Poverty and Wealth

Poverty and Wealth

Poverty is a central issue in social stratification. Sociologists debate how to define poverty, what causes it, and whose responsibility it is to address it.

Defining Poverty

Absolute Poverty

Absolute poverty means lacking the basic necessities for physical survival — food, clean water, shelter, clothing and warmth. A person in absolute poverty cannot meet their most fundamental biological needs.

• Measured against a fixed standard (e.g. the World Bank's $2.15 per day threshold)
• More common in developing countries
• Relatively rare in the UK, though it does exist (homelessness, food bank use, fuel poverty)

Relative Poverty

Relative poverty means being significantly worse off than the average standard of living in your society. You have enough to survive but cannot afford to participate fully in the life of the community.

• Measured relative to the rest of society — the most common UK definition is household income below 60% of the median
• By this measure, approximately 14 million people (including 4.3 million children) in the UK live in relative poverty
• A person in relative poverty in the UK might have a phone and television but cannot afford school trips, a winter coat, or to have friends over for a birthday party

Townsend (1979) — developed a deprivation index of 12 items considered necessities in modern Britain (e.g. a cooked meal every day, a refrigerator, a holiday once a year). Those who could not afford several items were defined as living in poverty. His approach showed that poverty was more widespread than government statistics suggested.

Subjective Poverty

Subjective poverty — people define themselves as poor based on their own feelings and experiences. This recognises that poverty is about more than income — it includes shame, exclusion and powerlessness.

Who is in Poverty?

Group	Risk factors
Children	4.3 million in relative poverty; linked to lone parenthood, workless households and large families
Lone-parent families	Around 49% are in poverty; usually female-headed; barriers to full-time work (childcare costs)
Elderly people	Those relying solely on the state pension; especially women (lower lifetime earnings, career breaks)
Disabled people	Higher living costs; lower employment rates; benefit inadequacy
Ethnic minorities	Pakistani, Bangladeshi and Black African groups have the highest poverty rates
Working poor	People in work but on low wages (zero-hours contracts, part-time, minimum wage); around 60% of people in poverty live in a working household
Women	More likely to be in poverty due to the gender pay gap, part-time work, caring responsibilities and lone parenthood

Explanations for Poverty

Individual Explanations — Poverty is the Fault of the Poor

The New Right — Culture of Dependency

Murray (1990) argued that:

• An underclass exists at the bottom of society, characterised by long-term welfare dependency, lone parenthood and criminality
• Generous welfare benefits create a culture of dependency — people choose not to work because benefits provide an adequate income
• Absent fathers mean children grow up without discipline and role models
• The solution is to reduce benefits to create incentives to work

Lewis (1966) — identified a culture of poverty — values and behaviours passed from generation to generation that keep people poor (fatalism, present-time orientation, inability to defer gratification).

Evaluation:

• Victim-blaming — ignores structural causes of poverty (unemployment, low wages, discrimination)
• Most people on benefits want to work but face barriers (lack of jobs, childcare, health problems, transport)
• Deacon and Mann (1999) — no evidence of a widespread "culture of dependency"; most benefit claimants return to work when jobs are available
• Stigmatises the poor rather than addressing inequality

Structural Explanations — Poverty is Caused by Society

Marxist View:

• Poverty is an inevitable feature of capitalism — it exists because the ruling class exploits workers, paying them less than the value they produce
• A reserve army of labour (unemployed workers) keeps wages low for everyone
• The welfare state provides just enough to prevent revolution but not enough to eliminate poverty
• The real problem is the concentration of wealth at the top, not the behaviour of the poor

Weberian View:

• Poverty results from market situation — those with fewer qualifications, skills and resources have weaker bargaining power in the labour market
• Some groups face additional barriers: discrimination, disability, language
• The dual labour market traps many in low-paid, insecure work

Social Democratic View:

• Poverty can be reduced through government intervention — progressive taxation, minimum wage, universal services (NHS, education), generous benefits
• Townsend (1979) — the welfare state should provide a minimum standard of living for all citizens
• Nordic countries (Sweden, Denmark) demonstrate that strong welfare states produce lower poverty rates

The Cycle of Deprivation

The idea that poverty is transmitted from one generation to the next:

1. Poor parents → poor housing, diet, health → limited educational achievement → low-paid work → poverty → poor parents...

2. This cycle operates through both material deprivation and cultural factors

Evaluation: contains elements of truth but risks blaming individuals; structural barriers (discrimination, lack of jobs, low wages) are the primary drivers.

Wealth and Income Inequality

Key Facts

• The richest 1% in the UK own approximately 21% of total wealth
• The richest 10% own around 45% of total wealth
• CEO pay has grown from 47 times average worker pay (1998) to over 100 times (2020s)
• Wealth inequality is far greater than income inequality

Marxist Explanation

• Wealth concentration is the defining feature of capitalism — the bourgeoisie accumulate capital while workers receive wages
• Inheritance ensures that wealth passes between generations of the same families
• The tax system favours wealth (lower capital gains tax, inheritance tax avoidance) over income

Functionalist/New Right Explanation

• Wealth inequality motivates entrepreneurship and innovation
• The wealthy create jobs and invest in the economy ("trickle-down economics")
• Davis and Moore (1945) — inequality is functionally necessary

Evaluation: "trickle-down" has limited evidence; inequality has grown even during periods of economic growth; the relationship between wealth and merit is weak (inherited wealth, luck, networks matter more than talent alone).

The Welfare State and Poverty Reduction

Arguments For the Welfare State

• Provides a safety net for the most vulnerable
• Reduces extreme poverty and its health/social consequences
• Universal services (NHS, education) promote equality of opportunity
• Beveridge (1942) — the welfare state was designed to tackle the "five giants": want, disease, ignorance, squalor and idleness

Arguments Against (New Right Critique)

• Creates dependency — discourages work
• Expensive — requires high taxation
• Murray — contributes to the underclass
• Universal benefits go to those who do not need them

Exam Technique

For a poverty question, always define absolute AND relative poverty. Use Townsend's deprivation index. Present both individual (New Right/culture of poverty) and structural (Marxist/Weberian/social democratic) explanations. Evaluate by noting that most sociologists reject individual explanations as victim-blaming. Include recent statistics to show the current scale of poverty.