Impacts- Econ Bad- Poverty

Impacts- Econ Bad- Poverty

Whilst, economic growth has the potential to reduce poverty, history records that not all American citizens have necessarily benefited from ‘economic growth reducing poverty by the elevation of real incomes’.20 Yates had identified that for American working class persons, real hourly wages were lower in the 1990s than in 1970s25 and that between 1977 and 1990 the real family income fell for the poorest 60% of all families but increased by a third for the wealthiest 20% of families.26 These figures are more recently supported by Dooley and Prause who reveal that American males in the 25th percentile earned less in real terms in 1997 (a year of supposedly ‘good’ economic times) than their 25th percentile peers did in 1967 (p. 3).27 To further illustrate that employment need not contribute to poverty reduction for all members of society, thereby better health for all, Figure 1 illustrates the annual income of a full-time worker in America, single with two qualifying children, working at minimum wages and receipt of Earned Income Tax Credit (EITC) from 1970 till 2004.28 From this graph it is evident that although working on a full-time basis, such families have not been able to maintain living above the poverty level, even after receiving the EITC. This reinforces findings by others27,29 that not all individuals in societies necessarily benefit from economic development, hence not all are able to benefit from ‘economic status improvement’ as a result of (official) economic growth, consequently such subpopulations would not experience better health (lower morbidity and mortality rates) as implied by Brenner (p. 1215).20 Given that not all members of society necessarily benefit from economic growth, it is not surprising that there is widening in life expectancy between socioeconomic groups in US,30,31 which reconciles the vast literature on socioeconomic status23,32,33 and supports Wilkinson's34 observation that ‘among the rich developed countries, health is indeed related to relative rather than absolute income, and that, as a consequence, health may not be strongly related to economic growth’ (p. 257). As a result of such environmental factors operating in most western countries, and given that inadequately employed workers may reflect similar health outcomes as the unemployed,35 future health-economy research should consider utilizing more comprehensive labour market measures.

Impacts- Econ Bad- A2: Poverty

Alternate causalities to poverty
Fane and Warr 2 (Geroge and Peter, Australian National University, How Economic Growth Reduces Poverty, http://www.ciaonet.org/wps/wap02/wap02.pdf, WIDER, Discussion Paper No. 2002/19, Feb 2002, AD: 7/6/09)

The results and methodology reported here suggest that large oversimplifications are involved in relating poverty reduction directly to GDP growth, without distinguishing among different possible sources of growth. Contrary to the implicit assumptions of many commentators, the poor do much better if a given amount of GDP growth is produced by technical progress in services, or manufacturing, than if it is due to technical progress in agriculture. Although more work needs to be done to improve on the parameter values assumed in this study, these qualitative results are robust with respect to wide variations in assumptions about elasticities of substitution among goods and factors. The results also imply that growth in broad sectors—agriculture, manufacturing, services, etc.—will be associated with very different effects on poverty and inequality depending on whether the exogenous shocks affect demand or supply. For example, an increase in the supply of factors used intensively in agriculture depresses the real returns to these factors while raising agricultural output; whereas an increase in demand for agricultural products, perhaps due to policy changes, would raise both agricultural output and the real returns to the factors used intensively in agriculture.
Growth is not the only factor to poverty
Madan 2 (Anisha, Financial analyst for GE and MBA at Kellogg School, Northwestern University, The Relationship between Economic Freedom and Socio – Economic Development, http://www.econ.ilstu.edu/uauje/PDF's/CarrolRound/madanpost.pdf, UAUJE, pg 8-10, 2002, AD: 7/6/09)

There is a vast amount of literature and studies performed that show that economic growth is not the end-all and be-all of economic development. Focus needs to be on social indicators that depict the quality of life of people. The Basic Needs approach to development formulated by Paul Streeten attempts to provide opportunities for the full physical, mental, and social development of the human personality and then derives ways of meeting this objective. The emphasis is on ends rather than means and non-material needs are recognized. (Streeten, 1981). Thus, mere economic growth rates cannot be a proxy for the quality of life and cannot indicate that basic needs are met. This is explained as follows: (1) The income or economic growth approach to measuring human progress deals only with the quantity of products but not with the appropriateness of those goods and services. (2) Some basic needs can only be satisfied, or more effectively satisfied through public services (education, water, and sanitation), through subsidized goods and services, or through transfer payments. (3) Consumers, both poor and rich are not always efficient in optimizing nutrition and health. Additional income can be spent on foods with lower nutritional value leading to a decrease in health. (4) The manner in which additional income is earned may affect the quality of life adversely. Compared to others, certain production choices can increase income more but have a greater negative impact on human and environmental well being. One example of this is female employment. Although the mother's income can rise, breast-feeding may reduce, which decreases the nutrition of babies. (5) Increased income does not guarantee a reduction in the mal-distribution of wealth within society or households. Therefore, the Basic Needs Approach shows that the economic growth approach neglects the importance of non-material needs and ignores the significance of socio-economic development.

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