Poverty Line Not Defined

Poverty Line Not Defined

It’s been a while now that the poverty line has been lost in the country; it means there is no official report to tell the people whether they live above the poverty line with their current income or below it. But considering average household income and expenditure, one can conclude that “the economic condition of many households is not promising,” Fararu news website reported.
The last official statistics on poverty goes back to 2010 when the poverty line was announced as “below $200.” However experts differed in their estimate of the figures. For instance in the year 2011, the chairman of the Competition Council said the poverty line should be fixed “at an income of at least $500.”
The poverty threshold, or poverty line, is the minimum level of income deemed adequate in a particular country. In practice, like the definition of poverty, the official or common understanding of the poverty line is significantly higher in developed countries than in developing countries.
In the year 2014 there is still no official announcement on the poverty line. But Hadi Abouei, general secretary of the Iranian Workers Association says “in the first three months of the current year (started March 21), the expenditure of each worker household was $735, an increase of $165 compared with the previous year.

Farhad Nili, an economist has proposed figures to define community poverty at the Strategic Commission of the Expediency Council. He highlighted some very interesting facts including: The highest poverty rates are in the four provinces of Sistan Baluchestan, Chaharmahal and Bakhtiari, Lorestan, Northern and Southern Khorasan; the poverty pattern is ‘U shaped,’ meaning that it is at a high level among the youth and decreases with increase in age; it then reaches a peak with the retirees of the household. For this he gives the following explanation: “In our financial system it is impossible for an individual to make ‘negative investments’ (or to become a debtor) and the elderly use the benefits of previous positive investment.”
He also pointed to the results of the survey conducted on “inequality, poverty and welfare in the country” and asserted, “Between the years 1991 and 2007, revenues from employment have grown 4.3% faster annually than free jobs wages.” According to him this trend indicates the “positive reinforcement approach to employment and jobs and severing the relationship between productivity and income.”

 Class Gap
The welfare of households highly depends on the current income of the breadwinner of the household. Of course, inflationary trends have to be taken into consideration. Any loss or reduction in the income of the household head has a corresponding effect on the welfare level, which can decline significantly. Inflation or the sustained increase in the general price level of goods and services in an economy over a period of time, also contributes to lowering standards of living as it diminishes the purchasing power of a household.
Nili also said that the welfare index in Tehran is significantly higher than in the rest of the country; however, the inequality and class gap is also higher in Tehran. “Actually we can say that the richest and poorest citizens of the country live in Tehran.” At present, urban Tehran households with male, literate heads between the ages 30-50, have more welfare benefits compared to other households.

He also compared the inequality of income distribution in Egypt, Iran, India and America and stated “our poor live on the same levels as the Egyptian poor but their condition is far better than Indian people; but the American poor are still better off.” However, the welfare of Iranian and American rich is not much different. Actually, the welfare of people with high incomes in Iran and America is the same, he noted.
For that matter, the economic status of the wealthy even in the poorer countries would be on par with the affluent classes in the developed nations, since the well-heeled in any nation, rich or poor, are in an economically favorable position in contrast to the other groups.
Nili also added that at present in the community “6% of the people benefit the most in welfare facilities while 6% are deprived of even the minimum facilities.”
Therefore the Social Welfare Organization (SWO) should cover the poorest in the community and the Iranian National Tax Administration (INTA) should target the richest to bridge the economic gap, he added.


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