Explain the distinction between absolute poverty and relative poverty (Extract D, lines 2–4) and analyse two causes of poverty.
While the member countries of the OECD represent some of the world's most advanced economies, high rates of both absolute and relative poverty persist across various regions. In many middle-income member states, absolute poverty remains a challenge due to inadequate access to basic necessities. However, across high-income economies, the debate focuses more heavily on relative poverty and social exclusion.
Research indicates that employment alone is no longer an automatic safeguard against financial hardship. The rapid rise of the gig economy and precarious contracts has created a class of "working poor" who face highly unstable incomes. Furthermore, structural shifts—such as the rapid automation of manufacturing—have left low-skilled workers isolated from well-paying jobs. Without targeted government investment in retraining programs and skills education, structural unemployment remains a primary driver of long-term economic deprivation. Rising housing costs and regional disinvestment have further concentrated poverty in specific urban and rural communities.
