4.2.1 Absolute and relative poverty

Absolute poverty definition + how is it measured? (2)

• Absolute poverty is when people are ​unable to afford sufficient necessities to maintain life

• The World Bank defines anyone living on ​less than US$1.90 ​a day as living in absolute poverty

Relative poverty definition + how is it measured? (2)

• Relative poverty is a situation where household income is a certain percentage less than the median household income in the economy

• In the UK, those with below 60% of the median income are considered to be in relative poverty

How many people in the UK are living in relative poverty?

1 in 5 people → 21% of adults

What percent of children in the UK are eligible for Free School Meals + how many children is this? 

• 25.7% of children are eligible for FSM. This is around 2.2 million pupils

What influences absolute poverty? (4)

• Economic growth + a fall in absolute poverty

• Government tax and benefit policies → can support the most vulnerable groups in society e.g. children, pensioners, people stuck in long-term unemployment

• Corruption, war etc

• Disease, malnutrition + health problems

What influences relative poverty? (4)

• Inequality in wages + unemployment

• Government policy → e.g. regressive taxes + fall in real wages → increase in relative poverty

• Trade union → bargain for higher wages

• Corruption, war etc

What policies could be used to tackle relative poverty? (6)

• Minimum wage in the labour market

• State provision of public + merit goods

• Gov subsidies for necessities

• Progressive tax system

• Policies to lower unemployment

• Microfinance