Economic Policy Recommendation: Poverty as a Social Problem - Assignment Example

? Economic Policy Recommendation Poverty as a Social Problem Poverty Poverty is a state where one is not in a position to cater for his basic needs and those of his family. When a person is not able to eat well, dress well, access basic education, access medical care and live in a good sanitized surrounding, then the person is said to be poor. Poverty is one of the major global social issues affecting a larger population in the world. This problem is more adversely felt in developing or third world countries like Somalia, Ethiopia, Tanzania, Kenya and other African and Asian countries mostly (Sharp, Register, & Grimes, 2013). It causes a great concern when food and water are the fundamentals of life, yet billions in the world do not have adequate access to such commodities given their poverty status. Economics puts it that resources are limited and proper planning and use of these resources is necessary in order to solve such humanitarian problems as poverty. In solving such problems, economic policies need to be identified, analyzed and implemented. This research is thus directed to identify and analyze the policies that need to be implemented in order to alleviate the misery of poverty. The policies that will be discussed in this paper include tax, education, employment, income and population control policies and how they can alleviate poverty. Impact of Poverty on Society The impact of poverty on society is so adverse that, it is said to be immeasurable (Sharp, Register, & Grimes, 2013). Research has shown that approximately two-thirds of the total world population goes to bed hungry (Wendy, 2012). The estimates of the World Bank also put it that perhaps one-third of the world’s population lives on less than below one dollar in a day. Various parts of the world are faced with outright famine, including the recent examples of mass starvation of close to 1,000,000 people from Ethiopia during the 1984-1985 droughts (Sharp, Register, & Grimes, 2013). Similar cases include the tragedy of Somalia in 1990 and the in progress catastrophes in North Korea and East Africa. The hungry suffer left, right and center and neither the summer’s heat nor the winter’s cold can protect them. These people live in surroundings with no medical care and no sanitation. Their life expectancy is low, and the infant mortality is high. In the United States, eight out of 1,000 live births die before the age of five. In poverty-stricken countries like Ethiopia, Tanzania and Pakistan, this rate reaches about one death out of ten live births. Surprisingly, an Ethiopian can expect to die 35 years earlier than their contemporary in the United States (Alistair, 2002). These cases, and many more, show us how much of the world’s population is stricken by the misery of poverty. Economic Causes of Poverty 1. Determinants of Resource Prices and Employment These are the factors that will determine whether a resource is cheap or expensive in the market. Some of these include Cost of production, education, import cost, tax and availability of industries. To begin with, when the cost of producing resources is high, the resulting prices of the resources will be high. This will make lower income earners not able to access the resources. When these resources are basic for human beings, and some people are not able to access them, then these people are considered poor. When people cannot access education because they cannot afford to or do not know the value of it, the result is that these people will not be able to get better employment opportunities. They will therefore not be able to meet their daily needs to survive, hence considered poor. When the cost of importing goods into a country is high, the result is that most intended consumers of the goods may not be able to purchase it. Being that these goods are among the basic goods needed by human beings to survive, the people who cannot afford them will be considered poor. When high tax is levied on basic goods such that the common citizens struggle to get access to them, the citizens will be considered poor because they will not be able to survive. When a country is not industrialized and depends on importation of basic goods, its citizens will lack employment, hence low income. Their potential to purchase basic goods will then be reduced hence they will be considered poor. 2. Determinants of Individual or Family Income When the level of education of a person is low, they might fail to be employed or become self-employed, which sometimes is not sufficient to provide for them and their families’ basic needs. When members of a family lack employment or are not sufficiently employed to earn a good income, the family will be considered poor as it will not be able to meet its daily needs. When a family does not have certain resources such as land, capital and skills, its income level will remain low to a point where it might be considered poor. In a family where perhaps only the head is employed and there are many dependents, the family will have difficulty to properly meet the needs of its members (McConnell, Brue, & Flynn, 2011). 3. Determinants of Income Distribution Factors like resource distribution, level of industrialization, government and the cost of doing business, determines how income is distributed among the regions and to the individual citizen (Sharp et al, 2013). One will expect to find people coming from low income areas to be relatively poor as compared to those from areas with a lot of resources and industrialized. The Effects of Discrimination on Income Not everyone earns equal income. There is discrimination in income earned depending on race, religion, level of education, position in an organization and many others. These factors make some people richer as others become poorer. The poor suffer at the expense of the rich and become poorer (Wendy, 2012). Economic Policy Solution to Poverty These are certain remedies that should be implemented by a government in order to alleviate or reduce the levels of poverty. They include: Employment policy Policy: The government needs to make a policy that will ensure that all youths who finish their college studies do not take more than six months to get a job. The government