counter argument poverty

Poverty Is a Choice

Extreme poverty has declined, but the line is very low.

We live in what often feels like a biblically terrible time, marked by mass extinctions, deep recessions, epidemics, climate emergencies, inequality, and forever wars. But one thing, at least, has gotten better. More than 1 billion people have escaped extreme poverty—so many, so fast, that the world might be able to declare, within a decade, the end of this most miserable form of deprivation. “The global poverty rate is now lower than it has ever been in recorded history,” Jim Yong Kim, a former president of the World Bank, recently argued . “This is one of the greatest human achievements of our time.”

Or perhaps not. In an acidic rebuke to world leaders, the outgoing United Nations special rapporteur on poverty and human rights, Philip Alston, argues that the effort to end global poverty has failed. More people live in deprivation now than two decades ago. “We squandered a decade in the fight against poverty, with misplaced triumphalism blocking the very reforms that could have prevented the worst impacts of the pandemic,” Alston wrote in his last report .

So who’s right: Alston or Kim? The pessimistic argument is a hard one to make when looking at the raw, headline numbers. The global extreme-poverty rate fell from 36 percent in 1990 to 10 percent in 2015; the number of poor people dropped from 2 billion to 700 million. But Alston believes that by focusing only on those numbers, the world is deluding itself.

Read: A moral case for giving people money

The divisions between the World Bank’s economists and the UN’s special rapporteur are in some sense technical, about where to set the poverty line. They are in a more important sense interpretive, about whether progress has been fast or slow, and whether today’s global poverty counts are laudable or tragic.

This is a realm of yes-and s and no-but s, not direct refutations. Extreme poverty has declined rapidly, but the extreme-poverty line is very low: A person living below it spends no more than $1.90 a day, enough in many poor countries to cover some starch, a few fruits and vegetables, some cooking oil, a bit of protein, and that’s about it—with nothing left over for utilities, education, health care, transportation, or investment in wealth-generating assets, such as a cow or a motorbike. That poverty threshold represents “a staggeringly low standard of living, well below any reasonable conception of a life with dignity,” Alston argues—it is a catastrophic-destitution measure, not a poverty measure. He emphasizes the lack of progress made at the $3.20-a-day and $5.50-a-day poverty lines, too. Half the world lives on less than the latter figure.

Alston takes issue with the fact that the World Bank’s extreme-poverty line is an absolute measure, not a relative one: It sets a line and sees how many people cross it, country by country, rather than pegging the poverty threshold to median income, country by country. But “relative poverty is what really counts these days,” Alston told me, as it captures social exclusion, and the way that living on a few dollars a day is more challenging in middle-income countries like India and Kenya than in low-income countries like Afghanistan and Chad. “In a poorer country,” the bank itself explains , “participating in the job market may require only clothing and food, whereas someone in a richer society may also need access to the internet, transportation, and a cell phone.”

The bank also acknowledges that the global extreme-poverty line is low. It has generated a measure that includes relative poverty, and produces counts at the $3.20-a-day and $5.50-a-day lines. Its economists, researchers, and program experts stress that rising above the extreme-poverty line is no guarantee against malnutrition, stunted growth, early death, or any of the other horrible consequences of destitution.

But Alston’s most controversial, and most important, argument is that the focus on progress measured against the $1.90-a-day line—the prevalence of “everything’s getting better” arguments, made by Davos types like Bill Gates and Steven Pinker —has hampered progress toward true poverty eradication, and toward civil rights, social inclusion, and a basic standard of living for all. “By being able to rely so heavily on the World Bank's flagship figure, they can say, ‘Look, progress has been consistent. We’ve been doing great,’” Alston told me. “The implication of that is that the triumph of neoliberalism has brought with it very significant benefits for poor people. In reality, that’s just not the case.”

Read: How many people in the world are actually poor?

What if world leaders and multilateral institutions focused on the $5.50 line, or measures of poverty that capture social exclusion and relative deprivation? What if the headline story were that half the world still qualifies as desperately poor, and poverty head counts remain stubbornly high in dozens of countries? What if the story were not that we are succeeding, but that we are failing?

That story would not capture all the good that has happened in terms of infant-mortality rates falling, school-enrollment numbers rising, and malnutrition fading. But it would hold the world accountable for the fact that poverty is, always and everywhere, a choice. Alston’s view, and a necessary one, is that the world cannot wait for economic expansion to lift people above the poverty line. It cannot count on trade compacts and infrastructure projects and the ticking of GDP growth rates from 2.3 to 3.2 percent to do it. It needs direct interventions by governments, as fast as possible, to eliminate inequality and build safety nets, even in the poorest places.

A business journal from the Wharton School of the University of Pennsylvania

Why the Fight against Poverty Is Failing: A Contrarian View

October 31, 2006 • 20 min read.

Abraham George is the founder of The George Foundation, an NGO engaged in humanitarian work in India, and the author of India Untouched: The Forgotten Face of Rural Poverty. In this contrarian essay, he explores why the current strategies that governments and development agencies are employing to reduce poverty are not working the way they should. Among his arguments: Microcredit programs, as they are now practiced in India, do little to help the poor.

• Public Policy

By the World Bank’s broad definition of poverty ($2.00 or less a day per person), there are more poor people in the world today than a quarter century ago. Nearly half the world’s population, over three billion people, lives in poverty. In India alone, two-thirds of its one billion-plus population is poor. Yet, the strategy for alleviating poverty across practically every developing nation has remained essentially the same for the past several decades.

There is plenty of talk about ways to increase income, reduce illiteracy and ill-health, and empower women. The increased attention given to these issues and pledges of additional financial assistance by world leaders are not matched by new and effective national initiatives that can significantly reduce poverty. So far, none of the poor countries has been able to achieve any of its key developmental targets. The emphasis is still on more funding for programs that have been in existence for many years. Yet these programs have had only marginal effect, and have not kept up with population increases.

My personal experience on developmental projects is confined to India, but the broader lessons learned there are applicable to most developing countries. What follows explains what I consider are misconceptions in the current approaches, and how the attack on global poverty can be far more successful.

International Development Assistance Hasn’t Worked

The UN Millennium project argues that it is the poverty trap of poor health, poor education and poor infrastructure reinforcing each other rather than bad planning, corruption, and ineffective execution that is hindering development of poor countries. The idea is that underdeveloped nations can be saved through more outside assistance and by expanding existing programs that are run mostly by governments. Those who support this notion want the World Bank and other international agencies and donors to make increased contributions to supplement domestic government resources. But there is very little evidence that foreign assistance has made much difference in overcoming the poverty trap in any country.

As a consequence of the financial assistance received from international agencies, national governments rely on strategies developed by planners at organizations such as the World Bank and the United Nations. There is no shortage of ideas, enthusiasm, and expectations at the planning level, but what is lacking is good execution.

Planners have no responsibility for ensuring that funded projects meet their goals in the field. Other than requiring periodic written reports and demonstration of individual cases where success has been prearranged, there is little feedback or accountability.  Beneficiaries are not in a position to let their views be known, nor do they understand what is expected in the longer run.

Misuse of Funds

Governments, international agencies and donors have spent billions of dollars to address poverty. For example, in rural India, the government spends significant funds on subsidies (for electricity, fertilizer, fuels, etc.), food rations, price supports, land allocation/distribution, job training and financial assistance for initiatives in agriculture and small businesses. Loans from the World Bank and other international agencies and bilateral aid supplement domestic government resources. But who has benefited from all these programs and assistance?

The beneficiaries are usually corrupt officials who manage and distribute funds, and landlords and powerbrokers who directly or indirectly extract benefits for themselves. In India, over 90% of the agricultural land is owned and partly cultivated by less than 10% of the rural population who are termed farmers; others are mostly laborers. Governments allocate land to the poor, but they are unable to utilize it because of limited water resources, bad soil conditions, and/or the inability to secure credit. Larger subsidies benefit bigger farmers, but the poor do not gain much directly from any government programs.

