experience confirms that growth alone cannot reduce poverty and income inequality. Economic policy must be combined with effective social policies aimed at education for all, health for all and gender equality. This is essential if globalization is to work for all the world's peoples, and if we are to meet the goal of halving, by the year 2015, the proportion of people living in extreme poverty.
In their Declaration of the Millennium Summit, world leaders recognized the need to "spare no effort to free our fellow men, women and children from the abject (pitiful, low, lack of self respect ) and dehumanizing conditions of extreme poverty." The International Day for the Eradication of Poverty is a reminder of the global responsibility that exists to work for a more equitable world economy, where all countries have a fair chance to compete, and where those who have more will do more for those who have less.
At the Millennium Summit, 150 world leaders agreed to a number of steps to help people escape the misery of poverty. These include: By 2015, halving the proportion of people living on less than a dollar a day. By 2015, halving the proportion of people who suffer from hunger. By 2015, halving the proportion of people who are unable to obtain safe drinking water.
By 2015, providing primary education to all girls and boys, on an equal basis. By 2015, have halted--or even reversed--the spread of HIV/AIDS and the scourge of malaria. By 2015, reducing maternal mortality by three-quarters and child mortality by two thirds. By 2020, improvement in the lives of at least 100 million slum dwellers.
Statistics Half the world nearly three billion people live on less than two dollars a day. The GDP (Gross Domestic Product) of the poorest 48 nations (i.e. a quarter of the world s countries) is less than the wealth of the world s three richest people combined. Nearly a billion people entered the 21st century unable to read a book or sign their names. Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn't happen. 51 percent of the world s 100 hundred wealthiest bodies are corporations.
The wealthiest nation on Earth has the widest gap between rich and poor of any industrialized nation. The poorer the country, the more likely it is that debt repayments are being extracted directly from people who neither contracted the loans nor received any of the money. 20% of the population in the developed nations, consume 86% of the world s goods. In 1960, the 20% of the world s people in the richest countries had 30 times the income of the poorest 20% in 1997, 74 times as much.
Consider the global priorities in spending in 1998 (Global Priority $U.S. Billions) Cosmetics in the United States 8 Billion Ice cream in Europe 11 Perfumes in Europe and the United States 12 Pet foods in Europe and the United States 17 Business entertainment in Japan 35 Cigarettes in Europe 50 Alcoholic drinks in Europe 105 Narcotics drugs in the world 400 Military spending in the world 780
Compare the previous spending to what was estimated as additional costs to achieve universal access to basic social services in all developing countries: Global Priority $U.S. Billions Basic education for all 6 million Water and sanitation for all 9 Reproductive health for all women 12 Basic health and nutrition 13
Social exclusion is related: Persons with Disabilities Older persons Children and Families at risk of Poverty People living in rural and urban disadvantaged areas Drug Users Public Assistance recipients Refugees and Immigrants
Gabriela Ciot Universitatea Tehnică Cluj Napoca DPPD Poverty in Romania The poverty problem becomes one of the most analyzed issues in Romanian specialty literature. The studies on poverty increased, especially after 1995. These studies evidenced the dynamics, the dimension, the profile of poverty, also the structural, individual or regional factors of it. Some of the studies were following the process of pre-accession into the EU. The information that will follow below is from the study Urban and rural poverty, conducted by a group of researchers from the Institute of Researching the Quality of Life from Romania (2004).
The main characteristics of Romanian povertythe key problem for Romanian society are: 1. Consumption (money income) poverty from rural environment and 2. Extreme, multi-dimensional poverty from urban environment; From the consumption perspective, the rural poverty is the main problem of poverty in Romania, but from the perspective of new poverty, profound, chronically, multidimensional, this is urban poverty; Consumption poverty is decreasing, because of the economically increasing processes, the new poverty is in process of development, as a consequence of inequality increasing and weakening of the social cohesion;
Summary of the main characteristics of rural and urban poverty in Romania (Pascariu, Stanculescu, Stoica, 2004). Key problem: Type of poverty: Dimension : Depth: Associated with: Rural poverty Consumption poverty Traditional Predominant temporary Extended, decreasing Superficial, but more profound than consumption poverty from urban environment Village, peasant, agriculture s problem Urban poverty Extreme poverty New Persistent Relative reduced, increasing Profound, feeding poverty combined with dwelling insecurity and social exclusion Poor areas from cities, impoverished townfolk, restructured industry, low delinquency, negative prestige.
