International Day for the Eradication of Poverty: the global response lies in expansive and brave welfare policies

The United Nations celebrate the International Day for the Eradication of Poverty on Monday, October 17^th. Experts from the Strategic Alliance of Catholic Research Universities (SACRU) have provided insights on ensuring dignity for all in practice

The International Day for the Eradication of Poverty dates back to October 17^th, 1987, when more than a hundred thousand people gathered in Paris at Trocadéro, where the Universal Declaration of Human Rights was signed in 1948, to remember the victims of extreme poverty and violence. Three years later, in 1992, the General Assembly of the United Nations (UNGA) officially declared October 17^th as the day to acknowledge the effort and the struggle of people living in poverty. Ending poverty is the first Sustainable Development Goal (SDG) in the UN Agenda 2030. Yet, in 2015 more than 700 million people still lived in extreme poverty and struggled to satisfy basic needs in health, education, and access to water. The Covid-19 pandemic exacerbated the issue in several parts of the world. The trend also concerns a percentage of employed workers whose salary is not enough to escape extreme poverty.

Inspired by its mission of global cooperation for the Common Good, the Strategic Alliance of Catholic Research Universities (SACRU) has collected some insights from its experts on the topic. SACRU is a network composed of eight Catholic Universities from four different continents. The contributions represent the personal views of individual academics and are not intended as the official positions of SACRU and its partner Universities.

Contributions by experts – SACRU Universities

Boston College (United States of America)

Written by Fr. Kenneth, R. Himes, OFM, Professor of Theological Ethics

International Day for the Eradication of Poverty

From the vantage of a wealthy nation like the United States, the Covid-19 pandemic offered an important insight about poverty. It is a public policy choice more than bad luck, happenstance, or fate. During the worst of the pandemic’s effects on the U.S. population, and when the U.S. economy was undergoing significant reversals, the number of Americans living in poverty actually went down, and did so in a fairly dramatic way. The reason for this surprising state of affairs was the major expansion of social spending that was provided by the federal government. Whether it was child tax credits, housing subsidies, unemployment insurance, earned income tax credits or social security payments to the elderly, the cumulative effect was a reduction in the number of people living in poverty, even as the economy was suffering a major downturn.

The United States has never been in the forefront of social welfare spending.  Prior to the pandemic, the Organization for Economic Co-operation and Development reported that of its twenty-seven richest peer nations, the U.S. ranked twenty-third in the share of government spending as a percentage of GNP. When looking at government spending specifically on family benefits, the U.S. ranked dead last among its twenty-seven peers. The United States spent less on combating child poverty than any of the world’s richest nations. Yet, this changed during the pandemic as millions were prevented from falling into poverty despite the global recession and millions more were actually lifted out of poverty in the U.S. during the pandemic.

Simply put, there is no ironclad economic law of poverty that must doom some to misfortune. Human decisions about taxation, government transfers, and social spending can reduce poverty markedly. Yet, despite this evidence, the U.S. government is beginning to cut back on the programs that did so much good, now that the economic impact of the pandemic is lessening. Eliminating poverty is not a utopian dream, it is a set of strategic policy choices by human agents.

Universitat Ramon Llull (Spain)

 Written by Paco López, Professor from Pere Tarrés Faculty of Social Education and Social Work

 Protecting community life in cities: a key challenge for reducing inequality

In 2018, more than 55% of the world’s population, according to UN data, was concentrated in urban areas. The global population growth forecast increases that percentage to almost 70% by 2050. Urban phenomena are studied, among other reasons, because they clearly represent the inequality that exists in our world. This is reflected in the 2030 Agenda for Sustainable Development, whose eleventh goal aims to make cities and human settlements inclusive, safe, resilient, and sustainable. In recent decades, gentrification processes have occurred in certain neighbourhoods of large cities. This term is attributed to Ruth Glass, who described the process by which, in the 1960s, in various working-class neighbourhoods of London, the original population was gradually replaced by one of higher socioeconomic status.

