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Education vs Job Creation

 

A policy question from Taneshia House, who this week asks,

“What do you say when people - economic justice activists - say formal education doesn't solve poverty? What if they say that job training and job creation is more important? Is that true?”

They both matter. It’s not possible to create jobs that reduce poverty without an educated population, but education doesn’t solve poverty by itself. To unpack this, it’s worth thinking a bit about the role that each of these things – jobs and education – play in reducing poverty.

Looking at education first, it’s important to note that it’s about more than preparing people for the world of work. In a review of research on the area, academics Emily Hannum and Claudia Buchmann noted that,

“Countries with better-educated citizens indeed have healthier populations, as educated individuals make more informed health choices, live longer, and have healthier children. The populations of countries with more educated citizens are likely to grow more slowly, as educated people tend to marry later and have fewer children.”

Beyond this, people who can read and write can participate more fully in social and political life, and have a greater opportunity to influence the world around them. Development economist Amartya Sen talks about education in terms of freedom, arguing that education gives individuals increased opportunity to pursue their dreams.

But, as many people argue, having a high school certificate or university degree doesn’t end poverty. You can be educated and hungry, smart and unemployed.

That’s where job creation comes in. As agricultural productivity increases, far fewer people are needed in primary production, meaning that huge amounts of labour are freed up for work in other industries like manufacturing and services. Or, as is often the case, freed up to be underemployed or unemployed.

Formal education creates people with skills to work, but doesn’t create jobs for these people (other than a few who are employed in the education sector). Good formal education, backed up with the right (and culturally appropriate) incentive structures can be an engine for enterprise and the flourishing of small businesses that create employment. Job training and informal education can foster skills for jobs that already exist, bridging the gap between formal academic skills and the needs of the workplace.

Spending time in places like Cambodia, Ghana and Rwanda, I’ve seen first hand the huge challenges facing high school and university graduates. Having worked hard in formal education, they’re often bewildered to find so few jobs available, and despite the ambitions of many, they often lack the skills to start their own enterprises. These countries desperately need the skills these young people have, but they don’t have the resources to put them to good use at the moment.

That’s where the role of things like outside investment, short-term migration overseas and aid can be so important. They can provide the employment opportunities, markets and resources needed to help educated citizens move out of poverty and become productive taxpayers, contributing to their own economy and creating opportunities for others.

At the Global Poverty Project, we’re committed to providing you the tools to take more and better action that will really see an end to extreme poverty, starting with the ability to ask questions like this. If you’d like to ask a question for future blogs, email it to blog@globalpovertyproject.com, ask us on our Facebook discussion page or tweet at us using the hashtag #askGPP.
 

Can we all have cars and fridges?

 

Richard Wood has asked us a tough question this week about the highest possible standard of living for all the world:

“If the world's resources were shared out equally amongst all people, what standard of life could be sustainably supported? Could we all have a refrigerator? Could we all have a car? Could we all eat like I do? An almost unanswerable question, I'm sure, but you didn't ask for answerable questions, just questions!”

There are two parts to thinking about this question – the pure maths, and the politics and economics of it.

Mathematically, the answer is pretty straightforward. Global gross national income (adjusted for purchasing power) in 2009 was $58.2 trillion, and with 6.8 billion people, that works out at $8,558.82 per person.

That’s the equivalent of everyone having the buying power of someone earning just more than $8,500 in the USA.

As a pure thought experiment, the consequences of this are that:

  • We could all have fridges - Wal-mart has simple fridges for $150.
  • We could all eat well - People typically spend between 10% and 30% of their incomes on food. Assuming 30%, that’s about $2500 a year, or about $7 a day. You’re not going to be eating in restaurants, but you can eat healthily, including meat.
  • We could all run cars.

Of course, in reality it’s a little more complicated than all of this, due mainly to the changes in supply and demand that you’d see if income was distributed like this. So, a couple of points worth considering here:

  • When people earn more, they eat more meat. There’s strong evidence that as people are lifted out of poverty, their diet changes dramatically. On this thinking, having everyone earn $8500 a year would decrease the amount of meat that the richest billion eats, but dramatically increases the amount that the poorest few billion eat (religious considerations aside). It takes considerably more land, energy and water to ‘grow’ meat than vegetables, and so such big increases in consumption would likely be met with large real-terms cost increases and huge impacts on the environment.
  • Car prices go down, petrol prices go up. Increased numbers of people driving cars would push down car prices as global production increased and the second hand market took off. But, more cars means greater demand for petrol, and there are limits to the rate at which oil can be extracted, and limits to the total amount of oil. Thus, as we’ve seen in recent years as oil demand has spiked, there’d likely be large rises in oil prices.