The presumption that with more money, corrupt and inefficient governments and bureaucratic institutions will utilize funds efficiently and improve the deplorable conditions of the poor is an illusion. There are too many impediments to poverty reduction: bribery, political influence in the allocation of land and/or credit, diffused focus and priorities, poor execution, a shortage of rural infrastructure, and social inequality, among other factors. Supporters of the “more money” approach should be reminded of what the late Indian Prime Minister Rajiv Gandhi once admitted: Less than 15 cents of each dollar in assistance intended for the poor finally gets to them. That is not to say that assistance should not be increased. But the real focus should be on ensuring that the allocated resources reach the poor.

Corruption and misallocation of development funds are ultimately the result of failed governance. Why bad governance? Unethical and illegal practices flourish in countries without free and independent press to investigate wrongful practices. Where the press is not sufficiently strong, there is little chance of preventing the “opportunistic behavior” of individuals, businesses and officials. Corruption can be reduced by assuring press freedom and strengthening private social institutions (such as advocacy groups) that stay independent. (Surprisingly, a democracy like India does not permit private radio stations to broadcast daily news!)

If citizens cannot rely on an impartial judicial system, there is little hope for a just and fair society. Societies that do not protect property and persone from predators cannot expect to create sufficient wealth for everyone. It is the erosion of press independence and the weakness of legal system that are most troubling.

The Limited Role of NGOs

There are several participants in the developmental arena: national and foreign governments, international agencies, private companies and non-governmental organizations (NGOs). The role of NGOs has gained attention in recent years as they focus on micro-issues and provide grass-roots assistance. Many have taken up projects to improve the quality of education and healthcare, while focusing on specific critical areas such as HIV/AIDS, illiteracy and women’s empowerment.

NGOs have been advocates for the poor, pointing out issues of concern and presenting ideas for improvement, often figuring out how to press through the corrupt and self-serving regulations faced by their beneficiaries. Several are involved in income generation activities, offering microcredit or assisting with water resource management and use of indigenous technology. Some private companies have formed NGOs to attract grants from their governments and international agencies. These efforts usually complement those of governments in the implementation process.

Despite positive contributions, NGOs have not been involved in major developmental undertakings intended to create large employment and wide income generation through sustainable businesses. This is attributable to their lacking good managerial skills and organizational structure to take up business ventures. Further, donor funds are usually restricted to narrowly defined projects. Consequently, the role that NGOs are best suited to play is in support of projects funded by governments and international agencies, or those limited initiatives approved by private donors.

Unfortunately, those NGOs that actually carry out developmental work in the field are stuck within programs specified by planners in developmental agencies and donor institutions. New ideas that deviate from those already specified by planners seldom qualify for any funding. Thus, project proposals are prepared to reflect the requirements set by these planners in terms of methodology and outcomes. There is little initiative from the ground up, and no real feedback. Demonstrating compliance on paper ends up more important than actually getting the job done effectively. As a result, recipients of developmental funds spend significant time preparing reports for the planners to qualify for continued funding, and less time worrying about what benefits the poor.

Microfinance Is Not a Panacea

The expression “social entrepreneurship” was coined to reflect corporate benevolence toward the poor. Muhammad Yunus, who founded the Grameen Bank in Bangladesh in 1976, intended exactly that when he started giving poor people credit and assisting them in their local business ventures. Subsequently, many NGOs around the world started offering small loans to women who could otherwise not obtain credit from commercial banks. As different microcredit programs sprang up in poor countries, governments, international agencies and private donors joined in with necessary capital. Several experts in these institutions termed microcredit a revolutionary concept, and there is growing belief among many that it might be the way to solve poverty.

Today, some for-profit funds and supposedly not-for-profit organizations market microcredit lending in developing countries, and even offer advertised returns on investment. One such microcredit intermediary in India recently publicized that it has been charging 36% interest until recently, when it dropped the rate to 26% for some borrowers by making the lending process more efficient. After all, it argued, credit card companies charge as high as 28% interest for credit-risk customers.

The assumption is that poor people can be rescued quickly and easily with a modicum of money. (Microcredit is intended mainly for starting or expanding small businesses run by borrowers.) The claim is that microcredit (loans of around $100) has lifted tens of millions out of poverty in the developing world. However, assertions that more than 90% of the people who receive microcredit are poor, that most of them succeed in businesses started with these loans, and that they repay the loans at 24% annual interest or higher, go unchallenged.

So far, there has not been any outcry on the high rate of interest. The poor do not have any voice in, or understanding of, financial markets. They are happy to get loans to meet personal emergencies (such as expenses toward surgery, marriage or dowry) or to pay off financial obligations to local money lenders who charge even higher rates. Microcredit intermediaries claim that this is social entrepreneurship, and not living on the backs of the poor.

In my personal experience in rural India, I have observed that a small number of people, mostly village leaders and their family members, operate the few shops and businesses. They are the only ones who have the support mechanisms, knowledge, and skills to make a business succeed. A great majority of the poor rural populations do not have the ability or experience to start or run businesses, with or without access to credit. To expect them to succeed in business is unrealistic. They are uneducated and labor for landowners and for the few nearby businesses. At best, they might benefit from the trickle down effect if landlords and small businesses prosper.

The George Foundation is engaged in poverty alleviation projects in rural Tamil Nadu, India, focusing on income generation activities, education, healthcare and community development. The foundation has studied some 17 villages and over 50 microcredit programs in South India. Data show that less than 5% of those receiving micro-loans start any business of their own. One preferred activity is buying and selling sheep, hopefully at a profit equal to the wages foregone. These types of activities are unsustainable in the long run. Consequently, less than 2% continue beyond the first three years, and very f ew succeed in any such “business” with small amounts of money and little or no support, training, or skills.

Microcredit lenders are not concerned about what the borrowers do with their loans. Loans are usually made to individuals, but guaranteed by groups that can demonstrate their capacity to repay. Most borrowers of microcredit repay loans from income received at regular jobs, or from grants provided by governments for self-help programs. Not surprisingly, it is the intermediaries — commercial banks and loan facilitators — that gain the most from the spread between the cost of funds for the intermediaries and the loan interest charged by them. Commercial banks in India, for example, receive funds for microcredit programs from the government-run NABARD bank at 5% to 6%. They then lend at 10% to12% to a microcredit intermediary which, in turn, lends at 24% to 36% to the final borrower.

The assurance of loan repayment makes microcredit popular among lenders, in addition to the high interest charged. Borrowers are motivated to repay loans because of an expectation of future monetary benefits. If one borrows and repays twice (no need to start any business, but maintain good paperwork), then he/she becomes eligible for a grant for $100 or more from a separate government program (each state offers its own variation of this facility). The free money from the government can be used to repay the third micro-loan made to that beneficiary. The government is short the amount of the grant, but the borrower is debt free, and the microcredit middle man is assured of capital and high returns.

Why this round about way to offer free money when there are several direct means to reduce the debt burden of the poor? The answer probably lies in the fact that this form of “hand-out” is invisible within “social entrepreneurships”. Moreover, major financial institutions have become embroiled in this commercial activity. A new breed of educated and well-trained loan sharks, with bank support, is now in the microcredit business in India. Microcredit has become a trendy cure-all. If poverty alleviation were a matter of lending, the world could eradicate poverty easily. It would cost about $300 billion at $100 per person — a small sum in comparison to the trillions of dollars already expended over the past half a century. The present form of microcredit, as practiced in India, results in little or no sustainable development benefit for the poor. 

Importance of Private Sector Participation

In developing countries, the government bears the primary responsibility for delivering basic services for the poor. It has traditionally been the agent for healthcare, education and job training, especially due to the inability of rural populations to pay for basic services. A significant portion of the costs associated with public services will continue to be borne by the state until rural incomes rise and/or until the private sector finds it attractive to be involved in such efforts.

