What is Poverty?

It is difficult to define as there is no official poverty line. How we measure poverty will affect how it is defined and described. What we do know is that poverty is not just about a lack of income. It is also about limited access to opportunities, like playing hockey or taking a college course.

Poverty is not just about income, but it is always about income.

Measuring Poverty

Unfortunately none of these measurements give a complete picture of the challenges that an individual or family living in poverty faces. When you are poor you struggle for survival every day. This takes a toll on your physical, emotional and mental health. As you strive to meet your basic needs, you are not free to participate in your community. That is why poverty is about more than a lack of money, it is also about a lack of opportunity.

There are many ways to measure poverty, but none tell the full story.

Low Income Measure

If poverty is measured using the low income measure (or LIM) then it is being compared to a region’s standard of living. LIM is set on the median family income and those below this line live in poverty. The challenge with this measure is that there is great disparity in standards of living across a region (e.g. Alberta) that the measurement won’t accurately describe local conditions.

Market Basket Measure (MBM)

Measuring poverty using the market basket measure (or MBM) is more precise than LIM as it looks at purchasing power in the community where you live. This measurement looks at the cost of a basket of goods (i.e. food, shelter, clothing, transportation and other necessary goods and services) in comparison to disposable income to determine the poverty line. However, there can be much argument about what is in the “basket”.

Low Income Cut Offs

The most commonly used measure is Low Income Cut Offs (or LICO) as it shows the most accurate picture of how much income is needed before or after taxes to meet your basic needs. This measurement is updated based on the Consumer Price Index.