Absolute poverty is an economic measurement that determines an individual’s financial ability to obtain the basic necessities of life. It is also a measurement that used to justify investing monies to help developing countries and, in some respects, even the poverty-stricken in our own country. However, absolute poverty is not always a reliable measurement of need. Why? Because of the units used to quantify poverty levels.
Measuring absolute poverty requires knowing what constitutes a basic necessity. For example, the necessity of food is determined by the number of calories an individual needs to continue living and thriving. Where heating a home is concerned, necessity would be measured by the BTUs required to maintain a habitable temperature. What absolute poverty does not take into consideration are the means by which basic necessities are met.
If a measurement of absolute poverty dictates a family needs $100 per month to meet its caloric intake, what is that money being spent on? Spending $100 on generic grocery store items and farm fresh produce will get you a lot further than spending the same amount on brand names and gourmet foodstuffs. Therefore, there is built-in disparity that is not accounted for.
Relative Poverty Level
Some economists maintain that the relative poverty level is a better measurement than absolute poverty. Relative poverty takes into account the generally accepted living standards in a given region. This makes it easier to define poverty levels between regions with distinctly different economic variables.
If absolute poverty were used to measure the difference between welfare recipients in American cities against the poorest of people in developing countries, for example, the American welfare recipients would still come out seeming to be relatively wealthy. On the other hand, the relative poverty scale demonstrates that some of our welfare recipients do live in poverty as compared to the generally accepted American standard of living.
Is absolute poverty a reliable measurement? Not always. Sometimes relative poverty gives us a clearer picture of reality.