Consumption poverty affects millions of Romanian citizens, new poverty is specific only for a few hundreds of thousands of inhabitants from urban environment, affected by this form of poverty; Extreme poverty in Romania is concentrated in urban environments, at the level of youngsters, children and it is closely linked to the phenomenon of persons without housing, without a chance for unemployment and living in forms of social disorganization. In rural environments, this type of poverty is marginal; the key problem being traditional poverty, associated with reduced level of modernization and with agricultural dominance in economic life; The analysis of the predictors of poverty risks shows that for both types of poverty (consumption and extreme multi-dimensional), the main factors are occupancy and education;
Factors and determinants of poverty On transition period, the groups with high risk of consumption poverty were: peasants, unemployed, free workers in non/agricultural sectors, persons with low level of education, (especially the ones with gymnasium studies), household with more than 5 members, households with more than three children, residents of rural environment, Roma people and children. (PNUD, 1999; Zamfir, 2001; Teşliuc, Pop, Teşliuc, 2001; Banca Mondială, 2003, cited by Pascariu, Stanculescu, Stoica, 2004). First observation is that in 2002, the persons from poor households lead by employees or retired persons represented 76% of the people in poverty. In Romania, an employee or a retiree, in spite of a regular income earned working in formal sector of economy, this doesn t cancel the risk of poverty. The main explanation is the increasing of the real value of incomes.
Minimum wage in Romania started from a level of 65% from medium wages in 1989, then raised at 27% in 1999, and 35% in 2004. In 2007 the minimum wage in Romania is 118 Euro (390 RON). In comparison with other countries from EU Romania is situated on one of the last places. For instance, in 2005, Luxembourg had the highest minimum wage (1467 Euro), when Romania and Bulgaria had the last position with 88 Euro, and 77 Euro. The wages represent the main income for more than one quarter from rural households. The number of employees from rural areas is less than the one from urban area and also the wages are lower.
Besides these two factors, the rural environment is disadvantaged because of physical infrastructure, public utilities, dwelling conditions and access to the fundamental social services, which deepensthe difference between both residential environments. It could be added to the above mentioned factors the inbalanced distribution of administrative and budget resources, which represents another major cause for rural poverty. In Romania, the inhabitants of big cities get bigger salaries than the ones from small cities, or villages. In 2003, for example, only by moving from a village to a small city (15-50.000 inhabitants) a person could have had an increase in wages with 17%, or 35% if the persons was moving to capital city Bucharest. (Păuna şi Păuna, 2003)
The rigid work market, and the lack of active occupancy policies, resulted in a hidden or long term unemployment. Pension of social insurance is 49% from medium income (in 2004). Medium pension for agriculture workers is 20% from medium pension from social insurance. The child allowance in 2006 was 69 Euro (240 RON) and for a child with handicap double, 138 Euro (480 RON). In 2007, was introduced a new allowance: for a child under 2 years old the amount is 60 Euro The unemployment help is 50% from minimum income if the person didn t work (59 Euro it is paid for 6 months) and 75% from minimum income if the person paid 12 months the social insurance (88,5 Euro).
The case of Romania is similar with other European countries (Mingione, 1996): Even though the consumption poverty is large spread in villages, the economic poverty has become acute and it extends fast on the other sphere of life in cities, (because in villages the lack of money is partially compensated by the products obtained in households, and the standard of community and the general cost of life is lower). The economic and demographic transformations are emphasized in urban environment. The majority of the population from urban environments has occupations in industry, so it is affected by the closing of companies and economic reform.
The family relatives and the community solidarity is stronger in villages. The families from cities, without the relatives from villages find it hard without their support in urban environment and they don t have access to the niche of survival agriculture. The major sources of risks are strongly differentiated in the two environments. If the rural environment and the main risk sources are the natural ones, because they put in danger the harvest and the work of household on entire year, the vulnerability specific to towns is linked with the assurance of dwelling. The risk of loosing their housing, of being evacuated or not being able to obtain a housing for youngsters is much more high in the cities than in rural environment, where people with their own forces, with their traditional knowledge and with cheap material build a house.
Another determinant factor of Romanian poverty is education. The data show a huge discrepancy between the two residential environments at the level of whole population and at the level of young generation. Even though at the level of young ages, the comparison shows that the distance rural-urban diminished, the education and rural education are considered key problems not only in relation with antipoverty politics, but also with a lasting development of rural environment and whole Romanian society (MEC and ISE, 2002 or National Developing Plan 2004-2006). Educational level and employability are strongly correlated. A high level of instruction assures an individual access to the labor market and income which assures protection against consumption poverty. More than that a high income assures the possibility of savings and the access to credit, access to housing, security, and, so, protection against extreme, multi-dimensional poverty.
The economic growing in Romania represents a necessary condition, but not sufficient for the re-absorption of poverty in Romania. Taking into account the residential environment and the specificity of poor areas, the anti-poverty strategies must contain a specific set of measures and developmental policies, which could be adapted to local context.
Case Studies on: Poverty in Germany, Portugal, Italy, Spain, Cyprus, Romania and France Thank you