Government-run institutions have, for the most part, failed to offer quality services because they are unable to motivate those who carry out the tasks in the field. Those who can afford to pay for quality services rely on private providers. Even those who work for government go to private clinics for their healthcare needs, and send their children to private schools. Quality will never improve unless service providers have the incentive to serve the poor. Until then, the “haves” have markets to choose from, while the “have-nots” have bureaucrats to dictate to them.

But, lack of affordability should not prohibit private sector participation. With NGOs as project facilitators, opportunities exist for public-private partnership. Private institutions can deliver services at reduced prices, but at a profit, within a competitive and independently monitored system where the costs are subsidized or even fully paid for by the government.

In developing countries there is no serious effort to involve private companies, though most rural areas are, in fact, ideally suited for industries in herbal products , alternate fuels, cement and tile, lumber and pulp, meat, dairy and poultry. These private industries should function in a free market with sufficient checks and balances to ensure that they operate in a socially and environmentally responsible manner. By offering job opportunities in villages, they would alleviate migration to cities for employment.

Financial incentives like low-interest loans and tax breaks, and physical infrastructure improvements will motivate private companies to build factories in rural areas. Elimination of controls on the sale of agricultural products, and assistance in finding new markets will attract many businesses. These measures will in turn improve the demand for produce and boost commodity prices to levels that can financially sustain rural families. Further, international agencies and donors must consider equity participation in companies instead of simply channeling funds through governments or offering grants. They should provide loans at low interest rates directly to local entrepreneurs who can demonstrate an ability to run successful businesses. In short, some of the available developmental funds must be used to support commercial activities in deprived communities. With more economic activity, the poor labor class can gain employment at better wages.

Government’s role ought to be that of a catalyst. There should be no room for bribes. The focus should be to provide incentives for private (and community) participation. When private individuals and institutions find it worthwhile to take risks and invest in economically depressed areas, there will be sustainable development and poverty reduction. As incomes rise, there will be less need for government involvement in the delivery of many services currently provided.

It is not money alone but integrity and ideas that will make the real difference. A noted economist once asked me how I would go about improving the productivity of rural laborers on our farms. Creative thinking was my thought! We have instituted a program of de-worming drugs every six months, and daily iron tablets and protein-rich nutritional supplements prepared from locally available grains and nuts. Our workers wear wide hats protecting them from direct sunlight. These are simple, low cost measures, but they have contributed to a healthier and more productive labor force on our farms. For less than $10 per person a year, we have doubled their productivity!

A New Model for Corporate Philanthropy

Contrary to the recognized activities of NGOs, our foundation has embarked on a path similar to those of private organizations: We build institutions, develop human resources and managerial skills, and undertake major commercial projects — for humanitarian reasons. One project currently underway is a 250-acre banana farm, the second largest in South India. My life-long experience in business, my convictions about free and open markets and the need to encourage an entrepreneurial spirit in the individual have helped me not to rely on donor funds alone. Instead, our foundation has invested in sustainable projects that generate “profits” as well as steady income for the poor.

Our decision to confine business activities to farming results from the fact that the rural adult population in India is generally illiterate and lacks industrial skills. It is farming that gives them opportunities to better their lives; it is what villagers have a natural affinity for; and it is an industry where large numbers can be employed.

With the goal of empowering poor women and elevating their income-generating capacity, The George Foundation set up Baldev Farms, a “learn while you earn” program. The farm uses precision agricultural tools, organic fertilizers and superior technology in drip irrigation to conserve water. Apart from the farm workers’ daily wages, we set a portion of the profits generated from the sale of produce in a savings account to be used at the end of five years for the purchase of one third to one half acre of land for each family. Families will then cultivate their newly purchased land, sharing resources, such as wells and tractors. The foundation will remain a support organization to help address concerns and difficulties, while also offering know-how and access to markets.

Within three years of starting Baldev Farms, more than 150 villagers, mostly women, have found labor and supervisory employment in the field; hundreds of others have benefited indirectly. Most have already come out of poverty, paid off their debt and freed themselves from bonded labor status. As the foundation expands its farming activity in high-value fruits and vegetables, it will soon generate sufficient cash flow to finance other humanitarian initiatives.

Though the final chapter on this program is not yet written, the concept of offering each poor family a piece of the land to cultivate profitable crops is proving to be sound. With the profit sharing plan in place, everyone in our farm is highly motivated, takes initiatives and works hard. It is becoming increasingly clear to us that good management and a dedicated work force are assuring profitability to empower the poor.

Admittedly, our “corporate” approach to philanthropy cannot be replicated by most NGOs. Only private for-profit companies have skill bases and resources to undertake such business ventures. But they must recognize that market opportunities can be tapped only when the purchasing power of consumers rises. Hence, for the foreseeable future, investment in the rural sector ought to be toward production as opposed to selling to the “bottom of the pyramid.” In the longer run, it is competitive markets and involvement of the community in sustainable development projects that will solve poverty.

As long as significant poverty exists around the world, and the disparity between the rich and the poor widens, private companies in developing countries need to make a contribution to solving the problem. A dialogue must begin between and among business leaders on devising rules for business conduct in deprived communities. The model must consider how poor people can be brought into the mainstream of consumers with sufficient purchasing power within a reasonable time period. Those who work must earn enough to be able to come out of poverty. Minimum wages and benefits must be adequate to meet at least basic human needs, and farmers must be able to sell their crops at prices that assure a fair net gain. Economic success and social justice must go hand in hand.

There is serious concern in many circles, and rightly so, about whether the private sector can be trusted to operate fairly in communities that are poor. The fear is that free markets mean exploitation, citing what they call the “Wal-Mart Syndrome” of forcing suppliers, especially those from poor countries, to offer products at prices that leave little gain for workers.

Troubling issues like this one will always exist. But they can be addressed through effective enforcement of laws and regulations concerning minimum wages, worker safety and benefits, non-competitive practices and environmental protection. Private companies must resist the temptation to extract government funds for their business activities in the name of social entrepreneurship. They must recognize that it is in their long-term interest to win the support of the communities where they operate. Repressive local norms in compensation and treatment of labor must be replaced with fair practices that assist the poor in adequately caring for their families. Market forces of supply and demand and competition for gaining a dedicated labor force and loyal consumers are powerful factors in motivating good behavior on the part of corporations.

There are no easy answers. Poverty, in large part, can be solved if the poor gain new skills and if more jobs become available in the rural sector. For some, the solution lies in ownership of a permanent income generating asset: land. The poor need to have the opportunity to own and develop land, and grow profitable crops that can be sold in a competitive market.

More money is not a prerequisite for success; proper use of available funds is. There is no substitute for good planning, effective organization and execution with accountability. Only those who bear financial risk can be expected to perform effectively.

Handouts will not solve poverty; neither will it be solved by grand government projects, or by piecemeal interventions of NGOs. Instead, poverty will be solved with vibrant economic activity driven mostly by the private sector. The hundreds of millions of new jobs that are needed each year will come mainly from corporate business ventures in rural areas. The developmental strategy to address poverty must embrace this reality.

A market-based approach to poverty reduction will result in income and wealth creation, and lay the groundwork for the next generation to avail of a wider range of opportunities with enhanced resources.

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Yet Another Conservative Argument About Poverty Appears To Be Wrong

Senior National Correspondent, HuffPost

Two prominent scholars are calling B.S. on a popular conservative argument about poverty.

The argument comes up anytime the political discussion turns to anti-poverty programs, and whether to strengthen or weaken them. It goes like this: Sure, poor people in America may struggle to pay for necessities like rent, gas and health care. Even so, they’re still pretty well off by international standards, because they have running water and air conditioning ― and cell phones and televisions, too. Last year, for example, Rep. Darrell Issa (R-Calif.) called America’s poor “the envy of the world.” (He later reaffirmed that position in an op-ed for The Hill .)

