What Is The Difference Between Relative Poverty And Absolute Poverty

The terms absolute poverty and relative poverty are often used in discussions about economic inequality, but they represent fundamentally different ways of understanding and measuring deprivation. While both concepts aim to capture the experience of those struggling with limited resources, they do so from distinct perspectives. Understanding the nuances between absolute and relative poverty is crucial for developing effective policies to address poverty and promote social well-being. This article will delve into the definitions, causes, impacts, and measurement of both types of poverty, highlighting their key differences and exploring the implications for individuals and societies.

Understanding Absolute Poverty

Absolute poverty refers to a condition where individuals or households lack the basic necessities to sustain life. This includes the inability to afford essential items such as:

• Food: Insufficient caloric intake and lack of access to nutritious food.
• Shelter: Lack of safe and adequate housing, exposing individuals to the elements and health risks.
• Clothing: Inability to afford clothing appropriate for the climate, leading to health problems and social exclusion.
• Healthcare: Lack of access to medical care, resulting in untreated illnesses and preventable deaths.
• Clean Water and Sanitation: Lack of access to safe drinking water and proper sanitation facilities, increasing the risk of disease.

In essence, absolute poverty is defined by a fixed standard, often expressed as a specific income level below which individuals are considered unable to meet their basic needs. This threshold remains constant over time and across different countries, allowing for comparisons of poverty levels across diverse contexts.

Causes of Absolute Poverty

Several factors can contribute to absolute poverty, often interacting in complex ways:

• Lack of Economic Opportunities: Limited access to education, job training, and employment opportunities traps individuals in a cycle of poverty. Without the means to earn a sufficient income, it becomes impossible to escape the most basic forms of deprivation.
• Conflict and Instability: War, political instability, and social unrest can disrupt economic activity, displace populations, and destroy infrastructure, leading to widespread poverty. Conflict can also exacerbate existing inequalities, disproportionately affecting vulnerable groups.
• Natural Disasters: Earthquakes, floods, droughts, and other natural disasters can devastate communities, destroying homes, crops, and livelihoods. The immediate aftermath of a disaster often results in widespread food shortages, displacement, and increased poverty rates.
• Poor Governance and Corruption: Ineffective governance, corruption, and lack of accountability can hinder economic development and divert resources away from essential services such as healthcare, education, and social welfare programs. Corruption can also create barriers to accessing opportunities and exacerbate inequalities.
• Lack of Access to Resources: Limited access to land, credit, and technology can prevent individuals from improving their economic circumstances. This is particularly true in rural areas where agriculture is the primary source of livelihood.
• Discrimination and Marginalization: Discrimination based on gender, ethnicity, religion, or other factors can limit opportunities and perpetuate poverty among certain groups. Marginalized populations often face barriers to accessing education, employment, and healthcare, trapping them in a cycle of disadvantage.

Impact of Absolute Poverty

The consequences of absolute poverty are far-reaching and devastating, affecting individuals, families, and communities:

• Health Problems: Malnutrition, disease, and lack of access to healthcare lead to increased morbidity and mortality rates, particularly among children. Chronic health problems can also impair cognitive development and reduce productivity.
• Reduced Educational Attainment: Poverty can prevent children from attending school or force them to drop out to work and support their families. Lack of education limits future opportunities and perpetuates the cycle of poverty.
• Increased Vulnerability to Exploitation: Individuals living in absolute poverty are more vulnerable to exploitation, including child labor, human trafficking, and forced prostitution. They may be forced to accept dangerous or degrading work conditions simply to survive.
• Social Exclusion: Poverty can lead to social exclusion and isolation, as individuals are unable to participate fully in community life. This can result in feelings of shame, hopelessness, and despair.
• Increased Crime and Violence: Poverty can contribute to increased crime and violence, as individuals turn to illegal activities to survive. Lack of opportunities and social support can also create a sense of desperation and hopelessness, leading to increased rates of substance abuse and suicide.

Measuring Absolute Poverty

The most common method for measuring absolute poverty is to establish a poverty line, which represents the minimum income required to meet basic needs. The World Bank, for example, uses an international poverty line of $2.15 per day (in 2017 PPP dollars) to measure extreme poverty. Anyone living below this line is considered to be living in absolute poverty.

However, setting a universal poverty line is challenging, as the cost of basic necessities can vary significantly across different countries and regions. To address this, some organizations use national poverty lines that are tailored to the specific context of each country. These national poverty lines are typically based on the cost of a basket of essential goods and services in that country.

Understanding Relative Poverty

Relative poverty, in contrast, is defined in relation to the living standards of the majority of the population in a particular society. It focuses on income inequality and the extent to which individuals or households fall behind the average standard of living. People experiencing relative poverty may have their basic needs met, but they are still considered poor because they lack the resources to participate fully in the social and economic life of their community.

