Poverty results from society's failure to fairly allocate resources and provide opportunities.
The poor should be seen as the victims of this system and should not be blamed for their poverty.
The causes of poverty include:
Disadvantaged position in the labour market due to their lack of power.
Social stratification.
The inevitable consequence of capitalism.
Many poor individuals are employed but receive wages too low to meet basic needs.
Abigail McKnight (2002): Poverty and low wages are linked over the lifetime of individuals and across generations.
Childhood poverty is likely to lead to low-paying jobs in adulthood.
Low pay in working life increases poverty risk in old age.
Causes of low pay and poverty:
Decline in demand for unskilled labor due to automation.
International competition which force wages down.
Majority of low paid workers are employed in the labor intensive or declining industries.
Growth of the service sector, reducing secure full-time jobs.
Companies outsourcing cheap labor for lower costs.
Increased labor supply, particularly from women entering the workforce.
David Byrne (1999): The "new reserve army of labor" keeps wages low.
The unemployed are desperate for work and willing to accept lower wages.
Capitalism forces workers to move from one low-paying job to another as requirements change.
Poverty is deeply rooted in the structure of society.
Peter Townsend states that class determines how resources are distributed.
He adds that the social status and lack of wealth, prestige, and opportunities limit the poor’s access to well-paying jobs.
Marxist theory argues that poverty remains because it benefits the ruling class.
Capitalism requires a motivated workforce, and poverty ensures that people will work for wages.
J.C. Kincaid (1973): Low wages at the bottom keep wages low throughout the economy.
Unequal wages create competition among workers, reinforcing economic inequality.
Provides a strong structural explanation for poverty in capitalist societies.
However, it does not fully explain why specific groups or individuals become poor.
It fails to distinguish the poor from other working-class members.
Focuses too much on economic structures and ignores reasons why certain individuals/ groups are more likely to become poor as compared to others.