Urban Poverty Essay, Research Paper
Poverty is defined as the deprivation with reference to socially accepted norms. Historically poverty has been a rural phenomenon. In the past cities for the most part housed society?s elite whereas the poor were secluded to the rural areas. The industrial revolution saw a shift in this trend. People began to migrate to the great cities of the world in large numbers. Poverty that was once considered a rural phenomenon increasingly became an urban reality. Recent estimates reveal that by 2015, the poorest cities will house three-quarters of the world population.
The poorest cities of the world lie in the developing world, in third world countries. African and Asian cities will continue to grow in population faster than the rest of the world, and as a result house more of the worlds poor. These cities lack sufficient housing, piped water, sewage, public transportation, schools, police protection, health care facilities, and other necessary amenities of urban life.
Poverty though, is by no means exclusively a problem facing the third world. Inner cities in several of the worlds developed nations such as the United States of America and Great Britain, face poverty and poverty related problems. It is worth noting though that people living in these conditions handle poverty in a markedly different manner. In this paper I will attempt to compare the poverty faced by people living in third world cities with the poverty faced by people in cities of the developed world. More specifically I will compare poverty faced by people living in the Indian city of Bombay with that of people living in the poor parts of New York City. The reason I have picked these two cities in particular is because of their similarities in size and population. Before I start to compare the two cities, it is very important to get a hand on how these cities came about form a historical and social perspective, for that in a sense defines the outlook of the people living in the two cities.
Bombay is located on the Western coast of India. The city is now officially known as Mumbai. It originally consisted of seven islands, namely Colaba, Mazagon, Old Woman?s Island, Wadala, Mahim, Parel and Matunga-Sion. This group of islands, which have since been joined together by a series of reclamations, formed part of the Kingdom of Ashoka, a famous Indian Emperor. The islands were passed into the hands of various Hindu rulers until 1343. In that year, the Mohammedans of Gujerat took possession and the Kings of that province ruled for the next two centuries. In 1534 the Portuguese, who already possessed many important trading centers on the Western coast of India took Bombay by force of Arms from the Mohammedans. In 1662 the islands were given to the English King Charles II in dowry on his marriage to Portuguese Princess Catherine of Braganza. In the year 1668 the English East India Company on lease from the crown acquired the islands for an annual sum of ten pounds in goal. Subsequently in 1687 the English East India Company moved its headquarters to Bombay, making it the trading capital of India. In 1858 after the unsuccessful First War of Independence, the East India Company was accused of mismanagement and the islands reverted to the British Crown. The Bombay Stock Exchange was established in 1875, and is one of the oldest in Asia preceding even the Tokyo stock exchange. On August 15?th 1947, India gained independence from British rule and today Bombay is considered the financial and business capital of India.
Behind the hype of being considered India?s most dynamic and westernized city, lies the reality that the city is in a constant crunch for space and is overburdened by poverty. In less than five hundred years the city has metamorphosed from a fishing settlement into a sprawling megapolis of fifteen million people. The roots of the population problem lie, paradoxically, in the city?s enduring ability to create wealth. Bombay by itself generates 35 percent of India?s Gross National Product (GNP), its port handles half the country?s foreign trade, and its movie industry is the biggest in the world. Symbols of prosperity are everywhere: from the phalanx of office blocks clustered on Nariman point (India?s Manhattan) to the yuppie couples nipping around town in their shiny new cars. The flip side of the success story is the city?s much chronicled poverty.
Each day, hundreds of economic refugees pour into Bombay from all around the country. Some find jobs and secure accommodation; many more (around a third of the total population) end up living on the already overcrowded streets, or in the midst of the appalling squalor of Asia?s largest slums. Their day-to-day economic survival is reduced to rag picking and begging from cars at traffic lights.
The reason behind this mass exodus of people from the rural areas is the fact that there are few ways of earning livelihood open to village workers who do not possess any land. They can find jobs in farms, but real wages (money wages adjusted for inflation) have been declining. The average real wages for unskilled agricultural labor declined by 6.2 per cent in 1991-92 for the country as a whole. Since then accepting for the year 1994-95, real wages have been increasing slowly, that is by less than 5 per cent. As a result there is a natural temptation to make more money in the cities in order to survive the onslaught of inflation. As a result Bombay has been the city hardest hit by migrant workers who survive in shanty living conditions and put a tremendous burden on the already overburdened urban infrastructure.
