Category Archives: Economics

Oxfam condemns government for increasing income inequality

Radio package created for Vox Radio (Featured by AudioBoo)

The government need to do more to curb rising income inequality across the UK, according to a new report published by Oxfam last week.

The charity condemned the government for cutting services for the poor, calling for an increase in progressive tax rates and a clamp down on offshore tax havens used by the rich elite.

Today, the five richest families in the UK are wealthier than the bottom 20 per cent of the entire population.

“There is global recognition that inequality is undermining our ability to achieve the social and environmental goals we want to accomplish,” said Faiza Shaheen, senior researcher at the new economics foundation.

The think tank argues that we should tackle inequality at a grassroots level, and calls for more to be done at an earlier stage to ensure people are paid a fair wage.

Adam Memon, head of economic research at Central Policy Research said the solution is not taxing the rich more.

“The vast majority of people, whether you’re on the right or left wing, want to reduce income inequality – It’s clearly a bad thing.

“If we’re looking to reduce income inequality it’s far more important to reduce the tax burden on those with lower incomes,” he added.

Last month, a study by TUC showed that in the last three years the gap between the top 10% and bottom 10% of earners in London rose by almost 5%.

In the last two decades the richest 0.1% has seen their income grow by more than £24,000 a year across the UK.

In comparison, the bottom 90 per cent experienced a real terms increase of less than £150 a year.

Speaking to The Daily Mail, TUC general secretary Frances O’Grady said: “This growing pay gap is bad news for our economy and bad news for living standards.

“The picture is particularly bleak in London and the South East, but in areas like the Midlands, the North West and the East of England, a significant gulf has developed between top and bottom earners.

“Unless this trend stops now and more high-skilled jobs with decent pay are created, this worrying pattern is likely to become even more entrenched.”

Why Boris Johnson is wrong about equality

Originally published on The City Scoop

Boris_Johnson_-opening_bell_at_NASDAQ-14Sept2009-3c_cropped

It must be tough to get to the top, and you sure as hell can’t be thoughtless buffoon to get there. Hence, you might of been surprised by our mayors now infamous comments at a speech on Wednesday, addressing the Centre for Policy Studies in London, a free-market neoliberal British policy think tank.

Boris mocked the 16% “of our species” with an IQ below 85 and called for more to be done to help the 2% of the population who have an IQ above 130. He declared that inequality was essential to foster “the spirit of envy” and hailed greed as a “valuable spur to economic activity”.

I must admit however, I was not entirely shocked by the Mayors latest bout of pleb bashing, the Eton bred, Oxford Graduate in Classics, following a similar outburst last week. The Mayor was lambasted after he defended the rich, claiming they have been unfairly ostracised by the British public. According to Boris, life sure is tough being in the top 1%.

His most recent remarks reflect a very troubling trend, a deeply concerning misconception when it comes to causal link between poverty and intelligence. Boris’  ‘interesting’ remarks about the poor in this country shows there is something inherently wrong with the Mayors conception of equality.

While it’s not particularly out of the ordinary for our bumbling mayor to talk utter shite, his recent slew of comments attacking the poor and rallying behind this nations elite has left a sickly taste in my mouth. And I would assume the five million people living below the Mayors ‘London Living Wage’ were none too pleased by the remarks either.

Boris, who is a person known for not mincing his words, said that economic inequality is something that is inescapable, in a world where there are ‘natural differences’ between peoples aptitudes.

Boris is wrong about equality. Economic inequalities will not cease to exist, not because of inherent differences in natural ability, but as long as people hold onto this unwarranted assumption that poor people are somehow inherently inferior. While I am not condoning deterministic bred apathy, for us to understand the issue of income inequalities as they stand, we must understand what the reasons for these differences in ability are. Once we understand the reasons, we can attempt to find the solution. Simply accepting that inequalities will always exist is lazy and ill-conceived means at tackling the problem.

But it is easy for people like Boris to feel morally and intellectually superior when they have been educated to such a high standard. The former journalist, and now heavy weight political figure, has had ample opportunities in life that only a very small fraction of us could ever hope for. His success, despite what he may think or believe, is not necessarily due to his aptitude, but a combination of circumstances that propelled him into the limelight.

