Poverty Cycle

A. Poor Education

• To begin with, poor people live by hand-to-mouth existence. They earn low wages, and so most of the allocation goes to basic needs such as food, shelter and clothing.
• Poor families don’t see education as an open option for them because it would mean added expenditure from their meager savings.
• Survival is more prioritized than education.
• If children aren’t educated well, they grow up with degraded skills and talents. This only qualifies them for manual labor and simple chores.
• When you have poorly talented people in your population, you eventually have an unskilled labor force as your foundation. They can’t improve their lives primarily because they don’t have the necessarily skills to handle more complex work.
• No progress is made. It’s either they remain their current status or wallow deeper into poverty.

B. Poor Health

• It’s already taken for a fact that the poor can only earn a meager amount of money. Unfortunately, due to much expenditure, there’s not much allocation given to basic healthcare.
• Poor families therefore tend to get sickly and malnourished. (Even though, there is also allocation for food, most of the time, this doesn’t meet the demands of the family.)
• The repercussions of a malnourished family lead to poor motivation to work. Since they don’t have the physical strength for labor, their drive is lost as well.
• This results in a small workforce and low productivity.

C. Big Families/High Populations

• It’s a common trait for poor families to be large in nature because of this mentality that having many children would mean many hands in serving the family.
• Unfortunately, this mentality backfires against the family. It becomes more of a burden taking care of the children, than the children providing income for the rest of the family. (Added note: this is also one of the causes for child labor.)
• Big families result in a large population in the country, which means having a large workforce.
• Following the rule on price determination (see Causes: Supply and Demand, Teach: Lesson 5) – a glut in labor force drags the price for labor. People will tend to work for cheaper wages in the hope of landing jobs.
• Common laborers are now more expendable because of their little value, and replacing them would be easy with the high supply or workers around.
• With workers easily unemployed, unemployment tends an upward swing. This is followed by low productivity, and so the poor remain as they are.

D. Low Savings

• Poor families don’t have access to basic goods and services because they couldn’t afford it. They always have to settle for compromises or nothing at all.
• Their earnings are small primarily because of little investment. Sources for income is therefore scarce.
• Little investment also means smaller opportunities for the labor force. There are not enough jobs to supply the ever-growing able-bodied workforce.
• Only a small fraction is at work, while the rest are left unemployed.

E. Poverty Cycle in Discussion

• These poverty cycles overlap each other in most cases in society.
• It is also important to note that they are tightly related with each other, and that the cause for one cycle can be the result of another, or perhaps a total reciprocal of each. (E.g. High Population and Low Savings)
• Have the students cite concrete examples of each factor in every chart. This would help them in better visualizing the problem and its repercussions.

Further Reading

• Economics lesson plans were based and adopted from Fr. Roberto Yap's economics notes found in the Tulong Dunong Sourcebook and Michael P. Todaro: Economics for a Developing World