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So, when we say Domestic problems these are the issues na kinakaharap ng bawat bansa within their borders. However these problems, are also. Poverty is a term used to describe a condition where individuals or families experience significant hardship and lack the resources to enjoy a basic standard of living that most people consider essential. It’s not just about having less money; it’s about living in a state of pronounced deprivation in various aspects of life When we say “pronounced deprivation in well-being,” we mean that people in poverty often lack access to fundamental things that contribute to a good quality of life. These may include basics like nutritious food, clean water, adequate shelter, healthcare, education, and the opportunity for economic and social participation. Poverty affects not only a person’s financial situation but their overall well-being and quality of life. One way to measure poverty is by looking at income or consumption. People who don’t earn or spend enough to meet a certain minimum threshold are considered poor. So, ano nga ba yung threshold? Threshold is like a line or a point that separates one situation from another. So, sa context ng poverty,is the level of income or resources that marks the point where someone is considered poor. Falling below this threshold or this line means you’re unable to meet your essential needs and face significant hardship. According to wb, this is how poverty is being measured? So, we can measure it through subjective and objectives ways. So as we all know, a subjective measure, based on personal opinions, feelings, or individual perspectives. So ang way to measure poverty is through direct surveys.
Directly asking them about their situation. Kung nanonood kayo ng balita diba may mga balita minsan yung mga reporters na data about poverty sa Pilipinas. And sometimes may mga line don na “ 8 sa 10 pamilya ang nagsasabing sila ay mahirap” so that’s a direct survery dahil hindi naman sila gumamin ng numerical statistics parang masabing mahirap yung Isang tao, it’s just based on how the interviewee perceived yung well-being niya or ng kaniyang family. And of course we have the objective measure divided into two categories the monetary and non- monetary. First in monetary life,we have what we call absolute poverty and relative poverty. So what’s the difference? Absolute Poverty:
- Absolute poverty is when someone doesn’t have enough money to cover basic needs like food, shelter, and healthcare. It’s a fixed level of income that marks the “poverty line.” If you earn less than that, you’re in absolute poverty. Relative Poverty:
- Relative poverty is about how your income compares to others around you. You might have enough for basics, but if you have a lot less than most people in your area, you’re in relative poverty. It’s not about an exact Income level, but how you stack up against others in your society.
- Poverty Threshold: The Poverty Threshold represents the minimum income level required to meet both basic non-food and food needs. It is often used as a benchmark to identify individuals or households living in poverty. If a person’s or household’s income falls below the Poverty Threshold, they are considered to be in poverty.
On the food threshold, a person needed at least PhP 1,683 on average per month to meet his/her basic food needs in 2021. A family of five needed at least PhP 8,413.
- Subsistence Incidence: Subsistence Incidence, on the other hand, measures the proportion of the population living below the Food Threshold. It specifically focuses on food poverty. Subsistence Incidence provides insights into the percentage of people who cannot afford adequate food even if they can cover basic non-food needs. The World Bank recognizes that poverty cannot be measured solely by income or monetary means. It also considers non-monetary methods to assess poverty, two of which are the Basic Needs Approach and Anthropometric Approach:
- Basic Needs Approach:
- The Basic Needs Approach is a method of measuring poverty that focuses on whether individuals or households have access to essential non-monetary necessities to live a decent life. It assesses whether basic human needs are met, including access to clean water, sanitation facilities, healthcare, education, and adequate nutrition.
- This approach takes into account a broader range of indicators beyond income and considers whether individuals can access essential services and resources to ensure a basic standard of living.
- It acknowledges that poverty is not only about income but also about access to fundamental goods and services required for a dignified life.
- Anthropometric Approach:
- The Anthropometric Approach measures poverty by assessing the physical well-being of individuals, particularly children. It focuses on health-related indicators such as nutrition and child growth.
- Anthropometric measures include assessing children’s height, weight, and nutritional status. Malnutrition, stunted growth, and underweight children are considered indicators of poverty in this approach.
- This approach recognizes that poverty can lead to inadequate nutrition and poor health outcomes, particularly among vulnerable populations. Through this, masasabi natin na there’s an economic growth if a country becoming more productive.