And it is not necessarily wealth that has been the key ingredient in this recipe for success, and I say this as someone who has grown up in relative poverty. During my childhood, all around me my peers and I were subject to obstacles that Boris could hardly fathom in his sheltered upbringing.

Could a man like Boris, suckling from the teats of aristocracy and privilege, ever know the frustration of growing up in poverty? Has he ever felt the anxiety of hearing parents bicker over unpaid bills? Has he ever had to share a 80p bag of chips for dinner with his family? Has Boris ever experienced bailiffs coming to his home as a child and taking all his possessions? Can he appreciate the stigma and low self-esteem that comes with being the child of poor, working class immigrants? Can he comprehend the difficulty of growing up with parents who can barely speak English? Has he lost a parent and been brought up on meagre benefits? Has he had family members succumb to a criminal life just to survive?

This kind of life, while it doesn’t necessarily close doors for you, it makes it so much more difficult to succeed, and this I have experienced first-hand.  While I concede these obstacles can be overcome with hard work, with determination, and most importantly, a whole lot of luck – for a lot of people, it just doesn’t pan out like that.

I have been incredibly fortunate in my life to have the right people around me, to give me guidance and help me understand this world and my place within it. But many of my peers, my friends, and even family members, have not been so fortunate; they have not been given the same nurturing and encouragement to reach their full potential. To hear Boris say that some humans are just inferior, I find deeply insulting, and incredibly frustrating. If we don’t believe in people, if we don’t give them the means to attain success, then how can we ever expect to irradiate inequality?

Yes, the problem is a natural difference Boris, but not in intelligence, but in privilege. Because I can guarantee you, if you’d gone to my school, located in a working class constituency in East London, and not the grand halls of thorough bred Eaton, you’d not be the same person you are now. If you’d grown up in poverty, you’d most certainly not be Mayor of London. And to be quite frank, I hope you aren’t for much longer, because the last thing we need in this country is another egocentric, self-righteous prick in office.

London Fashion Week and Global Poverty

There are high hopes for this seasons London fashion week to provide a much needed boost to the economy, but critics suggest the event neglects to help those suffering most.

Big Brands, Big Money

Homless man next to women posing during NY Fashion Week

Homless man next to women posing during NY Fashion Week

Big name British designers such as Vivienne Westwood, Paul Smith and Burberry’s Christopher Bailey are among those who will show off their designs during London fashion week starting Friday.

There are high hopes for growth in Britain’s luxury sector.

September is one of the most important months in the fashion calendar as the four big catwalk fixtures – New York, London, Milan and Paris – gear up for next summer.

London’s fashion week is best known as a showcase for cutting edge talent and avant-garde trends.

“It’s an exciting time for London with a host of established brands such as Tom Ford and Burberry firmly on the calendar alongside new talent and labels which are growing,” said Helen David, head of womenswear at luxury department store Harrods.

The Rana Plaza disaster

Garment factory

Combined London fashion weeks attract more than 100 million pounds ($160 million) in orders a year, along with journalists and bloggers from around the world.

However, critics argue that most of this wealth only benefits the already very rich, and does little to alleviate the poverty of those making these clothes for mass market.

Amirul Haque Amin, president of the National Garment Workers’ Federation, intends to join forces with British union campaigners to highlight the plight of workers in the global fashion industry.

The link between cheap fashion in Britain’s shops and shockingly poor worker conditions was highlighted following the collapse of the eight-storey Rana Plaza garment manufacturing building in April earlier this year.

Amin will use his visit to persuade UK retailers to pay a wage far in excess of the £25 (3,000 taka) a month earned by the Rana Plaza workers. He says more pressure is needed to bring equality to the industry.

“The Rana Plaza disaster not only exposed unsafe conditions for workers turning out British stores’ clothes, but the pittance on which they struggle to survive. It is high time UK retail chains, and other companies sourcing from Bangladesh, matched ethical claims with action to lift their suppliers’ workers out of poverty,” he said.

As of mid-September 2013, compensations to families of the Rana Plaza disaster victims were still under discussion, with many families struggling to survive.

Future of the Industry

File photographs of models are seen on the floor during a casting call for Haizhen Wang's Spring/Summer 2014 collection

The British luxury sector is forecast to almost double in size over the next five years. Fashion contributes 21 billion pounds to Britain’s $2.5 trillion economy and is the largest employer of all the creative industries in the UK.

