Poverty is a long-standing concept that has evolved over time. At one time, people considered to be poor were beggars and unemployed. To fix the situation, there was an attempt to reintegrate them into the workforce. Over time, the idea that poverty could be due to problems in the economic system has become more widespread. This view is gradually changing the way poverty is addressed. Even today, poverty looks different in every country. Poverty is divided into two categories: absolute poverty and relative poverty.
Poverty is the state of not having enough financial resources to live in decent conditions in society.
Absolute poverty and relative poverty are two ways of measuring poverty in a country and around the world. Depending on a country’s economic situation, it will either have absolute (extreme) poverty or relative poverty.
Absolute poverty refers to when a person doesn’t have enough money to meet the minimum living requirements (food, shelter, etc.). This type of poverty is more common in developing countries. This is often called extreme poverty.
Absolute poverty is mainly found in developing countries, but it can also exist in emerging and developed countries. The absolute poverty line is international and set by the World Bank at $1.90 per day. Each country converts this amount into its own currency using purchasing power parity (PPP) (World Bank, 2015). People living in extreme poverty are unable to meet their basic needs such as food, adequate housing, etc.
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Purchasing power parity (PPP) is a way of converting the different currencies around the world into a common currency to compare the purchasing power of each currency.
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Relative poverty is calculated in comparison to a country’s median income. The percentage of people living below this income is the relative poverty rate. This type of poverty is used to account for social and economic inequalities in developed countries.
A person may not be in extreme poverty and may have access to basic goods and services but may have to budget all their essential expenses to the penny in order to have enough money for the next month. This person is not in extreme poverty, but their quality of life is not appropriate for the country they live in, so they are still living in poverty.
In Canada, in 2018, 12.3% of Canadians earned a net income below the national average standard of living. The average standard of living is the median income in Canada.
The median income (after tax) for 2018 was $61,400. Half of $61,400 is $30,700.
So, in 2018, 12.3% of Canadians earned less than $30,700. (Government of Canada, 2020)
It is important to consider relative poverty since this part of the population does not have the financial means to lead a decent life in their country. By being aware that these people are struggling financially, actions can be taken and policies and services can be put in place to help them.
In many countries, the government intervenes to help its citizens live better lives. To help children, some governments have introduced free primary and secondary education, family allowances, institutions for orphaned and abandoned children and child protection facilities.
To assist adults, the government can set a minimum wage, provide financial support to charitable and social organizations, offer financial support through unemployment insurance programs, social insurance, pension funds, etc. Charities can hand out food, offer free sports programs, etc.
The United Nations (UN) also developed a poverty reduction plan. This was a high-level action plan to curb global poverty by working hand in hand with other governments and international organizations. Several global institutions are involved, including the World Bank, which funds projects to fight poverty, UNICEF, which promotes the well-being of children, OXFAM, which seeks sustainable solutions to poverty, etc.
The various international organizations fight poverty in their own way.
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The World Bank is an important organization that finances projects to help people around the world escape extreme poverty.
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OXFAM is a social organization that addresses wealth inequality by providing aid on the ground.
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UNICEF focuses on the rights and protection of children worldwide by working with people living in extreme poverty to give children the best opportunities.
Prior to industrialization in Canada, retirement did not yet exist. The elderly were often looked after by their children. People without family support had to rely on charities for assistance. However, help from these organizations was hard to come by and usually required work to get it.
In the early 20th century, industrialization led many people to migrate to the city. Many older people no longer had family support since they moved from the countryside to the city. There were more poor people who relied on housing shelters to survive.
In 1908, the government created a pension plan. The government encouraged citizens to save for their retirement. Workers could buy annuities that provided annual benefits after a certain age. However, the pension program did little to improve the situation since many people could not afford to pay into a pension plan while they were working.
The Old Age Pensions Act was introduced in 1927. This act, created by Canadian Prime Minister William Lyon Mackenzie King, helped senior citizens, but strict eligibility criteria limited its access. Furthermore, this pension was not available to Indigenous people.
Old Age Security was the first universal pension plan. It came into force in 1952. All senior citizens, including Indigenous people, had the right to receive pensions. However, these pensions did not improve the lives of the elderly.
In 1966, the pension program was transferred to the provincial governments. At the time, the Régie des rentes du Québec (replaced by Retraite Québec in 2016) was in charge of the Quebec Pension Plan (QPP). The QPP provides some financial security for retirees through allowances. The plan works by means of contributions from employees and employers.
Organizations helping people living in poverty in Canada:
International organisations fighting poverty in the world:
World Bank. (2015, October 4). Selon la Banque mondiale, la pauvreté dans le monde devrait passer pour la première fois sous la barre des 10 %. https://www.banquemondiale.org/fr/news/press-release/2015/10/04/world-bank-forecasts-global-poverty-to-fall-below-10-for-first-time-major-hurdles-remain-in-goal-to-end-poverty-by-2030
Government of Canada. (2020, September 8). Carrefour des dimensions de la pauvreté. Statistics Canada. https://www.statcan.gc.ca/fra/themes-debut/pauvrete#info-lowincome
Government of Canada. (2020, February 24). Enquête canadienne sur le revenu, 2018. Statistics Canada. https://www150.statcan.gc.ca/n1/daily-quotidien/200224/dq200224a-fra.htm