Eric Martinez

ePortfolio assignment- Reflective paper

ECON 2010
Dr. KT Magnusson- Salt Lake Community College

Reflecting on World Poverty

This paper is a personal reflection on the current status of world poverty. In this
reflection, I will relate personal experiences and observations, as well as make some suggestions
that could possibly help by slowing down or alleviating poverty. It will be based on reading the
article provided, Global Poverty.
First, it is important to note that poverty is a relative term. It is based on the idea of a
standard of living, set by various governments around the world. The standard of living in a
highly developed country is higher than that of an underdeveloped country, sometimes known as
a third-world country. It also depends on what is required to live and thrive within that
country/area. For example, a single mother living in the U.S. working for a wage of, say, $20,000
a year could be considered to be living in poverty, one who earns the equivalent wage in a third
world country would be considered wealthy or very well off. Having lived in a country for two
years whose income per capita was about $4260, my own perception of poverty vs. wealth gives
me perspective on this idea.
That said, I think that its important to note that declaring poverty based off of monetary
income alone is not a completely accurate way of gauging poverty. Again, the term is relative.
Although money may be necessary to survive here in the U.S., it may not be necessary in other

parts of the world. In some places, people work to build their own houses and obtain/grow their
own food, and become very prosperous in a different way.
However, poverty in other countries that do require money is all too apparent and ever so
present. There are many ideas on how to combat poverty and extreme poverty. Some of these
ideas lack evidence or promise, while other ideas show both evidence and promise, while at the
same time opening new doors for new ideas.
One of the first conclusions that one may make is to establish or raise the minimum wage
for those countries with residents that dont make enough money. This seems rational at first: the
government should force companies to pay their employees more, raising their income and, in
turn, their quality of life. However, when we look closer at the effects it might have, we find the
opposite would most likely occur. First of all, in a lot of these countries the problem is that there
is no employment, or very little of it. Where there is employment, raising or establishing a
minimum wage can be detrimental. In an effort to save money, businesses find cheaper ways of
producing, often by reducing their workforce, and turning to automation. This has the opposite
impact, as less people are employed, and those who were employed are in a worse situation than
before. As we learned in class, when the price of the resource (employment) increases, demand
decreases. I think that although government is an important resource to improving global
poverty, we also need to look past the government. Businesses can also do a lot to help combat
poverty all around the world.
One observation made is the impact that trade and globalization can have on poverty. As
technology continues to move forward, education and communication becomes cheaper and
more available in various parts of the world. This creates more opportunities for improving the
quality of life by making information more accessible, providing cheap alternatives and

substitutes for otherwise expensive equipment. In some places, globalization also provides jobs
at or above the average income. As companies look to produce items and services at the lowest
cost possible, they begin offshoring operations to impoverished countries, where they can pay
workers less money. They also look for materials at a lower cost, which often means that some
of these materials also come from these impoverished countries, which can also contribute to the
economy. However, this also often introduces unsafe work environments, sometimes even
resulting in injury or death of laborers. Also, these laborers earn a wage that would be considered
insufficient or even illegal in developed countries. This can be considered by some as
exploitation or oppression.
Globalization, without a doubt has its downfalls, and in some cases can be very
detrimental to those who work in dangerous work environments. It comes with its risks, but can
also be very good for developing countries by providing much needed jobs, and sometimes even
bringing new technology that can help others obtain their most basic needs. My own opinion is
that globalization would probably be the best way to disperse wealth to these developing
countries. I also, however think that it should be done more responsibly. It is important that
companies provide fair wages, safe working conditions. They can still do this while saving
money. They may not save as much money, but they are more likely to get support from
consumers if they are being responsible. Not only do these offshore jobs/resources assist
individuals who live in poverty, but it also turns around and improves the community. When
people have more money, they can consume more in their own communities. This often supports
local businesses, promoting growth. This can also encourage new local businesses to emerge,
and create more jobs for local individuals. As more businesses emerge, opportunity emerges and
competition is created, which can promote more innovation and stimulate local economies.

Although it does take away from the economy of the developed countries, I think that the impact
it makes on the underdeveloped countries is more important. There are areas in the world that
have been brought out of poverty because of globalization.
Government can further assist by enforcing safety standards and working condition laws.
This may cost businesses more money, but one suggestion I have is to adjust tariffs and taxes so
that doing business in different impoverished, undeveloped countries is more economically
enticing.
In conclusion, I think that businesses and government can work together to combat
poverty throughout the world by creating jobs through globalization. Using globalization as a
catalyst, certain communities and economies can be stimulated. This would in turn help the
economy grow, creating not only jobs, but opportunities for new local businesses and a thriving
competitive market in some areas.