It would be fair to say that ever since early man the concept of poverty has been around, as it is a notion, measured by comparison. Nevertheless, it has not been until recent history that society has sought to implement specific measurement, largely, in part to ever growing inequalities. Webster’s dictionary (2015), defines poverty as ‘the state of having little or no money and few or no material possessions’.1 Tony Fitzpatrick (2014), elaborates by stating ‘Poverty is a form of injustice, denoting a relative lack of those resources needed to ensure a minimal standard of living, equal opportunities, mutual social respect and participative inclusion in a societies way of life, and without which it is difficult to flourish, to fulfill one’s potential and to achieve or sustain a decent level of wellbeing. Poverty is characterized by socioeconomic conditions that empower those who monopolize key resources at the expense of those who do not, such that poor individuals are disrespected by, for instance, being held responsible for social circumstances they did not create and over which they have no control’ (p.11-12).
In this essay, I will be attempting to outline the nature of change in poverty on a global level and at a local level (restricted to New Zealand) along with possible drivers. Following this I will discuss how these changes could affect business and/or the relationship between the two.
Global change in poverty
When discussing poverty and its change on a global level, one has to acknowledge its problematic nature. Jon Gertner (2010), points out that for decades, governments have traditionally accepted that Gross Domestic Product is the measure of a country’s progress. G.D.P is a figure that that compresses the extent of its economic activity into a single data point that is an index of a countries entire economic output. The accepted view is that the more the G.D.P grows then the better a country and its populace are doing. However, the Organisation for Economic Cooperation and Development (OECD), have found that this may not be the case (Roberts, L. 2015. Leading Sustainable 2nd Lecture Notes, pg 5). Their research shows that between 1990 and 2005 despite a rising G.D.P. some countries still declined in wealth (OECD 2011 Towards Green Growth; Roberts, L. 2015. Leading Sustainable 2nd Lecture Notes, p. 5). This raised more questions around the issue of sustainability, which in turn led to new approaches to measuring living standards. In an attempt to better understand poverty and measure any change (while including an international extreme poverty line of $1.25 a day - international prices), many groups and research teams have added other indicators that, in theory, give a better measurement on an individuals well being. The World Bank lists a multitude of indicators that are now used as a measure of global wellbeing, some of these indicators being; Agriculture and rural development, Aid effectiveness, Climate change, Economy and Growth, Education, Environmental, External debt, Health, Infrastructure, Social development and trade.2
With further research and analysis of indicators and the drivers behind them, conflict on whether or not global poverty has ‘increased or decreased’, has emerged.
This tension between views is highlighted in the United Nations Survey on Trade, Income Distribution and Poverty in Developing Countries. In this survey, Amelia U. Santos-Paulino (2012), points to differing data sources, methodological choices and multiple poverty lines as likely reasons for conflicting studies on change in poverty at a global level. While certain studies show a strong and steady decline of poverty rates over the decade prior to 2011 (Dhongdge and Minoiu, 2011), other studies declare that the number of people barely existing on less that $2 a day has increased (Kanbur, 2001; 2004).
Along with Kanbur (2004), Ortiz et al (2012), has noted