page_title: Poverty
section_title: Relative poverty
hierarchical_section_title: Poverty / Classifications of poverty / Relative poverty
caption_attribution_description: English: Extreme poverty as a proportion of world population. Source: The World Bank http://siteresources.worldbank.org/INTPOVCALNET/Resources/Global_Poverty_Update_2012_02-29-12.pdf
context_page_description: Poverty is not having enough material possessions or income for a person's needs. Poverty may include social, economic, and political elements.
  Absolute poverty is the complete lack of the means necessary to meet basic personal needs, such as food, clothing, and shelter. The threshold at which absolute poverty is defined is always about the same, independent of the person's permanent location or era.
  On the other hand, relative poverty occurs when a person cannot meet a minimum level of living standards, compared to others in the same time and place. Therefore, the threshold at which relative poverty is defined varies from one country to another, or from one society to another. For example, a person who cannot afford housing better than a small tent in an open field would be said to live in relative poverty if almost everyone else in that area lives in modern brick homes, but not if everyone else also lives in small tents in open fields.
context_section_description: Relative poverty views poverty as socially defined and dependent on social context, hence relative poverty is a measure of income inequality. Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income. There are several other different income inequality metrics, for example, the Gini coefficient or the Theil Index.
  Relative poverty is the "most useful measure for ascertaining poverty rates in wealthy developed nations". Relative poverty measure is used by the United Nations Development Program (UNDP), the United Nations Children's Fund (UNICEF), the Organisation for Economic Co-operation and Development (OECD) and Canadian poverty researchers. In the European Union, the "relative poverty measure is the most prominent and most-quoted of the EU social inclusion indicators".
  "Relative poverty reflects better the cost of social inclusion and equality of opportunity in a specific time and space."
  "Once economic development has progressed beyond a certain minimum level, the rub of the poverty problem – from the point of view of both the poor individual and of the societies in which they live – is not so much the effects of poverty in any absolute form but the effects of the contrast, daily perceived, between the lives of the poor and the lives of those around them. For practical purposes, the problem of poverty in the industrialized nations today is a problem of relative poverty (page 9)."
  In 1776 Adam Smith in the Wealth of Nations argued that poverty is the inability to afford, "not only the commodities which are indispensably necessary for the support of life but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without".
  In 1958 J. K. Galbraith argued that "People are poverty stricken when their income, even if adequate for survival, falls markedly behind that of their community."
  In 1964 in a joint committee economic President's report in the United States, Republicans endorsed the concept of relative poverty. "No objective definition of poverty exists... The definition varies from place to place and time to time. In America as our standard of living rises, so does our idea of what is substandard."
  In 1965 Rose Friedman argued for the use of relative poverty claiming that the definition of poverty changes with general living standards. Those labeled as poor in 1995 would have had "a higher standard of living than many labeled not poor" in 1965.
  In 1979, British sociologist, Peter Townsend published his famous definition, "individuals ... can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong (page 31)".
  Brian Nolan and Christopher T. Whelan of the Economic and Social Research Institute (ESRI) in Ireland explained that "Poverty has to be seen in terms of the standard of living of the society in question."
  Relative poverty measures are used as official poverty rates by the European Union, UNICEF, and the OECD. The main poverty line used in the OECD and the European Union is based on "economic distance", a level of income set at 60% of the median household income.
  Many wealthy nations have seen an increase in relative poverty rates ever since the Great Recession, in particular among children from impoverished families who often reside in substandard housing and find educational opportunities out of reach.
  Poverty rate is a calculation of the percentage of people whose family household income falls below the Poverty Line. The United States federal government typically regulates this line, and typically the cost of the line is set to three times the cost an adequate meal. This line is subject to change based on the level of price changes and size of the family. According to census, poverty rate helped determine that around 14.8% of U.S population had household incomes that was below t
caption: This graph shows the proportion of world population in extreme poverty 1981–2008 according to the World Bank.
exif: {}