4.2.1 Absolute and Relative Poverty

• Absolute Poverty

  Being unable to afford necessities to maintain life e.g. Food, shelter, safe drinking water, information. The World Bank defines this as living on less than $2.15 a day
• Relative Poverty 


  When an individual's income falls below a particular percentage/ threshold of median household income e.g 60% is the UK poverty line and 1/5 of UK citizens are in relative poverty
• Poverty Line


  The minimum level of income required to achieve an adequate standard of living
• Poverty Trap


  The tax and benefits systems disincentivises people from working longer hours or looking for work as they risk losing benefits or paying more tax leading to lower productivity
• Causes of Changes in Relative Poverty


  -Inequality in wage growth

  -Changes in government spending and tax

  -Growth in under-employment, zero-hour contracts, part-time jobs and temporary jobs

  -Decline of trade unions as workers are unable to bargain for higher wages

  -Rising long-term and structural unemployment