Cyclical Poverty

CYCLICAL POVERTY DESCRIBES poverty that is intermittent as opposed to poverty that is long-term. Actual poverty in the United States is determined by the U.S. Office of Management and Budget and is based on the number of adults and children in the household. Some individuals spend their lives in actual poverty, while others fluctuate in and out of poverty. It is the latter who are referred to as the cyclical poor. The cyclical poor often work at jobs that are highly affected by [Page 225]changes in the environment or the economy. In industrialized societies the cyclical poor are regularly referred to as the working poor. Because of their marginal poverty status, this population tends to cycle on and off public assistance, often in congruence with economic highs and lows. In contrast, the structural poor are represented by the long-term, often generational poor, and are less affected by the economy.

It is assumed that cyclical poverty exists as a result of fluctuations in the economy from periods of economic prosperity to lows that are associated with recessions and depressions. These fluctuations, referred to collectively as the business cycle, affect unemployment rates and employee wages. In prosperous economies jobs are readily available, leading to low unemployment rates. Prosperous economies also bring about increases in wages for those who are employed. Alternatively, as the economy declines, unemployment rates increase, employees are laid off, and wages are reduced. The most notable economic low in the history of the United States is the Great Depression, which lasted from 1929 until the recovery of the 1940s. At the worst point of the Depression, one in four Americans was unemployed.

The regular ups and downs of the economy can have widespread implications, especially for the marginal working poor. Because increases in unemployment are associated with increases in poverty, recessions or depressions within the business cycle result in increased poverty rates. The individuals most affected by this cycle are the millions of working poor families who earn incomes near the poverty line. During the economic downturns that occur every four to 10 years, the working poor are laid off or suffer pay cuts. Because of their precarious proximity to poverty, these economic lows can be the catalyst that plunges the marginally poor into actual poverty.

Cyclical poverty in nonindustrialized societies is often due to food shortages caused by poor agricultural planning or by natural phenomena. In nonindustrialized countries, farming is often an attempt to achieve a level of food security. Because of a lack of knowledge or lack of capital, these farmlands are often not used efficiently. With proper planning, several different crops can be grown in a season on one parcel of land without destruction of soil. However, insufficient knowledge of effective farming methods and planning and decreased income can lead to erosion of the land. Thus, farming in these areas is often unproductive.

Natural phenomena that affect crop production can also destroy the sustenance of these countries. Floods as well as droughts can wipe out vast amounts of crops, and freezes that come too late or too early can significantly impact crop production. Fluctuations of crop production in these nonindustrialized societies cause prices to rise and fall, resulting in a cyclical pattern of poverty.

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