What is poverty? What types of poverty are there?

In essence, there are three types of poverty:

Absolute poverty or extreme poverty, is poverty characterized by an income of about one dollar (more recently 1.9 U.S. dollars) per day, according to the World Bank. There are 1.2 billion people in the world who fall into this category. 

Relative poverty

Relative poverty is spoken of in affluent societies where absolute poverty is virtually non-existent, but a poor “underclass” (now also called a precariat).

The relatively poor income is considered to be less than half of the median income (more precisely: median income). 

Feelings of poverty, or even socio-cultural poverty, can be less fixed at concrete income limits.

It is more the consciousness that constitutes this type of poverty. It concerns those who consider themselves ‘poor’ because of their general social exclusion or discrimination, or who are afraid of a deteriorating economic situation or who live in constant fear of poverty. 

Absolute poverty

Absolute poverty is life on the outermost edge of existence. It is characterized by insufficient resources to meet vital basic needs. Absolutely poor people suffer from severe deprivation and must constantly fight for their survival. Absolute poverty is hardly comprehensible to most of the people living in Germany.

The most common indicator of the determination of absolute poverty is the availability of one dollar and less per day for the satisfaction of life

needs. (Recently, the World Bank has set this limit at USD 1.90.) Most of the 1.2 billion people who fall into this category even have significantly less than a dollar at their disposal. They often have virtually no cash at all and try to live exclusively on the yield of their land.

addition to the 1-dollar limit, the World Bank also talks about the 2-dollar limit (also known as moderate poverty).

It is considered an indicator of typical poverty in middle-income countries.

The money available must, of course, also be related to the cost of living, which is on average 30% higher for urban areas than in rural

areas.

Prevalence of absolute poverty

In figures

The number of people who are considered to be absolutely poor, i.e. 1 dollar or less, was still 1.25 billion in 1990, according to the World Bank. By 2004, the number of absolute poor had fallen to 970 million. (The year 1990 as a starting point is important because the first of the 8 Millennium Goals adopted in 2000 aims to halve the number of the absolute poor by 2015 – not in 2000, but in 1990.)

The number of people who have only 2 dollars or less at their disposal, and are therefore still very poor, was 2.65 billion people in 1990.

By 2004, this figure had fallen only slightly to 2.55 billion. It seems more difficult to reduce the number of under-2-dollar earners than to reduce the number of under-1-dollar earners.

The comparison between the two most populous countries on earth is interesting: India and

China. While in India the number of the absolutely poor stagnated or increased over the period between 1990 and 2004 (from 376 to 370 million for the one dollar limit and from 733 to 867 million for the 2 dollar limit), it decreased significantly in China (from 374 to 128 million for the 1 dollar limit and from 820 to 452 million for the 2-dollar limit).

Because China is going through such a positive development, the prevalence of absolute poverty is calculated as a figure that includes both China and exclusive

China. Indeed, it turns out that if you include China, the global number of the absolute poor has diminished over the years, whereas it hardly decreases if you take China out. In concrete terms, this means that if China is taken out, the number of the absolute poor has only slightly decreased from 873 million in 2004 to 841 million. In terms of the two-dollar limit, the number of people affected increased from more than 1.83 billion to almost 2.1 billion. Poor in the countryside and in the city Interesting is the comparison between the absolutely poor who live in the countryside and those who live in the city.

It is clear that most of the absolutely poor are still in rural areas. In 1993, more than 1 billion lived in rural areas and only about 240 million in cities. By 2002, the ratio for the rural poor had shifted somewhat: only 890 million in rural areas, but now 290 million in urban areas. This indicates, on the one hand, a rural exodus to the cities, but on the other hand the difficulty of earning a living in the city. In 1993, the two-dollar limit was 2.2 billion in rural areas and 686 million in urban areas; in 2002, the number of the absolute poor in rural areas was 2.1 billion, and that of the absolute poor in urban areas was 750 million. In percentages, you can also give the absolute poor in percentages, i.e. as a share of the total population, instead of in absolute numbers.

The World Bank study on which this is based follows this proportional development from 1981 to 2004.

In 1981 we found the highest proportions of the absolute poor in the total population in East Asia and the Pacific (with almost 58%), especially in China (with almost 64%).

