Difference Between Absolute and Relative Poverty (With Table)

Money, in this 21st century where everything comes from money, can solve most of our problems. Through money, people gain ‘power’ and ‘respect’. Society is categorized into two classes-rich (the person who have huge wealth) and poor (the person who has less wealth).

Absolute vs Relative Poverty

The main difference between absolute poverty and relative poverty is absolute poverty means the person who doesn’t have basic needs such as food, roof, basic education, and basic medical needs whereas relative poverty means when a person does not earn enough to meet a minimum level of living standards, compare to other people in the same time and space.

 Absolute poverty can be defined as the state in which a person lacks his or her basic needs which include food, water, shelter, basic medical care, basic education. Absolute poverty defines as when someone income is below the household budget. They don’t have enough money to satisfy their daily need.

Relative poverty can be related when someone household receives 50% less than the average or normal household income, which means they have some money but still not enough to afford anything beyond their daily needs. Relative poverty can be permanent which means they are trapped in a low income and they have no chance of enjoying it. Relative poverty is seen mostly in developed countries.

Comparison Table Between Absolute and Relative Poverty.

Parameters of ComparisonAbsolute PovertyRelative Poverty
DefinitionAbsolute poverty defines the lack of income and the lack of standard requirements for living.Relative poverty defines as when a person cannot meet his daily requirement.
ResultsMass povertyResult in inequality
CauseThe main cause of absolute poverty is lack of education, shelter, etc.The main cause for the relative poverty is due to the differences in their income.
Quality of lifeBetterPoor
Ability to changeAbsolute poverty can be eradicated.Relative poverty cannot be eradicated.

What is Absolute Poverty?

Absolute poverty refers to a condition where a person does not earn enough to meet their day-to-day basic requirements. When a person goes below this threshold their survival is in danger. Absolute poverty is not caused by one deciding circumstance, it’s a combination of circumstances that lead to this term.

It is caused by-

  1. Absolute poverty refers to a condition where a person does not earn enough to meet their day-to-day basic requirements. When a person goes below this threshold their survival is in danger. Absolute poverty is not caused by one deciding circumstance, it’s a combination of circumstances that lead to this term. to lack of education where the person didn’t attend his school lack of food.
  2. From politics.
  3. To access of services like of access to school or health service.
  4. Lack of available jobs.
  5. Conflict- likes wars, etc.
  6. By someone with physical disabilities.

Absolute poverty can be defined by the World Bank as having an income below 1.90 dollars per day.

It was accepted traditionally all over the world. And some causes of absolute poverty are low Price –consumption curve (PCC), low Per Capita Income (PCI), lack of income, etc.

The term absolute poverty covers basic needs of living. In day-to-day life, we often hear about the rise of poverty. This mainly refers to relative poverty which is based on the average income levels of a country. Absolute poverty covers only basic requirements. It can be reduced if there is control over overpopulation due to which liabilities of jobs will be higher.

What is Relative Poverty?

Relative poverty means a person cannot afford to spend their money more than their basic requirement. Thus a person can be poor in a relative sense or cannot be in terms of it. It can be observed internationally or within society. We can say relative is an injustice to someone who is facing it. Relative poverty has chances of changing over time, as the wealth of the society increases, the amount of income and resources will increase as well.

Relative poverty is stated to be universal and used to measure or compare between other countries. The people who fall under these criteria are like to be said below the poverty line or above the poverty line.

Relative poverty can be changed over time or it can be permanent. It is different in places, nation to nation. Relative poverty depends upon the development of the nation. Relative poverty is present overall in countries or nations.

It was conceptualized by Prof. Peter Townsend.

 Many causes lead to relative poverty some of them are poor health, education, unemployment, etc.

The Main Difference Between Absolute Poverty and Relative Poverty

  1. Absolute poverty means lack of income and lack of standard requirement for living whereas relative poverty means a person cannot afford to spend their money more than their basic requirement.
  2. Absolute poverty can be changed by the time when relative poverty cannot be eradicated.
  3. Absolute poverty is not universal and also not to be necessarily present in every county but relative poverty is said to be universal and it is present in every nation or country.
  4. A person that comes under absolute poverty lies under the poverty line but in the case of a relative, it lies above the poverty line.
  5. Absolute poverty can be reduced if there is control in population, employment, etc.  But relative poverty can be reduced if the difference between the rich and poor is minimized.
  6. Absolute poverty is said to be mass poverty but relative poverty is said to be inequalities between the people.

Conclusion

From the above discussion, we can conclude that due to inequalities there is an impact on people’s lives due to their low wages. And education and health care play a crucial role in poverty. If the person is uneducated they will face the problem of seeking or finding a job.

The above two terms- Absolute and Relative poverty is related to it shortage of income, lack of basic daily needs.

References

  1. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-4991.2000.tb00954.x
  2. https://content.iospress.com/articles/journal-of-economic-and-social-measurement/jem00192