The terms poverty industry or poverty business refer to a wide range of money-making activities that attract a large portion of their business from the
poor. Businesses in the poverty industry often include
payday loan
A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates.
The term "payday" in payday loan refers to ...
centers,
pawnshops,
rent-to-own centers, casinos, liquor stores, lotteries, tobacco stores, credit card companies, and bail-bond services. Illegal ventures such as
loansharking
A loan shark is a person who offers loans at extremely high interest rates, has strict terms of collection upon failure, and generally operates outside the law.
Description
Because loan sharks operate mostly illegally, they cannot reasonably ...
might also be included. The poverty industry makes roughly US$33 billion a year in the United States. In 2010, elected American federal officials received more than $1.5 million in campaign contributions from poverty-industry donors.
In poorer countries, the poverty industry exploits the
bottom of the pyramid and its extent can at times be used as a litmus test to assess the effectiveness of poverty-alleviation initiatives. In some cases, the poverty industry directly takes advantage of poverty-alleviation initiatives (e.g. formal, government-supported
microfinance). For example, some moneylenders misrepresent themselves as formal microfinance initiatives or obtain loans from formal microfinance initiatives through deception. They on-lend these loans to micro-entrepreneurs (informal
intermediation).
See also
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Economic inequality
There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of ...
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Ghetto tax
A cost of poverty, also known as a ghetto tax, a cost of being poor, or the poor pay more, is the phenomenon of people with lower incomes, particularly those living in low-income areas, incurring higher expenses, paying more not only in terms of mo ...
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Misery index (economics)
The misery index is an economic indicator, created by economist Arthur Okun. The index helps determining how the average citizen is doing economically and it is calculated by adding the seasonally adjusted unemployment rate to the annual inflatio ...
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Pay-to-stay (imprisonment)
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Predatory lending
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Working poor
The working poor are working people whose incomes fall below a given poverty line due to low-income jobs and low familial household income. These are people who spend at least 27 weeks in a year working or looking for employment, but remain und ...
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Poverty Industrial Complex
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Wage slavery
Wage slavery or slave wages refers to a person's dependence on wages (or a salary) for their livelihood, especially when wages are low, treatment and conditions are poor, and there are few chances of upward mobility.
The term is often us ...
References
Further reading
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Industries (economics)
Industry
Industry may refer to:
Economics
* Industry (economics), a generally categorized branch of economic activity
* Industry (manufacturing), a specific branch of economic activity, typically in factories with machinery
* The wider industrial sector ...
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