What is Poverty?
The concept of poverty has been dynamic and multidimensional. According to the World Development Report, poverty is a state of deprivation from wellbeing that restricts what Amartya Sen calls the “capabilities that a person has, that is, the substantive freedoms he or she enjoys to lead the kind of life he or she values”. A household could have just enough income but deprived from other basic requirements of life such as education and health. Therefore state of wellbeing needs to be defined in order to denote someone as poor. Oxford Poverty and Human Development Initiative (OPHI) has come up with Multidimensional Poverty Index (MPI) that takes into account three major dimensions in identifying the poor. These are Education, Health and Living Standard as shown in figure 1. For a person or household to be called poor, s/he must lack 1/3 or more of the dimensions presented in the matrix. Someone who is deprived of more than half of the dimensions at a time is considered to be ‘severely poor’. Again, there is another concept of ‘working poor’ that determines mainly the income poverty of a household. Based on ILO and other literature (Mazid,2001:2) working poor are mostly those who work without social and legal regulatory rights, belong to poor households, and earns less than $2 a day.
Most of the working poor will come under MPI as severely poor since they fail to obtain very basic living standards, let alone education and health.