EconomicsEconomicsWealth and PovertyWealth and Poverty

(social welfare)(social welfare)

Alex Yang Eric Hsieh

Period 4

What are we talking about?What are we talking about?(Definitions)(Definitions)

Wealth: how much a person has (usually in terms of money)

Poverty: - poverty line: those below it cannot afford basic necessities

Absolute poverty: one world, one poverty line

Relative poverty: many societies, many lines

What’s that have to do with anything?What’s that have to do with anything?(Poverty in the UK)(Poverty in the UK)

- 13 Million people - 4 Million children

UK attitude:‘laziness and lack of will-power’

Distribution of Wealth in the UKDistribution of Wealth in the UK(reality is cruel, indeed)(reality is cruel, indeed)

Statistics:-no drastic change over time but the rich got

richer

Percentage of Wealth Owned Over Time

0

5

10

15

20

25

30

35

Recorded Years

Per

cen

tag

e o

f W

ealt

h

Ow

ned Top 1%

Top 2%

Distribution of Wealth in the UKDistribution of Wealth in the UK(how things add up in modern terms)(how things add up in modern terms)

Percentage of Wealth Owned By Percentageof Population

23

30

43

56

74

94

0 20 40 60 80 100

1

2

5

10

25

50

To

p P

erce

nt

of

Po

pu

lati

on

Percentage of UK Wealth

Statistics:-poorest HALF share only 6% of national

wealth

Gini Coefficient and the Lorenz CurveGini Coefficient and the Lorenz Curve(if you have no idea what they are, don’t worry,(if you have no idea what they are, don’t worry,

you’re supposed to feel that way)you’re supposed to feel that way)

Max O. Lorenz

Lorenz CurveLorenz Curve(clashing of ideal world and real world)(clashing of ideal world and real world)

0

20

40

60

80

100

120

0 50 100 150

Percentage of UKWealth

Ideal Percentageof Wealth

Lorenz Curve Based on 2002 DataLorenz Curve Based on 2002 Data(two very different worlds)(two very different worlds)

Gini IndexGini Index(no, not the kind that grants wishes)(no, not the kind that grants wishes)

UK Gini Coefficient By Year

60

62

64

66

68

70

72

1976

1979

1982

1985

1988

1991

1994

1997

2000

Year

Co

effi

cien

t

Gini Coefficient

UK Steps Against PovertyUK Steps Against Poverty(the arduous struggle)(the arduous struggle)

Blair: commitment to ending child poverty in a generation - number of people living in poverty declining in recent years Main necessity: public support - changing the “poverty is due to laziness” mentality

PoundsPounds

Image creditsImage credits Lorenz curve example: Penn State University:http://450.aers.psu.edu/images/lorenz.gif

Cartoon pound sign: CartoonStock: http://www.cartoonstock.com/lowres/cfr0021l.jpg Corrado Gini: University of York:http://www.york.ac.uk/depts/maths/histstat/people/gini.gif

Pound note: Guardian International Currency Corp: http://www.guardianfx.com/information/europe/england.html

UK Map: British Towns and Villages Network:http://www.british-towns.net/britain/uk_physical_map.htm

Works Cited

Distribution of Personal Wealth. HM Revenue and Customs. 2 Dec 2005.<http://www.hmrc.gov.uk/stats/personal_wealth/menu.htm>

Gini Coefficient. 26 Nov 2005. Wikipedia 2 Dec 2005.<http://en.wikipedia.org/wiki/Gini_coefficient>

Lorenz Curve. 1 Dec 2005. Wikipedia. 2 Dec 2005.<http://en.wikipedia.org/wiki/Lorenz_curve> Lorenz Curves. 4 April 2004. Duncan Williamson. 2 Dec 2005.<http://www.duncanwil.co.uk/lorenz1.html> Poverty Line. 29 Nov 2005. Wikipedia. 2 Dec 2005.<http://en.wikipedia.org/wiki/Poverty_line> The Facts About Poverty in the UK. Oxfam UK Poverty Programme. 2 Dec 2005.<http://www.oxfamgb.org/ukpp/poverty/thefacts.htm>