Absolute poverty
Absolute poverty means not having enough to meet basic needs for survival and health: food, clean water, shelter, clothing, basic health care. It is measured with a fixed line, like the World Bank line of about US$3 a person a day (2021 prices) for extreme poverty. Seebohm Rowntree in York (1899) first measured it by pricing a minimum diet.
Strength: easy to compare across countries and over time. Weakness: what counts as "basic" differs between places and changes over time.
Relative poverty
Relative poverty means having much less than the usual standard of living in your society, so you cannot take part in normal life. Peter Townsend described it as lacking things most people see as normal. A common line is below 60% of median household income (the EU and UK) or 50% (OECD).
Because the line moves with average income, relative poverty can stay even when everyone gets richer, and some say it measures inequality rather than poverty. Deprivation indices list items (warm home, two meals a day, a winter coat) and count how many people lack them. Social exclusion is a wider idea: being shut out of jobs, services and social life.
Who is poor? Distribution of poverty and wealth
- Higher risk: children, lone-parent families (mostly headed by women), disabled people, unemployed and low-paid workers, some ethnic minorities, older people with no private pension, rural households in many low-income countries.
- Income is a flow (wages, benefits); wealth is a stock (houses, land, shares, savings). Wealth is much more unequal: in many countries the richest 10% hold more than half of it.
- Poverty is often persistent: many people move in and out of it, but some stay poor for years, and disadvantage passes between generations (cycle of deprivation).
Explaining poverty: cultural and structural views
Individual and cultural explanations
- Oscar Lewis: a culture of poverty (fatalism, living for today) is learned in families and passed on.
- Charles Murray: a growing underclass depends on welfare benefits, with high crime and family breakdown. New Right thinkers say generous benefits create dependency.
Structural explanations
- Poverty comes from how the economy and society are organised: unemployment, low wages, insecure "zero-hours" and gig work, discrimination.
- De-skilling (Braverman): machines and management break skilled jobs into simple tasks, lowering pay and control.
- Globalisation: factories move to cheaper countries, leaving areas with worklessness; new jobs are often low paid.
- Marxists: poverty helps capitalism by keeping wages low (a reserve army of labour).
Critics of the underclass idea say most poor people want to work and share mainstream values; the problem is the lack of good jobs.
Causes and effects of poverty (economic view)
Causes: unemployment, low productivity and pay, low education and skills, illness and disability, large families or many dependants, discrimination, weak social protection, high living costs, conflict and disasters.
Effects: poor health and lower life expectancy, lower school results, less spending and slower growth, more stress and crime, lower social mobility, and a cycle that passes poverty to the next generation.
Welfare responses
- Welfare state: the state protects people "from cradle to grave": benefits, pensions, free health care and education, social housing (for example, the UK welfare state from 1945, Nordic models).
- Means-tested benefits go to those below an income level; universal benefits go to everyone in a group (such as all children).
- Minimum wage, tax credits, free school meals.
- India: Public Distribution System (cheap grain), MGNREGA (100 days of rural work a year), pensions and direct cash transfers.
Debates: New Right says welfare creates dependency and should be cut; social democrats say benefits are too low and poverty is caused by the system; Marxists say welfare only softens capitalism.
Try it
List 10 things a teenager in your town "needs" to join normal life. Ask an older relative which ones they had at your age. The list changes: that is why relative poverty moves over time. In the 3D, raise everyone's income and watch both poverty lines.
Key formulas and definitions
- Absolute poverty: income below the cost of basic needs (fixed line)
- Relative poverty: income below 60% (or 50%) of median income
- Median: the middle value when incomes are put in order
- Income = flow of money; wealth = stock of assets
- Culture of poverty / underclass = cultural view
- Unemployment, low wages, de-skilling, globalisation = structural view
Worked examples
1. Median income in a country is 30,000 a year. Where is the relative poverty line at 60%?
0.6 ร 30,000 = 18,000 a year. Households below 18,000 are in relative poverty.
2. Incomes of 5 households: 8, 12, 20, 25, 40 (thousand). Find the 60% median line and count who is poor.
Ordered, the middle value is 20. 60% of 20 = 12. Only the household with 8 is below 12 (12 is not below it), so 1 household is relatively poor.
3. Everyone's income doubles. What happens to absolute and relative poverty?
Absolute poverty falls, because more people can buy basic needs. Relative poverty stays the same, because the median and the 60% line double too.
4. Give a cultural and a structural explanation for long-term unemployment in an old mining town.
Cultural: young people learn low expectations and rely on benefits. Structural: the mines closed through globalisation, and the new jobs are few, low paid and need different skills.
5. Is free school meals for all children universal or means-tested?
Universal, because every child in the group gets it regardless of family income.
Common mistakes
- Thinking relative poverty means "not really poor". People in relative poverty may go without heating, healthy food or school activities.
- Using the mean instead of the median for the relative line. The median is the middle income.
- Mixing up income and wealth. Income is money coming in; wealth is what you own.
- Giving only one side of the underclass debate. Exam answers need both cultural and structural views with evaluation.