Now two of the nation’s leading scholars on poverty, Kathryn Edin from Johns Hopkins University and Luke Shaefer from the University of Michigan, are weighing in. Edin and Shaefer are the authors of $2.00 Dollars a Day , an award-winning 2015 book on deep poverty that got a lot of attention inside Washington and beyond. In a new working paper , out this week at Michigan’s National Poverty Center website, the two researchers (along with doctoral student Pinghui Wu) draw on a variety of data to compare specifically how low-income groups in America fare relative to the population of poorer countries.

Their focus is four simple indicators of well-being: life expectancy, infant mortality, homicide and incarceration. The results don’t reflect favorably on the U.S.

In America’s poorest counties, life expectancy turns out to be roughly the same as it is in Bahrain, Mexico and the United Arab Emirates. For infant mortality, Edin, Shaefer and Wu looked specifically at racial and ethnic groups with lower-than-average incomes in the U.S. The most striking finding: Among non-Latino black Americans, infant mortality rates are only slightly better than in Grenada, and worse than in Sri Lanka.

The numbers for homicide and incarceration yield similar results: Statistics for low-income groups in the U.S. look a lot like those for people living in countries with economies that, per person, generate far less wealth.

International comparisons like these are inevitably crude, in part because poorer countries don’t have the infrastructure to collect statistics as reliably as the U.S. does. And to make their comparisons, Edin and Shaefer couldn’t always use the exact same years. But the paper’s conclusion is consistent with other data showing that the standard of living for America’s poor is way behind that of peer countries in Europe and Asia. A big reason for that is that safety net programs in the U.S. provide a lot less protection than those overseas.

It doesn’t have to be that way. Studies have shown that programs like Medicaid and WIC (the Supplemental Nutrition Program for Women, Infants, and Children) reduce infant mortality. Research also suggests that initiatives to improve early childhood care , when designed properly, can yield health benefits in adults, potentially allowing people to live longer.

The key is bolstering those programs, or perhaps trying some new approaches ― which, more or less, is what Democrats like Hillary Clinton have proposed doing for some time now. But such efforts typically run into resistance from Republicans.

They have their reasons. Conservatives tend to oppose bigger government on principle. They think that government spending, and the taxes to finance it, weaken the economy. They also think anti-poverty programs are inefficient and, in some cases, encourage dependency.

Some of these arguments are defensible. Some are not. The idea that America’s poor have it good appears to belong in the latter category.

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Book Reviews

'poverty, by america' shows how the rest of us benefit by keeping others poor.

Jennifer Ludden

After Matthew Desmond won the Pulitzer for Evicted , about families struggling to stay housed, the Princeton sociologist realized he still didn't understand why the U.S. has more poverty than any other advanced democracy.

His new book Poverty, By America , provides a provocative and compelling answer: It's because the rest of us benefit from it, and act to keep it that way.

Desmond admits it feels rude to accuse ordinary people of exploiting others, especially as many don't even realize they're doing it. But he says to understand poverty requires examining not just the relentlessly demonized 1% but "ourselves ... we the secure, the insured, the housed, the college educated, the protected, the lucky."

This means Poverty, By America is not an immersive attempt to bear witness to suffering like Evicted. Instead, Desmond lays out public policies, laws, and tax breaks to show how the U.S. actually spends big on social programs — second only to France! — but gives the most to those who need it the least. Welfare dependency? Yes indeed, for the richer half.

He packs in a sweeping array of examples and numbers to support his thesis and it can be overwhelming to absorb. But the accumulation has the effect of shifting one's brain ever so slightly to change the entire frame of reference.

One example among many he offers: In 2020, the federal government spent more than $193 billion on subsidies for homeowners — "most families who enjoy this benefit have six-figure incomes and are white" — but just $53 billion on direct housing assistance for low-income families. That's not for lack of need. Because of chronic federal underinvestment, only 1 in 4 extremely low-income Americans who qualify for housing aid get it.

The U.S. needs more affordable housing – where to put it is a bigger battle

Desmond notes that more affluent Americans also disproportionately benefit from subsidized retirement and college savings plans. Exclusionary zoning laws keep their segregated neighborhoods prosperous with well-funded schools, while concentrating poverty elsewhere.

Meanwhile, lower-income families locked out of those neighborhoods — disproportionately Black and Latinx — pay more at every turn. Higher interest rates on mortgages when they can get one — and higher rent when they can't. Desmond's analysis finds U.S. landlords in poor neighborhoods typically make double the profit as those in richer ones. Poor people are also hit with billions in bank overdraft fees every year, a policy that became more widespread after banking deregulation in the 1980s.

These inequities and others are self-perpetuating. The wealthy have more political power, Desmond says, and wield it by lobbying for lower taxes, lower wages, and other laws that give them even more money and power.

When it comes to solutions, Poverty, By America first offers its own reality check.

Two of the biggest U.S. anti-poverty programs are the Earned Income Tax Credit and housing vouchers to subsidize rent. But Desmond says writing this book has forced him to see how they "rescue millions of families from a social ill, but they do nothing to address its root causes." The tax credit allows companies to keep wages low, he says, and housing vouchers don't keep landlords from raising rent when their tenants' wages go up .

"We need to ensure that aid directed at poor people stays in their pockets," he says.

To that end, Desmond calls for policies that give the poor more power in the workplace and housing market, and sees hope in the growing push for unions and a resurgent tenants rights movement.

He also wants a return to bigger investments in the general welfare, which he says would amount to "more poor aid and less rich aid" and less segregation. How to pay? "We could just about fill the entire poverty gap in America if the richest among us simply paid all the taxes they owed ," he says.

The Picture Show

How one photographer is using his camera as a weapon against poverty and racism.

The IRS recently did get more money to go after rich tax dodgers. Maybe it's a start.

But by this point in the book, Desmond has made crystal clear just how difficult it is to change policies that keep so many cozy in their relative prosperity. In 2015, President Obama proposed ending the tax credits in 529 college savings plan; the uproar from his own party was so intense that it was quashed the next day.

Then Desmond suggests something that felt contrived at first, but stuck with me and seems smart for this moment. Taking a cue from the anti-racist push and consumer movements, he says Americans can join to create change by being "poverty abolitionists."

"Poverty in America is not simply the result of actions taken by Congress and corporate boards," he says, "but the millions of decisions we make each day when going about our business."

Changing those decisions can be simple, like choosing UPS over FedEx because their drivers are unionized. Or more disruptive, like examining whether your company exploits workers or your stock market portfolio includes some that do.

Of course, for those who are able, investing and buying to counter poverty can be time consuming and even costly. But Desmond says it's precisely in understanding those costs that we acknowledge our shared complicity.

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'Ending world poverty is an unrealistic goal'

Despite the on-trend rhetoric and optimism, the chances of (all but) ending absolute poverty in our generation are slim. The chances of ending poverty altogether are zero.

The closer we get to ending extreme poverty, the harder it is going to be to do it. We're going to have to pretty much end violent conflict, experience a Damascene climate conversion, sustain high rates of economic growth, avoid any recession in poor countries and make sure nobody who is disabled or seriously ill sees their income drop to less than $1.25 a day. It would potentially cost some of the world's biggest businesses billions of dollars and need to be agreed by a group of world leaders who, if they all went out to dinner, would be sat around the table with their calculators out arguing about how to split the bill.

Call me a cynic but I'm sceptical. This chart did the rounds in response to Bill Gates' annual letter and demonstrates the trajectories on which the end of poverty hype is based – and that's just in countries where we have some idea of the data ( if we can trust the data at all ). In sub-Saharan Africa we are not on track to hit many millennium development goals – look at DfID's annual report if you don't believe me (page 23).

Luckily, there is more to development, as an effort in international solidarity, than simply ending absolute poverty. It is an important benchmark, but a world in which a billion people live on $1.26 a day would contain as much cause for outrage as the one we live in today. A big box would be ticked but how many lives would really have changed?

