Absolute Poverty

Absolute poverty has come to have two quite different meanings. The root idea is that an individual or family is in poverty if it cannot afford the basics of human life: food, clothing, and shelter. But usage has bifurcated. Absolute poverty in developing countries is assessed using very lean standards; for example, the World Bank estimates how many people live on less than $1.25 a day. Absolute poverty in developed countries is usually measured by poverty lines that are absolute only in the sense that they arefixed rather than automatically adjusted when living standards change. The best known of these measures is the official U.S. poverty line.

It makes no sense to discuss absolute poverty without also referring to the alternative approach in whichrelative poverty lines are used. The underlying idea, endorsed by most poverty researchers in Western Europe, relates to social inclusion/exclusion. It is held that community standards about what it means to be poor are not fixed, but are relative to mainstream living standards and so rise as mainstream or average standards rise. In addition to goods required to meet basic requirements, people need certain goods that, if lacking, make them feel ashamed and, in that sense, socially excluded from mainstream society.

Definitions of poverty, far from being value-neutral, are hotly disputed in the political arena. Conservative policymakers generally endorse absolute definitions, if they accept the existence of

poverty at all in modern societies. Using an absolute definition leads to the policy goal of bringing people up to a “decent minimum” standard of living. American liberals and European social democrats, by contrast, usually favor relative definitions. Poverty lines then rise in line with average or median incomes, and there is an implied value judgment that the poor should share in the fruits of economic growth.

The history of research inquiring into absolute poverty reflects the bifurcation of meanings. The first major survey of poverty(Life and Labour of the People of London, 1903) was conducted in Britain by businessman-philanthropist Charles Booth. Evidence was collected from school attendance officers, rather than directly from the public, with the focus being on two necessities of life: adequate diet and housing. As mentioned earlier, the World Bank has maintained this focus on absolute necessities and extreme poverty by regular publication of estimates of the numbers of people worldwide who live on less than $1.25 (previously $1) a day and less than $2 a day. The latest available figures are for 2005, when 1.4 billion people, or 26% of the world's population, lived on less than $1.25 a day. The first Millenium Development Goal is to halve the number living at this level between 1990 and 2015. The Nobel Laureate in economics, Amartya Sen, conceives of absolute poverty as an absence of freedom to exercise effective life and career choices. In order to exercise effective choice, people need a range of “capabilities and functionings.” Based partly on Sen's thinking, the United Nations now [Page 2]publishes the Human Development Index, which gives equal weight to indicators relating to per capita income, educational development, and health (life expectancy).

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