4.2 Poverty And Inequality

Question 1

What is absolute poverty

Answer 1

When people are unable to afford sufficient necessities to maintain life.

Question 2

How does the world bank define absolute poverty

Answer 2

Anyone living on less than US$1.90 a day to be living in absolute poverty

Question 3

How does economic development correlate with absolute poverty

Answer 3

The more developed a country, the fewer people in absolute poverty. In developed countries the government tends to intervene to attempt to provide the necessities

Question 4

What types of poverty is a bigger issue in the UK

Answer 4

Relative poverty

Question 5

What is relative poverty

Answer 5

Regards peoples income compared to others in their area.

Question 6

When is someone said to be in relative poverty

Answer 6

If their income falls below an average income threshold for the economy, they are at the bottom end of the income scale.

Question 7

How is relative poverty classed in Britain

Answer 7

Those with an income of less than 60% of median household income. (£27,300 in 2017) after deducting household costs.

Question 8

How many people are in relative poverty in the UK

Answer 8

14 million

Question 9

What is the poverty line

Answer 9

The minimum level of income deemed necessary to achieve an adequate standard of living in a given country

Question 10

What is the poverty trap and who does it affect

Answer 10

When the tax and benefits system creates a discentive to look for work or work for longer hours.
By working longer hours, individuals may find they lose income due to the income tax and national insurance contributions as well as losing some income-related state benefits.

Affects people on low incomes

Question 11

What is poverty caused by

Answer 11

Unemployment
Lack of skills
Health problems
Income dependency

Question 12

What are the two main causes of growth in relative poverty

Answer 12

Those on higher salaries see larger income growth than those on lower salaries

Changes in government spending and taxation

Question 13

Why has relative poverty been growing in the UK

Answer 13

Growing inequality in wages growth (the wages of the richest are now 170 times more than the average worker) those in the public sector have had low wage increases.

Deindustrialisation has increased the number of service sector jobs which tend to be lower paid.

Growth in underemployment, zero-hour contracts, part time jobs and temporary jobs.

Decline of trade unions means workers can’t bargain for higher wages.

State benefits have fallen in relative value whilst taxes have become more regressive

Moreover long term and structural unemployment has risen