Poverty is a perception – it is a status which is bestowed on people who have relatively little – even in societies of plenty. That's why we probably can't really ever "end" poverty. To see a world in which so many people have less than you and to want them to have more is, to many of us, human nature. It's why poverty in the UK matters as much as poverty abroad, despite the material differences. Relative poverty will always exist and it should always be at the forefront of efforts to improve our world because it demands more than the bare minimum solution.

Despite this, the aid industry currently has quite a few eggs in the end poverty basket . We risk assuming that the public distinguishes between absolute and relative poverty. It probably doesn't - especially not in austere times. Just look at the prevailing political view on aid to middle income countries that contain hundreds of millions of desperately poor people. Too much negativity and we're accused of not making any progress with aid money, too much talk of progress and aid is no longer necessary. It shouldn't be a Catch 22 but in reality, for some, it is.

As Owen Barder alludes to in his turn of the year assessment , aid agencies are an increasingly endangered species. For those working in organisations that are dependent on official development assistance, it is hard to talk about ending their dependency, but the 21st century demands the challenge is not ducked.

So if we accept that we won't be satisfied if we overcome absolute poverty, where do we go next? The emerging consensus around the perils of inequality presents as opportunity to articulate a broader and more sustainable vision. It is essential that we take it.

We've worked really hard on helping those at the very bottom, but is that really enough? Imagine how different the world would be if the focus of much aid spending was not "ending $1.25 dollar a day poverty" but "creating a fairer and more equitable world".

Inequality is about much more than income and that is why it is such a valuable frame. A recent Oxfam report generated welcome headlines but If we took the wealth of the world's richest and used it to double, treble or even quadruple the incomes of the world's poorest three billion people would that be enough? It would make a big difference but those people would still be relatively poor and deserving of better, fuller lives. The politics of inequality will be as important as the economics.

It is policy not aid which matters most in today's world – decisions taken on tax regimes, remittance flows and trade concessions are now the fastest route to assist poor countries in their development. Yet it is proving very hard to secure those decisions. Inequality is at the root of the reasons why.

Inequality, as a focal point for campaigns, allows us to accept and explain that building a better world is a slow and perennial endeavour. Delivering a world where the quality of education, healthcare and national infrastructure available to every person is sufficient to bestow on them meaningful hope and ambition is hopefully the aim of "development". It is not possible without tackling inequalities. Goals and targets will help us to keep moving forwards but achieving them will not equal success, which is why – despite its important role as an aspiration – we shouldn't be so belligerent about zero poverty and especially about whether aid is the tool to get us there.

Jonathan Tanner is media and public affairs officer at Overseas Development Institute . He writes here in a personal capacity. Follow @Tannerjc on Twitter

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Income Inequality Isn’t The Problem

Disparities are shrinking because millions are being lifted out of poverty each month. 

If you’ve been paying attention to economic controversies in the last decade, you may have noticed many discussions about economic inequality. It’s a hot topic and several people believe that the alleviation of poverty requires a substantial reduction in inequality. For example, Thomas Piketty, the French economist whose book Capital in the Twenty-First Century became a bestseller, understands the distinction between income inequality and poverty but sometimes uses the terms interchangeably, as if one necessarily begets the other. But inequality of income and wealth can remain high or even increase while poverty is decreasing.

In order to understand economic inequality, we need to ask a few questions. First, are there good kinds of economic inequality and bad kinds? Second, is it a good idea, as many policymakers and even some economists insist, to reduce inequality by taxing those at the top end more heavily? Third, has poverty been increasing? Fourth has economic inequality been increasing?

To answer the first question, let us consider two historical figures of twentieth-century American history. The first came to prominence in the late 1940s, when he invented a light one-man chainsaw, and sold more than 100,000 of them at a price that made him quite rich. That added slightly to wealth inequality. But although the wealth gap between this man, inventor Robert McCulloch, and his customers was higher than it was before, the customers got a product they valued that made their lives easier. In economists’ terms, the wealth of these customers increased slightly. Is that increase in wealth inequality a problem? When I’ve asked college students this question, the vast majority says no—and I agree.

Now let’s consider the second figure. In the early 1940s, as a Congressman from Texas, this man defended the budget of the Federal Communications Commission when a more senior member of the House of Representatives was trying to cut it. So the FCC owed him a favor. One FCC official suggested the politician have his wife apply for a license for a radio station in the underserved Austin market. She did so and within a few weeks, the FCC granted her permission to buy the license from the current owners. She then applied for permission to increase its time of operation from daylight-hours-only to 24 hours a day and at a much better part of the AM spectrum—and the FCC granted her permission within a few weeks. The commission also prevented competitors from entering the Austin market.

These moves made Lyndon Johnson and his wife very rich. When he ran for President in 1964, the radio station accounted for over half of his $14-million net worth. This increase in his wealth added slightly to wealth inequality. But customers in the Austin market were, due to the FCC restrictions on further radio stations, slightly less well off than if more stations had been allowed. When I tell this story to college audiences and ask them if they think there’s an important difference between McCulloch’s and Johnson’s methods of increasing wealth inequality, virtually all of them do, and few will defend the latter way.

How does this relate to wealth inequality? In any given year, there isn’t just one inventor or innovator. There are thousands. So each one’s success increases wealth inequality a little but also improves the well-being of tens of millions of people who are less wealthy. Also, as other competitors enter the market and compete with the innovator, they drive down prices and make consumers even better off. Indeed, Yale University economist William D. Nordhaus has estimated that only 2.2 percent of the gains from innovation are captured by the innovators. Most of the rest goes to consumers.

In short, there is indeed a distinction between good economic inequality and bad. Entrepreneurial innovation that improves the lives of consumers is good; using political pull to transfer wealth is bad.

Consider another example—two of the richest people in the world are Bill Gates and Carlos Slim. Gates got rich by starting and building Microsoft, whose main product, an operating system for personal computers, made life better for the rest of us. Would you have a well-functioning personal computer if Bill Gates hadn’t existed? Yes. But his existence and his clear thinking early on hastened the PC revolution by at least a year. That might not sound like a lot, but each gain we consumers got from each step of the PC revolution occurred a year earlier because of Bill Gates. Over 40 years, that amounts to trillions of dollars in value to consumers. The market value of Microsoft is currently just shy of $700 billion. Assume that Microsoft was much better than other innovators at capturing consumer value and captured fully 10 percent of the value it created, rather than the usual 2.2 percent. That means it has created almost $7 trillion of value for consumers over those forty years.

Mexican multi-billionaire Carlos Slim is currently the seventh-richest man in the world. He got rich the way Lyndon Johnson got rich. The Mexican government handed him a monopoly on telecommunications in Mexico and he uses it to charge high prices for phone calls. Slim is clearly exacerbating income inequality in a way that makes other people poorer.

Thomas Piketty concedes that it matters how one gets rich, and that many rich people made their money legitimately. But when it comes to advocating policy, he forgets that important distinction. He advocates an annual “global tax on capital” with rates that would rise with wealth. “One might imagine,” he writes, “a rate of 0 percent for net assets below 1 million euros, 1 percent between 1 million and 5 million, and 2 percent above 5 million.” He adds, “one might prefer” a stiff annual tax of “5 or 10 percent on assets above 1 billion euros.”  

But such a policy doesn’t discriminate between those who accrued their wealth honestly and in ways that ultimately contributed to the social welfare and those who got rich through government power. Here’s Piketty’s response to that point: “In any case, the courts cannot resolve every case of ill-gotten gains or unjustified wealth. A tax on capital would be a less blunt and more systematic instrument for dealing with the question.”

Piketty’s last sentence is the opposite of the truth. A tax on capital, no matter whether that capital was acquired legitimately or illegitimately, is incredibly blunt. It’s systematic only in the sense that it systematically takes wealth from all wealthy people. I agree with Piketty that courts are not usually the ideal way to resolve the issue of ill-gotten gains: much of what government does to produce those gains is legal, however morally questionable. The best way to prevent ill-gotten gains is to take away the government’s power to grant them. If the Mexican government had not had the power to create a telecommunications monopoly, for example, Slim’s wealth would be—much slimmer.