Key Characteristics of Relative Poverty

• Focus on Inequality: Relative poverty emphasizes the gap between the rich and the poor, rather than simply focusing on whether individuals have enough to survive.
• Context-Specific: The definition of relative poverty varies depending on the country or region being studied. A person considered relatively poor in a wealthy nation may be considered well-off in a developing country.
• Dynamic: The relative poverty line changes over time as the overall standard of living in a society increases.
• Social Exclusion: Relative poverty can lead to social exclusion, as individuals are unable to afford the goods and services that are considered normal or necessary for full participation in society.

Causes of Relative Poverty

Several factors contribute to relative poverty:

• Income Inequality: A wide gap between the rich and the poor is a primary driver of relative poverty. When a small percentage of the population controls a large share of the wealth, many individuals are left with insufficient resources to maintain a decent standard of living.
• Lack of Access to Education and Skills: Limited access to quality education and job training can prevent individuals from acquiring the skills needed to compete in the labor market. This can lead to lower wages and reduced opportunities for advancement.
• Discrimination and Social Exclusion: Discrimination based on gender, ethnicity, or other factors can limit opportunities for certain groups, leading to lower incomes and higher rates of relative poverty.
• Changes in the Labor Market: Automation, globalization, and other changes in the labor market can lead to job losses and wage stagnation, particularly for low-skilled workers.
• Regressive Tax Policies: Tax systems that disproportionately burden low-income earners can exacerbate income inequality and increase relative poverty.
• Inadequate Social Safety Nets: Weak or poorly designed social safety nets can fail to provide adequate support for individuals and families struggling with low incomes.

Impact of Relative Poverty

While the effects of relative poverty may not be as immediately life-threatening as those of absolute poverty, they can still have significant negative consequences:

• Reduced Well-being: Relative poverty can lead to feelings of shame, stress, and social exclusion, negatively impacting mental health and overall well-being.
• Limited Opportunities: Children growing up in relative poverty may have limited access to quality education, healthcare, and other opportunities, hindering their future prospects.
• Social Unrest: High levels of relative poverty can contribute to social unrest and political instability, as individuals feel marginalized and excluded from the benefits of society.
• Health Disparities: Even in wealthy countries, individuals living in relative poverty may experience higher rates of chronic disease and lower life expectancy due to factors such as poor nutrition, stress, and lack of access to healthcare.
• Weakened Social Cohesion: High levels of income inequality can erode social cohesion and trust, making it more difficult to address social problems and build a strong community.

Measuring Relative Poverty

Relative poverty is typically measured by comparing an individual's income to the median or average income in a particular society. A common approach is to define the relative poverty line as a percentage of the median income, such as 50% or 60%. Individuals whose income falls below this threshold are considered to be living in relative poverty.

For example, the European Union uses a relative poverty line of 60% of the national median equivalized disposable income. This means that individuals living in households with an income less than 60% of the median income for their country are considered to be at risk of poverty.

Key Differences Between Absolute and Relative Poverty

Addressing Poverty: A Multifaceted Approach

Tackling poverty, in both its absolute and relative forms, requires a comprehensive and multifaceted approach that addresses the root causes of deprivation and inequality.

Strategies to Combat Absolute Poverty:

• Investing in Education and Healthcare: Providing access to quality education and healthcare is essential for improving human capital and breaking the cycle of poverty.
• Promoting Economic Growth: Policies that promote inclusive economic growth, create jobs, and increase incomes can help lift individuals out of poverty.
• Strengthening Social Safety Nets: Social welfare programs such as food assistance, cash transfers, and unemployment benefits can provide a safety net for vulnerable populations.
• Improving Infrastructure: Investing in infrastructure such as roads, water systems, and sanitation facilities can improve living conditions and promote economic development.
• Promoting Good Governance: Combating corruption, promoting transparency, and strengthening institutions can improve the effectiveness of poverty reduction efforts.
• Empowering Women: Addressing gender inequality and empowering women can lead to significant gains in poverty reduction, as women are often disproportionately affected by poverty.

Strategies to Combat Relative Poverty:

• Reducing Income Inequality: Policies that promote progressive taxation, increase minimum wages, and strengthen labor unions can help reduce income inequality.
• Investing in Education and Skills Training: Providing access to quality education and job training can help individuals acquire the skills needed to compete in the labor market and earn higher wages.
• Strengthening Social Safety Nets: Robust social welfare programs can provide a safety net for individuals and families struggling with low incomes.
• Addressing Discrimination: Anti-discrimination laws and policies can help ensure that all individuals have equal opportunities, regardless of their gender, ethnicity, or other characteristics.
• Promoting Affordable Housing: Ensuring access to affordable housing can help reduce the burden of housing costs on low-income households.
• Supporting Community Development: Investing in community development initiatives can help revitalize low-income neighborhoods and improve the quality of life for residents.

Conclusion

While both absolute and relative poverty describe conditions of deprivation, they differ significantly in their definitions, causes, impacts, and measurement. Absolute poverty focuses on the lack of basic necessities for survival, while relative poverty focuses on income inequality and the inability to participate fully in society. Understanding these differences is essential for developing effective policies to address poverty and promote social well-being. By implementing comprehensive strategies that address both the symptoms and the root causes of poverty, societies can create a more just and equitable world for all.