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Current time:0:00Total duration:7:30

Absolute and relative poverty

Video transcript

there are two different ways that we could think about poverty the first way is is a poverty so bad as to threaten the survival of the person or is a poverty such as to basically exclude them and sideline them from society so let's have a look at this graph on the vertical axis let's label that as resources now we have to think that there must be a minimum level of resources a human being needs in order to survive and let's draw an arbitrary line on this graph let's draw this line here and when we when we mentioned and when we mention resources the kind of things I'm talking about are shelter food and water including things like sanitation so anything really that falls below this line is really threatening survival now when we mentioned resources one of the things that we can and think about is we could think about it as resources or we could think about it as a level of income and you may have actually heard the term many people are living brin below one dollar a day or two dollars a day so oftentimes we actually use a level of income to denote this minimum level of resources that are needed now what we're talking about here is a specific idea that idea of absolute poverty and absolute poverty has an absolute value associated with it an absolute level at which if you go beneath it survival is threatened one of the things that absolute poverty also kind of brings up is the fact that this level applies no matter where you are so when we say absolute poverty is one to two dollars a day that could be whether you live in Africa Canada or even the Arctic that also opens us up to a degree of debate because what we do know is that really we're using these arbitrary income or resource cut-offs but people living in the Arctic for example will require perhaps a lot more resources and the minimum resource R will be much higher because they have to have a lot of heating expenses it's much harder to find food so really there is a degree of real-life variability that absolute poverty may not may not really consider so let's go back to this line this absolute poverty line and let's look at the horizontal axis and label this as time and over time this is absolute line so it just continues really unchanged unless we decide to redefine it and this again is our absolute poverty line so one of the things that can potentially happen in a society is that the median level of income that average or the middle level of income in a society particularly developing a poor country can gradually rise as a country gets richer and when it does so we find that less and less people may as either the numbers of a poor may live in absolute poverty and more and more people will live above this absolute poverty line so one of the things that we can see is that if in general a society is becoming richer as to say kind of equally becoming more wealthy that may very well lead to a decrease in absolute poverty so really when we think about absolute poverty we're talking about these really small numbers one to two dollars and we're really focusing on developing countries but let's think about developed countries and countries where the income levels and resource levels are actually much higher do they have any poverty now we've got a very very similar graph and again on the heart on the vertical axis figure for resources and on the horizontal axis we're going to put time and what we have privileging previously mentioned is that absolute poverty line so let's draw that in here and really the absolute poverty line can mean can be different values and different definitions and different organizations can define it based on income or resource and define it differently okay let's consider the United States so instead of thinking about one or two dollars a day in the United States the median per person income is actually above eighty dollars a day so it could actually be much higher on this level so the resource level of those individuals is actually much higher than this absolute poverty line so does that mean that we don't have any people living in poverty in the United States this is where things can actually change because we can use a different marker now instead of saying absolute poverty and thinking about poverty as being different arbitrary cut-offs such as one or two dollars a day why don't we start to think about poverty as actually being what do we think about poverty as being a level a percentage level below the median income of a country so in this case why don't we think about the concept of relative poverty I'm going to draw a line and say there's different definition but let's define a relative poverty line as to say it's less than 60% of the median income so much higher than is absolute poverty line but it's actually linked to a country's income and one of the things that we can see now is that if a country's income for example rises up while the absolute poverty line would not change unless we redefine it the median income level would if the income rise in the country is distributed equally would tend to also keep keep track would tend to increase alongside so people will continue to live in this relative poverty one of the important things to think about relative poverty is of what we're saying is relative poverty is not talking about survival because that is absolute poverty what relative poverty is talking about is people whose incomes are so low in their own society that they are basically being excluded from society of being sidelined because their income levels are too low so even if for example they're owning $20 a day which is much more than an absolute poverty line they're still not able to participate in society to have a to have a meal to engage in the educational process to gain suitable transport in societies where the median income per person and I should put that down here it's actually this is this is per person is much higher so this really separates out this absolute poverty line which is a measure across all countries and it tends to be a single standard from this relative poverty which is related to the society or the country or the environment where an individual is living absolute poverty focuses on survival the basic necessities of life was relative poverty really talks about being excluded from society and relative poverty can track with a country's per person income going up and down was absolute poverty tends to stay this stay the same