What is Poverty?
Poverty is defined as not having enough money or resources to have a good level of living, whether it is due to a lack of access to healthcare, education, or water and sanitation services, among other things. In research conducted by Seebhom Rowntree in the twentieth century, poverty in the United Kingdom was classified as either primary or secondary.
- Primary poverty is defined as a lack of sufficient funds to cover fundamental requirements; it is sometimes referred to as "living below the poverty line."
- Secondary poverty occurs when people earn just enough money to meet their basic needs, but spend a portion of it on "coping mechanisms" to deal with financial and work-related stress (high risk and/or difficult working conditions due to abuse and long hours), resulting in them struggling to make ends meet.
Understanding the Poverty Cycle
People born into poverty are significantly more likely to remain poor, according to statistics from throughout the world. Some people may be able to avoid it, but for the vast majority of people, hard labor isn't a viable option when the economic system is working against them. This is what the poverty cycle is all about. If you don't have access to good food, proper housing, power, or water, you're basically living in extreme poverty. And the price of these goods is either too much for you to pay, or you can't afford them all. So, which one do you think is most important?
That is why defining relative or absolute poverty is difficult since it is influenced not only by economics but also by society and politics. Is poverty, then, a quantifiable concept? If so, should we use a relative or absolute technique to quantify it?
What is the difference between relative and absolute poverty?
Absolute poverty occurs when a person's or family's household income falls below a specific threshold, making it difficult to cover basic requirements such as food, housing, safe drinking water, education, and healthcare. Even if the country grows economically in this situation of poverty, it has little influence on those who live below the poverty line. Absolute poverty compares households based on a predetermined income threshold, which varies by nation and is determined by the country's general economic situation.
Relative poverty occurs when a household's income is 50% less than the national average, implying that they have some money but not enough to buy anything more than the bare necessities.
This form of poverty, on the other hand, varies depending on the country's economic progress. Relative poverty is frequently referred to as "relative deprivation" since those that fall into this category do not live in complete poverty, but they do not have the same level of living as the rest of the country. It might be television, the internet, clean clothing, a safe household (one that is devoid of abuse or neglect), or even education.
Relative poverty can also be permanent, implying that certain families will never be able to enjoy the same living conditions as other members of the same community. They're "stuck" in a low-relative-income category. When using the relative technique to quantify poverty, it's important to include another concept: persistent poverty. Every two out of every three years, households earn 50 to 60 percent less income than average incomes. Persistent poverty is an essential notion to remember since long-term poverty has a greater influence on economic and social situations.
The term "relative poverty" refers to a type of social exclusion. Poverty is, in general, about exclusion.
It's the inability to get what you need to live a decent life in its most severe form. Relatively speaking, it is being excluded from what comprises regular everyday life in more developed countries:
- Internet to access jobs or public services
- The proper clothes to find that job
- Paying for education
- Access to decent housing (respiratory diseases is one of the most common symptoms of poor housing)
Relative poverty is determined by the country's degree of development. It's about ensuring that everyone has access to the same living standards, so that everyone may live their lives to their best potential. In this sense, poverty alleviation entails releasing vast, untapped economic potential inside any country.
How is poverty assessed?
To determine whether poverty is absolute or relative, you must first create thresholds and collect data to determine the total number of individuals who are impoverished. When a relative approach is employed, a (variable) level of what households should be able to rely on to cover their basic requirements is established, and everyone who falls below it is classified as being in this group. The absolute technique maintains a constant degree of accuracy across time. When this technique is utilized, there might be a big disparity between the current level of poverty and the historical benchmark. As a result, absolute poverty is losing its economic status, particularly in nations where the economy is developing and living standards are improving.
The relative approach to evaluating poverty is regarded a better and more relevant technique since it incorporates current facts and statistics. Relative poverty is the most commonly used indicator nowadays since it represents the number of families that have been "relatively" left behind from those who are currently living comfortably. Unlike the relative technique, however, the absolute method allows us to assess whether or not earnings have grown over time. This is to say, it makes no connection between the condition and inequality or unequal allocation of resources.
Result
As a result, many economists throughout the world advocate for a hybrid approach to poverty assessment in order to find areas where progress is feasible. As stated at the outset, you may believe that poverty is just a lack of money or resources to have a fair level of living, but as you learn more about the different types, causes, and remedies to poverty, you'll realize that it's much more complicated.