Name: Curt Samms Grade: 12 Arts Subject: Economics Teacher: Mr.

Hutchinson School: Kingston College

Table of Contents.
Pg.

Acknowledgement . 2 Introduction 3 Aims 4 Methodology . 5 Report- 6 - 16 What is poverty .. 6 Types of poverty ....... 6 - 7 Factors of poverty .8-9 Ways to measure poverty 9 - 11 Persons susceptible to poverty .. 11 Reasons for poverty12 How government alleviates poverty 12 -14 Unemployment rate 14 Inflation. 15 Conclusion..16 Questionnaire. 17 - 18 Bibliography.. 19

Acknowledgement.

In preparation of this project, there are a few people that I must thank for their aid and assistance in completely this Internal Assessment. Firstly, I would like to thank my mother for helping me carry out my investigation. She helped in issuing out and collecting the questionnaires. Also I would like to thank the creator of all things, the lord Almighty who gave me the breath to awaken every day to finish my Internal Assessment. Thirdly, I would like to thank my sister for helping me to type my SBA. Finally, I would like to thank my father for purchasing the necessary stationery to complete my Internal Assessment. To all these persons I would like to say a heartfelt thank you, as I couldnt have done it without you.

Introduction.

This Internal Assessment will focus on the economic problem of poverty. It will explain to you what poverty is, the causes of poverty, its effects and possible solutions to the problem. It will also state how the government deals with poverty in Jamaica. It will also compare and contrast the problem of poverty in Jamaica with two other countries namely Canada and The United Kingdom. I hope that all the readers of my Internal Assessment will learn about poverty and it causes and effects and that my possible solutions will be used to come up with a means to end poverty.

Aims.

To fulfill the requirements of my Internal Assessment. To achieve or obtain the highest mark possible for this Internal Assessment going into the Csec Cape Economics examinations. To learn about the various economics policies that can be used poverty can be reduced in Jamaicas Economies. To promote self-learning through research.

Methodology.
In order to gather information for my Internal Assessment, I utilized the use of questionnaires and the countries websites. These methods were most suitable for this project. The questionnaire was chosen as it gives clear response from individuals giving me a clear understanding of what people think of the reasons are for poverty, etc. I distributed the questionnaire to twelve individuals in my rural area and gave them an allowance of five days to answer the questionnaire but only ten were collected as two individuals lost theirs.

Report
Poverty is the state of one whose wealth is low as to be unable to obtain the minimum standard of living such as clean water, clothing, health care, etc. Poverty can also be viewed as a state of mind. It is a very serious problem and we must find ways to alleviate it on individuals as each year over 8 million people die because they are simply too poor to stay alive, etc. There are two types of poverty Absolute poverty and Relative poverty: Absolute poverty- This poverty deals with individuals with an income level which is below the minimal requirements necessary to afford minimal standards of foods, clothing, health care, shelter and education. To measure absolute poverty the line must be the same in all countries, cultures and technological levels. Absolute poverty is also referred to as extreme poverty. The measure is only possible when all consumed goods and services are counted and when purchasing power parity is used, it aims to ensure that mere survival takes place with the same amount of resources being used across the world The purchasing power parity (PPP), basically suggests that prices of goods in countries tend to equate under floating exchange rates and therefore people would be able to purchase the same quantity of goods in any country for a given sum of money. That is, the notion that a dollar should buy the same amount in all countries. Hence if a poor person in a poor country living on a dollar a day moved to the U.S. with no changes to their income, they would still be living on a dollar a day. The new poverty line of $1.25 a day was recently announced by the World Bank (in 2008). It is important to note that if every person in the world real income was increased and the distribution of income doesnt change absolute poverty would decrease. The measuring of poverty by absolute threshold has the advantage of applying the same standard across different locations and
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time periods, making comparisons easier but it has the disadvantage that any absolute poverty threshold is to some extent arbitrary; the amount of wealth required for survival is not the same in all places and time periods. For example, a person living in far northern Scandinavia requires a source of heat during colder months, while a person living on a tropical island does not. For a person to be consider in absolute poverty two of the following have to be missing:

1) 2)

Food: Body Mass Index must be above 16. Safe drinking water: Water must not come from solely rivers and ponds, and must be available nearby (less than 15 minutes' walk each way).

3) 4) 5)

Sanitation facilities: Toilets or latrines must be accessible in or near the home. Health: Treatment must be received for serious illnesses and pregnancy. Shelter: Homes must have fewer than four people living in each room. Floors must not be made of dirt, mud, or clay.