Really, this means that the sustainable part of your question becomes important. Certainly it’s not sustainable for everyone on the planet to consume as we do now, based on current technology and data on how the world works. But, people have been arguing that the world will run out of food for 200 years, and it hasn’t happened.

So, to finish, I think the lesson that we can take out of question like this is less about what equal consumption looks like, but rather, what consumption looks like at the bottom and at the top.

Right now, there’s a billion struggling to get by, and there’s a billion with more than enough. Ending poverty doesn’t mean that the billion poorest people eat, shop and drive like we do – it simply means that they can get on with life with dignity. That might need some small changes from us, but it’s largely a distributional issue.

 

At the Global Poverty Project, we’re committed to providing you the tools to take more and better action that will really see an end to extreme poverty, starting with the ability to ask questions like this. If you’d like to ask a question for future blogs, email it to blog@globalpovertyproject.com, ask us on our Facebook discussion page or tweet at us using the hashtag #askGPP.

Land Acquisition & Food Security

 

A question was asked of us on Twitter using the hashtag #askGPP, by RB_Phan:

How serious has the trend for speculators and rich nations buying up agricultural land in Africa and other undeveloped areas become?

In mid-2008, global food prices sky-rocketed. Key foods like wheat, rice, maize doubled or trebled in price, driven by increased consumption in the booming economies of China and India, falling supply after crop failure from natural disasters, and compounded by arable land being shifted to biofuel production and speculation on international markets.

Some countries panicked in response. Russia banned wheat exports. Vietnam banned rice exports. And, a few countries started to purchase large tracts of land in other countries, to secure their own supply of food in the future.

I first read about it in the Economist last year, and was staggered to see the sheer scale of what was happening. Saudi Arabia, China, some of the Emirati city-states and others purchased farms through their sovereign wealth funds, state-owned companies, or directly as the state. Naked in their self-interest, they were out to ensure that their citizens had enough to eat well into the future.

Spanish NGO Grain published a fascinating report on the topic towards the end of 2008, and has more recently setup a website - farmlandgrab.org - dedicated to tracking what’s happening. More recently, John Vidal wrote a great article on the topic in the Observer in March.

Some have argued that it’s a new form of imperialism, the rich stealing from the poor; others have said that it’s simply the market at work.

From my point of view, as someone committed to seeing an end to extreme poverty, it’s something to keep a close eye on. In and of itself, it’s not a problem - people have been buying and selling land in other countries for decades. But, it’s part of broader movement of the securitisation of resources, one that risks positioning global food supplies as a geopolitical issue with security considerations.

Food - along with fresh-water - is not just a commodity. It’s part of the global commons, an assured human right, and a foundation stone of the fight against poverty. Tonight, almost a billion people will go to bed hungry, not because there’s not enough food, but because they can’t afford it.

The global community has an obligation to deal with issues in food supplies as a challenge of the commons, not as 193 competing states. The land grab that we’re witnessing should be seen as an early warning sign that we must work harder on cooperation to deal with these common challenges, because the consequences of failing to act are huge.

What can everyday people do to create change?

 

This week, we respond to two questions sent in by Alma Louise, who is grappling with how she can mobilise her community to do more in the fight against extreme poverty.

“What can everyday people do to create positive change for people living in poverty?”

It’s really easy to be overwhelmed by the magnitude of trying to do something as an individual about extreme poverty. Rather than trying to do everything, at the Global Poverty Project we talk about the really simple things that you can do in your daily life in six different groups. We’ve got a heap of how-to guides with practical tips on how to do many of these things, along with a series of blogs that I’ve summarized below:

“What is a polite response to people who say they care but feel obliged to help their own family instead of others? (Not realising they can do both, I guess)”

I think the first thing to recognise is that each of us are motivated by different things. All of us are motivated to help those nearest and dearest to us, the question is the extent to which we want to support those further away from us.

Depending on their personality, there are a couple of different approaches you can take to engage them in conversation around these issues:

Common humanity: Ask what distinguishes blood relatives from other people? Talk about the common connection that we all share as people, and the question, “how would you want to be treated and thought of if you were in extreme poverty?”

