Urban Poverty

Updated on February 23, 2024
Article byPrakhar Gajendrakar
Edited byShreya Bansal
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Urban Poverty?

Urban Poverty refers to the people living in urban areas, most metropolitan and capital cities, facing the issues of lack of supplies, safety, sanitation, and essential utilities and services for the foremost reason of being poor or below the poverty line.

Urban Poverty

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Every country has a city facing urban poverty due to overpopulation, pollution, poor healthcare, and the absence of access to emergency services. An urban poor is considered to be in a better state than a rural poor. However, there are similar problems that are directly or indirectly interlinked to both urban and rural poverty.

Key Takeaways

  • Urban poverty occurs when a lack of utilities, resources, and services forms the life of a poor person living in a major city.
  • Overpopulation, pollution, congested living, and poor sanitation are standard features of urban poverty in any country.
  • Governments consistently work to provide better services and eradicate the problems of rural and urban poverty.
  • Only in rare cases can people grow themselves out of poverty and dire living conditions to a better standard of living.

Urban Poverty Explained

Urban poverty definition states that the people living in big cities still face many challenges due to low levels of income and constituting factors like overpopulation, inflation, high cost of living, and added services that one requires in an urban environment. More than a billion people live in informal settlements in a gradual part of Asia, Africa, and Latin America.

Poverty has always been a social curse to society, but in modern times, more than half of the world’s population resides in urban areas. It goes in-depth with people living in megacities, as most of the growth occurs in such regions only.

Many governments needed to scale up the nature of urban poverty, which comes with multiple factors affecting the livelihood of ordinary people with low and medium incomes. When it comes to rural poverty, there is a lack of utilities and services. Still, in urban areas, because of slow growth and development, people need more proper sanitation, education, water supplies, healthcare, and a good quality of life because of overpopulation, migration, and congested living conditions.


The characteristics of urban poverty are –

  • While urban areas might have more infrastructure for utilities compared to rural areas, people often need help accessing reliable and safe utilities.
  • The residents always have an eviction problem, and people live in an overcrowded manner in packed houses.
  • People face common issues of sanitation, healthcare, government schemes, and accessing emergency services.
  • Citizens typically have a poor standard of living and need more essential resources and comfort.
  • People facing issues with natural calamity come across loss and harm of property due to natural disasters.


Let us understand the reasons for urban poverty –

  • A common cause is that most people living or not living under the poverty line take loans to satisfy their needs and end up falling into a debt trap.
  • People in rural areas migrate to mega cities to seek jobs and business opportunities, eventually shifting to capital cities, which contributes to population growth in urban areas.
  • With a growing population, there needs to be a match between the skills that people have and the skills demanded, as well as the availability of jobs in the overall market.
  • Rapid urbanization without proper planning often leads to poor living conditions and environmental issues.
  • People with low levels of income need help to sustain a good lifestyle in megacities that are already expensive with inflated costs of products and services compared to rural areas.


Let us understand the concept with the help of some examples.

Example #1

Suppose a fictional unplanned city, which has become a metropolitan city over time, is a hub for industries and the global market. Likewise, many people from different states came there to seek work and business opportunities. The population grew, and now the city lacks utilities, the crime rate has increased, the city was unplanned now due to overpopulation, there is a lack of basic amenities, and there is a massive gap in pricing and disrupted real estate market, which makes it challenging to find affordable housing and people live on streets.

These are simple effects of urban poverty, including the labor class struggling with emergency services and water and power supply. Many of the population lives in fear of extreme pollution and natural disasters. Most capital cities in the modern world are like this because the rural people, hoping to find good work and better facilities, shift to big cities and become part of the urban poverty. Governments face challenges in optimizing the whole city. There is a lack of education services, and unemployment is increasing at an alarming rate.

Example #2

In Kuala Lumpur city, the prime minister of Malaysia, Datuk Seri Anwar Ibrahim, met with all the members of parliament to critically highlight and resolve the urban poverty problems the city faces. In a social media post, the prime minister expressed his focus to minimize the burden on people.

It is the same problem arriving in Latin American countries, Asian continents, and parts of Europe. People are stuck between earning minimum wage and trying to make a good living for themselves and their families. Urban poverty in America is facing the same issues as the records. Poverty in suburbs and urban areas in the US is drastically increasing compared to rural areas.

Urban Poverty vs Rural Poverty

Let us understand how poverty in rural and urban areas differs from each other.

  • Rural poverty is depicted with a low standard of living. In contrast, urban poverty can occur in settings where there is more access to certain services and where urban households have a better living standard than rural areas.
  • Rural poverty comprises a lack of education and access to its services. On the other hand, in urban areas, despite the challenges of urban poverty, they have better access to quality education.
  • Rural poverty is witnessed with a lousy experience in healthcare and housing. In contrast, urban poverty is witnessed even when people are close to good healthcare and live in well-built houses.

Frequently Asked Questions (FAQs)

1. How to reduce urban poverty?

Poverty is a direct condition of not having an income source. Therefore, employment generation can help in reducing poverty, especially in urban areas where autonomous consumption is high and expensive. But at the same time, people need more education and knowledge, which makes them ineligible for even basic jobs. Therefore, free education and schooling programs can help people uplift themselves.

2. What are the four conditions associated with urban poverty?

The four conditions associated with urban poverty are –
– Lack of work opportunities, with no employment and jobs, with no proper education.
– People are living in an overcrowded manner with a constant risk of forceful eviction and no ownership.
– They need access to essential utilities, emergency services, or healthcare facilities and are deprived of water supplies, proper sanitation, and drainage.
– Need help accessing government services and other federal programs.

3. Why did urban poverty increase during the 1950s?

The main reasons for urban poverty increasing in the 1950s were –
– People are losing their jobs, wages, property, and financial support in the war climate.
– Racial discrimination plays a vital role in education and at work.
– Post-war, the job market saw a massive hike, but only in labor works and operations.

This article has been a guide to what is Urban Poverty. We explain the concept along with its causes, comparison with rural poverty, examples, and characteristics. You may also find some useful articles here –

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