6)

Education: Everyone must attend school or otherwise learn to read. Relative poverty- This poverty deals with individuals who are under the average standard of living in their community as their income doesnt compliment that amount of spending. For example households in the Jamaica with a total income that fall below the average income threshold are considered to be in relative poverty. Relative poverty will fall if society gets more equal income distribution. Relative poverty recognises that poverty is not just a matter of bare survival but also constitutes a minimal standard of living as measured by the community in which one lives. In some European countries, for example, the poverty threshold is set at one half the average national income.

Figure 1 Factors of Poverty excluding overpopulation.

There are several factors of poverty which hinder the eradication of they are: Diseasecommunities that suffer from a high disease rate have a low productivity rate and less wealth as it contributes the eradication of poverty in the community. Overpopulation- as the world becomes more and more populated there becomes fewer jobs that are necessary to obtain an income to rise from poverty. Apathy- when people do not care or feel they are powerless they dont try to change things, fix a mistake or to improve conditions. Some family members feel so powerless that they try to bring their family or members of their community down to their level of poverty as a result of jealous as apathy breeds apathy. Dependency- when a person as a belief, attitude, that he cannot help himself and must depend on assistance from others. Dishonesty- as the resources are diverted into the pockets of those in power which was intended for the community there is more than morality at stake as dishonest is a major cause of poverty. The amount that was stolen from the public that is received and enjoyed by the individual is far less than the decrease in wealth that was intended for the public. Ignorance- sometimes individuals
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have a lack of knowledge sometimes as a result of people trying to keep it away from them are unable to obtain a job and thus fall into poverty. These five major factors in contribute to secondary factors such as poor leadership, bad governance, under-employment, lack of skills, etc.

Poverty has traditionally been measured in terms of the income or expenditure level that can sustain a minimum standard of living. There are various ways in which different countries measure poverty, they are as follows:. The Poverty line- The poverty line or Poverty Datum line is the level of annual income below which a household is defined to be living in poverty. It is defined differently by different governments and institutions. A global poverty line of $ (1) dollar US was suggested by The World Bank In 1990. The line allows for the comparison how many people there are living in poverty in each country. It is based on the income level needed for each individual to buy life essentials (food, clothing, etc.) and changes over time. The common way of measuring poverty is to use the relative poverty line method in which a poverty line is set in accordance to the populations median income, being set at 40%, 50% or 60% of the median income for instance. The OECD generally uses 50 % as the poverty line. Another way to measure is with the use of the absolute poverty method used by United States of America. The U.S. poverty line was created in 1963-64 and is based on the dollar cost of the U.S. Department of Agricultures Economy food plan multiplied by a factor of three.The multiplier was based on research showing that food costs then accounted for about one third of the total money income. This onetime calculation has since been annually updated for inflation.

Country Jamaica

1992 34.2

2002 19.7

2003 14.8

2009 16.5

This graph shows that Jamaica has progress over the last the years but poverty as time to rise again in 2009. Basic needs approach is another major approach to measure absolute poverty. It attempts to define the minimum amount or resources necessary (usually food) to maintain long term physical well-being. The Human Development Approach goes a step further, acknowledging that eradicating poverty is more than a matter of increasing income to purchase market goods and services. It uses additional criteria, including infant mortality, life expectancy, nutrition and health, access to

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clean water and sanitation, literacy and other aspects of human existence that affect the overall quality of life. There are however individuals that are more prone to poverty than others, they are: i. Indigenous people- They have a rich and ancient culture and make valuable contributions to the worlds heritage thanks to their traditional knowledge their understanding of ecosystem management. However due to their lack of resources such as money to send their children to school, there children become uneducated and cannot find a job as they are untrained. ii. The disabled- These are person suffering from a physical aliment such as crippled. They are prejudiced against because of stereotypical attitudes, the cost/time of hiring a person with a disability, etc. iii. The elderly- Employers often see the elderly senses of rapidly deteriorating and refuse to hire them. The age limit a person has to retire some without a pension further increases why they fall into poverty. iv. Single parents- Single parent has to deal with all the pressure of paying the bills on their sole income which they struggle to do for themselves and or their family. Most cases the parents income cannot pay all the bills so they become unable to afford the homes basic needs. v. Gender Discrimination- This happens mostly in women where it is difficult for them to find a job because of their gender. vi. Youth- Youth are often seen as inexperience and immature regardless of their qualifications as job opportunities for them become scare especially for their not educated where it becomes even more difficult.
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Reasons for poverty