Global Connection: We live on a fundamentally interconnected world, where our actions impact others, and their actions impact us. Even if you don’t subscribe to the idea of a common humanity, you can see that our health, security and wealth depend on our ability to get along. In this view, doing something about poverty is about protecting our own long-term interests.

One final thought is to talk to them about the difference between actively supporting (through donating, volunteering, etc), and making sure that at the very least your actions don’t hurt the world’s poorest. Most of us are shocked to hear that some of our actions – especially in the products we buy – can have a negative impact on some of the world’s poorest and most vulnerable.

Whatever approach you take, it’s important to remember that people who hold these views aren’t ‘wrong,’ they just happen to have a different view to you.

 

At the Global Poverty Project, we’re committed to providing you the tools to take more and better action that will really see an end to extreme poverty, starting with the ability to ask questions like this. If you’d like to ask a question for future blogs, email it to blog@globalpovertyproject.com, ask us on our Facebook discussion page or tweet at us using the hashtag #askGPP.

When and how will poverty end?

 

As the first in our series of responses to reader questions, Andy Farrell emailed us to ask:

“As someone who was around for Band Aid, then Live Aid, took part in the Race Against Time and wears their Make Poverty History wristband every day can I ask how long projects will continue before extreme poverty is actually ended please?”

In the 25 years since Band Aid took place, we’ve seen extreme poverty more than halved, from 52% to 25% of the world’s population according to World Bank data. However, the collected data masks the more challenging fact that much of that progress was made in China and South-East Asia. Today there are more people in extreme poverty in Sub-Saharan Africa than there were a generation ago.

The optimistic view, which we share at the Global Poverty Project, is that we have the resources - economic, political, social and technological - to see an end to extreme poverty within the next generation. But, to make this happen, there’s a huge amount that needs to be done - which is what we talk about all the time, and is summarized in our post, The End of Extreme Poverty within a Generation.

Right now, we’d call this scenario an improbable possibility. Our role is to make this a probable reality, through our everyday actions.

As a follow up to this, Andy also asked us a second question:

“I watch and take part in shows like Comic Relief, sponsor kids and donate in other ways but feel that while some progress is made for the length of time there has been, not just to create significant awareness of the fight to end poverty but also generate huge amounts of money to be put in to it that little is being achieved.

My concern is that there have been a staggering amount of organisations and projects set up with an aim to end extreme poverty but the effort put in to create these organisations could have been better utilized to deal with the issue. Are these organisations doing what is needed to achieve the goal?”

This question really goes to the heart of asking what actions we need to take to make the end of extreme poverty a probably reality.

The uncomfortable truth for some here is that it’s not going to be led or done by those of us in the world’s richest countries. It’s going be driven by the citizens, governments and companies of the world’s poorest countries.

But, along the way, there’s a vital role that we have to play in making it possible for these people and organisations to succeed.

Donating - and giving aid more generally - is an important first step by saving and transforming lives around the world. It makes a huge difference at a community level, and gives people the chance to lift themselves out of poverty. But, aid and aid agencies alone won’t end poverty.

To really see an end to extreme poverty, we need to change the rules and systems that keep people poor. We need to see that our purchases matter as much as our donations, and that trade is ultimately the best route out of poverty - which is why we talk about fairtrade and ethical purchasing so often. We need to see that international trade rules are made fairer for poor countries so they have the chance to compete, and that laws in rich countries ensure that poor countries aren’t ripped off by corruption, tax evasion and unethical behaviour.

So, to answer the question directly - no, these organisations aren’t doing what is needed to achieve the goal. As a sector, aid agencies are too focused on chasing donations and keeping donors happy by directing as much of your money as possible to the beneficiaries.

It would be easy to see this as their failure, that aid agencies and charities “aren’t effective”. But it’s not. It’s our failure as donors to these organisations to ask the right questions about what’s making real change. Instead of focusing like Andy does on outcomes and reducing poverty, we ask about administration costs. The result is a sector that focuses on delivering change at an individual and community level at the expense of changing the rules that keep people in poverty.

 

At the Global Poverty Project, we’re committed to providing you the tools to take more and better action that will really see an end to extreme poverty, starting with the ability to ask tough questions like this. If you’d like to ask a question for future blogs, email it to blog@globalpovertyproject.com, ask us on our Facebook discussion page or tweet at us using the hashtag #askGPP.