Despite a still struggling global economy, British fashion brands are hoping to cash in on evidence of a rebound in the luxury sector as solid demand in Japan and the United States combined with recovery in Europe offset China’s slowdown.

Advocacy groups however, are concerned that the working conditions of those producing a majority of the clothes we buy are living in economic slavery.

Feeding the trolls – Brendan O’Neill on Unpaid internships

Another response to Brendan O’Neill.

Masterful troll that he is, the Spiked editor has spurred me to retort once more. Seeing as this is a topical issue, one very relevant to me, I thought I’d post my response here for further discussion.

Original Article –
Why interns don’t deserve pay – by Brendan O’Niell

My response…

“Is there anything worse than when middle-class campaigners use grubby-kneed poor folk as a Trojan horse for the pursuit of their own self-enriching escapades? Resilient working-class kids have for years topped up their internships with Saturday jobs or evening work, while kipping on a friend’s couch to cut outgoings.”

Oh Brendan, how utterly contrived your argument is. As an intern who comes from a low income family, and as an aspiring journalist, I think you’re just a bit out of touch with what obstacles people like me face these days.

I intern 5 days a week, and work weekends when I can. I am on the books of three different temping agencies. I think this is neither fair nor just, namely, that people with wealthy parents have significantly easier circumstances than me. Life would be considerably easier if I was even just paid a menial sum of money for my efforts, rather than next to nothing.

I agree that an internship is an opportunity to learn; I do not contend that interns are “work” for the company “employing” them. But the fact that I can’t claim jobseekers while interning, that I am given no state support is simply ridiculous. I can’t even afford to pay my phone bill, the interest on my student account overdraft, and more and more this just makes internships very unappealing. But without doing unpaid work, the simple fact is, it would be near on impossible for me to become a successful journalist.

Oh yes, but we mustn’t forget the middle-class campaigners now, right Brendan? The people who can actually afford to finance their children’s internships. But I suppose there are plenty of middle class campaigners to argue for the importance of unpaid internships, ones such as, editors of small online magazines perhaps? The same small magazines that quite frequently use and abuse unpaid interns. Now for me at least, this is “easily the most grating argument” used by a greedy businessman such as yourself Brendan.

While I do not disagree that internships are very useful and if not more so to the intern, the fact remains, is they ultimately make the business employing them money. I can find several articles written by interns on Spiked alone that are more successful than a lot of your own articles Brendan. And a lot of your posts are simply written to irk the far left wing, and thereby garner you views and comments. I’ve been following your articles for some time now, and it is my opinion that you’re nothing more than just a glorified troll Brendan.

Interns deserve to be paid for their efforts, even if it is below minimum wage. But you ride off their success; you don’t give them the monetary value their efforts deserve, however small it may be. As someone who has worked for Living Marxism, I’m sure you must understand why this is wrong?

 

Fellow interns, what are your thoughts on unpaid internships?

Common Misconceptions in Society

stopconfusingmewithfacts

It’s not exactly news that people have blatant misconceptions about the workings of society. I was reading a New Statesman article highlighting the fallacies in the public’s beliefs on political issues. It was really quite harrowing to see the common misperceptions in our society. As Bobby Duffy and Hetan Shah report;

On average, we think 24% of the population are Muslims – when the real figure is around 5%; we think 31% are immigrants – when the official figure is 13%; and we think 36% are aged 65+ – when in fact only 16% are.

People grossly overestimate the amount that is spent on foreign aid: a quarter of us think it is one of the 2-3 things government spends the most money on, when it is actually only around 1% of expenditure.

The biggest single error in our survey is on the scale of benefit fraud: people think that out of every £100 spend on benefits, £24 is claimed fraudulently, when the best government estimate is that it’s actually only around 70p.”

I have some further examples to add to this superb analysis. Tax avoidance and evasion costs the taxpayer almost £120 billion a year. We collectively spend over £60 billion a year waging war in distant lands. The British government spends almost £2 billion on intelligence agencies, that spy on us and the world in its entirety.

The much disputed Health Tourism issue however, only costs the taxpayer £30 million a year. The cost of granting amnesty to all undocumented immigrants would cost us £4 billion. And the despised benefit fraudsters cost us just over £1 billion a year, as mentioned, only 70p of every £100 spent on benefits.