can achieve this by promoting entrepreneurship amongst the youth, by providing enterprise funds and low interest rate loans to them. The government can also improve its level of industrialization by searching for foreign and local investors who can invest in the major industries in the country to provide employment to the labor force (Wendy, 2012). This will open up more employment opportunities in the county, hence solving the problem of unemployment. When most people in a country are employed, the level of poverty is much reduced since many people can afford the basic requirements of life. Income policy Policy: The government needs to come up with a fair system of rewarding its work force without discrimination. This can be achieved by employees being compensated based on the basis of the nature, amount and quality of the work done instead of employees being compensated on the basis of education level, racial factors, and their position in the organization and other forms of discrimination (McConnell et al, 2011). This will ensure that those who earn a high income given their levels of education, for instance, will be able to work equally hard to be able to justify their high pay. This is contrary to how it happens in most places in the world, where bosses earn more salaries than their juniors since they are more learned and they only go to the office, hang their coats and leave for their own businesses (Wendy, 2012). They leave their juniors to complete most of the tasks and get less pay in return. This policy will ensure a fair distribution of income among employees. Benefits will also be harmonized, hence allowing employees to be enriched in their particular workplaces. This policy will enable lower income earners to be able to say goodbye to poverty as their potential to make more purchases will be increased. Education Policy Policy: the government should ensure that basic education is accessible and affordable for every citizen without any discrimination whatsoever. The basic education provided should also empower individuals with technical skills that can enable them to become fruitful citizens in the society afterward. The government can be able to achieve this policy by introducing free primary education and formulating a syllabus which can nurture both academic and technical skills of the students. In this case, the students will be able to be self reliant even if they do not proceed further with their education. This will ensure that many people are empowered to work, hence reducing their dependency level. When the dependency level is reduced, the poverty level gets reduced since most of the people, however little income they earn, and are able to support themselves well with it since they are providing for a few people (Wendy, 2012). Tax policy Policy: The government needs to ensure that the basic needs of its citizens are more affordable and accessible to them. This policy can be achieved by making such goods such as; foodstuffs, medical equipment, education and clothing tax free. The government has the power to introduce, control and remove the Value Added Tax (VAT) of a product. The government should also ensure that such basic goods which are produced in the country receive subsidies to promote their production. When such products are imported from other counties, the government may waive import duty from such goods so that it promotes entry of such goods in the country as well as making such goods affordable to the common citizens (Sharp et al, 2013). When the import duty is waived, the resulting prices of the particular goods will be reduced, increasing their affordability. When tax is controlled to enable a good to be affordable and accessible to the citizens, the poverty level is reduced. This is because many people, who could not afford such basic needs due to their high prices caused by high taxes, can now afford such goods when the tax is reduced or removed. The people will then be able to feed themselves, access medical care, access education and be clothed. Population control policy Policy: The government should encourage families to have fewer children depending on their levels of income; the maximum number of children per family should be four. When there are many children in a low-income family and the income level of the house head is low, the house head exposes these children to a lot of unnecessary suffering. The number of dependents in a household can also be reduced by introducing population control measures. The government can achieve this policy by encouraging the use of family planning methods of birth control. The services can be government sponsored so that all citizens get access to them without any charges. Awareness can be created to sensitize families about such services and the need to have manageable numbers of children. The government can also improve literacy levels of its citizens since in developing countries, it is observed that most of the illiterate people are the ones with many children and thus explains why they are poor (Alistair, 2002). When the population is manageable, there will be a better distribution of national resources and access to such will be increased. The level of dependents will reduce, and the poverty level will also reduce. When a household has a manageable number of members, they will reduce levels of poverty since the resources in their possession will be able to cater for the planned family members. Conclusion In a nutshell, even if poverty still remains a problem for humanity, the research has revealed that its causes are known to us vividly. The research goes ahead to provide policies that can be used to alleviate the problem. Therefore, it depends on a government and its citizens to decide which way to go implement the policies above in order to fight poverty or just ignore them and remain poor. References Alistair, S. (2002). Children Starve in National Crisis. New York: San-Sentine. McConnell, B., Brue, L., & Flynn, J. (2011). Economics of Social Issues. New York: MacGrawHill. Sharp, M., Register, C., & Grimes, P. (2013). Economics of Social Issues (20th Edition ed.). Boston: MA: McGraw-Hill Learning Solutions. Wendy, A. S. (2012). Introduction to Economices:Social Issues and Economic Thinking. Chicago: John Wiley & Sons. Read More