A family earns $30,000 a year in rural Mississippi. They have a car, a small house, and enough food. A family in San Francisco earns $80,000 and struggles to pay rent, childcare, and medical bills. Relative poverty is having less income than the societal average. It is measured against the standard of living in a particular society.

Relative poverty is not about survival. It is about participation. People in relative poverty may have enough to eat, but they cannot afford what most others take for granted: a reliable car, a decent apartment, school supplies, a birthday party for their child. They are excluded from ordinary life.

How it is measured

• Percentage of median income, often 50% or 60%
• Material deprivation indices
• Social exclusion indicators
• Subjective poverty: how people feel about their situation

The U.S. does not use a relative poverty measure officially, but the OECD does. Countries with strong social safety nets have lower relative poverty rates. Relative poverty can exist even in wealthy societies. It is about inequality, not just scarcity.