Productive in a way na yung isang country produces more of items over time, when a country offers more of services. As we all know, economic growth is a good indicator of a country’s progress. It usually means more jobs, better living standards, and a stronger economy. And dahil nga sa Economic growth, is magkakaroon ng increase sa state capacity and the supply of public goods. When economies grow, states can tax that revenue and gain the capacity and resources needed to provide the public goods and services that their citizens need, like healthcare, education, social protection and basic public services. Economic growth can be measured through our GDP. Just like it says there, it can me measured by removing the effects of inflation. Therefore, we use what we called the REAL GNP. So napagaralan natin sa macro diba? GDP can be categorized into Nominal GDP and Real GDP. The real GDP growth rate is a more useful measure than the nominal GDP growth rate because it considers the effect of inflation on economic data. **
Fluctuations in business are a normal part of the economic landscape and can be influenced by various factors such as changes in consumer and business sentiment, government policies, international events, and more.
- Expansion: This is the phase where the economy is growing and thriving. During an expansion, businesses are doing well, people are getting jobs, and economic output is increasing. It’s often characterized by rising consumer spending, business investment, and overall optimism in the economy.
- Peak: The peak marks the high point of an economic expansion. It’s when the economy is at its strongest.It’s when the economy is operating at or near its full capacity But it also signals that it may be reaching its limits. Prices may start to rise quickly, and there might be some signs of overheating in certain sectors. It’s also a point at which inflationary pressures may build.
- Contraction: After the peak, the economy enters a contraction phase. Contraction: Contraction refers to a phase in the economic business cycle when economic activity is slowing down. It typically involves a decline in various economic indicators like GDP growth, employment, and industrial production. During a contraction, the economy is still growing, but at a slower rate than usual. It’s sometimes called an economic slowdown. Recession if the contraction is severe and prolonged.contraction has lasted for a longer duration than usual or expected.
- Recession: A recession is a specific and more severe phase of the economic cycle. It occurs when there is a sustained period of significant economic decline. In a recession, there is a noticeable decrease in economic activity, often characterized by negative GDP growth, rising unemployment, reduced consumer spending, and declining business investment. Recessions can have a more profound and lasting impact on the economy than contractions. In summary, contraction is a milder phase of economic slowdown, while a recession is a more severe and prolonged period of economic decline. Recessions are typically marked by more significant economic hardships for individuals and businesses.
- Trough: The trough is the low point of the business cycle. Economic indicators such as GDP, industrial production, and employment are typically at their lowest levels. This can result in reduced consumer spending, business investment, and overall economic output. There’s a high unemployment.Both businesses and individuals may face financial stress. It’s when the economy hits bottom and begins to recover. A trough in the business cycle occurs when a recession ends and economic recovery or expansion begins During this phase, economic activity starts to pick up again, businesses regain confidence, and the cycle moves back into the expansion phase. So there’s a recovery, after that if The business cycle is a natural part of any economy and is driven by various factors, including changes in consumer and business confidence, monetary policy, fiscal policy, and external shocks like natural disasters or geopolitical events. Understanding the business cycle helps economists and policymakers make informed decisions to manage and stabilize the economy during periods of contraction and promote sustainable growth during periods of expansion. The measurement of Income distribution is calculated by dividing the ‘Gross Domestic Product (GDP)’ by the nation’s population Income distribution exists due to various factors. It reflects the reality that individuals within a society have different levels of income based on several key reasons:
- Differences in Skills and Education: People possess varying levels of skills and education, which influence their ability to perform different jobs and earn higher incomes. Education and training lead to higher-paying opportunities in many cases.
- Labor Market Dynamics: The supply and demand for specific skills and professions impact wage levels. High demand for certain skills can lead to higher wages, while oversupply may result in lower wages.
- Social Welfare Programs: Governments can implement social welfare programs, such as unemployment benefits, food assistance, housing subsidies, and healthcare services, to provide financial support and essential services to individuals and families with lower incomes. These programs aim to reduce poverty and improve the well-being of vulnerable populations.
- Minimum Wage Laws: Governments may establish and periodically adjust minimum wage levels to ensure that even the lowest-paid workers earn a wage that allows them to cover basic living expenses. This can help address income disparities at the lower end of the income distribution. Distribution of Income: Market demand is also influenced by changes in income distribution in society. If income is evenly distributed, then there will be more demand. If the income is distributed unequally, then more demand will concentrate on rich people. Less equal societies have less stable economies. High levels of income inequality are linked to economic instability, financial crisis, debt and inflation. Income distribution is also essential in measuring the difference between people living in countries with lower GDP levels and those with higher GDP. Income distribution is critical for determining the poverty rate at any GDP level for any country. A more equal distribution of income is associated with lower poverty rates in an economy. Equal income distribution, where everyone in a society or economy receives roughly the same income, is a concept associated with economic and social theories like socialism and communism.
