Poverty in the United States: Definitions of Relative & Absolute Poverty

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  • 0:05 Poverty
  • 0:51 Relative Poverty
  • 2:43 Absolute Poverty
  • 3:47 Populations at Risk
  • 5:23 Lesson Summary
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Lesson Transcript
Instructor: Erin Long-Crowell

Erin has an M.Ed in adult education and a BS in psychology and a BS in management systems.

Today, a significant number of Americans suffer from poverty. In this lesson, we define and discuss the difference between relative poverty and absolute poverty. We also examine the populations that are most at risk.


If you live in or near a large city, it's likely you have seen or interacted with the extremely poor. There's no denying that a significant portion of our population could be called 'needy.' And even though we have numerous government programs and charities that attempt to fight extreme poverty, it can sometimes seem like we're fighting a never-ending battle.

Poverty is a significant part of our society, but there isn't just one definition of poverty that fits all poor people. Poverty can look different between cultures and affect people in different ways. Let's discuss two significant definitions of poverty and which populations are most at risk.

Relative Poverty

First, relative poverty is when people are poor relative to those around them. For example, someone who lives in an expensive subdivision yet rents a run-down house and does not own luxurious things could be considered poor compared to the rest of the neighborhood. For the most part, poverty is relative and socially defined. Compared to people starving in third-world countries, even many poor Americans are well-off. The impoverished that live in the inner city may have the same amount of money as those who live in rural areas, but since the cost of living is so high, those in the inner city may be worse off. At the same time, though, those in the inner city may also have access to more resources.

Because of relativity and the lack of concrete numbers, it's difficult to reach a consensus when it comes to identifying the poor. So in order to develop a clearer picture of poverty in the United States, the government has calculated an official poverty line, and the number is adjusted each year for inflation. Any family that falls below the poverty line is recognized as impoverished. As of 2012, the poverty line in the continental U.S. was set at $11,170 for a one-person household.

The use of the poverty line is controversial, as it does not take into account a number of factors, such as regional differences in the cost of living, benefits such as food stamps and school lunches, and more. It also lumps together those who have almost nothing with those who are struggling but managing to get by.

Those with incomes below the poverty line are considered impoverished.
Poverty Line Graph

Absolute Poverty

Regardless, the poverty line does give us a way to identify those most in need. Most that fall below it suffer from absolute poverty, which is when people do not have enough money to purchase what is needed for survival. Where relative poverty sees inequality of income, absolute poverty sees families go hungry, live in inadequate housing, suffer from lack of health care, and possibly not have access to safe drinking water.

It is estimated that nearly 50 million Americans - that's more than 16% of our entire population - live in absolute poverty as of 2012. These individuals have great difficulty improving their living situation, as poverty can be a self-perpetuating cycle. Children in impoverished families are at an extreme disadvantage when seeking employment; in turn, the lack of stable employment ensures continued poverty.

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