• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain the causes of Absolute & Relative Poverty in the UK

Extracts from this document...


´╗┐Explain the causes of absolute and relative poverty in the UK (15) Poverty is caused by both a low real national income relative to a to a countries total population size and by inequalities in the distributions of income and wealth. The former leads to absolute poverty for most of a country?s inhabitants, whereas the latter causes relative poverty. Absolute poverty occurs when income is below a particular level. It refers to a set standard which is consistent over time and between countries. Measuring poverty by an absolute threshold has the advantage of applying the same standard across different locations and time periods, making comparisons easier. However, it does not take into account that you need different levels of income in different places, for example, a cup of coffee is more expensive in England than it is in Brazil. ...read more.


The first of the causes of relative poverty is old age. Old age causes poverty largely because many old people rely on the state pension and lack a private pension. Before the 1980?s, the state pension rose each year in line with average earnings. This meant that pensioners, albeit from a lower base, shared in the increase in national prosperity delivered by economic growth and higher real earnings. However, since the early 1980?s, the state pension has risen in line with the retail price index (RPI) rather than with average earnings. This has kept the real value or purchasing power of the state pension at its early 1980?s level, while the real earnings of those in work continue to rise. Pensioners reliant solely on the state for a source of income have become relatively worse off, even though the real value of the state pension has not fallen. ...read more.


Income support is an extra benefit to people on low incomes, such as the elderly who would otherwise be completely reliant on the state pension, and to families otherwise dependent solely on the unemployment benefit paid to one of the families members. Incapacity benefit is a weekly payment for people who become incapable of work while under the state pension age. The low-waged, unlike the un-waged, are workers with jobs, albeit jobs in which their hourly and weekly earnings are low. The low waged include many unskilled workers, together with the skill workers who have lost their jobs in the manufacturing industry and who have had to trade down to unemployment in more menial unskilled activity. The low waged poor are almost always relatively poor rather than absolutely poor. In contrast the many homeless people living on the street fall into the category of absolutely poor. The introduction of the national minimum wage was an attempt to reduce the poverty of the low waged. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Markets & Managing the Economy section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Markets & Managing the Economy essays

  1. Marked by a teacher

    Supermarkets in UK - An oligopily

    5 star(s)

    This is partly down to the threat of substitutes. For instance, Tesco has competition from companies like Sainsbury that can provide substitutes for their goods. This drives the prices of groceries down in both companies. Monopsony issues There has been growing concern over the monopsony power of the big four supermarket chains: Tesco, Asda, Morrisons and Sainsbury.

  2. Free essay

    Characteristics of poverty in the UK

    Absolute poverty will usually lead to death. Firstly child poverty is a big problem in poverty as nearly four million children face it. However it did decline due to more parents being given jobs and therefore the children will be less likely to face poverty.

  1. Explain the Causes of Popular Protests Between 1815 and 1822

    Although the problems in the city were a large cause of popular protests, the situation in the country was also a contributing factor because of enclosure, this was the method in which strips of land that was owned by individuals was bought by

  2. For a duopoly involving homogeneous products, explain and contrast a Cournot, Stackelberg and Bertrand ...

    Therefore firm 1 anticipates firm 2 reaction to its own choice. There is a first mover advantage which results in higher profit for the leader (firm1), over the follower (frim2). Firm 1 needs to choose the output combination on firm 2's reaction curve R2(q1)

  1. What are the origins of the Pension Crisis and what can be done to ...

    of pensioners, whilst people staying in education longer is contributing to the decreasing size of the workforce. The problem stems from the peak in the birth rate in the 1940's followed by the large bulge in the 1960's in which more that ten million babies were born (Barr, Nicholas, The Economics of the Welfare State; Oxford University Press, p213).

  2. Case study of Singapore E-Government.

    This is in line with national drive to promote a pro-enterprise environment, to facilitate business growth in Singapore. The G2B Portal is the first entry point for all local and international businesses to access a full suite of aggregated and integrated G2B information and services.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work