That brings us to the second question: Is it a good idea to reduce inequality by more heavily taxing those at the top end? If there’s anything we know from basic economics, it’s that incentives affect behavior. Tax high incomes or wealth heavily and you will have fewer people trying to make high incomes and get wealthy. Moreover, even if the incentive effect were slight, high taxes on highly productive people take wealth out of their hands, where much of it likely would have been used to finance more pro-consumer innovation and productivity, and put it in the hands of government bureaucracies. That simple transfer of wealth, independent of the effect on incentives, makes a society worse off.

Third, has poverty been increasing? No. In fact, what economists call extreme poverty—living on an income of less than $1.90 a day—has fallen dramatically over the last 3 decades. For the first time in world history, fewer than one billion people live in extreme poverty .

This is all the more striking when you remember that the world population, at 7.6 billion people, is at an all-time high. Why has this happened? Because of increased international trade and economic growth—which have made some people extremely wealthy, while also lifting over one billion others out of crippling destitution. The argument that economic inequality somehow exacerbates poverty is specious.

Finally, has economic inequality been increasing or decreasing? The wrong way to answer that question is by comparing the wealth of billionaires to the wealth of the poorest people on earth. The correct way is to compute something called the Gini coefficient. This coefficient, which can range from 0 to 1, measures income inequality. With total income equality, the Gini would be 0; with total inequality, which would mean one person having all the world’s income, the Gini would be 1. So what has happened to the Gini coefficient over time? Economists Tomas Hellebrandt and Paolo Mauro reported the answer in a 2015 study for the Peterson Institute for International Economics. They found that between 2003 and 2013, the worldwide Gini coefficient fell from 0.69 to 0.65, indicating reduced income inequality. Moreover, the two economists predict that by 2035, income inequality will decline further, with the Gini coefficient falling to 0.61. The reason is not that higher income people will do worse but that lower income people in some of the poorest countries, like India and China, will do much better because of economic growth.

If the problem we care about is poverty, then the calls to tax the rich and reduce income inequality are misguided. Instead, we should be cheering for policies that lead to higher economic growth. One other important measure is increased immigration. Allowing more immigration into the United States would allow people to move from low-productivity jobs in poor countries to higher-productivity jobs in America. That would dramatically improve the plight of the poor while also improving, but by a smaller margin, the well-being of the rich. Piketty, for all his faults, put his finger on how to do so. He wrote: “A seemingly more peaceful form of redistribution and regulation of global wealth inequality is immigration.  Rather than move capital, which poses all sorts of difficulties, it is sometimes simpler to allow labor to move to places where wages are higher.”

Amen, frère.

View the discussion thread.

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Effective Altruism Forum EA Forum

Some objections and counter arguments against global poverty/health interventions.

I've written a brief document ( https://docs.google.com/document/d/1IwR7uO1yUR_78G8oR8Tg1UaY59A1riIuhP5p4roLMgY/pub ), trying to collate some answers to frequently raised objections to donating to global poverty charities.

I'll probably extend this document in the next few months.

Q: Isn’t economic growth going to lift people out of poverty? Should we not focus on growth?

Q: should we not support health systems strengthening instead of supporting ‘vertical’ interventions that might are not sustainable.

Q: Can stopping tax evasion by multinational enterprises close the gap in finance for development? 

A: Yes, eventually, but it would take decades, because the growth trickles down to the poorest very slowly. We have written about this in detail here.

A: AMF and SCI must strengthen general health-care systems insofar as they reduce the burden of disease that would otherwise be met by the rest of the health-system (see figure from below).

We have written about this in detail here.

Q: Can stopping tax evasion by multinational enterprises close the gap in finance for development?

A: While tax evasion is certainly an issue that can help with development, the matter is much more complicated than this. We refer the interested reader to the Center for Global Development and the International Center for Tax and Development for more information on this. In brief, the Center for Global Development writes on this issue:

“We find that the potential for governments to raise additional revenues by taxing multinational companies is limited by the actual levels of profit generated by foreign direct investment in each country; changes to effective tax rates may also have impacts on investment prospects. Estimates of corporate tax dodging are often presented, mistaken, or repurposed in a way that exaggerates potential impacts - for example, large aggregate tax loss estimates are compared with aid revenues or healthcare funding gaps, implying that taxes raised in China, Brazil and South Africa might be available for public spending in Cambodia, Haiti and Malawi. Multi-year tax estimates are compared with annual costs of nurses or teachers. In some cases larger estimates (‘trillions’) which relate to estimates of corruption, informal sector activities or offshore assets held by domestic citizens are mistakenly repurposed to represent complex tax planning practices of multinationals. Much-quoted figures such as ‘‘developing countries lose three times more to tax havens than they get from aid each year” and “‘60% of global trade takes place within multinationals” or “Zambia could have doubled its GDP” are not likely to hold up.”

Regarding "should we not focus on growth" the fact that Chinese reforms have been responsible for the bulk of recent poverty relief (with India following up in the rear) really does make a big argument for anything that contributed to that and wasn't ludicrously expensive. For example, the think tanks and technical advice involved in India's reforms, the economists and analysts who contributed to governance in Hong Kong and Singapore (which acted as powerful models for the CCP in deciding to reform).

I think the response to that shouldn't be "oh, it's too hard" but rather "something along those lines plausibly IS better than what we're doing, these are our plans to investigate it, and we will modify our recommendations if the investigation comes out positive with specific targets." One might follow that with one's reasons for giving now before such investigation, even a back of the envelope calculation about total spending on such things over the last 100 years and an estimated role for these in growth-inducing reforms.

Absolutely agree that growth has lifted lots of people out of poverty.

The idea here was that, even under very optimistic growth projections, i.e. Africa emulating China, it would simply take to long for growth to benefit the very poor. Because the main factor for growth is capital, and free market forces already provide that (China is investing a lot in Africa), our marginal dollar might be better spent elsewhere.

I think you could strengthen the response to the first question by noting that global poverty/health interventions likely promote economic growth, and with a more equal distribution (obviously by a very small amount depending on the size of the intervention).

We're looking into this issue currently.

Do people ask about MNC tax evasion specifically or illicit financial flows generally? And when they do ask about MNC tax evasion - is it tax evasion of LDCs or globally?

Does anyone know if someone's looked into the likes of these http://www.taxjustice.net/ for effectiveness. I see this article in a search suggesting donation if its something you care about, but not sure about an evaluation? https://www.givingwhatwecan.org/blog/2014-10-07/donating-in-face-corruption

This is about illicit financial flows generally. I should probably make this more clear. Thanks for the feedback.

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Ending Poverty

The COVID-19 pandemic has caused an increase in the number of people living in extreme poverty, for the first time in a generation. Progress in important areas, such as childhood vaccination and income equality between countries has been reversed, which has not happened in the past three decades. If the current trend continues, it is projected that by 2030, a shocking 575 million people will still be living in extreme poverty, and 84 million children will not be able to attend school. It is estimated that it will take almost 300 years to eliminate discriminatory laws, end child marriage and close gender gaps in legal protection. In 2020, with 71 million more people living in extreme poverty than the year before, the COVID-19 crisis caused the biggest setback in global poverty reduction in decades.

In 2020, with 71 million more people living in extreme poverty than the year before, the COVID-19 crisis caused the biggest setback in global poverty reduction in decades. In April 2020, the United Nations issued a framework for the immediate socio-economic response to COVID-19  and created the Secretary-General's UN COVID-19 Response and Recovery Fund .