Gentrification reveals a major political conflict that questions our conception of cities and our view of the rights of the people who inhabit or own them. Taking the term proposed by Henri Lefebvre, the “right to the city” is in question: are cities territories to be inhabited, or are they commodities to enrich the owners of the space? The response we give will have an enormous impact, because the phenomenon directly affects the evolution of the social fabric of cities. This social fabric is a fundamental element in people’s lives, so it needs to be flexible, but also stable and consistent. These qualities also make it a protective network for the most disadvantaged.

The analysis of the psychosocial impact of gentrification offers solid reasons to be concerned about the protection of human ecosystems. It is a phenomenon with common roots to environmental deterioration and, probably, the responses may also have shared aspects. The effects of gentrification on human communities are so great that some authors refer to them as acts of “communicide.” Gentrification processes have impact on people’s well-being and health. This impact may be accentuated in those with fewer resources who face a double loss: one caused by changes in their living conditions and the other by the destruction of the social support that could help them cope with the impact of these changes. All this guides the analysis of urban policies from the perspective of social justice and community health. It also makes it necessary to review and strengthen the intervention strategies of professionals whose actions can have an impact on the improvement of community ties. At stake is the quantity and quality of life for all, especially the most vulnerable ones.

 Universidade Católica Portuguesa (Portugal)

Written by Joana Silva, Associate Professor of the Business & Economics School

All else being (un)equal

Over the past three decades, inequality has been falling between countries for the first time since the early nineteen century. Yet, more than 70% of the world population lives in a country with rising inequality. How can we justify this apparent contradiction? The answer lies in the decomposition of overall inequality in between-countries and within-countries inequality. Whereas the gap between countries has been narrowing due to globalization and the growth of emerging economies, the disparities of income within countries have been rising rapidly.

Rising inequality within countries is an important concern as excessive inequality can limit the access to opportunities and, therefore, the potential and prospects of low-income earners within each country. Recent literature has pointed that income inequality has profound effects on welfare and social coherence and hampers economic growth.  But fighting inequality is a two-sided task. First, governments must ensure that ex-post policies act as an effective safety net for the most vulnerable and that the link between income inequality and inequality of opportunities is minimized.

Second, policy should act ex-ante by targeting the real sources of inequality and use the existing data and tools to study the underlying mechanisms and create the right incentives for economic agents. For instance, a recent study of inequality in Portugal found that past changes in wage inequality were mostly driven by changes in differences in pay-premium across firms, uncovering an expected significant role of firms in the dynamics of inequality.  Despite the evidence, very few inequality policies actually target firms. All else being equal, inequality is one of the most prominent social challenges we will face in the near future. Yet, today’s world is better equipped than ever to answer it. Every State (and every firm!) around the globe is still in time to define how inequality will evolve tomorrow, through actions today.

Australian Catholic University (Australia)

Paving an even road out of crisis

In April 2022, just weeks before Australian voters headed to the polls, researchers from ACU released a report titled Scarring Effects of the Pandemic Economy.  Prepared in partnership with Catholic Social Services Victoria and St Mary’s House of Welcome, the report declared that COVID-19 should be seen as “not just a pandemic in public health terms – it is also a pandemic of job loss and job market insecurity”. The measures put in place to cushion the pandemic’s economic impacts “failed to address rising financial pressure or exclusion of the poorest and most marginalised in our community”, lead author Dr Tom Barnes wrote in an accompanying article on The Conversation. The regular citing of low unemployment figures as a sign that the recovery was on track has created a misleading view of social and economic wellbeing, the report found. As the Victorian Council of Social Service noted in its response, “When you dig down beneath the headlines, the reality of our post-COVID recovery looks a lot spottier and more uneven.”

