4.2 Poverty and Inequality

Question 1

absolute poverty and causes

Answer 1

When a household does not have sufficient income to sustain even a basic acceptable standard of living
/to meet people’s basic needs

multi-dimensional - about more than very low income per capita

caused by population growth > GDP growth
savings gap
absence of public services
endemic corruption
high levels of debt and repayment
civil wars and natural disasters
low rates of formal employment
absence of property rights

Question 2

relative poverty

Answer 2

level of household income considerably lower than the median level of income within a country

less than 60% of median income in UK

occurs because income and consumption are skewed across households, communities and regions

causes:
cuts in top rates of income tax, leading to increase in richer households disposable income
surging executive pay
regressive impact of high food and energy prices