From 1990 to 2014, the world made remarkable progress in reducing extreme poverty, with over one billion people moving out of that condition. The global poverty rate decreased by an average of 1.1 percentage points each year, from 37.8 percent to 11.2 percent in 2014. However, between 2014 and 2019, the pace of poverty reduction slowed to 0.6 percentage points per year, which is the slowest rate seen in the past three decades. Within the 24-year period, most of the poverty reduction was observed in East Asia and the Pacific, as well as South Asia.

What is Poverty?

Poverty entails more than the lack of income and productive resources to ensure sustainable livelihoods. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion, as well as the lack of participation in decision-making. In 2015, more than 736 million people lived below the international poverty line. Around 10 per cent of the world population (pre-pandemic) was living in extreme poverty and struggling to fulfil the most basic needs like health, education, and access to water and sanitation, to name a few. There were 122 women aged 25 to 34 living in poverty for every 100 men of the same age group, and more than 160 million children were at risk of continuing to live in extreme poverty by 2030.

Poverty facts and figures

• According to the most recent estimates, in 2023 almost 700 million people around the world were subsisting on less than $2.15.
• The share of the world’s workers living in extreme poverty fell by half over the last decade: from 14.3 per cent in 2010 to 7.1 per cent in 2019. However, in 2020 it rose for the first time in two decades after the COVID-19 pandemic.
• It is projected that the global goal of ending extreme poverty by 2030 will not be achieved , with almost 600 million people still living in extreme poverty.
• One out of six children lives in extreme poverty . Between 2013 and 2022, the number of children living on less than US$2.15 a day decreased from 383 million to 333 million, but the economic impact of COVID-19 led to three lost years of progress. 
• In 2021, 53 per cent of the world’s population – 4.1 billion people – did not benefit from any form of social protection .

Poverty and the Sustainable Development Goals

Ending poverty in all its forms is the first of the 17 Sustainable Development Goals (SDGs) of the  2030 Agenda for Sustainable Development .

The SDGs’ main reference to combatting poverty is made in  target 1.A : “Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programmes and policies to end poverty in all its dimensions.”

The SDGs also aim to create sound policy frameworks at national and regional levels, based on pro-poor and gender-sensitive development strategies to ensure that by 2030 all men and women have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance.

Measuring Poverty

There has been marked progress in reducing poverty over the past decades. In 2015, 10 per cent of the world’s population lived at or below $1.90 a day -down from 16 per cent in 2010 and 36 per cent in 1990- while in 2023 almost 700 million people around the world were subsisting on less than $2.15.

At current rates of progress, the world will likely not meet the global goal of ending extreme poverty by 2030 , with estimates indicating that nearly 600 million people will still be struggling with extreme poverty then.

Extreme poverty is concentrated in places where it will be hardest to eradicate— among the least developed countries, in conflict-affected areas, and in remote, rural areas. The outlook is also grim for the nearly 50 percent of the world’s population who live on less than $6.85 a day – the measure used for upper-middle-income countries.

Global Action

The 2030 Agenda for Sustainable Development promises to leave no one behind and to reach those furthest behind first. Meeting this ambitious development agenda requires visionary policies for sustainable, inclusive, sustained and equitable economic growth, supported by full employment and decent work for all, social integration, declining inequality, rising productivity and a favorable environment. In the 2030 Agenda, Goal 1 recognizes that ending poverty in all its forms everywhere is the greatest global challenge facing the world today and an indispensable requirement for sustainable development.

While progress in eradicating extreme poverty has been incremental and widespread, the persistence of poverty, including extreme poverty remains a major concern in Africa, the least developed countries, small island developing States, in some middle-income countries, and countries in situations of conflict and post-conflict countries. In light of these concerns, the General Assembly, at its seventy-second session, decided to proclaim the Third United Nations Decade for the Eradication of Poverty  (2018–2027). The objective of the Third Decade is to maintain the momentum generated by the implementation of the  Second United Nations Decade for the Eradication of Poverty  (2008-2017) towards poverty eradication. Further, the 3rd Decade is also expected to support, in an efficient and coordinated manner, the internationally agreed development goals related to poverty eradication, including the Sustainable Development Goals.

Department of Economic and Social Affairs (DESA)

In 1995, the  World Summit for Social Development  held in Copenhagen, identified three core issues: poverty eradication, employment generation and social integration, in contributing to the creation of an international community that enables the building of secure, just, free and harmonious societies offering opportunities and higher standards of living for all.

Within the  United Nations system , the  Division for Social Policy and Development (DSPD)  of the  Department of Economic and Social Affairs (DESA)  acts as Focal Point for the United Nations Decade for the Eradication of Poverty and undertakes activities that assist and facilitate governments in more effective implementation of the commitments and policies adopted in the Copenhagen Declaration on Social Development and the further initiatives on Social Development adopted at the 24th Special session of the General Assembly.

A potential game-changer in accelerating SDG progress

At the 2023 SDG Summit held at the UN’s headquarters in New York, the General Assembly adopted a political declaration to accelerate action to achieve the 17 Sustainable Development Goals (SDG). The document aims to drive economic prosperity and well-being for all people while protecting the environment. In addition, it includes a commitment to financing for developing countries and supports the proposal of an SDG Stimulus of at least $500 billion annually, as well as an effective debt-relief mechanism.

• International Day for the Eradication of Poverty

Through  resolution 47/196  adopted on 22 December 1992, the General Assembly declared 17 October as the  International Day for the Eradication of Poverty .

The observance of the International Day for the Eradication of Poverty can be traced back to 17 October 1987. On that day, over a hundred thousand people gathered at the Trocadéro in Paris, where the Universal Declaration of Human Rights was signed in 1948, to honour the victims of extreme poverty, violence and hunger. They proclaimed that poverty is a violation of human rights and affirmed the need to come together to ensure that these rights are respected. These convictions are inscribed on a commemorative stone unveiled that day. Since then, people of all backgrounds, beliefs and social origins have gathered every year on October 17th to renew their commitment and show their solidarity with the poor.

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Brain-based arguments to reduce child poverty miss the point

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A new study concluded that babies of poor mothers who received cash stipends experienced changes in their brain activity patterns. Advocates for the now-expired child tax credit hope the finding will help restore support for this and other federal anti-poverty programs.

“Not so fast,” writes Mical Raz , a professor of history and health policy at the University of Rochester , and a practicing physician, in a Washington Post op-ed published in the newspaper’s “Made by History” section. “This line of argument suggests that ending poverty in its own right is not a sufficient goal and that improving the brain function and biology of poor babies should drive policy.”

Raz draws on her own research while also tracing the history of anti-poverty policies in the US such as Project Head Start. She asks:

If poor children’s brains are “improved” from cash benefits, does that imply that their brains are biologically inferior to begin with? Presenting social science interventions as having the potential of “fixing” poor children—and among this group the overrepresented number of children who are from minority backgrounds—has the distinct risk of fueling a debate about whether some children and families are innately and immutably inferior.

Based on a wealth of evidence, working to reduce child poverty is good policy in itself, she argues. With nearly 11 million US children living in poverty, a rate far higher than in peer countries, “these children deserve better, and their advocates don’t need to rely on the shape of children’s brain waves to make that case.”

Raz is the University’s Charles E. and Dale L. Phelps Professor in Public Policy and Health, professor of history, and a physician at the University’s Strong Memorial Hospital. The author of What’s Wrong with the Poor? Psychiatry, Race, and the War on Poverty (University of North Carolina Press, 2013) and Abusive Policies: How the American Child Welfare System Lost Its Way (University of North Carolina Press, 2020), Raz is an expert on the history of US poverty and child abuse policies over the last half century.

• Read the full Washington Post op-ed online .

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Reporting by Gabriella Borter; Additional reporting by Ted Hesson, Mica Rosenberg, Kristina Cooke and Andy Sullivan, and Marvin Valladares in Azacualpa, Honduras; Writing by Andy Sullivan; Editing by Kat Stafford, Aurora Ellis and Tom Hogue

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Gabriella Borter is a reporter on the U.S. National Affairs team, covering cultural and political issues as well as breaking news. She has won two Front Page Awards from the Newswomen’s Club of New York - in 2020 for her beat reporting on healthcare workers during the COVID-19 pandemic, and in 2019 for her spot story on the firing of the police officer who killed Eric Garner. The latter was also a Deadline Club Awards finalist. She holds a B.A. in English from Yale University and joined Reuters in 2017.

