Absolute and relative poverty 4.2.1

Question 1

absolute poverty, how would world bank define it

Answer 1

when people are unable to afford sufficient necessites to maintain life
wb: anyone living on less than $1.90 a day

Question 2

how does economic development correlate with absolute poverty

Answer 2

developed country=fewer people in absolute poverty as gov tends to intervene to attempt to provide necessities

Question 3

relative poverty

Answer 3

peoples income compared to others in their area, if their income falls below average income threshold for the economy, they’re at the bottom end of the income scale
income is 60% lower than median household income theyre in relative poverty

Question 4

poverty line

Answer 4

minimum income to achieve a satisfactory standard of living

Question 5

poverty trap

Answer 5

affects people on low incomes when tax and benefits create disincentive to work (lose income from income tax, losing benefits from working)

Question 6

causes of growth of poverty

Answer 6

unemployment, lack of skills, health problems and income dependency
2 main causes of relative poverty growth are if those on high salaries see larger income growth than those on lower salaries or there’s a change in gov spending

Question 7

what happens to absolute poverty as GDP increases

Answer 7

absolute poverty falls if GDP increases if the state provides support for those who can’t benefit from a growing economy

Question 8

why has relative poverty grown in the UK

Answer 8

inequality in wage growth (public sector have had low wage increases, wages of the richest are now 170 times the average worker but was 60 times before)
de-industrialisation= more service sector jobs which are lower paid
more underemployment/part time work/ zero hour contracts= lower wages for workers
decline in trade unions so workers can’t bargain higher wages
state benefits fell, tax increased