What Do Poverty Rates Depend on - Assignment Example

The article argues the limited amount of earning in the labor market is implicated to the individual poverty and the difference in groups’ rates poverty. The main goal of the article was to give an alternative view of how labor markets work to generate poverty that provides a richer basis for generating good policy advice. The article believes the working class, who are the main contributors to poverty, is seriously limited and flawed. Because of this, they provide a poor basis for generating good antipoverty policy advice.

Economic theory related to the issueThe article tried to expound the issue of poverty among the working class individuals from an economic point of view. The article argues that the kind of poverty affecting the working class occurs primarily due to the interaction between the supply and demand forces in a competitive market environment. It states that the difference in levels of poverty experienced by different families who are exposed to the same poverty standards occurs strictly from differences in the ownership of or willingness to supply labor.

The article, therefore, states that poverty, unemployment, or underemployment can be corrected only through adoption f efficient market processes. The article found out that the working class poverty occurs when there is an increase in wages of high wage workers and decrease in wages of low-wage workers. One-market processes that can help in reversing the poverty among the working class is through improving the human capital of poor workers.