Poverty is the condition of not having access to material resources, income, or wealth.
Poverty is usually measured as either absolute or relative poverty. Absolute poverty refers to a set standard which is consistent over time and between countries. The World Bank uses this definition of poverty to label extreme poverty as living on less than US $1.25 per day, and moderate poverty as less than $2 or $5 a day. Relative poverty explains poverty as socially defined and dependent on social context. Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income. Relative poverty measures are used as official poverty rates in several developed countries and are measured according to several different income inequality metrics.
Poverty may correspond not only to lack of resources, but to the lack of opportunity to improve one’s standard of living and acquire resources. The term for a person’s ability to change their economic status in a society is known as social mobility. If there is a high level of social mobility, it is relatively easy for people to leave poverty. Easy access to higher education and prevalence of well-paying jobs contribute to social mobility. While some factors that contribute to poverty are the result of individual choices, such as dropping out of school or committing a crime, other factors affect poverty that are beyond individual control.
Social exclusion occurs when individuals and communities are blocked from rights and opportunities that are available to others. Social exclusion is a concept used in many parts of the world to characterize forms of social disadvantage. It refers to processes through which individuals and entire communities of people are systematically blocked from rights, opportunities, and resources that are normally available to members of society and that are key to social integration. These include housing, employment, healthcare, civic engagement, democratic participation, and legal due process. Poverty and exclusion are two different concepts. Poverty is a distributional outcome, whereas exclusion can be defined as process of declining participation, solidarity, and access. It is quite difficult to measure social exclusion quantitatively, as social exclusion is relative, sensitive, and variable.
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Key Points
• Poverty can also refer to the lack of opportunity to improve one’s standard of living (or poor life chances).
• Social mobility describes a person’s flexibility to change their economic status.
• If there is a high level of social mobility, it is relatively easy for people to escape poverty; if social mobility is low, it is very challenging for people to escape poverty.
• Economic measures of poverty include access to material needs, typically necessities such as food, clothing, shelter, and safe drinking water, measures of income, or measure of wealth.
• Social measures of poverty include access to information, education, health care, or political power.
• Absolute poverty refers to a fixed threshold based on access to income and material resources, while relative inequality is measured using a region’s median income and standard of living and therefore reflects income inequality.
• Relative poverty explains poverty as socially defined and dependent on social context. Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income.
• Social exclusion is distinct from poverty. Poverty is a distributional outcome, whereas exclusion can be defined as the process of declining participation, solidarity, and access to opportunities.
• Social exclusion is distinct from poverty. Poverty is a distributional outcome, whereas exclusion can be defined as the process of declining participation, solidarity, and access to opportunities.
• Unemployment or lack of transportation can be causes of social exclusion.
• The problem of social exclusion is usually tied to that of equal opportunity, as some people are more subject to such exclusion than others.
Key Terms
Absolute poverty: A measure of poverty based on a set standard that is consistent over time and between countries, referring to the ability of individuals or groups to meet their basic needs.
World Bank: A group of five financial organizations whose purpose is economic development and the elimination of poverty.
Relative poverty: A measure of wealth inequality, describing an individual or group’s wealth relative to another individual or group.
Social mobility: The movement of individuals, families, households, or other categories of people within or between social strata in a society.
Social exclusion: processes through which individuals and entire communities of people are systematically blocked from rights, opportunities, and resources that are normally available to members of society and that are key to social integration.