The concepts of relative and absolute often come up when poverty is discussed but which concept of poverty is bet to describe the UK? The Office for National Statistics records an individual as being in poverty if they live in a household with disposable income below 60% of the national average. This 60% threshold is most commonly used for the UK and it is an indicator for relative poverty. Essentially, the definition of relative poverty may vary from time and place or whether the individual feels poor according to what he sees around him. According to ONS, almost a third of the UK population experienced poverty in at least one year between 2010 and 2013, an equivalent to approximately 19.3 million people. It should be noted that attempts
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This would allow families without work to live on a sufficient amount of income and maintain a minimum standards of living. It would ensure that every family is able to afford the essential aspects of basic living standards. The inequality gap will diminish the social problems such as crimes because the less advantaged will see improvements in their living standards. Families with children will have access to opportunities such as better education which in the long run will create positive externalities for society. However, the increase in welfare benefit requires compensation by other reforms such as increasing taxation (e.g. VAT and income tax). Increasing income tax may be very risky because in doing so, it creates a major disincentive to work. People may choose to work less to avoid the higher tax bracket which meant that the economy cannot not produce at its full potential. Another unfavourable outcome is falling into the “poverty trap” because individuals will acknowledge that the government funds are readily available as long as they still qualify for it so they fall into this comfort zone where they have no tendency to look for work. They will be caught in this poverty trap and suffers consistent underdevelopment. Ultimately, the optimum amount of welfare benefit should be enough to encourage them to work rather than stay on benefit. It should aim to provide aid temporarily through difficult times and should not be thought as a permanent
This would allow families without work to live on a sufficient amount of income and maintain a minimum standards of living. It would ensure that every family is able to afford the essential aspects of basic living standards. The inequality gap will diminish the social problems such as crimes because the less advantaged will see improvements in their living standards. Families with children will have access to opportunities such as better education which in the long run will create positive externalities for society. However, the increase in welfare benefit requires compensation by other reforms such as increasing taxation (e.g. VAT and income tax). Increasing income tax may be very risky because in doing so, it creates a major disincentive to work. People may choose to work less to avoid the higher tax bracket which meant that the economy cannot not produce at its full potential. Another unfavourable outcome is falling into the “poverty trap” because individuals will acknowledge that the government funds are readily available as long as they still qualify for it so they fall into this comfort zone where they have no tendency to look for work. They will be caught in this poverty trap and suffers consistent underdevelopment. Ultimately, the optimum amount of welfare benefit should be enough to encourage them to work rather than stay on benefit. It should aim to provide aid temporarily through difficult times and should not be thought as a permanent