Tuesday 3 October 2017

Poor people don't work. Why?

  • Poverty is not just life below the poverty line, its living under financial stress, where it is difficult to maintain quality of life. A life in poverty means living deprived of sufficient food and nutrition, education, proper shelter, sanitation, clean water and so on. This points to the need of seeing poverty as a multidimensional phenomenon.
  • We are all children of one and the same God and, therefore, are absolutely equal.
  • Poverty in India is attributable to (i) social inequality leading to exclusion and marginalization (ii) illiteracy (iii) population (iv) gender inequality (v) unequal distribution of wealth (vi) faulty economic reforms (vii) corruption and (vii) colonial rule.
  • India has more than 400 million (30% of total population) people under the poverty line. In 1947 when colonial British left India, they left 70% Indians in deep poverty. Seven decades later, poverty is down to 30% despite the multi fold increase in population. Despite the progress, even 30% poverty means a huge headcount in a country of 1.3 billion people. 
  • UNDP in its 2017 report estimated India’s poverty at 41% i.e. 528 million.
  • There are lazy poor people just as there are lazy rich people and laziness is not the only cause of poverty. There are many factors such as economic instability, cultural discrimination, physical or mental disability, or familial problems. 
  • Many people ignore the poor, justify their dislike of the poor, or view their poverty as deserved because they think that those in poverty could come into wealth if they just worked harder. 
  • Working harder is an useless advice and an even more ridiculous mindset. In a free market society, people are rarely compensated for hard work. They are compensated for valuable skills and smart working.
  • Poor people may be born poor, but they don't have to remain that way. They choose to remain poor. Coming out of poverty is neither easy nor hard. External helping hand is essential to come out of poverty quickly.
  • A poor person can't think or plan his old age years. Poverty restricts forward thinking and planning. 
  • Work is a pillar of our society. It supplies income that enables families to thrive, fosters a sense of pride and belonging, provides dignity and purpose. For these reasons vast majority of prime-age people work for pay. 
  • Few of poor don't work, which robs them of this sense of purpose, affects their families’ prospects for prosperity.
  • The presumption is that poor don’t earn enough or work hard enough.
  • The reasons poor not working primarily is females with children citing family and home responsibilities, and others citing disability and illness.
  • To meaningfully reduce poverty, public policy must focus on improving the health of poor, decrease work disincentives and providing work supports to poor parents such as disability assistance.
  • But when a lack of employment leads to poverty, it raises important questions about the role for government. Government can make poverty less painful through income transfers etc, but the question is whether government can encourage those who prefer not to work.
  • We can either accept the status quo of leaving millions of people in poverty, or continue funding large government programs that transfer income from working taxpayers to the nonworking poor.
  • In India, the labor force participation rates* among prime-age workers have declined over the past three years from 48% to 43% suggesting that India is facing a work problem. China's labor force participation rate is 71%, in USA it is 64% and world average is 63%.
    *The labor force participation rate is the percentage of the population that is either employed or unemployed.
  • The children growing up in a poor family just need to work hard to escape poverty.  Poverty has been proven to be a leading contributor to a child’s social, emotional, and behavioral problems. For children, poverty is an extremely difficult situation to overcome; and even if the children overcome it, they run the risk of being damaged by it for life. Children living in poverty are at an extremely high-risk for mental and physical disorders, due to lack of nutrition, physical stimulation, and emotional development.
  • In USA, the reality is that one in six Americans lives in a household that is “food insecure”.
  • The rich are great beneficiaries of poverty. It is very cheap to be rich in India. In a poor nation, the social elite can pass through life without facing any competition. The less democratic a nation, the safer it is for the rich.

Poverty is easy to spot, but hard to define.
Those parts of India which have been longest under British rule are the poorest today ...  Nehru
India is a rich country inhabited by very poor people ...  Manmohan Singh

As opposed to the western ‘trickle down’ capitalism India needs a comprehensive “human development” plan in order to really crush the widespread poverty. The present economy based on GDP growth, India is only promoting inequality that sustains by keeping the poor in poverty. It needs an economy that supports millions of small and medium enterprises that are suitable to employ low skilled poor people. Agriculture must be made sustainable and remunerative. Focus on good governance to root out corruption. Promote women empowerment through education and healthcare to deal with population growth. 

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