The South Asia region was also very high (almost 50%) with India below (51%). By contrast, the percentage of the absolute poor in sub-Saharan Africa was only around 42%.

By 2004, some of these percentages had improved

significantly. In East Asia and the Pacific, the percentage of the absolute poor fell from nearly 58% to just 9%. In China, the share fell even more: from 64% to 9%. In South Asia, the share fell from almost 50% to just over 30% (India: from 51% to 34%). For sub-Saharan Africa, on the other hand, the percentages remained almost unchanged: from 42% in 1981 to 41% in 2004. It appears, therefore, that while poverty reduction has made significant progress in South Asia and East Asia/Pacific, the situation has largely stagnated in sub-Saharan Africa. Are there absolutely poor people in Germany?

Yes, most of them are homeless people and street children who have ended up on the streets because of their family situation or addiction

problems. Domestic violence or criminality often also play a role. It is gratifying that there has been a significant reduction in homelessness in recent years. According to the Federal Government’s 2nd Poverty Report, the number of homeless people fell from 530,000 in 1998 to 310,000 in 2003. The number of street children or young people is estimated at 5,000 to 7,000.

Relative poverty

Relative poverty is a lack of material and intangible goods and a limitation of life chances, compared to the prosperity of the respective society. Those who are relatively poor have significantly less than most. In many cases, his income is not enough to lead an acceptable life.

In contrast to the concept of absolute poverty, which refers to subsistence, i.e. to what is absolutely necessary for life, the internationally recognized concept of relative poverty is based on the idea of social

inequality.

In Germany, for example, those who have a maximum of 50% of the median income of a population group are considered to be relatively

poor. A distinction is also made between a “poverty risk” (also known as “mild poverty”) that is estimated at 60% of median income, the actual poverty line, which, as I said, is defined as 50%, and “strict poverty”, which is estimated at 40% of median income. According to the criteria of the European Union, the poor person who has 60% or less of the median income is poor.

Relative poverty, however, must be “relative” because financial income is only one indicator among others and must be seen in the context of other

circumstances. The 2nd Poverty Report of the Federal Government of 2005 therefore rightly states: “Finally, an indirect determination of poverty, such as in the form of income poverty, falls short if other factors (e.g. wealth, debt, health, education, unemployment) have different importance on the same income.” Above all, the assessment of relative poverty is about the actual standard of living or the actual satisfaction of basic needs.

Because the so-called “income poverty” does not sufficiently reflect the social status, one tries with the “life situation concept” a further

description. This concept interprets poverty as undersupply in various areas, such as housing, education, health, work, income, and technical and social infrastructure. Similarly, a study by the Workers’ Welfare Association (AWO) describes various “poverty dimensions”: these include material poverty, educational disadvantage, cultural poverty, social poverty, lack of values, emotional poverty, neglect, false care, and foreign-specific disadvantage. One thing is common to almost all attempts to describe the problem of “poverty”: it is about the unequal distribution of opportunities to participate in social life.

Prevalence of relative poverty

According to the Poverty Report of the DGB, the Joint Welfare Association, and the Hans Böckler Foundation, 9.1% of the German population in 1998 were affected by relative poverty (50% of average income). Poor was therefore one in 11 German citizens. The rate of low-income income was slightly lower in the old Federal Republic of Germany at 8.7% and slightly higher than the national average in the new Länder at 10.7%.

The 2nd Poverty Report of the Federal Government focuses on the risk of poverty in its statistical

figures. Thus, in 1998, 12.1% of the risk of poverty (60% of average income) was affected. By 2003, this proportion had risen alarmingly to 13.5% (old countries: 12.2%; new countries: 19.3%). This shows that we are dealing with new poverty in Germany, and especially in the eastern part.

What is the German poverty rate compared to other European

countries? According to the latest EUROSTAT figures from 2001, Germany, with a poverty rate of 11%, was above countries such as Sweden (9%). Denmark (10%), but still well below the average of the

then 15 European countries (15%).

Relative poverty increasingly affects children in Germany. And this situation is deteriorating dramatically at the moment. In 2003, 1.08 million children were living in households receiving social assistance (with the receipt of social assistance a useful indicator of relative poverty), this figure had already risen to 1.45 million by the end of 2004. In 2006, this figure is already 2 million or more.

