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It is estimated that a third of children in the UK (approx 4.5 million) live in poverty. In
understanding the problem of poverty, it is important to consider the meaning, measurement and
consequences of poverty, as well as the policy measures that a government can take to reduce

Absolute Poverty.
People are said to be in absolute poverty when their income is insufficient for them to be able to
afford basic shelter, food and clothing. Even in more affluent countries there are some people who
do not have any housing. Of course, the problem of absolute poverty is more extensive in poor

Relative Poverty.
While someone in the UK may consider themselves to be poor if they are living in low quality
accommodation, have a TV but no VCR/DVD, and can only afford to go out once a week to socialise
with their friends, someone in a poorer country might regard themselves as very affluent if they
had the same standard of living. This reflects the difference between absolute and relative

People are relatively poor when they are poor in comparison to other people. They are those who
are unable to afford a certain standard of living at a particular time. As a result, they are unable
to participate in the usual activities of the society they live in.

The concept of human poverty, introduced in the Human Development Report (1997), sees poverty
as a situation where people lack not only material goods, but also lack access to those items needed
to enjoy a long, healthy and creative life including self-esteem and the respect of others.

Relative poverty varies between countries and over time. Someone regarded as poor in the USA
might be regarded as relatively rich in, say, Ethiopia. Twenty years ago, in the UK a personal
computer might have been regarded as something of a luxury for a household, but now (in order to
participate in the activities of a society) it might be viewed as a necessity. If a country
experiences a rise in income, then absolute poverty will fall. However, if those people on high
incomes benefit more than those people on low incomes, then relative poverty may rise.
Measuring Poverty.
To assess the extent to which poverty is a problem, it has to be measured. Economists often
define as poor those whose income is less than 60% of the average income (adjusted to take
account of family size). The current Labour government has set itself the target of eradicating
child poverty in the UK by 2020, and it now publishes an annual poverty audit. This includes
poverty statistics and assesses the government’s performance against a set of indicators. Among
the indicators included are :







Particular groups are more prone to poverty than others. These include the old, the disabled,
the sick, lone parents with young children, the unemployed and those from ethnic minorities.
For example, in 2005/06, 32% of lone parent families were in households below 60% median

Causes of Poverty.
The amount of poverty experienced depends on the level of income achieved and how it is
distributed. The reasons why particular people are poor include :

      Unemployment.

      Low wages.

      Sickness and disability.

      Old age.
      The poverty trap.

      Being a lone parent.

      Reluctance to claim benefits.

The Effects of Poverty.
Poverty, especially absolute poverty, has a number of serious adverse effects on those who
experience it. The poor tend to suffer worse physical and mental health and have a lower life
expectancy. The children of the poor suffer in terms of receiving less education, and it is often of
a lower quality. They are less likely to stay in education post-16, have fewer books at home and
attend low performing schools. They are also less likely to have a personal computer in the home
and to travel abroad. All of these factors tend to result in them gaining fewer qualifications and a
vicious circle of poverty developing. The poor can also feel cut off and even alienated from society,
unable to live the type of life that the majority can experience.

Government Policy Measures to Reduce Poverty.
Governments may seek to reduce absolute poverty by introducing measures which raise the income
of the poorest groups. They may also try to reduce relative poverty by introducing measures which
also reduce the gap between the rich and the poor. Among the various measures that they might
use are :

      Operating a national minimum wage.

      Cutting the bottom rate of income tax.
   Increasing employment opportunities.

   Improving the quantity and quality of education and training.

   Making use of the “trickle-down” effect.

   Increasing benefits.

   Increasing the provision of affordable child care.

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