The findings of the Scarring Effects report offer some insights on how to better deal with present and future crises. The report calls for a rise in key welfare transfers like JobSeeker, renewed government investment in public and social housing, and ongoing and expanded funding for social service providers, including those who provide emergency relief and accommodation.  Higher wages for low-paid workers could also play an important role in easing financial pressure on those most vulnerable. As well as his role in preparing the Scarring Effects report, Tom Barnes was a contributing researcher to the Australian Catholic Council for Employment Relations’ submission to the Fair Work Commission’s wage review, which called for a 6.5 per cent increase to the minimum wage amounting to around $50 per week for the lowest-paid workers.

While business groups have long rallied against wage increases, Dr Barnes’ analysis found that a rise of this magnitude was both affordable and necessary to address the growing gap between rich and poor. “I believe it is possible for employers and business groups and political leaders to take an enlightened view, to look at the world beyond profits and growth, and to actually see things through a lens of social justice and the common good.”

A longer version of this article originally appeared in ACU’s Impact.

Sophia University (Japan)

Written by Masamitsu Kurata, Associate Professor of Economics

Child Poverty under Multidimensional Crisis: Lessons from Japan

The Covid-19 pandemic made it clearer that poverty is multidimensional. It does not merely threaten health but spreads to economic crises due to lockdowns and educational disruption due to school closures. In many countries, the pandemic had relatively large negative impacts on the poor. In particular, the children of the poor face the most painful reality under a multidimensional crisis. Osendarp et al. (2021), for example, estimates that by 2022 COVID-19-related disruptions could result in an additional 9.3 million wasted children and 168,000 additional child deaths in low- and middle-income countries.

Child poverty is still a major social issue, even in high-income countries like Japan. Japan’s child poverty rate is higher than the OECD average and appears to have been exacerbated by the pandemic. In response to this situation, the Japanese government released the results of its first national survey on child poverty in 2021. It found that before and after the pandemic, children from poor households skip meals more often, feel anxious and depressed more often, and have a poorer understanding of school classes than those from non-poor households (Cabinet Office of Japan, 2021).

Various measures have been taken to address child poverty in Japan. One prominent measure is “children’s cafeterias,” which is a place that provides free or cheap meals to poor children. According to a national survey by an NPO, the number of children’s cafeterias across Japan has increased significantly from 2,286 in 2018 to 6,007 by 2021 (the National Children’s Cafeteria Support Center Musubie, 2022). Although many of them were temporarily restricted in their activities due to the pandemic, they are now gradually resuming their services with infection control measures.

Children’s cafeterias can offer not only meals, but also opportunities for children to interact with each other, study for schoolwork, and participate in community activities. More interestingly, 52% of the cafeterias are operated by voluntary groups, 21% by NPOs, and 10% by individuals, most of which are non-governmental. Such grassroots activities are considered a promising way to take a multifaceted approach against multidimensional poverty within each community.

Written by Erina Iwasaki, Professor from the Faculty of Foreign Studies

Interconnection of Poverty and Discriminations Under COVID-19 Pandemic

As Amartya Sen had made clear, poverty is not just about the lack of resources and income but access to education and basic health care. It is also about human rights and dignity. Poverty is interconnected with the issue of discrimination, social exclusion, violence, and denial of participation in decision-making. The COVID-19 pandemic shed light on this interconnection between diverse discrimination and poverty. According to the World Bank, the COVID-19 pandemic is reversing the trend of poverty reduction and would have pushed additional 97 million people in the world to extreme poverty in 2020, of which the most vulnerable would be those relying on the informal employment, women, those with disabilities, refugees, those living with disabilities, minorities, etc.. (https://blogs.worldbank.org/opendata/updated-estimates-impact-covid-19-global-poverty-turning-corner-pandemic-2021;https://feature.undp.org/coronavirus-vs-inequality/)

In Japan, “stay home”, telecommuting for work and school, since the first state of emergency was declared in April 2020, led many shops and restaurants to shut down. As a result, poverty increased among female-headed households because a large number of female workers were employed in the service sector, which was the most affected industry by the COVID-19 pandemic. It evidences the insecure and unstable nature of informal employment: the informal workers are first to lose their job when an incident occurs. The COVID-19 pandemic also revealed the problems that have been overlooked, such as domestic violence and poverty among children living in single-parent or female-headed households. Astonishingly about half of the children living in single-parent households, most of whom are headed by females, are poor in Japan. Why do such a large number of female-headed families and children fall into poverty? It mirrors the structural problems and persistent gender inequality that society embraces. The International Day for the Eradication of Poverty on October 17 is the day to reconsider the reality of our distorted society.