Feeling poverty

The perceived or socio-cultural poverty arises from a subjective feeling and awareness of concern and cannot be pinboard at income limits. It often arises when people feel socially excluded or discriminated against because of their economic situation when they feel that they are not an integral part of the society in which they live.

If people have chosen a modest and simple lifestyle, they do not usually see themselves as

poor. However, if they feel that they are objects and victims of circumstances or developments that they cannot control and why they involuntarily suffer material and emotional hardship, they often see themselves as poor, even if they could not count towards the poor by objective standards. Above all, it shapes a lack of perspective and the absence of hope and confidence that one can free oneself from the emergency through one’s own hands work.

Feeling poverty is much more common in developed countries than in countries where the lack of resources needed for everyday life is felt at every step. In Germany in particular, people who have suffered severe income losses and a downgrade of their standard of living, or who fear a deterioration in their economic situation, feel that they are affected or threatened by poverty. It is not so much the concrete income that characterizes this type of poverty, but rather the subjective consciousness and perceived impotence. “It is the downhill path, not poverty, but the way to it that the Germans fear. And the worst thing is that the governing parties, even the political system, do not seem to give them the glimmer of hope. The perceived poverty – that is the missing perspective.” (Hellmuth Karasek, in Der Tagesspiegel of 4. 12. 2002)

At this point, it must also be admitted that the term ‘felt poverty’ has also been criticized as an attempt to persuade oneself to be poor and disadvantaged, even though one is objectively well

off. “The term ‘felt poverty’ is another indicator of the high level at which we have made ourselves comfortable to complain. Oh God, what’s wrong with me, the neighbor has a new car,” says Dietmar Hefendehl on the page “wissen.de” in his justification for having chosen the term “feeling poverty” as the word of the month. In this respect, it is preferable to speak of socio-cultural poverty, to which certain objectivity can be attributed, even if the persons concerned do not feel ‘poor’, a phenomenon which can be observed above all in children who often do not see themselves as poor until they are disadvantaged compared to others.

Poverty and socio-cultural deprivation

The perceived poverty is mainly concerned with socio-cultural disadvantages (such as child-unfriendly environments) that hinder the development of a social personality, or with social exclusions, such as leisure activities and other social activities. The child-unfriendly circumstances could include, for example, a cramped housing, insufficient opportunities for development, poor education without regulated structures, the transfer of values, models and guiding principles, or the systematic promotion of healthy self-confidence.

The exclusion would be subject to disadvantages that are perceived and suffered in comparison with peers.

Children, in particular, are sensitive to inequalities and social differences: the others get a lot of pocket money, I can’t even afford a break; others wear branded clothing and shoes, I can’t even afford comparable discount products; others can afford expensive air travel, I can’t even take a holiday in Bavaria. It may be that this social disadvantage is not perceived as social injustice, but either as a failure of the parents or even as an individual failure of his own, since the saying goes: “Everyone is a blacksmith of his own happiness.”

It is usually no consolation if one’s own disadvantage is to be regarded as the result of mass unemployment, which affects one’s own family, since any unemployment, even if it has structural causes, can be interpreted as a personal failure and gnaw at one’s own self-confidence.

In this context, the question must be raised as to whether socio-cultural deprivation is a consequence of material hardship or whether economic poverty is a consequence of socio-cultural

factors. Recently, there are tendencies that do not attribute the disadvantages of the precariat – as the impoverished class is called – to poverty, but, conversely– its poverty is attributed to the specific behaviors of the underclass. For example, the STERN: “Poverty is a consequence of their behavior, a consequence of the underclass culture.” The truth, however, should not be sought exclusively in one direction or the other; on the contrary, both sides of the coin are likely to be mutually dependent and strengthened. “Both dimensions – material and socio-cultural – are closely related to each other, especially in the case of chronic poverty,” says Prof. Hans Weiß of the Ludwigsburg University of Education, adding: “Restrictive material conditions can lead to socio-cultural dysfunction, especially if they last for a long time. Conversely, dysfunctional behaviors also exacerbate the effects of poverty on children. This is what the talk of the ‘devil circle of poverty’ means.”