- Economic Equality: Advocates for equal distribution argue that it promotes economic equality, reducing the wealth gap between the rich and poor. They believe this leads to a fairer and more just society.
- Social Stability: In theory, equal income distribution can help reduce social tensions and conflicts related to income disparities. A more equal society may experience fewer instances of poverty and social unrest.
- Basic Needs: Equal income distribution can ensure that all members of society have access to basic necessities such as food, shelter, healthcare, and education.
- Democratic Principles: Some proponents argue that equal income distribution aligns with democratic principles by giving all citizens an equal say in the economic and political processes.
- Redistribution of Wealth: It involves redistributing wealth from the affluent to those with fewer resources, which proponents argue is a way to address systemic inequalities.
- Safety Nets: Equal income distribution can create a strong social safety net, providing a financial cushion for those facing temporary hardships.
- Incentives for Collective Efforts: In some systems aiming for equal distribution, there may be incentives for individuals to work together for the common good, as individual income gains are limited. Income inequality, or the unequal distribution of income, exists due to a combination of economic, social, and historical factors. Here are some of the key reasons why income inequality exists:
- Market Forces: In a competitive labor market, individuals with skills, education, and experience that are in high demand often command higher wages. Conversely, jobs that require fewer skills or are in less demand tend to pay lower wages.
- Policy Choices: Government policies, including tax, labor, and social welfare policies, can either mitigate or exacerbate income inequality, depending on their design and implementation.
- Economic Crises: Economic downturns, such as recessions or financial crises, can disproportionately impact lower-income individuals and households, widening income gaps.
- Access to Opportunities: Disparities in access to education, healthcare, and job opportunities can limit upward mobility and contribute to income inequality.
- Social and Cultural Factors: Cultural norms and social structures can influence income distribution by affecting career choices, family dynamics, and social mobility.
- Market Speculation: Speculative activities in financial markets can lead to income disparities, with some individuals earning vast sums through speculative investments. The Lorenz curve is a graphical representation used in economics to illustrate income distribution within a population. It provides a visual way to depict income inequality by comparing the actual distribution of income with a perfectly equal distribution. Equality Line: A line of perfect income equality, often referred to as the “equality line” or “45-degree line,” is drawn on the graph. This line represents a situation where income is equally distributed, meaning every segment of the population earns the same share of the total income. The closer the Lorenz curve is to the equality line, the more equal the income distribution. The further away from the equality line, the greater the income inequality.
Absolutely, population growth is influenced by a combination of several key factors, including:
- Birth Rates: The number of births within a population contributes significantly to population growth. High birth rates result in more individuals being added to the population over time.
- Death Rates: Conversely, the number of deaths within a population affects population growth. Low death rates lead to longer life expectancies and contribute to population growth.
- Fertility Rates: Fertility rates, which indicate the average number of children born to a woman during her lifetime, play a crucial role in birth rates and population growth.
- Life Expectancy: Longer life expectancies, often associated with advances in healthcare and living conditions, can lead to population growth by reducing death rates.
- Immigration: The influx of people into a region or country through international migration can increase the population. Immigration can have a substantial impact on population growth in some areas.
- Emigration: Conversely, emigration, or the departure of people from a region or country, can decrease the population of the area they are leaving.
- Government Policies: Government policies related to family planning, immigration, and population growth can have a significant impact on demographic trends.
- Economic and Social Factors: Economic conditions, social norms, and cultural factors can influence fertility rates and individuals’ decisions about family size.
- Healthcare Access: Access to healthcare services, including family planning and maternal care, can influence birth rates and maternal mortality rates, impacting population growth.
