Home > Articles > Business & Management > Global Business

Why Poverty Hurts Everyone

  • Print
  • + Share This
What is the impact of poverty on the rest of us—the nonpoor? Philip Kotler and Nancy R. Lee suggest it is enormous, and they make their case in this chapter.
This chapter is from the book
  • “Poverty is a call to action—for the poor and the wealthy alike—a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities.”
  • —The World Bank1

At 5 a.m. in Zimbabwe, 13-year-old Chipo walks two miles to draw water to bring back to quench the thirst of her four younger siblings, ages 5 to 11. She prepares a slim pot of porridge, wondering where she will get something to feed them that night. She will have to carry her youngest sibling, who has had diarrhea for a week, to a medical clinic four miles away, where she expects a long wait. Her parents died from AIDS earlier in the year. Her neighbors are poor too, but they have provided a little help. She has no thought of schooling; her siblings and their survival are her only concern.

Meanwhile, near a vending machine at a gas station in Newark, New Jersey, Jim spots Suzanne after not seeing her for a long time. He is taken aback by her gaunt frame and worn-looking clothing. She breaks down and explains that she hasn’t been eating much because she doesn’t have money for food. Three years ago, she was hit by a drunk driver, and the accident shattered many bones in her body. She spent months in the hospital, and when she returned home, her husband divorced her. She has been living on $700 per month in alimony and $60 in food stamps. She applied for disability assistance but was told she was ineligible. She also has applied for part-time jobs, but she feels that when employers see her cane for walking, they immediately dismiss the idea of hiring her. Her rent is $430, her utility bill is $90, and her phone bill is $60. She spends over $70 a month on co-payments for doctor visits and prescription medication, and $40 a month for gas. That leaves $10 for food, since she usually runs out of food stamps toward the middle of the month. Suzanne fights back tears as she explains how awful she feels about not bathing, but soap and shampoo are not covered by food stamps.

Most of the terrible fates experienced by the poor like Chipo and Suzanne are familiar to many of us. We see the faces of the hungry, unemployed, and homeless. We read about gender inequalities, those who are illiterate, and villagers who have to travel an hour for health care or to get clean water—on foot. We know about mothers who experience their children dying young from diarrhea, who die in childbirth, and who age prematurely. We are frequently reminded of the vast numbers who have tuberculosis, malaria, or HIV/AIDS. And we hear about those whose farmland is producing less each year, whose livestock are not healthy, and whose water is contaminated.

But what is the impact on the rest of us—the nonpoor? We suggest it is enormous, and we make the case in this chapter. Over the years, many books have been written about poverty and its causes and cures. Some take a 360 degree view and offer broad policy and solution ideas often involving economic measures. Others get very close to the victims of poverty and describe their hardships and sufferings. Our book differs as it focuses on the fieldwork aspects of trying to solve specific problems of hunger, disease, inadequate schooling, family planning, inadequate or foul water, and other problems contributing to poverty. We believe that the developing field of social marketing, with its apparatus of concepts, tools, and principles can make a deep dent in these problems and has been missing in the poverty solution mix.

Our relentless focus and attention is on those poor who want to help themselves. What do they want and need that will address the barriers and support the behaviors that will move them out of poverty, even keep them out in the first place? They are the homeless people who don’t know what resources are available or how to access them; the millions of women who want to use family planning, but can’t convince their husbands; poor farmers who are afraid to try chemical fertilizers because they heard they might be bad for their livestock; sexworkers who fear they will lose business, even be jailed, if they suggest that their clients use condoms; fishermen who thought the mosquito net delivered to their door was for catching more fish; young adults wanting a job requiring computer skills they don’t have; tuberculosis patients who think because they feel better they can discontinue their medications; poor families wanting to save money but not trusting financial institutions; children dropping out of school because their itching from riverblindness makes them the brunt of teasing; and the high school students who end up not graduating because their attendance is so poor they get behind.

We will describe many cases in this book where social marketing theory and practice has been successfully applied to influence behaviors that reduced poverty and improved the quality of lives. We believe that the need to accelerate our progress in fighting poverty is growing more urgent than ever as a result of the financial meltdown starting in 2008 that has caused more people to lose their jobs and many to lose their homes and increase the numbers of poor. Hopefully help will be forthcoming along with these new tools and concepts for addressing the issues.

We begin with a brief picture of the poverty landscape, answering the questions: Who are the poor? How many are there? Where do they live? Why are they poor?

Who and How Many Are the Poor?

Governments are interested in measuring poverty for several reasons: to know its percentage in the population, to track whether it is rising or falling, to know its percentage among different groups, and, perhaps most importantly, to provide direction for developing poverty-reduction strategies. Several commonly used definitions of “poor” appear in the sidebar titled “Definitions of Poverty.”

The World Bank reports that a person is considered poor if his or her consumption or income level falls below some minimum level necessary to meet basic needs. This minimum level is called the poverty line. Because basic needs vary across time and societies, poverty lines vary in time and place. Each country uses a line that is appropriate to its level of development, societal norms, and values. Information on consumption and income is obtained through sample surveys of households, conducted fairly regularly in most countries. When estimating poverty worldwide, the same poverty reference needs to be used, providing a common unit across countries. Since 2005, the World Bank has used reference lines set at $1.25 and $2 per day of income, per person.2

Jeffrey Sachs, in his book The End of Poverty, distinguishes and describes three degrees of poverty. For each, we have applied the World Bank’s reference lines to estimate the size of each group:

  • Those in extreme poverty are households that “cannot meet basic needs for survival. They are chronically hungry, unable to access health care, lack the amenities of safe drinking water and sanitation, cannot afford education for some or all of the children, and perhaps lack rudimentary shelter—a roof to keep the rain out of the hut, a chimney to remove the smoke from the cookstove—and basic articles of clothing, such as shoes.”3 Using the World Bank’s most recent data (2005), economists estimated that 1.4 billion people were living in extreme poverty, less than US$1.25 a day.4
  • For those in moderate poverty, “[the] basic needs are met, but just barely.”5 These people still must forgo many of the things that many of us take for granted, such as education and health care. The smallest misfortune (poor health, job loss, natural disasters, drought, inflation) threatens their survival or might cause them to spiral down to extreme poverty levels. By defining the moderate poor as people earning between $1.25 and $2 per day, the number is estimated at 1.6 billion.6
  • A household in relative poverty has an “income level below a given proportion of average national income.”7 It is a reflection of the distribution of income in a given country. “The relative poor, in high-income countries, lack access to cultural goods, entertainment, recreation, and to quality health care, education, and other prerequisites for upward social mobility.”8 They may also have received less attention with the focus on solving the problem of the extreme and moderate poor, where suffering is more obvious. Although no formal estimate of the global relative poor exists, it would not be surprising if more than another billion may be in this class, making the world’s total number of poor people about 4 billion—a majority of us.
  • + Share This
  • 🔖 Save To Your Account