Poverty and Inequality

Definitions

Poverty and inequality are interrelated but distinguishable concepts. Poverty entails the lack of certain requisites for a decent standard of living. How to define what goods or circumstances constitute poverty is a matter of heated academic and practical debate. Definitions of poverty depend upon a prior understanding of what persons need to live within their society. A bare-minimum conception of poverty is the lack of what is required in order simply to stay alive. Starvation is one severe result of undernutrition and/or hunger, which are forms of poverty. Hunger-focused definitions depend upon nutritional minimums—that is, those nutritional inputs (in terms of calories, proteins, vitamins, etc.) that allow a person to subsist.

Beyond sheer survival, the question of what persons really need in order merely to escape poverty is by no means a settled one. Healthy food and potable water are widely agreed upon as requisites, but also important are decent housing, clothing appropriate for one's climate, and basic medical care. Many [Page 1219]social scientists assert (explicitly or implicitly) some “hierarchy” of needs, such as Abraham Maslow's (1954) pyramid of needs, conceptions that place socalled subsistence needs as more fundamental than “higher-order” needs, such as self-actualization. Similarly, most basic definitions of poverty focus on material goods that address physical needs. In the standard, neoclassical model of economics, income becomes the basic currency of analysis; income is seen as a reasonable indicator of utility or welfare. As will be discussed, however, income can be a very imprecise indicator of one's standard of living.

While poverty reflects persons' unfavorable condition vis-à-vis some societal standard, inequality is a concept that has to do with the interrelationships among all segments of a group—the well-off, the poor, and those in between. That is, for any particular good, poverty is a reality of those at the bottom of that good's distribution, whereas inequality is a phenomenon of the distribution as a whole. Even as poverty and inequality often exist together, societies can have relatively high poverty and low inequality (e.g., India), or relatively low poverty (by international standards) and high inequality (e.g., the United Kingdom).

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