Overpopulation can strain economies by creating a large and potentially underemployed workforce. Addressing the employment needs of a growing population can be a significant challenge. Overpopulation can be driven by high birth rates, lower death rates due to improved healthcare and living conditions, and immigration into densely populated areas. Environmental Impact: Overpopulation can have adverse environmental consequences, including deforestation, habitat destruction, pollution, and overexploitation of natural resources. These activities can lead to ecological imbalances and biodiversity loss. Urbanization: Overpopulation often results in rapid urbanization, as people move from rural areas to cities in search of better opportunities. This can lead to overcrowding, inadequate housing, and challenges in providing infrastructure and services. Economic Challenges: Overpopulation can strain economies by creating a large and potentially underemployed workforce. Addressing the employment needs of a growing population can be a significant challenge. So sinasabi lang dito na kung sino pa yung mga country may mga mahihirap sila pa yung palaging anak ng anak ko. Therefore yung growth rate or the highest growth rate sa buong mundo ay mula sa mga mahihirap na bansa. SLOWING POPULATION GROWTH First this is very evident sa mga high income countries like Japan, china , and sa south korea. China’s population is projected to decrease by 48 million, or around 2.7 per cent, between 2019 and 2050 Sa south korea naman, meron lang silang fertility rate of 0.78. So at this current rate, they’re projected to have the same amount of population as 2100 as it did nung 1953.
So, it’s says na sa 2100 magkakaroon na lang sila ng 20m population from their current population of 52 today. So grabe yung decline sa kanilang birth rate. So, ano nga ba yung epekto nito sa economy?
- Aging Population: A declining birth rate and rising median age result in a population with a higher proportion of elderly individuals. This can place increased pressure on healthcare systems and social safety nets to provide for the needs of the aging population, such as healthcare, pensions, and elderly care services.
- Economic Implications: A shrinking and aging population can have economic consequences. A smaller workforce may lead to labor shortages in some industries, which could impact economic productivity. It may also pose challenges for funding social welfare programs that rely on contributions from the working-age population to support retirees.
- Impact on Social Services: The demand for healthcare, long-term care, and other services typically used by elderly individuals may increase. Governments and societies need to plan for these increased demands to ensure the well-being of their aging populations.
- Pension Systems: Declining populations can strain pension systems, as there may be fewer workers contributing to support retirees. Some countries may need to adjust pension policies or retirement ages to address these challenges.
- Immigration: Some countries with declining populations may turn to immigration as a way to address labor shortages and bolster population numbers. Immigration policies may evolve to attract skilled workers and address demographic imbalances.
- Economic Restructuring: Declining populations can lead to economic restructuring, with a shift toward industries and services catering to elderly consumers, such as healthcare, senior housing, and leisure activities.
The unemployment rate is the percentage of unemployed people in the labor force. To calculate the unemployment rate, you need to know the number of unemployed individuals and the size of the labor force. The labor force consists of all individuals who are either employed or actively seeking employment. In your scenario:
- Total Population (Philippines): 100 million
- Number of Unemployed People: 15 million Now, we need to determine the size of the labor force. To do this, we’ll subtract the number of unemployed people from the total population: Labor Force = Total Population – Number of Unemployed People Labor Force = 100 million – 15 million Labor Force = 85 million Now that we have the size of the labor force, we can calculate the unemployment rate using the following formula: Unemployment Rate = (Number of Unemployed People / Labor Force) x 100 Unemployment Rate = (15 million / 85 million) x 100 ≈ 17.65% So, the unemployment rate in the Philippines, with 15 million unemployed people out of a total population of 100 million, is approximately 17.65%. Labor Force Participation Rate: This rate reflects the proportion of the working-age population (those who are of working age and capable of participating in the labor force) who are either employed or actively seeking employment.
The working-age population is the population above the legal working age Thus, the measurement of the labour force participation rate requires the measurement of both employment and unemployment
- Frictional Unemployment:
- Explanation: Frictional unemployment occurs when individuals are temporarily without work as they transition between jobs, typically by choice.
- Example: Recent college graduates who are actively looking for their first job are experiencing frictional unemployment as they seek employment opportunities that match their skills and preferences.
- Cyclical Unemployment:
- Explanation: Cyclical unemployment is tied to the economic cycle and occurs during economic downturns when demand for goods and services decreases.
- Example: During a recession, manufacturing plants may lay off workers due to reduced demand for their products, leading to cyclical unemployment.
- Structural Unemployment:
- Explanation: Structural unemployment results from a mismatch between job seekers’ skills and available job openings, often due to changes in industries or occupations.
- Example: Workers in declining industries, such as coal mining, may face structural unemployment if they struggle to find new jobs in growing sectors like renewable energy.
- Institutional Unemployment:
- Explanation: Institutional unemployment occurs due to factors related to labor market institutions and policies, such as minimum wage laws, labor union negotiations, or employment regulations.
- Example: If a government implements a minimum wage significantly higher than the prevailing market wage or yung willing to pay for a particular type of job ng mga employers. So,it means that the legally mandated minimum wage is set at a level much higher than what employers would typically pay for similar work
