Poverty is caused by unemployment, low wages, illness, age and environmental factors such as droughts and floods.
Unemployment: people without jobs lose their main source of income. Long-term unemployment can drain savings and skills.
Low wages: people in unskilled or insecure jobs may work full time and still earn too little to meet their needs.
Illness and disability can stop people working, while raising their spending on healthcare. Age matters too: children depend on others, and older people with no pension or savings may have little income.
Environmental factors, such as droughts, floods and poor soil, destroy crops and homes, especially for farmers in poorer countries. Climate change can make these events more frequent.
- Main causes
- Unemployment, low wages, illness, age, environmental factors.
- In-work poverty
- Working full time but earning too little to meet needs.
- Environmental shock
- Droughts or floods that destroy crops, homes and income.
Worked example: One household's path into poverty
Follow a farming family in a drought-prone region.
- Environmental shock: a drought ruins the harvest, so the family's income collapses.
- Illness: with less food, a parent falls ill and cannot work.
- Debt: the family borrows to pay for medicine and food.
- Result: without savings or insurance, the family falls into absolute poverty.
Watch out for this
People are poor only because they do not work.
Many people in poverty do work but earn low wages. Illness, age and environmental disasters also cause poverty.
Check your understanding
Which is an environmental cause of poverty?
- Repeated floods destroy farmers' crops.
- A worker earns the minimum wage.
- A worker retires without a pension.