Around 8.4% of the world lives in extreme poverty, which the World Bank defines as living on less than $2.15 a day. To put that in perspective, the average cost of an American bread loaf in 2022 was $2.50. Extreme poverty affected more people in the past, but it’s still impacting millions, while billions of others earn less than the still-low $6.85 a day. What are the root causes of poverty? Here are 12 of the most significant examples:
What causes poverty in the first place? Here are ten root causes:
#1. Jobs with low pay
Without decent-paying jobs, people can’t afford basic necessities like food for their families, decent schooling for their kids, and a roof over their heads. In Burundi, a small East African country, 87% of the population lives on less than $1.90 a day. Its dependence on agriculture is one reason why. 90% of Burundi’s economy is in agriculture, making workers and crops yields vulnerable to floods, droughts and other natural disasters. Even in the best of times, most agricultural jobs don’t pay well, and people in Burundi earn the equivalent of $18 per month, on average.
#2. Inadequate education
Education is one of the best predictors of financial stability, but when people can’t access good schooling, they can’t qualify for decent-paying jobs. In many areas of the world, people aren’t getting educated. The reasons why vary. Oftentimes, kids from poor families are pulled from school so they can work, but a lack of school funds, too-few teachers, war and gender discrimination can limit someone’s education, too. According to UNESCO, the exclusion of girls from Afghanistan’s schools and global stagnation in 2023 meant 250 million kids weren’t getting the education they deserved.
#3. War and conflict
According to the United Nations, 455 million people experiencing poverty live in conflict settings. Economic productivity and trade dip, while industries like agriculture can suffer extreme losses. Considering how nearly half the world’s population depends on agriculture for income, war brings poverty just as much as it brings violence. Even wars in different countries have ripple effects. When Russia began its assault on Ukraine, it blocked Ukraine’s Black Sea ports, affecting wheat-importing countries like Egypt and Tunisia. In times of war, countries and people already experiencing poverty’s impacts always get hit hardest.
#4. Natural disasters and climate change
According to the World Bank, climate change has the power to impoverish 100 million people in the next decade. How? As disasters like floods, droughts, wildfires and storms increase in severity and frequency, the price of food, healthcare, rebuilt infrastructure and insurance skyrocket while labor productivity, crop yields, and natural resources drop. It’s expensive to live in a world bombarded with climate change, and while wealthy countries are impacted, too, it’s the poor countries that suffer most. Despite producing just 1/10 of all greenhouse emissions, the lowest-income countries experience the worst effects.
#5. High healthcare costs
Healthcare costs are a leading cause of global poverty. Even before the COVID-19 pandemic, out-of-pocket bills caused 1.4 billion people financial hardship, while more than half a billion people were living in – or fell – into extreme poverty. Costs have not decreased in the years since the first pandemic wave, and even in places with high insurance coverage (like the United States), medical debt forces people to cut spending on food, clothes and other necessities. To avoid incurring more debt, many people delay treatment, which worsens their health outcomes, hurts their ability to work and makes later care even more costly. It’s a vicious cycle that plunges those already struggling deeper into poverty.
#6. Food insecurity
Poverty and food insecurity have a close relationship. Without consistent access to healthy food, people not only waste more time looking for food, but they struggle with the health effects (and healthcare costs) of malnutrition, like a weakened immune system, cognitive decline and organ failure. If they have a job, working while hungry leads to reduced productivity and lower wages. For children, food insecurity makes it harder to escape poverty later in life, which starts the cycle over again. Like many of poverty’s root causes, food insecurity is also a consequence. In 2023, over 2.3 billion people faced moderate or severe food insecurity, which is defined as going without food for at least a day.
#7. High housing costs
Housing costs have skyrocketed in the past few years. The World Economic Forum describes this as a “global housing crisis,” warning that by 2030, up to 3 billion people could lack adequate housing. Even the wealthiest countries are failing to respond; in the United States, there is no state, county or metro area where the federal minimum wage allows a full-time worker to afford a two-bedroom rental. With so much income going towards housing, people lack a financial buffer that protects them from unexpected medical bills, job loss, inflation and other issues. Without enough affordable housing options, poverty will persist.
#8. Gender discrimination
About 388 million women and girls lived in extreme poverty in 2022 compared to 372 million men and boys. Gender discrimination is one of the primary drivers. For example, 2021 data from Chad found that around 24% of boys completed lower secondary school compared to just 14% of girls. Adult literacy is lower for women than men, as well, while about 61% of women aged 20-24 years old married before their 18th birthday. A lack of education and early marriage, which affects women more than men, both link to higher risks of poverty in Chad and around the world. Globally, legal restrictions on job options, a 20% gender wage gap and less access to land ownership contribute to gendered poverty, as well.
#9. Racial discrimination
People belonging to oppressed racial groups often experience poverty at a higher rate than others. South Africa represents a harrowing example. From 1948-1994, South Africa lived under apartheid, a system of racial segregation, which by design favored white South Africans while impoverishing non-white people, especially Black South Africans. Despite attempts at progress, a 2017/2018 report released by the South African Human Rights Commissions found that 64% of Black people lived in poverty compared to just 1% of white people. Reasons include a higher unemployment rate for Black people, an unequal education system and racial discrimination in the healthcare system.
#10. No reliable water and sanitation
Water systems are an important infrastructure, but without reliable access, people’s risk of poverty increases. People (usually women and girls) have to walk to collect water when there’s no safe system. Added up, the world’s women and girls spend 200 million hours every day getting water instead of going to school, working a paid job, spending time with family or performing other important tasks. Poor sanitation also causes poverty due to its link to disease. 1.4 million people from low and middle-income countries die as a result of unsafe water, sanitation and hygiene, while those who survive suffer expensive health issues and lost wages. With better water and sanitation systems, people waste less time, enjoy better health and earn more money.
#11. No affordable electricity
Like running water, electrical systems are part of an area’s infrastructure. Over 1 billion people are “energy poor,” which means they either lack electricity or they don’t use it, possibly because they can’t afford the electrical bills. Without affordable electricity, people lack a safe and reliable source of lighting, cooking, heating and other activities. Remote towns and villages are more likely to lack electricity, which matters because 80% of people experiencing extreme poverty live in rural areas. Electricity can help reduce poverty by powering medical, educational and work equipment, extending work and school days, and reducing the time women spend collecting fuel.
#12. Government failure
To combat the causes of poverty, like struggling education systems, conflict, climate change and poor infrastructure, the government must step up. The Child Tax Credit expansion in the USA provides an example of a government doing just that – only to quickly withdraw its support. As part of its pandemic relief, the government expanded the Child Tax Credit in 2021, which let qualifying families offset thousands of dollars per child. The expansion led to the largest one-year drop in child poverty on record, but in 2022, the government let the plan expire. Five million kids fell back into poverty. When governments fail to support programs that work, poverty gets worse.
Conclusion
Like an ancient tree, poverty’s roots grow deep and wide. Causes like low-paying jobs, inadequate education, conflict, climate change, discrimination and government failures all contribute. Because the problem is so complex, solutions must be multi-faceted, reliable and empowering. This isn’t a quick-fix issue, and while progress has been made, many programs neglect the root causes. To end poverty once and for all, human rights professionals, NGOs and governments must commit to digging deep and addressing problems at the source.
