Causes of Inequality and Poverty
Absolute poverty in Iceland is very low. According to World Bank Data, the percentage of Iceland residents living below the international poverty line (the equivalent of $1.90 per day) from 2004 to 2011 was level at 0.1%. ("Poverty Gap at $1.90 a Day (2011 PPP) (%)") But there is still relative poverty in Iceland. According to RÚV, Iceland’s state-sponsored news outlet, about 9 percent of Icelanders live below the low-income threshold, defined as 170,000 ISK per month in disposable income. The Welfare Watch, an Icelandic government subsidiary, has assessed that to alleviate poverty, the government should pay base child benefits untied from income, and reduce housing costs for poor Icelanders. ("Over Six Thousand Icelanders Live in Severe Poverty") If we take this agency’s position at face value, austerity policies in government benefits are a cause of poverty in Iceland, i.e. the government isn’t spending enough on welfare to keep all of its citizens out of pove...
