CHAPTER 5.

DOMESTIC PROBLEMS
AND POLICIES
Week 7
 LEARNING OBJECTIVES:
a. define the term poverty, absolute poverty;
b. compare and contrast the rate of population growth in LDCs and that of
modern Developed nations;
c. discuss the various manifestations of the underutilization of labor;

d. identify government policies that will promote a better balance between

urban and rural economic and social opportunities;
e. explain what is meant by “integrated” rural development; and
f. explain what is meant by “economics of education”
1. Poverty, Growth, and
Income Distribution
 1. POVERTY, GROWTH, AND INCOME
DISTRIBUTION
Poverty
Definition by United Nations

➢Fundamentally, poverty is the inability of getting choices and opportunities, a

violation of human dignity. It means lack of basic capacity to participate effectively in
society. It means not having enough to feed and clothe a family, not having a school
or clinic to go to, not having the land on which to grow one’s food or a job to earn
one’s living, not having success to credit. It means insecurity, powerlessness and exclusion
of individuals, households, communities and it often implies living in marginal or fragile
environment, without access to clean water or sanitation.
 Poverty
Definition by World Bank
➢Poverty is pronounced deprivation in well-being and comprises many
dimensions. It includes low income and the inability to acquire the basic
goods and services necessary for survival with dignity. Poverty also
encompasses low levels of health and education, poor access to clean
water and sanitation, inadequate physical security , lack of voice, and
insufficient capacity and opportunity to better one’s life.
Why are few people rich and few
poor?
How does poverty affect
someone's life?
POVERTY : Violation of Human Dignity

Poverty is scarcity, drought, or the state of one who lacks a certain

amount of material possessions or money. It includes low incomes and
the inability to acquire the basic goods and services necessary for
survival with dignity.
What is Poverty?
1. Poverty has various dimensions
Income poverty
Security poverty
Education poverty
Health-nutrition poverty
Multiple deprivations
2. Poverty is “welfare level below a reasonable minimum”.
TYPES OF POVERTY

1.Absolute Poverty
2.Relative Poverty
POVERTY: ABSOLUTE VS. RELATIVE
1. Absolute poverty- refers to when a person or household does not have
the minimum amount of income needed to meet the minimum living
requirements needed over an extended period of time. In other words,
they cannot meet their basic needs. When an individual goes below this
threshold their survival is threatened.

2. Relative Poverty refers to the standard of living compared to

economic standards of living within the same surroundings.
DIFFERENCES BETWEEN ABSOLUTE
POVERTY AND RELATIVE POVERTY
Absolute Poverty Relative Poverty

Any person not in a position to obtain essential Relative poverty does not concentrate on biological
commodities like food, shelter and clothing are said to needs but rather makes a comparison between two
experience absolute poverty people in the environment
Absolute poverty, however, does not include a broader Although people living in relative poverty are to an
quality of life issues or the overall level of inequality in extent well-off compared to those living in absolute
society. What the concept fails to recognize is that poverty, they still cannot afford the same standard of
individuals also have important social and cultural life as other people in society.
needs.
Quality of life is poor Quality of life is marginally better as those living
under relative poverty have access to health care
services
CAUSES OF POVERTY
CAUSES OF POVERTY
1. Rapidly rising population
- the population during the last 45 years has increased at the
rate of 2.2% per annum. On average 17 million people are
added every year to its population which raises the demand for
consumption of goods.
 CAUSES OF POVERTY

2. Low productivity in Agriculture

- the level of productivity in agriculture is low due to
subdivided and fragmented holdings, lack of capital, use of
traditional methods of cultivation etc. This is the main cause of
poverty in the country.
CAUSES OF POVERTY
3. Under-Utilized Resources:
-The existence of under-employment and
disguised unemployment of human resources and
underutilization of resources has resulted in low
production in the agricultural sector. This brought a
downfall in their standard of living.
CAUSES OF POVERTY

4. Low rate of economic development

-the rate of economic development in the
Philippines has been below the required level.
Therefore, there persist a gap between level of
availability and requirement of goods and services.
The result is poverty.
CAUSES OF POVERTY
5. Price Rise
- the continuous and steep rise has added to
the miseries of the poor. It has benefited a few
people in the society and the persons in the
lower-income group find it difficult to get their
minimum needs.
CAUSES OF POVERTY

6. Unemployment
- the continuously expanding of
unemployment cause of poverty. The job seeker
is increasing in number at higher rate than the
expansion of employment opportunities.
CAUSES OF POVERTY
7. Shortage of capital and able entrepreneurship
-Capital and able entrepreneurship have important
role in accelerating the growth. But these are in short supply
making it difficult to increase production significantly.
 CAUSES OF POVERTY
8. Social factors
- the social set up is still backward and is not conducive to
foster development. Laws of inheritance, caste system, traditions
and customs are putting in the way of faster development.

