Relative vs Absolute poverty… What’s the difference?

When you’re living in poverty, the last thing you worry about is the technical term for what you’re going through. Instead, you think about how to get enough food on the table - how to make sure your family has a safe place to sleep.

But it’s also helpful - if we truly want to see a world without poverty - for us to have the right language to be able to discuss these issues clearly and specifically.

Here are a few terms that help us do that…

Relative Poverty

a.       When households earn 50% of the average household income in their country (or less).

b.       The condition of not having enough income to maintain an average standard of living in the country you live in.

The two definitions above work together to present a full picture of relative poverty. There is both a statistical measure (50% - or less – of the average income) and a wider concept: that poverty is relative to the society you live in.

Relative poverty is perhaps the best measure to compare country against country. It changes as the wealth of a nation changes and is a useful tool for making comparisons.


Absolute Poverty

The condition of not having enough income to afford basic necessities like food, shelter and education.

Absolute poverty takes a broader view – defining poverty not in relation to income but instead what that income can buy you.

The strengths of this approach are that it gets straight to the core issue of poverty – that many people cannot afford essential things like food and education for their children.

However, it is difficult to use this definition to compare across different circumstances.

If you want to buy a loaf of bread in Norway it will cost you just under the four dollar mark – in Kenya however it costs a little over 50 cents.

So each country needs its own definition of what absolute poverty looks like for their inhabitants – and what level of income is needed to maintain a good quality of life.


Opportunity poverty

A concept that we at Traidcraft Exchange come across frequently is the poverty of opportunity. This is where people – usually living in rural areas of developing countries – have very few options when it comes to making a living.

For many people, if they don’t make money from what little land they have, they struggle to make any money at all.

And there are many even more disadvantaged – people who have no land, people with disabilities or women battling deep-set gender discrimination.

It’s in these circumstances that we give people – especially those most in need - the chance to earn more so they can provide a better future for their families.

Through peer support, diversification and a network of helpful contacts we start to see progress – and poverty, both relative and absolute, starts to become a little less severe.

To find out more about how we reduce poverty and promote opportunities to earn, sign up to our email list…

J McNaughton