I keep hearing about absolute and relative poverty but was hoping someone could clarify the difference for me.


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Absolute poverty indicates a lack of the most basic resources one needs to subsist: sufficient nutrition foremost amongst the. The World Bank measures absolute poverty as the percentage of the population that earn under $1.90 a day. By this measure only 700 million people, or less than 10% of the world’s population, are impoverished and this figure has declined steeply in the past 2 decades.

However The UN believes that  poverty is multi-dimensional and that such a simplistic ‘global poverty line’ doesn’t take into account lack of access to affordable education and healthcare etc. Others argue that this poverty line is unethically low and that it doesn’t  properly account for inflation and global difference in purchasing power parity. For example, children above the poverty line in India still have a 60% chance of being malnourished and therefore aren’t having even their most basic needs met.

Relative poverty is a measure of people who lack the minimum resources needed to attain the average lifestyle in their country of residence. It uses a multi-dimensional idea of poverty, accounting for local housing and healthcare costs, consumer price inflation and so on. It can be thought of as a measure of income inequality within the society whereas absolute poverty is a measure of deprivation. For example, the relative poverty guideline for a family of four in the USA today is $22,162 which is considerably higher than the World Bank’s global poverty line.

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