THE RELATIVE POVERTY OF VERY POOR PEOPLE.

THE RELATIVE POVERTY OF VERY POOR PEOPLE. The new approach I posted on yesterday takes into account concepts of relative poverty in setting the new guideline of $1.25 a day. The authors argue that relative poverty (whether my neighbor is better off than I am) begins to matter when per person consumption rises past $1.95. There are two reasons that I don’t think that “relative poverty” concepts should be used for comparisons among the poor and very poor. Emphasizing relative poverty for the wretchedly poor suggests that being poor is less painful if others around you are equally poor. I just don’t believe that. Second, and more importantly, it suggests that relieving absolute poverty is not desirable (or less desirable) if the improvement doesn’t happen across the board and in lock step. Relieving absolute poverty is too difficult and too important to impose that kind of restriction.