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New complaint filed challenging the constitutionality of the corporate transparency act..

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Legal Pleadings Court Papers Law Complaint

A recent lawsuit has been filed in the Federal District Court in Maine , William Boyle v. Yellen (Case 2:24 – cv- 00081), that mirrors case in Federal District Court for the District of Alabama, National Small Business Association v. Yellen, (Case No. 5:22-cv-01448) where the District Court deemed the Corporate Transparency Act (CTA) unconstitutional. This new legal challenge also disputes the CTA's constitutionality, presenting three main arguments:

Infringement on State Authority: The lawsuit posits that the CTA unlawfully infringes upon state sovereignty in the realm of corporate entity regulation. It argues that the primary authority to charter and govern corporate entities rests with the states. By imposing a federal standard for incorporation, the CTA allegedly oversteps Congress's powers and contravenes the principles of federalism and state autonomy.

Overreach of Congressional Authority: According to the complaint, the regulation of corporate formation lies outside Congress's enumerated powers, such as managing foreign affairs, regulating commerce (foreign, interstate, or with Indian tribes), or levying taxes. The formation of a "reporting company" is described as a local act that bears no relation to foreign affairs or national security, noting that many such companies may not partake in commerce across state lines, with foreign nations, or with Indian tribes.

Coercing State Agencies: The plaintiff asserts that the CTA compels state agencies to inform entities about the CTA's reporting requirements and to distribute the CTA filing form. This requirement is said to violate the principles of federalism by undermining state sovereignty.

Infringement of Personal Rights : The plaintiff contends that the Corporate Transparency Act (CTA) infringes upon his rights by mandating the disclosure of sensitive personal information to the Financial Crimes Enforcement Network (FinCEN), a division of the Treasury Department focused on criminal enforcement, merely because he is the "beneficial owner" of certain real estate holding limited

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liability companies.

Arguments challenging the legitimacy of the case against the CTA might include:

Constitutional Authority : Advocates for the CTA could argue that Congress possesses the constitutional right to enact this law, leveraging its authority to regulate interstate commerce and impose taxes. The CTA is viewed as a tool to oversee commercial activities significantly impacting interstate commerce, especially crucial in the fight against money laundering and financial crimes that frequently transcend state and national borders.

National Security and Public Welfare : The government could argue that the CTA is pivotal in bolstering national security and thwarting illegal financial operations. The collection of beneficial ownership information is designed to prevent the misuse of shell companies for money laundering, financing terrorism, and other illicit activities threatening national security.

Legal Precedence and Existing Regulations : Proponents of the CTA might reference current regulations and precedents mandating the disclosure of personal information for regulatory and law enforcement objectives. For instance, the Bank Secrecy Act and the USA PATRIOT Act already enforce specific reporting obligations on financial institutions to combat money laundering and terrorism financing.

Privacy and Data Protection : Although plaintiffs argue the CTA infringes upon privacy rights, the government could maintain that the Act incorporates measures to ensure the confidentiality and security of the disclosed information. Access to the beneficial ownership database is limited to authorized government bodies and financial institutions under specific conditions, with stringent penalties for unauthorized access.

Scope and Exemptions : The government may highlight that the CTA's mandates are narrowly defined, offering exemptions for specific organizations, including publicly traded companies, as well as entities with more than 20 full-time employees and over $5 million in yearly gross revenue. This point could serve to rebut claims that the Act places an excessive burden on small businesses.

Federal Authority : Against the critique that the CTA encroaches upon states' rights to oversee business formations, supporters could argue that the federal government possesses a valid interest in overseeing corporate entities that exert a national influence. This includes the prevention of financial crimes that transcend state lines.

The legitimacy of these arguments will ultimately be adjudicated by the courts, evaluating them against the U.S. Constitution, the extent of Congressional authority, and the equilibrium between regulatory objectives and individual freedoms. Nonetheless, the arguments supporting the CTA's constitutionality are persuasive enough to ensure ongoing compliance by recording companies with the Act's stipulations and deadlines, as it stands as the prevailing law.

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50 Years Ago: Elvis Songwriter Dies in Poverty, as He Predicted

M ost music fans today are aware there’s a long-running argument about whether the writers of the songs we love are fairly compensated for the profits made out of them.

The internet brought the argument into the light, but it wasn’t really new. Since the era of recorded music began – and actually, long before that, when people bought sheet music rather than albums – the disagreement has raged on.

It’s often assumed that those who reach certain heady heights will be more immune from being ripped off, if only because they can command bigger percentages and hire better lawyers. But consider the case of Arthur Crudup, who died on March 28, 1974. While his name may be almost unknown in some circles, his songs most certainly aren’t. But he still died in poverty, just like he predicted he would.

READ MORE: Elvis Presley Launches Recording Career for $4

Crudup – also known as Big Boy Crudup, Elmer James and Percy Lee Crudup – was the author of “That’s All Right” in 1946. Of course, Elvis Presley ’s 1954 version is the best-known, and it’s one of the compositions that stakes a claim to be the first-ever rock ’n’ roll song.

Presley recorded two more of Crudup’s tracks, “My Baby Left Me” and “So Glad You’re Mine.” Presley is reported to have said: “The colored folks been singing it and playing it just like I’m doin’ now, man, for more years than I know. I got it from them. Down in Tupelo, Mississippi, I used to hear old Arthur Crudup bang his box the way I do now, and I said if I ever got to the place I could feel all old Arthur felt, I’d be a music man like nobody ever saw.”

The Blues Foundation described Crudup as “probably the country’s most popular downhome-style bluesman in terms of record sales and jukebox play,” noting that “artists from Elton John to Eric Clapton to B.B. King covered his songs too.

Arthur Crudup’s ‘That’s All Right’

“But Crudup was a classic victim of music industry exploitation, and despite the commercial success… was never able to even support his family from his music.” He’s said to have been an “enterprising, self-made man,” and “when the the recording business finally got the best of him, he simply left it behind.”

Paid only a few thousand dollars during his music career, he undertook a huge range of jobs from lumberjack to migrant worker transporter, and at one point ran his own juke joint. When the blues resurged in the late ‘60s, he returned to action for a brief period, working with Bonnie Raitt as his final professional engagement in 1970.

Later, blues advocate Dick Waterman started a battle to have some of the missing royalties repaid, and nearly secured a $60,000 payment from Hill Range Publishing. “When the lawyer dealing with the issue went upstairs to get the check signed by the manager, he returned to the table pale and shaken,” Waterman wrote in his 2003 memoir Between Midnight And Day .

Arthur Crudup Died Before Any Justice Was Done

The lawyer said: “He won’t sign the agreement. He said it gives more away in settlement than you could hope to get from litigation.” Realizing “we were not going to get anything at all,” Waterman told Crudup “over and over that we would get them and make them pay for what they had done to him.

“Arthur looked me in the face and spoke slowly. ‘I know you done the best you could. I respects you and I honors you in my heart. But it just ain’t meant to be.’”

Crudup had said in 1970: “I was born poor, I live poor, and I am going to die poor” [via David Szatmary’s 1991 book Rockin’ In Time ]. He was right – he passed aged 68, without a penny to his name, a year after the failed settlement attempt.

But Waterman didn’t give up, and in the years to follow over $3 million would be paid to Crudup’s estate. “Despite the slight righting of the scales of justice in the way of money, Crudup still never really secured the reputation he deserved,” Guitar Tricks commented.

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Next: 10 Great Classic Rock Elvis Presley Covers

Source: 50 Years Ago: Elvis Songwriter Dies in Poverty, as He Predicted