Poverty has many forms and types, and the terms “absolute” and “relative” poverty are two of the basics types defined by organizations to set families who lie specific percentages below the poverty line.
Absolute vs Relative Poverty
The difference between absolute and relative poverty is that absolute poverty is a situation where the family cannot even meet the basic needs for survival, while relative poverty talks about families who barely meet the average needs.
The term absolute poverty is assigned for households who due to insufficient income, are unable to attain essential resources and amenities, in simple words, here the family is not able even to meet the basic needs for survival.
The term relative poverty is used to define a household where the income is at the bare minimum or just below the median income needed for a family. Here the family is almost able to attain an average standard of living.
Comparison Table Between Absolute and Relative Poverty (in Tabular Form)
|Parameters of Comparison||Absolute poverty||Relative poverty|
|Definition||Household workers here earn below a significant income level or close to no income at all to attain basic needs.||Families here earn the bare minimum income to sustain a living that is lower than median income earning families.|
|Classification of income/Poverty threshold||The level of income earned here varies from region to different countries because the poverty threshold is low.||Here, the families earn below 50% the income threshold of other earning families and are lower than 1.90 dollars/hour.|
|Basic resources||Here, families cannot even purchase or attain the necessary resources and amenities that are essential for survival.||The earning members of the families just get enough money to sustain themselves. Their lives are better in comparison.|
|Causes||Natural disasters, conflicts, child labour and crippling debt, are few causes for this type of poverty.||Here, the causes are unemployment, market inequalities, and even poor health.|
|Getting out of poverty||Here, programs are very few in terms of providing money without employment or educational qualifications.||Here, there are non-cash programs and others that provide money for daily wage workers.|
What is Absolute Poverty?
Many types of poverty show how difficult life can be in terms of financial status and living standards. But, absolute poverty is a type that takes into account those families, household members, or even individuals who earn well below the poverty threshold and cannot afford the basic needs.
Absolute poverty cannot be compared easily due to the varying living standards of different countries. If we take into consideration that an average member of this category earns about 500-100 dollars a year, their chances of survival vary from region to region
For example, – People who earn 500-1000 dollars a year would be able to survive on that income and avail bare minimum resources if they lived in a third world country. But, the same does not apply if that person moved to a developed country, where the cost of living prices are high.
There are a few causes that could lead to absolute poverty, and some of these are also extreme cases that push a family or an individual below the poverty line, such as –
- Natural disasters such as floods and earthquakes usually destroy homes or offices and leave citizens in a homeless state without any shelter. Families lose everything in this case and are pushed to fend for necessities.
- Conflicts between people, wars, disputes, usually displace people from their homes and force them to look elsewhere for shelter. In this case, displaced migrants are seen to come under the category.
- Debt is also a primary reason that causes absolute poverty. If the bank takes away all your assets, or the individual has gone bankrupt, then they might be forced to the streets.
What is Relative Poverty?
The families or individuals who earn less than the median income-earning families of the nation come under the category of relative poverty. It would mean that they make only enough to sustain themselves and keep themselves afloat in the economy.
Members here can only afford the necessary amenities, such as a roof over their head and food to eat and live on a hand to mouth basis. Which means, they use whatever they earn in one day to purchase resources for that day.
A few of the causes of relative poverty include –
- Unemployment, which could be due to recession in the country or region, and workers barely get by on their savings.
- Due to inequalities in the job market, some individuals do not get the opportunity to earn any money.
Access to primary healthcare is also restricted to people belonging to this sector, and hence why poor health and fatal calamities also are some causes for why they are unable to sustain themselves. Many programs help individuals to get back on their feet, such as non-cash programs in many countries.
Main Differences Between Absolute and Relative Poverty
- Absolute poverty constitutes of people who earn less than the negligible incomes required for sustenance. Relative poverty is when a person earns just below the median income of a working individual.
- In absolute poverty, a person cannot afford basic amenities. In relative poverty, a person I able to buy only essential resources.
- Income class of absolute poverty is close to negligible and varies from country to country. Relative poverty individuals earn less or almost 1.90 dollars an hour.
- Causes of absolute poverty are natural disasters and debt. Reasons for relative poverty are unemployment and poor health.
- Absolute poverty is difficult to get out of as compared to relative poverty where the individual can get into non-cash programs.
There are many causes that inflict poverty upon families and individuals and force them not to avail even the necessary resources needed for sustenance. Absolute poverty causes people to not be able even to get basic amenities such as food, water, shelter, or healthcare.
While, in relative poverty, the person can attain primary resources and needs, but their income is well below the median or average income of earning familines. This restricts them from having any comfort in life, and due to causes such as unemployment, they are pushed further and further below the poverty line.
Families here still have a chance to get out of this type of poverty through the help of government-funded programs and external support, and so there is still some hope for people.
Table of Contents