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Poverty. what is it?

what are poverty indicators

Poverty. what is it?

One of the problems with discussing poverty is clarifying what it means and how it can be defined. Within the current debate at EU level, poverty is generally divided into two types, absolute or extreme poverty and relative poverty.

Absolute and relative poverty

Absolute poverty

Absolute or extreme poverty is when people lack the basic necessities for survival. For instance they may be starving, lack clean water, proper housing, sufficient clothing or medicines and be struggling to stay alive. This is most common in developing countries but some people in the European Union (EU), for instance homeless people or the Roma in some settlements, still experience this type of extreme poverty.

The United Nations tend to focus its efforts on eliminating absolute or extreme poverty. The first goal of The United Nations Millennium Development Goals is to eradicate extreme poverty and hunger. Eradicating extreme poverty is translated into an objective to reduce by half the proportion of people living on less than a dollar a day. However, poverty in most EU countries is more generally understood as relative poverty .

Relative poverty

Relative poverty is when some people’s way of life and income is so much worse than the general standard of living in the country or region in which they live that they struggle to live a normal life and to participate in ordinary economic, social and cultural activities. What this means will vary from country to country, depending on the standard of living enjoyed by the majority. While not as extreme as absolute poverty, relative poverty is still very serious and harmful.

The European Union’s Social Inclusion Process uses a relative definition of poverty (see box below).

What is Relative poverty?

People are said to be living in poverty if their income and resources are so inadequate as to preclude them from having a standard of living considered acceptable in the society in which they live.

Because of their poverty they may experience multiple disadvantage through unemployment, low income, poor housing, inadequate health care and barriers to lifelong learning, culture, sport and recreation. They are often excluded and marginalised from participating in activities (economic, social and cultural) that are the norm for other people and their access to fundamental rights may be restricted.

European Commission, Joint Report on Social Inclusion 2004

The reality of poverty

These “official” definitions, however, often do little to capture the reality of the day-to-day struggle of living in poverty. To understand this better, is it vital to ask people who are themselves experiencing poverty what this means and to involve them directly in identifying and delivering the solutions.

EAPN is committed to ensuring that the voices of those experiencing poverty are heard when describing and defining poverty (see box below) and to promoting their active participation in the development, implementation and monitoring of policies and programmes to eradicate it.

What people in poverty think?

Lack of basic necessities

“I can afford only cheap food; fruit and vegetables to feed children is too expensive; fish is not affordable; “healthy food” is too expensive for me”

“The problem is not that we run out off money occasionally. The real problem is that we live our entire lives this way and our children grow up into this too”

“In Spain the apartments for tourists are empty during the calm periods. On the other side there are a lot of homeless who have no roof above their head. How can we explain those injustices to our children?”

“I cannot repair my broken TV”

“I have lost friends as I cannot participate in their activities; even to participate in self-help groups needs money and time; I’m short of money and time to participate in discussions”

“I cannot afford a daily paper; books, especially scientific literature is too expensive”

Bureaucracy and lack of information

“The system is too complicated, I don’t know where to get what”

“I have slept in cardboard boxes. I had the choice to die on the street or to take back my life in my own hands. I went to social services with the question to help me to find a house. I was confronted with an enormous bureaucracy. I had to tell several times my story, each time again and it took years before I got a house.”

“Every time I tell my life to civil servants I receive a lot of compassion, but rules prevent effective aid”

Lack of respect and lack of hope

“The way people look at you is humiliating. You are not considered a human


“Sometimes you get the feeling that animals are better protected because if you beat a dog you will be sentenced and maybe put into prison whereas if you beat someone I am not sure that you will always be punished for that…. My feeling is that dogs are more respected and better treated than Gypsies.”

“I don’t see any progress since years. I have no future.”

“I feel a little bit like Don Quixote. I am fighting against windmills here and there and there is no real hope anymore”.

Lack of decent work

“I have no work and no housing. How can I form my life if I have no work?”

