Most people have an intuitive idea of what it means to be poor – constantly worrying about money, not being able to access good health care and education for yourself and the people you love, being vulnerable to shocks like economic recessions, illness, or a political upheaval. Notwithstanding this general notion of what poverty is, the truth is that in some countries being poor means you get one meal of broken rice a day instead of two, while in other countries it can mean struggling to pay the electrical and heating bills.
Absolute vs. Relative Poverty
What is considered poor varies because poverty can be felt as relative deprivation. People compare themselves to others, in terms of the food they have, the things they buy, and how nice their house is. Even if you’re not starving to death, you can be poor if your income and standard of living is well below the average in your society. So many measures of poverty focus on this relative deprivation, for example how many people have incomes below 50 percent of the national median income. Eliminating poverty, with this definition, depends very much on reducing inequality. Measures of inequality, such as the Gini coefficient, measure how many people are at the top and bottom of the income distribution rather than the middle.
Other definitions focus on absolute poverty. So, for example, you’d be considered poor if your income was below a certain level that was considered the absolute minimum necessary for a decent life. The World Bank’s dollar-a-day measure of poverty is one of these absolute-poverty measures that classifies anyone who survives for a dollar or less a day as poor. But even this is not simple, because one US dollar won’t buy you the same thing in urban Canada as in rural Bangladesh. You’d get a half of a loaf of mediocre bread in Canada, but you could get many more meals’ worth of roti bread in rural Bangladesh for a US dollar. So incomes have to be adjusted internationally, using a device called PPP (purchasing power parity), to make them comparable. Most measures of absolute poverty use income per person per head – known as GDP per capita PPP.
Income vs. Broader Poverty
But a lot of people object to this income-based definition of poverty. Firstly, it doesn’t take into account inequality – a few people in a country could be really rich, and since GDP per capita is the average individual income, it would seem like the people in the country weren’t poor. This is a huge problem. Secondly, it only captures low incomes, when in fact what makes people poor isn’t just the lack of income but the lack of access to food, to housing, to health care and to basic human rights. The concept of human development tries to capture this multi-dimensional nature of well-being, which is not only affected by the economic but also the social, political, spiritual and environmental.
Amartya Sen won a Nobel prize for his theory of entitlements, which basically says that people are poor and famines develop not necessarily because they don’t have money, but because they don’t have effective access to and claim over food and other needs. They are vulnerable, without entitlement, and that’s why they stay poor – not because there isn’t enough food, housing or health care out there somewhere. The UN Development Program (which, incidentally, has helped to fund our recent Stand Up activities) has a measure called the Human Development Index (HDI) which includes a combination of child mortality, literacy rates, and GDP per capita to measure poverty. There’s also another definition of poverty that became popular in the late 70s and early 80s that focuses on people’s basic needs. Forget all this chatter about measurement, they said – what people really need is enough water, sanitation, a minimum amount of food, and shelter. The poor can be made better off by giving them basic materials. There is also, clearly, a difference in how poverty is experienced in developed versus developing countries. A person who might be considered poor here in Canada might not if they were living in Lebanon. Relative poverty is more important here in Canada and other developed countries, while in developing countries absolute poverty – including not having enough food – is more important. Both kinds of poverty are relevant.
The Millennium Development Goals use absolute measures of poverty, like the dollar a day poverty line, to pursue a vision of poverty reduction aimed at fulfilling basic needs. National governments’ poverty lines are often linked to how many people, given inequality and national average income, don’t have the money for basic diet and shelter. These measures vary – for example, in India, only 23% of the population is deemed to be in poverty – not too far the percentage some say live in poverty in Canada!
What is poverty for you? In getting a better sense of what it is, you’ll help be able to convince others to take the steps necessary to eradicate it.
—From Make Poverty History
