Question

Briefly compare and contrast poverty and economic inequality.

Answer 1

Poverty is the state of not being able to afford the basic minimum necessities for sustainence of life like shelter, food, clean drinking water etc.

Economic inequality on the other hand refers to the inequality which is based on two concepts ie wealth and income inequality. It means unequal distribution of resources within an economy.

These two concepts could be same as well as different. When there are more poor people or high rates of poverty in an economy, and the economy is doing well in terms of GDP and growth rate, then it implies that there is higher economic inequality ie there exists huge difference in wages and living standards. So here poverty and economic inequality are from the same source.

But these could be different in case when the economic disparity is the difference between the high and low income, which does not necessarily mean that the low income people are poor. A country could have high standards of living and within that people earning relatively low income than others which could mean economic disparity exists, but this won't imply that the low income earning people are poor. They are in relative terms earning less, but can sustain the basic needs of food , clothing etc.

Hence economic disparity and poverty are not always the same.

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