9. Political factors
CHARACTERISTICS OF POVERTY
CHARACTERISTICS OF POVERTY
1. Health: one third of deaths are due to poverty related causes.
Those living in poverty suffer from life expectancy.
* Almost 90% of maternal deaths during childbirth occur in Asia
and sub-Saharan Africa, compared to 1% in the developed
countries.
CHARACTERISTICS OF POVERTY
2. Hunger: Rises in the living cost making poor people less able to
afford items. Poor people spend most of the portion of their budget
on to food than richer people.

3. Education: Poor children are suffering from hunger, irritability,

headache, colds. It is safe to state that children who live at or
below poverty level will have far less success educationally than
children who live above the poverty line.
CHARACTERISTICS OF POVERTY
4. Housing: poverty increases the risk of homelessness. Slum-
dwellers, who make up a third of the world’s urban population, live
in poverty no better, if not worse, than rural people, who are at the
traditional focus of the poverty in the developing world, according
by the report of the UNICEF. There are over 100 million street
children worldwide.
CHARACTERISTICS OF POVERTY
5. Violence: according to the reports, many women become victims
of trafficking. The most common is the prostitution as a mean of
survival and economic desperation.
6. Lack of adequate governance
7. Feudalism-
8. Inequality and natural disasters.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

1. Agriculture is the main source of income for rural inhabitants,

primarily in farming and fishing. Most farmers and small
landholders live in areas that are prone to natural disasters or
conflicts. Declines in agricultural productivity, unsuccessful small
landholder farming operations and unsustainable practices have
caused deforestation and weakened fish stocks.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

2. Over a third of the rural inhabitants in the Philippines are

underprivileged. Indigenous people residing in these areas
experience higher rates of illiteracy, unemployment and poverty. A
lack of access to productive capital and limited market access has
created slow economic growth and underemployment. The rural
poor have limited options for off-farm employment and low access
to inexpensive financial services.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

3. The majority of poor Filipino households have only

achieved basic levels of education. At least two-thirds of
poor households are headed by an individual with an
elementary level education or below. Additionally, most
poor families have minimal access to health and
education services.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES
4. Poverty levels in the Philippines are affected by
unrestrained population growth. The average poor
family in the Philippines consists of six or more
members. Similar to other countries, impoverished
regions typically have higher birth rates. In rural areas
in the Philippines, the average woman will have 3.8
children compared to the cities where the average
woman will have 2.8.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

5. Four out of 10 poor families in urban areas do not have

decent living conditions. Most of the poor households in
urban areas reside as informal settlements in slum
areas of major cities like Manila. These homes do not
include proper facilities and also are bad for the
environment. These settlers typically move to major cities
from other provinces in search of better economic
opportunity and livelihood.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES
6. Moderate economic growth has not resulted in
poverty reduction. The average annual GDP increased
by only 0.63 percent per person between 1980 and
2021. Incidents of inequality among regions have also
continued to increase, hindering the reduction of
poverty. The country’s economic growth is directed at
Manila and the two bordering provinces. This prevents
distant provinces from sharing the benefits of
prosperity.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

7. The Government of the Philippines utilizes social

protection programs to provide poor families with
direct assistance. Impoverished families can receive
cash assistance through a conditional cash transfer
program. The program requires all families to enroll
their children in school and vaccinate their children
with government-provided immunizations.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

8. The International Fund for Agricultural Development

(IFAD) is working in the Philippines to improve the
incomes and food security of rural populations. IFAD
primarily focuses on women, fishers, small landholders
and indigenous people residing in fragile ecosystems.
Recent projects and programs are intended to improve
the environment with natural resource management
and sustainable access to land. Projects also include
skills for managing soil and water along with support
for fishing communities
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

9. Former President Rodrigo Duterte has been focused on

improving poverty-related issues for the country’s poor. President
Duterte signed an executive order to pass a law that
makes contraception free and more easily accessible to the poor.
Duterte is also improving infrastructure with new roads, bridges
and airports as a result of a planned increase in expenditure. Such
improvements will better connect impoverished communities to
Manila and thus bring opportunities for better jobs.
10 FACTS ABOUT POVERTY IN
THE PHILIPPINES

10. The government of the Philippines created AmBisyon

2040 and The Philippine Development Plan 2017-2022 in
efforts to reduce poverty. Both plans aim to improve
living conditions for the poor and reduce poverty by 15
percent by 2022. To achieve this goal, it is recommended
these policies work towards creating more jobs,
improving productivity in all sectors and educating
Filipinos with the necessary skills for work in today’s
economy
POPULATION GROWTH
Is the Philippines population growth slow or fast?
•The notable rate of population increase in
the Philippines is projected to slow in the future, but
should still be substantial. The current growth rate of
1.52% is projected to halve by 2050. The population is
forecast to hit 110 million by 2020, and 125 million by
2030
POPULATION

❑ Population is a group of similar species

living in a certain place at the same time.
❑Population is the interaction between the
organisms that causes a population to
change
 POPULATION
pop·​u·​la·​tion | \ ˌpä-pyə-ˈlā-shən \
Definition of population
1a: the whole number of people or inhabitants in a country or
region
b: the total of individuals occupying an area or making up a
whole
c: the total of particles at a particular energy level —used
especially of atoms in a laser
DEMOGRAPHY
❑ Demography is the science that deals with age, sex,
distribution, and the number of births and deaths of the
human population.
❑Demography (from prefix demo- from Ancient
Greek δῆμος ( dēmos) meaning 'the people', and -
graphy from γράφω ( graphō) meaning 'writing,
description or measurement') is the statistical
study of populations, especially human beings .
CHARACTERISTICS OF POPULATION

