Question

Question 5 from chapter 17: "Is fighting relative poverty an appropriate policy for the government of a highly affluent society to pursue? Explain your position."

Rycroft, Robert S. 2018. Economics of Inequality, Discrimination, Poverty, and Mobility, 2nd Ed. NY: Routledge.

Answer 1

As relative poverty the name suggests is generally the concept of the developed economies where poverty is calculated by comparing different income groups within the country. For this the people of that country are categorised into different income groups i.e. smaller income groups are compared with higher income groups. In this poverty is defined. So unlike absolute poverty, it takes income of the individual into consideration. Being relatively poor does not necessarily imply being absolutely poor but it can still lead to social isolation and unhappiness.

Relative poverty is a form of social exclusion. It depends on the level of development of a country. It's about giving everyone the chance to enjoy the same living standards so that everyone has an equal opportunity to live their lives to their full potential. In that sense fighting poverty is about unlocking huge, untapped economic potential within each country.

Therefore it is important to fight with relative poverty so as to increase the social welfare and to reduce the differences between the different sections of the society.