70p – is this what the Cameron government is waging a political war against? Is this what concerns us more than the suffering of our fellow human beings?

We spend billions trying to kill and oppress. We spend billions trying to catch and deport these supposed criminals. It is estimated that it would cost £12 billion pounds to deport all undocumented workers, three times as much as granting them amnesty. Not to mention the huge benefit it provides for them and the British economy. You tell me, what would you rather spent our taxes on – creating meaningful and lasting change in this world? Or trying to oppress and silence these already marginalised groups in society?

As David North, head of SEP in America puts it:

We have at our disposal material resources of which our revolutionary ancestors could hardly even dream. Were it not for the social and political obstacles that stand in the way of its realization, the eradication of poverty, … throughout the world, would be merely a technical problem which the existing level of science and industry is fully capable of solving.

And yet, nowadays, we are offered justifications and rationalizations for the existence of poverty and even squalor that would have embarrassed and offended thinking people 200 years ago. In our present society, people are conditioned to walk down a city street and take no notice of the ubiquitous scenes of human distress and social misery.”

These misconceptions and double standards are so prevalent that we think nothing of them. For instance, on April 15th, Martin Richard, an 8-Year-Old boy was brutally killed in the Boston Bombing attack. People all over the world wept for the child, and sent their condolences to his family. Shortly after, the assailants of this horrific attack felt the full force of US justice.

Last month on June 9th, a 10 year old boy was killed in a US drone strike in Yemen. The US refuse to even accept that they’ve murdered the child. Estimates suggest that nearly a thousand civilians have been killed in Pakistan, Yemen and Somalia over the past decade. Just some more “collateral damage” in our supposed war on terror.

Where are these peoples justice? Where is the equality in this world? The use of verified fact is severely lacking in the publics understanding of issues. We need to educate ourselves and then others to these facts in order to reveal an inalienable truth that is so lacking in contemporary politics. That’s the only manner in which we can quell these fallacies in the public’s beliefs, because our government seems hell bent on further dividing our society over menial issues.

The Problem with Capitalism

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(Note to reader: This is a reworking of an interesting post on reddit by user noamsky. At first I was just going to repost, but decided to fix errors, improve the wording and also introduced more established economic arguments and terms, to make it read more like an essay. For more reading on the topic, I would suggest you start with the links provided, as they give more substantial data and evidence to back these claims. However, I do necessarily agree with what is argued. This is merely a exercise to practice my subbing skills.)

We often hear, and are often told that free commerce is the undeniable only means to achieve prosperity for all.

I however reject this claim, for Capitalism as it stands has two major problems – Wealth Condensation and Economic Inequalities.

The problem of wealth condensation occurs when you have a finite amount of resources and they’re all privately owned. The most wealthy of those agents begin to benefit from some natural advantages that arise out of this disproportionate allocation of wealth.  At its most basic, we might argue this to be some form of “economies of scale”. Some of you who have studied economics or business in the past, may have some inkling as to what this term means. A very broad definition states that those with greater means of production, can benefit from reduced cost with increased levels of output.

How does this concept tie in with wealth condensation? Those with this larger portion of wealth have much more freedom than those without; that includes freedom to make money. Simply put, the losers and winners in a free market are decided largely by circumstance. When everything has a monetary value, those with more income are automatically able to access greater range of opportunities than those with no accrued wealth. Since having a large income or vast reserves of wealth increases opportunities to compound this wealth, the process is a type of positive feedback loop, or a condensation of wealth at the very top of the hierarchy. Hence, wealth continues to concentrate into fewer hands, whilst income inequalities are exacerbated in the process. This too can be considered a positive feedback loop. As wealth disparities accrue, the working class becomes increasingly desperate, ever more at the mercy of the modern day rich elite and their accompanying class of bourgeois. This is because their very survival depends on the oft touted trickle down of wealth from the very top of this pyramid.

As we have economies of scale for a business or institution, the concept also applies to the individual agent. For instance, suppose you have enough money to make a deposit on a house, and thereby procure a mortgage. This reduces your monthly expenses, and you begin to receive some of your mortgage payments as equity in your home. However, if one is unable to produce this initial down payment, the only other available option is to rent a property. The renter incurs a greater loss than the owner. This is due to the opportunity cost of the equity lost aggregated with the increased cost of rent compared to mortgage. Such persons are at the mercy of the landlord.

