4.2.1 Absolute and Relative Poverty

Question 1

What is ‘absolute’ poverty?

Answer 1

A person living below subsistence, this means that the person is unableb to meet their basic needs of food, clean water and sanitation e.c.t.

Question 2

What is ‘relative poverty’?

Answer 2

In the UK, those with below 60% of the median income are those living in relative poverty

Question 3

What are the causes of absolute and relative poverty?

Answer 3

• inequality in wages or unemployment
• welfare payments
• taxes
• disease
• wars and conflicts

Question 4

How does inequality in wages and unemployment cause absolute and relative poverty?

Answer 4

If workers can access a higher level of education, they will be able to access jobs of a higher wage. Those with lower levels of education will not. This is harmful with countries without the min wage.
0 hour contracts and part time jobs have left people underemployed
Decline of industry lead to structural unemployment

Question 5

What does ‘hysteresis’ mean?

Answer 5

Type of structural unemployment where someone is out of work for a longtime so their skills deteriorate

Question 6

How does welfare payments affect absolute and relative poverty?

Answer 6

State pensions tend to increase less than wages. Cut to benefits as seen in 2010 austerity program

Question 7

How do taxes affect absolute and relative poverty?

Answer 7

Indirect taxes are regressive, which means those on the lowest incomes bear the largest burden
5p fuel duty cut e.c.t