“I must admit that to you that I work illegally and this is not because

I think it is good. I am fully aware of the consequences, but this is the only way for me to get a job.”

Fear for one’s children

“It is impossible for me to invite the friends of my children at home, because my home is so small. So my children at their turn are not invited any more. Thus they become also excluded. We are obliged to lead a hidden life.”

“My children cannot participate in school holidays for skiing or a language week abroad. Training for lifelong learning is not affordable. I cannot afford cultural activities”

“My children will inherit my poverty.”

Voices of people participating in the 6th European Meeting of People Experiencing Poverty organised under the auspices of the Austrian Presidency of the EU in 2006

The day-to-day struggle

This means that the reality of poverty in the EU is much more a day to day struggle to live and survive which can adversely affect your health and psychological well-being and put stress on your personal relationships.

Living in poverty can mean:

  • becoming isolated from family and friends;
  • lacking hope and feeling powerless and excluded with little control over the decisions that affect your day to day life;
  • lacking information about the supports and services available to you;
  • having problems in getting your basic needs met and accessing decent housing, health services and schools and life long learning opportunities;
  • living in an unsafe neighbourhood with high levels of crime and violence and poor environmental conditions or in a remote and isolated rural area;
  • going without very basic necessities because you may not be able to afford essential utilities like water, heat and electricity or to buy healthy food or new clothing or to use public transport;
  • being unable to afford to buy medicines or visit the dentist;
  • living from day to day with no savings or reserves for times of crisis such as losing a job or falling ill and thus falling into debt;
  • being exploited and forced into illegal situations;
  • experiencing racism and discrimination;
  • being unable to participate in normal social and recreational life such as going to the pub or cinema or sports events or visiting friends or buying birthday presents for family members.

Overall, the reality of poverty in the EU is that it affects many aspects of people’s lives and limits people’s access to their fundamental rights. People affected often experience a range of different disadvantages which combine to reinforce each other and trap them in poverty. Poverty limits the opportunity for people to reach their full potential. For instance, children growing up in poverty are more likely to suffer poor health, do less well at school and become the next generation of adults at risk of unemployment and long-term poverty.

Some Key Issues

Why the EU focuses less on Absolute poverty?

Absolute poverty is often seen to be less of an issue for EU Member States than for developing countries. There are two main reasons for this.

First, the challenge in the EU is to try and ensure that the whole population share in the benefits of high average prosperity and not just reach basic standards of living, as is often the objective in less developed parts of the world. However, this clearly does not take into account the reality of the extreme levels of poverty affecting specific groups of the population in some new member states e.g. Roma.

Secondly, what is regarded as minimal acceptable living standards depends largely on the general level of social and economic development. There is a risk that a minimum standard of living necessary for survival which is set in a richer country would be insufficient to enable people to participate in normal social, recreational and cultural activities. This is contrary to principles of equality and social solidarity.

The problem with comparing relative poverty levels

PEP 2013 gr is po delegations

Comparing relative poverty levels between different countries does not sufficiently take into account the differences in standards of living. In reality it is more a measure of inequality.

For example a person who is relatively poor in a rich country usually suffers less material deprivation than someone who is living in a country with low overall living standards. In these countries poverty can be more extreme, you are more likely to lack basic necessities and survival can be more of a struggle, but because the general living standards are lower in these countries, there may be less relative poverty i.e. less difference between the “poor” and the living standards of everybody else.

This can lead to misunderstandings about the extent of poverty and run the risk of underplaying the severity of the poverty suffered by some groups, particularly in some new Member States. Of course, the worst situation is to be found in those EU countries with both a low overall standard of living and a high level of relative poverty.

In order to take account of the different economic situation in different Member States, when the EU list of commonly agreed indicators for social inclusion were endorsed by the 2001 Laeken European Council, it was emphasised that the value of the at-risk-of-poverty threshold should always accompany the indicator of those at risk of poverty i.e. what it means in monetary terms - purchasing power in terms of Euros.

Category: Forex

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