overpopulation 20% lack of eduction 50% Disabilities 20%

income eduality 10%

According to the recent questionnaire conducted to find what individuals think are the reasons for poverty in Jamaica, 50% of the respondents thought that lack of education was the main reason for poverty as people were not skilled enough to attain a job. Then with 20% each, there are disabilities and overpopulation, disabilities is when a person is unable to attain a job because of prejudice and overpopulation as the world population grows there becomes fewer jobs available to them. Last with 10% is income inequality within Jamaica. Income inequality refers to when income is distributed uneven among the country. There are however ways the government of Jamaica utilises to alleviate poverty in the nation. One such method is with The Program of Advancement through Health and Education (PATH) introduced in 2002. It is a conditional cash program funded by the Jamaican government with aid from The World Bank to supply cash to the needy and vulnerable. Another way the government attempts to alleviate poverty is with Jamaicas Emergency Employment
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Programme (JEEP) where the government supplies jobs to its citizens so that they have a source of income. Other ways the government attempts to alleviate poverty is with free education and health care which gives each child the opportunity to an education up to the end of the secondary level and free health so that everyone remains well which means they supplied two of the basic needs of an individuals. Also the government raised minimum wage to increase each person income and as social welfare programs. If the government comes up with ways to alleviate poverty it would increase the national income of the country. Poverty also has economic cost to Jamaica which are broken down by the Planning Institute of Jamaica (PIOJ): Crime Violent crime- 1% of GDP Theft of utilities such as water Shelters for the homeless Increased cost of police, judicial system, etc. Other Cost Include: Path-0.2% Food for the poor- 0.2% Forgone output- 1% So the GDP is:

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Crime 1% Health 0.8% Forgone output 1% Path 0.2% Total 3% of GDP

Unemployment Rate
14 12 10 Percentage 8 6 4 2 0 Year 2006 2007 2008 Years 2009 2010 United kingdom. Jamaica Canada

This entry shows the percentage of labour that is unemployed in the three nations. It is the state where a person is willing but unable to find work. The country with the lowest unemployment rate is the United Kingdom followed by Canada with Jamaica with the most and suffering the highest number in 2010 with 12.9 of the population unemployed. It is important to note as it that when people are without jobs they are likely to fall below the poverty line.

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Inflation
Y Canada e Jamaica a r United kingdom. s 0 2010 2009 Year United kingdom. 3.3 2.2

8 Canada 1.6 0.3

10

12

14

Jamaica 13 9.6

Percentage This again shows that Jamaica has the highest inflation rate of the other two nations with 2010 showing a rate of inflation of 13% up 3.4% from the last year. Inflation is a general increase in the level of prices goods and services over a period of time. In conclusion poverty is lack of basic need. There are two types of poverty, Relative poverty less income than another in your community and absolute poverty income unable to buy basic needs. There are five factor of poverty: ignorance, apathy, dishonest, disease and dependency. There is many ways to measure poverty such as with the use of the poverty line which is income level below which a household is consider in living poverty, etc. Government has strategies to alleviate poverty such as Social Welfare programs. The economic cost of poverty direct is shelters for homeless and indirect cost increased cost for police. Recommendations to alleviate poverty are to build more school so that more people can get an education, provide more jobs for the unemployed, and fight crime as violence cripples the poor by preventing them from accessing social investments like education or jobs outside their community. Encourage youth in rural areas to do agricultural works such as farming to boost the
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countries local products and stop importing goods thus increasing the strength of the Jamaica economy. Also to introduce anti-corruption agencies to stop the corruption in the government to have more wealth in the hands of the people of Jamaica.

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Appendix
Questionnaire.

1. What is your gender? A. Male B. Female

2. To which age group are you? A. 10- 15 B. 16-20 C. 21- 26 D. 27 and more.

3. What do you believe is the main reason for poverty? A. Unemployment B. Disability C. Overpopulation D. Income Inequality

4. What do you believe is the main effect of poverty? A. Rise in crime and violence B. Lack of education C. Short live span D. Other

5. What type of people are more prone to poverty? A. Elderly B. Disable C. Single parents D. Indigenous people.

6. How do you think the government alleviates poverty? A. Free education B. Free health care C. Social welfare programs such as P.A.TH.

D. Raising minimum wage 7. What do you think is the economic cost of poverty?

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A. Building shelters for the homeless D. More uneducated persons 8. What is the best term to define poverty?

B. Increased cost for polices

C. Food for hungry

A. Inability of an individual to afford to travel.

B. Inability of an individual to afford basic

needs. C. Inability of an individual to afford cars D. Inability of an individual to afford fancy clothes. 9. How many people do you know living in poverty? A. One B. Two C. Three D. Four or more.

10. What do you believe is the main factor of poverty? A. Dishonest B. Ignorance C. Dependency D. Apathy.

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Bibliography
InternetAddress Name of organization. Http://www.indexmundi.com Http://www.womenaid.org/press/info/poverty/bpp031.htm. http://www.indexmundi.com/jamaica/inflation_rate_(consumer_prices).html http://www.indexmundi.com/g/g.aspx?c=jm&v=71 Indexmundi Woman aid Slideshare.

Books-Economic Sixth Edition Author John Sloman Publisher Pearson Company Limited. Year published. 2006

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