Located on the Eastern Atlantic coast of the United States, New York City is the largest American city and the third largest city in the world. It is considered the financial capital of the United States and in a sense the financial capital of the world. New York City is made of five boroughs separated by various waterways. Brooklyn and Queens occupy the western portion of Long Island, while Staten Island and Manhattan are completely on their own land mass. Bronx, to the north remains attached to the New York State mainland. Manhattan was the first borough to be settled into by the Europeans. In 1624 Dutch settlers established the town of New Amsterdam in lower Manhattan. Peter Minuit supposedly bought the island from its Native American inhabitants for about $24 worth of trinkets. In 1664 the English seized the colony and renamed it; during the American Revolution they held it from 1776 to 1781. New York was briefly (1789-90) the U.S. capital and was state capital until 1797. By 1790 it was the largest U.S. city, and the opening (1825) of the Erie Canal, linking New York with the Great Lakes, led to even greater expansion. In 1898 a new charter was adopted, making the city Greater New York, a metropolis of five boroughs. Massive immigration, mainly from Europe swelled the city?s population in the late 19?th and early 20?th century. After World War II, many African Americans from the South, Puerto Ricans and Latin Americans migrated to the city in search for jobs.
New York city is perhaps the most beguiling place there is. It is a city of polar opposites. In one sense it represents the greatest dream of capitalism, and on the other it is the epitome in many ways of all that is wrong with America. Take a walk in Manhattan beside Central Park, notably its east side, past the city?s richest apartments and best museums, and keep walking: within a dozen or so blocks you find yourself in the lower reaches of Spanish Harlem. The shock could hardly be more extreme. The city is constantly like this, with glaring in your face wealth juxtaposed with urban problems ? poverty, the drug trade, and homelessness.
The increasing social polarization is closely connected to the specific character of the New York City economy, which has become increasingly based on Wall Street, luxury goods and tourism. Large number of immigrants have been attracted to New York-2 million in the last two decades-because the economic misery in their own countries is worse. For the vast majority of these immigrants, the only opportunities are in low-wage service employment, or jobs directly serving the very wealthy. The only jobs available are often low paid retail positions in the fast food industry or small shops, or as security guards.
The steady stream of immigrant labor, including that of undocumented workers, has been a major ingredient in New York’s vaunted prosperity. While the upper middle class and the super-rich have flaunted and increased their wealth thanks to the prosperous economic boom of the last decade, millions of workers face a daily struggle to put food on the table and a roof over their heads.
From the above descriptions it is clear that poverty is a very real problem faced by both cities. To a large extent the reason behind poverty in both these cities is very similar. In the case of Bombay it is largely due to mass migration from the rural areas of the country to the more appealing urban environment. In the case of New York City it is due to mass immigration over the years from various countries around the world to the great land of opportunity and freedom that America represents. However it is important to keep in mind that the definition of poverty differs greatly from the developed world that America represents, to the third world that India is a part of. Due to this factor it is important to take a closer look at some of the statistics that define poverty in the two countries.
The poverty rate in America is defined as the percentage of people following below a certain income level, depending on the size of a household. In 1996 it was $7995 for a single person. For a household consisting of two people it was $10233. For a household consisting of four people it was $16036. The poverty line has remained close to these values over the last four years. These lines were set in the early 1960?s, ever since which they have simply been adjusted for inflation. To put it differently, today?s poor are conceptually supposed to enjoy the same standard of living as the poor forty years ago, despite the general growth in income. Thus by the official definition of poverty, 14.5% of the population is poor.
Conservatives though have long maintained a strong objection to both the official and relative measures of poverty. They make their case in that the poor today enjoy a standard living far beyond the wildest dreams of an eighteenth century aristocrat, such as television and convenience foods that no courtesan or prince could imagine. They further argue that the official line, based on cash incomes, completely ignores the value added through non-cash benefits and welfare schemes such as Food Stamps, rent subsidies and Medicaid. In addition to that it ignores the value of ?housing services? consumed by poor people who own the houses they live in. (”Consumption of housing services” is how economists describe the pleasures of inhabiting your space.).
Responding to this pressure the U.S. Census Bureau has for the last several years experimented with various definitions of poverty and income. If one throws in every last benefit that the welfare state offers, we then manage to redefine poverty by almost a third i.e. from 14.5% to 10.4%. This is done by counting Medicaid, Medicare and the value of owner occupied housing at the equivalent of cash income.
On the flip side a more honest count of the poor, and one that in my opinion is the right approach, basis its measure on a updated market basket (as opposed to a 1955 or 1960 line that today?s values are based on) or figured on a poverty line measure against average income rather than a fixed standard from forty years ago. If the poverty line were measured based on average income, and was set at half the average income, the line would be pushed up to $19250 for two people or $26852 for four. This would then yield a poverty rate of almost twice the present level, in the 20-25% range.
