: How poverty is decreasing and income inequality increasing at the same time?
In: Economics
They are measuring two different things. Poverty measurements are related to a clear poverty line and how many people are above/below it. Income inequality is a relative measurement asking how far apart the lowest and the highest are.
Imagine that you were running a race against Usain Bolt – you would be moving forward in the race (poverty decreasing) **and** he would be putting distance between you (income inequality) simultaneously.
I will wait for the experts to respond but it is my uneducated understanding that poverty is increasing – it is the definition of poverty that is changing.
Poverty is basically how many people barely have enough money to survive, income inequality is that the rich people are getting richer far quicker than poor people. If both rich people and poor people are getting richer (even if at different rates) you will have fewer people living in absolute poverty.
A gap can get bigger by the edges moving further away, or by more of the middle between them disappearing.
Even though poverty may be decreasing, fewer people are doing ‘well’ and the ‘middle class’ is disappearing. Meanwhile the people who are doing absurdly well are doing even better than ever.
Think lots of ‘not in poverty, but not wealthy’ people and a couple of mega billionaires versus a general population of well off people, some very poor people, and some rich people, which is more like what existed 40 years ago
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