4.2.1 Absoloute and Relative Poverty

Question 1

What is Absolute poverty?

Answer 1

When people are unable to afford the basics of lives - a severe deprivation of basic humans needs including food, shelter, safe drinking water and infomation.

• The world bank defines this as anyone living on less than $1.90 a day.

Question 2

What is Relative poverty?

Answer 2

Relative poverty is about people’s income compared to others in the area.

It will always exist in a society that is not perfectly equal.

In the UK 14m people live below the official relative poverty line.

Question 3

What is the poverty line?

Answer 3

The minimum level of income deemed necessary to achieve an adequate standard of living in a given country.

Question 4

What is the poverty trap?

Answer 4

A situation in which there is little incentive for workers earning a low income to earn extra income, because it would result in having to either pay higher tax and/or losing some of their benefit payments.

Question 5

What causes poverty?

Answer 5

• Unemployment
• Lack of skills
• Health Problems
• Income dependency

Question 6

What is the relationship between absolute poverty and GDP?

Answer 6

As GDP increases - absolute poverty falls as governments pay more towards benefits.

Question 7

Why has relative poverty grown in the UK?

Answer 7

• Inequality in wages growth (Rich get Richer)
• De - Industrialisation has increased the number of service sector jobs which tend to be lower paid.
• Emergence of underemployment(Part time jobs, zero hour contracts and temporary jobs)
• Decline of trade unions and a general fall in state benefits
• Tax systems have become more regressive.