Let us now consider these statistics in the context of New York City. For a single individual the poverty threshold is defined to be around $8000. Based on that value 1.8 million people or 24.3% of the city?s population remains ?officially? poor. Keep in mind that the official rate is based not on average income or an updated market basket, which would raise the percentage by a significant figure. This figure has not changed much from the early 1990?s when the country was in the midst of a depression, and the unemployment rate was well over 10%, and today when the unemployment rate is between a much healthier 6-7%.
The poverty rate among families with children living in New York City is about 30%. For a family of four this is based on an income of around $16000. However the government has never really bothered to explain as to how a family of four can live on $16000 a year in New York City, when the cost of housing alone is generally at least half this amount. Furthermore the number of people who receive benefits such as Medicaid and food stamps have sharply declined. Poor families covered by Medicaid for even part of the year declined from 69.9% in 1996 to 55.9% in 1998. Many of those who are removed from welfare are either not aware of their continuing eligibility or are discouraged from applying. Moreover medical insurance, nice as it may seem offers no use to someone who can?t make the rent.
These figures are the most recent evidence of the growing rift between the rich and the poor in the United Sates and nowhere is this rift more apparent than in New York City where the cost of living is literally out of the roof. Several of the other problems associated with New York City such as homelessness, crime, drug trafficking and even to a certain extent racism, stem from this growing gulf between the very rich and the very poor.
The country currently seems to be heading towards the end of the biggest economic boom in American history. The economy is not going to get much better than it has been these last couple of years, at least not any time soon. However New York City still faces a scenario wherein a quarter of the population lives below the poverty level. David Jones, president of the Community Service Society fears that even if the current economic trend continues there will be no place for hundreds of thousands of workers whose benefits begin to expire in December 2001, under the five year lifetime limit established by the Clinton welfare legislation. Furthermore if the rate of unemployment were to rise even by a few percentage points it would create an even more serious and immediate crisis.
Let us now examine poverty levels and how they are defined in a country like India, and what they represent to the poor living in Bombay. Who are the poor in India and how poor are they really? The World Bank defines the absolutely poor as those having incomes of less than $1 per day per head, but by Indian standards this works out to Rupees (Rs.) 1300 per head per month, which is actually quite generous, considering that a family income of Rs. 5000 per month would be considered a middle class income in India. This is why United Nations data for the number of poor people in India-those with incomes of less than $1 per day, is a staggering 525 million people, making India the nation with the largest number of poor people in the world. Unlike the World Bank the government of India bases its estimates on poverty using a somewhat different yardstick. It is based largely on calories intake, and that brings down the number of absolutely poor to around 330 million. The figure, though largely reduced still represents a third of the countries total population and is easily the world?s largest concentration of the poorest of the poor.
It must be said however that the poor in India are by no means the Indian ?middle class? of Rs. 5000 per month family incomes. The absolute poor are the landless agricultural laborers, the peasant with tiny land holdings, the unskilled unemployed and semi-employed, the disabled and the chronically sick of poor-family origins.
How does this then relate to the poor people living in Bombay? The slum population reflects poverty in Bombay to a large extent. From 1954 to 1970 the government ran a slum-clearing program: by 1961, slum settlements housed only 10 per cent of the city population. But the rate of migration into the city outstripped the capacity of the authorities to house them, and in the last quarter century the population of people living in slums has grown rapidly.
Bombay is now home to nearly fifteen million people. The high price of land long ago took housing out of the reach of the poor and is now not even in the grasp of many sections of the middle class. Today, 55 per cent of Bombay?s people live in shanties, slums and on pavements. A quarter of these are in dilapidated houses. Collapse of buildings in the Fort Area ? the old colonial settlement ? is frequent, often causing injury or death. Many slum dwellers, live side-by-side with the rich, presenting as stark a contrast between poverty and wealth as you will get anywhere in the world. In contrast to New York City where homelessness, drug dealing, racism and crime are challenges caused due to poverty, the biggest challenge faced as a result of the poverty in Bombay is one of sheer survival.
It has been stated that Indians react to poverty very differently than those facing poverty in the United States. In the United States, and it certainly holds true for New York City, poverty often means anger and isolation. In India on the other hand even slums are built on strong family values. That may be the case in rural India, but in the case of people living in Bombay anger and isolation is increasingly becoming a major problem, and strong or not so strong family values don?t seem to be helping much. Crime, drug trafficking, and prostitution are not uncommon in Bombay today. Even communal and religious riots, which were once unheard of in Bombay, are today a fact of reality.