We can apply this same analogy to many real life situations for a majority of people in this world. If you have a high income or similarly, inherited wealth, you would be more inclined to pay for your child’s education. This is so that they can better devote their energies to study. Hence, there is greater chance these children will perform well in school, and land a well paying, respectable job. This is supported by evidence. For instance, recent studies have shown providing direct income support to poor families can dramatically increase academic performance.

However, if there is a lack of financial assistance and one comes from a poor household, parents would be inclined to tell the student to work as opposed to go to school. They may also ask the child themselves to help with financing their own education, or they may be forced to take out substantial loans. If they choose the latter, they must toil even harder on completion to repay the borrowed sum, with interest of course. However, what we have seen recently is many graduates are being forced into low skilled labour, such as serving tables at restaurants. This is because there is nothing more productive for society that they could be doing.  This all pertains to the issue at hand –  the only manner in which anything gets done under capitalism, is if someone up the hierarchy stands to benefit.

The women that manufactured the clothes you are most probably wearing right now lives and works as a modern day slave. Trapped in low wages, poor working conditions and gruelling hours, prospects for a better life are slim at best. In many places, such workers are paid far less than $50 a month.  The $20 billion industry only raised salaries after 1,100 people died in a collapse of a factory building earlier this year. This is the natural coercion of market forces at work – such persons are no longer slaves by name, only in horrific action. For many centuries the oppressed blacks and creole fought the colonies of France, England and US for their freedom. They inevitably succeeded with the Haitian revolution of Toussaint Louverture, and the subsequent abolishment of the Atlantic slave trade. However, it seems as if these imperialist empires were ultimately victorious in the war against liberty and equality. For once the English realised they could pay a free Indian a penny to do the work of a colonist slave, a new kind of economic slavery was born. Whilst in 2012 Gross World Product per capita was approximately $12,400, it is estimated that 1.3 billion people globally still live on less than $1 a day. This is not freedom. This is nothing but exploitation rooted in prior exploitation, and justified by those who grossly profit from such systematic abuse.

A great majority of us in this world are forced to sell our time, energies, and services for barely enough to scrape by. Whilst the person who employs these labourers, consumes the majority of the real output produced by them. This isn’t like a consensual relationship between two equal partners. Low skilled workers are often forced into such occupations, and now increasingly also young persons in the developed world. If you want to use a parallel, it’s like being forced into prostitution.

Saying all this however, it is possible for people to escape this poverty trap. Or at least, it appears that many have become self made bourgeois themselves. How can one climb up this hierarchy if born into poverty?

They may work for wages to earn capital for investment. However, even through this process someone up the hierarchy has greatly profited from the workers efforts. It is fundamentally impossible for one labourer to move up in the economic food chain without further enriching a very wealthy individual already ahead of him. Now suppose the worker acquires the appropriate investment, and now attempts to become a entrepreneur. He may be inclined to abuse his workers in a similar manner as he was himself exploited, and profit in a similar vain as his former owner. However, further up the food chain, others benefit from his enterprise. Such as for instance, manufacturers or suppliers, or even the government of his nation in the form of tax revenue or political donations.

They might also choose to take out a loan from a financial institution such as a bank to begin their enterprise, who also benefits from the interest paid on this loan. Whether you succeed or fail at your business endeavours, you are by virtue expected to pay the bank more money than you were given. Hence, the agent cannot create wealth for themselves without necessarily paying a portion of it up the ladder. Thus, social mobility for a few of the many poor entails further enrichment of the few wealthy. This means a smaller proportion remaining for the rest of the impoverished. The growth of inequality is absolutely inevitable. This issue can become so compounded, it forces intervention, or as we have seen throughout history, even up to the present day, violent and bloody revolution. It is theorized that the most dramatic and deciding factor of an uprising is hunger.

Returning to our previous example, pertaining to the landlord and the tenant – what happens when you mix the necessity of property ownership into this problem? What does a man do who is born into this society with nothing? He needs access to land in order to provide for himself. He must do this so he can grow either grow food or other products (producing raw goods), building or making things to sell (manufacturing), or having a space to perform some artisan trade or task (services). However, what happens when that land has already had ownership claimed for many generations? How does the worker acquire this land when it is disproportionately owned by the wealthy?