1.Size
2.Density
 CHARACTERISTICS OF POPULATION
1. SIZE
-pertains to the number of individuals in a population
Factors that contribute to the size of a Population
1. Natality- the number of species that are born (383,071 each day, 6885 each hour, 266 each
minute)
2. Mortality- the number of species that are die (As per world death clock)
3. Migration- the number of species from one place to another
a. Immigration- the number of species that entered the land. People who moved to a place
and add to the population
b. Emigration- the number of species that leave the land lessen the population of that place.
 CHARACTERISTICS OF POPULATION
2. DENSITY
-refers to the number of persons living per square kilometer which can be computed
as:

-Population density increases when the factors are favorable to the population and
decreases when they are unfavorable.
-Population density may vary from year to year and determined by external
factors.
REASONS WHY FILIPINO HAVE AN IMMENSE
GROWTH OF POPULATION
1.Tradition of having big families
2.The male macho image
3.Educational background
 REASONS WHY FILIPINO HAVE AN IMMENSE
GROWTH OF POPULATION
1. Unsatisfactory/ineffective family relationship
2. Economic reasons
3. Contraceptive methods
 PROBLEMS ON POPULATION GROWTH IN THE
PHILIPPINES
1. Environmental problem- increase in population means an increase in waste
materials thrown in the environment and there is a greater degradation and
deterioration of nature.
2. Economic problem- the economists consider growth a problem because it
hinders the country’s effort to satisfy the needs of the citizens.
3. Educational problem- it is a problem when the Philippine government cannot
provide enough education, classrooms, school facilities, educational materials
even qualified teachers.
 PROBLEMS ON POPULATION GROWTH IN THE
PHILIPPINES
1. Health problem- the health condition of the people is being affected due to
diverse conditions: prevalence of disease, epidemics and undernourishment.
2. Spiritual and moral problems- due to overpopulation, people become
materialistic and liberalistic. The morality and spirituality of young
generation seem rapidly declining.
3. Problem of food supply- Overpopulation leads to problem on how to
provide for people’s basic needs.
4. Problem of destruction of nature- Agricultural lands are converter into
industrial sites, biodiversity becomes endangered.
TAKE NOTE:
TAKE NOTE:
UNEMPLOYMENT
UNEMPLOYMENT

Unemployment refers to a situation in which the workers

who are capable of working and willing to work do not get
employed.
WHO IS IN THE LABOR FORCE?
18 years old and above
Able and willing to work
Not institutionalized (jails, hospitals)
 TYPES OF UNEMPLOYMENT
1. Frictional Unemployment
-” temporarily unemployed” or being between jobs.
-individuals who are qualified workers with transferrable
skills but they are not working.
Examples:
High school or college graduates looking for jobs.
Individuals that were fired and are looking for a better job.
 TYPES OF UNEMPLOYMENT
2. Seasonal Unemployment
- this is a specific type of frictional unemployment which is
due to time if year and the nature of the job.
-This jobs will come back

Examples: Professional Santa Clause Impersonators, Construction

workers, Cake baker every valentines day
 TYPES OF UNEMPLOYMENT
3. Structural Unemployment
- Changes in the structure of the labor force make some skills
obsolete.
-workers do not have transferrable skills and these jobs will
never come back.
- workers must learn new skills to get a job
-the permanent loss of these jobs are called “creative
destruction”
Examples: Auto assemblers fired as robot take over the production
Producers of goods ( rice) tractors fire assemblers.
 TYPES OF UNEMPLOYMENT
4. Cyclical Unemployment
- unemployment that results from economic downturn
(recession)
-As demand for goods and services falls, demand for labor
falls and workers are fired.

Examples: Restaurant owners fire waiters after months of poor

sales due to recession.
 CAUSES OF UNEMPLOYMENT
•Financial aid from the government
•Technological advancement
•Lack of education
•Overpopulation
•Lack of resources
 CAUSES OF UNEMPLOYMENT
•Lack of resources
•Corruption in the government and regulatory bodies
•Health issues
•Work habits or conditions ( workmates, colleagues)
•Lack of guidance
•Personal reasons.
What are the various dimensions of
poverty? Explain each.
Explain what is Frictional Unemployment?
Absolute Poverty vs. Relative poverty.
What are the causes of poverty?
What do you mean by unemployment?
Is underemployment more harmful
than unemployment?
Using the definition of the unemployment
rate, is an increase in the unemployment rate
necessarily a bad thing for a nation?
Why do you think that unemployment
rates are lower for individuals with more
education?
Is it desirable to pursue a goal of
zero unemployment? Why or why
not?
Is poverty a hindrance to
success?
ACTIVITY

Case study- (By Brgy)