Situational poverty is a type of poverty consisting in a period wherein an individual falls below the poverty line because of a sudden event. Situational poverty is generally caused by an unexpected crisis or loss and is often temporary. Events causing situational poverty include environmental disasters, divorce, death of the family head, illness, or loss of job. These uncontrollable events can cause a spiral of events which leads to a loss of income and material possessions.
Situational poverty essentially has two types:
- Cyclical: This depends on the ebb and flow of the national and global economy. An economic depression can make income levels fall and increase unemployment rates. Hence, some people can lose their jobs and others find themselves not being able to make ends meet with what they earned, thus falling below the poverty line.
- Of assets: It is triggered by a crisis specific to those experiencing poverty. Two types of household are usually target of this kind of poverty:
- Relatively secure middle-class families: Their fall below the poverty line usually encompasses making a high-risk decision.
- Families with permanently low income: The position of these families shifts constantly from above to below the poverty line and they are described by Leisering and Leibfriend as having a “precarious well-being”.
Situational poverty generally has a quick fix. People experiencing situational poverty are often of a higher level of education than those who experience entrenched poverty. They can be typically familiar with the complex hidden rules and social codes of the middle classes, and this knowledge can be helpful when they attempt to cope with the situation. Some factors that can turn into generational poverty (like, the natural disaster factor), can be tackled, and ultimately fixed by social welfare and hard work, coupled with a great personal support system. In many countries, assistance is provided in the form of temporary government benefits, job placement assistance, food banks, etc., in the hopes of preventing people from falling through the cracks. If situational poverty is prolonged, it has a potential to become generational.
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