Hence, the poor in this world face a momentous struggle in becoming wealthy. Increasingly the young in both developing and developed countries are poor, having had the means to acquiring wealth taken from them by the established older generations. For the assets of this country and the world in its entirety, are firmly in the hands of these persons, whom acquired their prosperity and then kicked out the ladder from beneath them. They began privatizing everything, and launched crusades of propaganda and disinformation to justify these measures.

For instance, the US asserts free markets are necessary to growth. However. the countries GDP stood at almost $16 trillion in 2012. It has the amassed the most wealth out of all the nations in this world, and so can by and large influence market forces as it see’s fit.  Hence, any free trade will likely result in the US coming out on top. That’s how the coercive power of money works. If you have a lot and other people don’t, but they desperately need it to survive, grow, and thrive, then they are going to be in a position where they are willing to work for much less. This is simply because they lack other options. Once again, this is not a consensual agreement.

Returning to this idea of economies of scale and efficiency of production. The issue is largely one of advantages in production – or a lack of advantage. For a nation like the US only stands to benefit from trade, whilst emerging economies can do nothing but be exploited, in a similar manner to the individual worker. With the huge improvements in ferrying and transportation, the modern day bourgeois can cheaply pay to transport goods across the world, and continue this systematic abuse of the worlds poor. They are able to perpetually profit by forcing these proletariat to compete the for work, often at slave wages. This willingness then deflates the value of their efforts, whilst the real value of their labour remains the same. The disparity between this nominal value, and the real value is in turn exploited and consumed by the wealthy elite.

It is this use of economic exploitation that inevitably traps entire nations in poverty. Workers in places like Cambodia or Bangladesh can protest their low income and ask better for better working conditions, as they have and continue to do so, But then said workers are harassed by the state for doing so. International behemoths like Nike run sweatshops where they make huge markups on products produced. When factories collapse and hundreds die, they simply wash their hands of the blood implying it is the moral obligation of factory owners to care for workers safety. They say this as if the supply chain isn’t one in the same, a continuous process that Nike grossly benefits from. The factory owner, who may have been a worker themselves at some point, is caught in the middle in this particular example. Major corporations and banks, posting staggering profits, are the ones who ultimately have all of the slack in this distorted system of distribution. That’s the only node in the chain where anybody has true freedom to do as they choose, and live sinfully wealthy lives, whilst stomping their boots in the faces of the slaves that made them so rich. They do all of this whilst boldly declaring that they are improving the quality of those slave’s lives, because the slave voluntarily chooses to enter the employment and work for whatever impossibly small rate market forces have decided upon.

Hence, the cycle of poverty continues, and economic inequalities are exacerbated. Only time will tell what will happen to the wealthy elite and those trapped in poverty. Only we can break this cycle of oppression. How this can be done however, is still a hotly debated topic. Perhaps something for another blog post, although there are some idea’s that seem promising. For instance, Meghnad Desai, a member of the UK’s House of Lords and a Professor of Economics at the London School of Economics, stated in an article last week that:

With global aid totalling roughly $130 billon, each of the 1.3 billion people living in extreme poverty (less than $1 per day) worldwide would receive $100 in cash [with direct aid].

Some countries have already experimented with such programs, and India is preparing to begin providing cash transfers to its 300 million poor citizens. In other words, a global cash-transfer scheme could be very effective, and would be feasible if donor countries pooled their aid budgets.

So perhaps direct transfers of cash to the poorest in the world, can help mitigate the effects of increasing income and wealth disparities. How and if we could do this however, remains to be seen. This idea remains somewhat unpopular with the majority of nations and the general public.

Growing up in poverty

Note to reader: This was my submission to the Guardian International Development Competition. As I did not make the shortlist I thought I’d post it here. 

Nelson Mandela once proclaimed that “Poverty is not an accident. Like slavery and apartheid, it is man-made and can be removed by the actions of human beings.” Last year World Bank President Robert Zoellick announced that the target to halve global poverty had been achieved. Yet critics argue that serious issues with surveys used to support this claim undermine its credibility. To understand how we can better engage the poor youth of today, I spoke to three people who grew up in poverty, to see how it has affected their lives in adulthood.