Pontificia Universidad Católica de Chile (Chile)

 Written by Jeanne Lafortune and Francisco Gallego, Professors of the Institute of Economics

Today’s poverty versus tomorrow’s?

Our planet is facing urgent environmental challenges.  The scientific community has raised calls for action in important areas linked to our planetary boundaries.  Reports on climate change have highlighted that human activity has severely impacted our planet and, through it, its inhabitants. At the same time, we have managed, over the last 40 years, to reduce world poverty substantially.  The Sustainable Development Goals set up several objectives so that this progress can continue from the end of hunger, the eradication of poverty, decent work, and reduced inequalities.  Is it possible to continue with these objectives and attack environmental challenges at the same time?  Is there a trade-off between reducing today’s poverty and generating more poverty in the future?

Various studies like Dasgupta (2021) or JPAL (2022) emphasize that it may be possible to reduce the impact of human activity on the environment without significant aggregate impacts on economic growth.  This implies that it is possible to attack the urgent environmental situation we are facing without believing that this will negatively affect the most vulnerable of the world’s population.  Furthermore, given that the most important damages in terms of biodiversity are predicted to happen in low-income countries with a growing population, reducing poverty in these zones could also have environmental benefits. However, this does not mean that we should solely focus on environmental problems without worrying about poverty.  Even if aggregate growth is unaffected, this does not imply that policies that are required to slow down climate change and the destruction of biodiversity (which usually involve taxes and/or quotas that can lead to price increases) will not have distributional consequences.  Increasing gas prices can generate more problems for the poor than those rich, and we must be conscious of those effects when designing environmental policies.  However, let us not use this preoccupation to justify our collective inaction in front of environmental challenges.  Solutions that help tomorrow’s poverty without increasing that of today’s are possible.

Università Cattolica del Sacro Cuore (Italy)

Written by Simona Beretta, Full Professor of International Economic Policy

A perspective to address poverty in practice

Climate change, the COVID pandemic, high food and energy prices are adding layers and layers of complexity to the issue of eradicating poverty. Neither pessimism nor optimism are reasonable perspectives for doing something “in practice”, as the title of the 2022 theme recalls. Practice requires realism, that is to say: awareness of the reality of poverty in all its dimensions and awareness of local, national, and global resources that can be mobilized to really affirm “dignity for all”. Nothing less than a passionate intelligence of the situation can do. Poverty is a problem for many, too many of our fellow members of the human family, but the experience of poverty is totally personal for each of them. Awareness of reality comes only with true proximity to those persons that experience poverty – material poverty like hunger, and non-material poverty like the shame of being discarded. Eradicating poverty is thus a matter of humility, in its literal sense: being close to earth (humus), being in touch with reality.

The 2015 statement of Pope Francis at the UN General Assembly keeps coming to my mind: “… we are dealing with real men and women who live, struggle and suffer, and are often forced to live in great poverty, deprived of all rights. To enable these real men and women to escape from extreme poverty, we must allow them to be dignified agents of their own destiny.” In that circumstance, pope Francis repeated the three practical names for dignity to materialize: lodging, labour, and land. In this sense, proximity to the poor, durable relations, and accompaniment are key in allowing the dignified experiences of accessing tierra, techo y trabajo. Governments obviously need to play their part, by carefully respecting and promoting the indispensable role of communities and peoples. Work is key: working out of poverty represents the slow but sustainable path to dignified development. However difficult it may be, this path only makes practical sense: meeting human needs does require a lot of human work.