We begin with a woman named Trisha from the US. Almost a quarter of all children in the industrialised nation grow up in low income families. She tells me she was considered “white trash” growing up on the outskirts of Lubbock, a medium sized city in the state of Texas. While both her parents were well educated, her father began to suffer from poor mental health at the age of four, leaving the burden of child rearing on her mother. This put enormous strain on her, and she would sometime­­s work two or more jobs at minimum wage.

They survived on mostly handouts – “We went to soup kitchens and churches for free meals, and got government food, and some food stamps.” She explains that “anytime anything unexpected happened…there was never any wiggle room, and my mother wrote hot checks to cover them.”

Trisha, now thirty, still lives in a trailer with her husband and two children. “Our car is broken down, and we rarely have extra money for anything.” She confides that at a point, she felt as if her parents “gave up… and just tried to keep things from getting worse…My mother is 65 and working part time as a cafeteria lady, with no retirement to speak of. I don’t want that for me, and I don’t want that for my family. I feel like I’m a little too old to change things…[but] I keep trying to think of ways out of this rut.”

In comparison to Trisha, Hernan is a young man who grew up in Argentina. The countries official poverty rate almost doubled to 47% during the 1989 currency crisis, and continues to fluctuate during the country’s volatile economic cycles. His father was a waiter and drug addict, his mother a housewife. Both had failed to complete high school, which Hernan says motivated him to study and become a scientist.

“The first time I dreamt of becoming a scientist I was 8 or less. I read relativity theory… Not understanding more than a few words, but [that] was enough…Einstein is my all time super hero. I decided to copy, by all means his rebellious [spirit].”

While the poverty rate fell to 16% by 1994, the consequent Tequila crisis left Hernan’s father unemployed. During this time, he “was forced to work in the streets, selling toy cars at the age of thirteen for money.” Despite all the odds however, the young Argentinean persevered, attaining several degrees and a string of well paying jobs. He now works as a computer scientist for Microsoft.

When asked what he found most difficult about growing up poor, he said “Everything cost you more. If you got money, talent doesn’t matter. I made my way through college because I’m somehow gifted at math. So, I always earned financial aids. Some of my friends, with talent for… music, literature or even politics, didn’t get any kind of luck.”

The last person I spoke to is a young man named Aman who now also works with computers. He was born in Bahrain, but moved to the Indian state Kerala at the age of thirteen. The World Bank estimates that around one-third of the total Indian population fall below the international poverty line, while almost two-thirds live on less than $2 a day. Soon after his arrival in Kerala, Aman’s parents divorced, and he ended up living with his amputee father.

“With a single disabled parent and no means of income, my brother and I worked through all of school and college. We rode auto rickshaws, we did door-to-door salesmanship for curry powders, we worked at telephone booths, sold lottery tickets, and for a while I even sold liquor in the black market.” He says he felt ashamed by his poverty, and would go to great lengths to hide the fact he was poor from his peers.

Growing up in a low income family clearly has a dramatic effect on a person later in life, both economically and psychologically. While Hernan and Aman were ultimately able to escape the poverty trap, their struggles were exacerbated by growing up in low income families. Trisha has not been so fortunate, and I can’t help but wonder what she might of achieved if her and her family had been provided with more substantial government aid. If in a nation like the US income inequalities did not exist, every family would earn around $200,000 a year. While in 2012 Gross World Product per capita was approximately $12,400, it is estimated that 1.3bn people globally still live on less than $1 a day.

From speaking to Trisha, Herman and Aman, it is apparent the most important factor to a child’s success is investment in their education. Without support for poor households, children are often forced into work at an early age. Research is clear – poverty is the single greatest threat to child’s well-being. Currently there is a lack of effective policy dealing with the issue, even in developed countries, were income disparities continue to grow. Yet there is promising progress. For instance, a new pilot study at Panthbadodiya in India has shown that supplementing a family’s income at regular intervals can dramatically improve a child’s education, and the family’s general wellbeing. Academic performance improved in 68% of the families, and the time they spent at school almost tripled.

Collectively we can still improve the prospects of those children born into such unfortunate circumstances. As Hernan so eloquently puts it – “Impossible? It’s just a word.”

By Suhail H. Patel