absolute or relative terms

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notyouraveragematteo

Senior Member
English, Japanese
What does 'absolute or relative terms' mean in the following context:

The polarization of society also entails a polarization in standard of living, as that of capitalists goes up and that of workers goes down in either absolute or relative terms.

THanks you.
 
  • snorklebum

    Senior Member
    Mexico English
    Or sometimes in relation to different values of money.

    "In absolute terms, I make twice as much money as I did 10 years ago, but relative to inflation, I make much less."
     

    Scherle

    Senior Member
    Filipino, and English
    What does 'absolute or relative terms' mean in the following context:

    The polarization of society also entails a polarization in standard of living, as that of capitalists goes up and that of workers goes down in either absolute or relative terms.

    THanks you.
    It is actually an example of Simile(part of figurative spech).I stand to be corrected.

    The way of living change as standard of living changes but the business owner (rich) become more rich but the poor become more poor.:)
     

    Thomas Tompion

    Senior Member
    English - England
    Or sometimes in relation to different values of money.

    "In absolute terms, I make twice as much money as I did 10 years ago, but relative to inflation, I make much less."
    It's not relative to inflation, snorkleb*m; it's taking inflation into account. You aren't relating what you earn (a flow of income measured in money/unit time) to inflation (a percentage).

    You could say that you were relating the change in your income to the change in the value of money, but that's not the same as saying you make less, relative to inflation. The fact that your nominal income has risen but not enough to compensate for the rise in the price level means that what you are earning buys less; your real income has fallen.
     

    Thomas Tompion

    Senior Member
    English - England
    What does 'absolute or relative terms' mean in the following context:

    The polarization of society also entails a polarization in standard of living, as that of capitalists goes up and that of workers goes down in either absolute or relative terms.

    THanks you.
    If we start, in an imaginary world, with standard earnings per individual as follows:

    Capitalists $100K a year; Workers $20K a year

    and after the polarization of society standard earnings are as follows:

    Capitalists $400K a year; Workers $40K a year

    Assuming prices to remain constant, the standard of living of capitalists has gone up in absolute terms by four times (they can buy four times more with their income than before), but in relative terms it has doubled - the only point of comparison is the workers' earnings, and capitalists are now ten times better off than the workers, whereas before they were only five times better off.
     

    panjandrum

    Lapsed Moderator
    English-Ireland (top end)
    What does 'absolute or relative terms' mean in the following context:

    The polarization of society also entails a polarization in standard of living, as that of capitalists goes up and that of workers goes down in either absolute or relative terms.
    [...]
    Inflation is not relevant - not least because we're talking about standard of living, not income.

    The standard of living of the capitalists goes up - let's say that it goes up from 100 to 150 over a period of time.

    Let's say the standard of living of the workers, by the same measure, was 20 at the start of the period. If their standard of living were to increase at the same rate as that of the capitalists it would be 30 by the end of the period.

    If the standard of living of the workers went down only in absolute terms, at the end of the period it was less than 20.

    If their standard of living went down only in relative terms, at the end of the period it was more than 20 but less than 30.
     

    notyouraveragematteo

    Senior Member
    English, Japanese
    If we start, in an imaginary world, with standard earnings per individual as follows:

    Capitalists $100K a year; Workers $20K a year

    and after the polarization of society standard earnings are as follows:

    Capitalists $400K a year; Workers $40K a year

    Assuming prices to remain constant, the standard of living of capitalists has gone up in absolute terms by four times (they can buy four times more with their income than before), but in relative terms it has doubled - the only point of comparison is the workers' earnings, and capitalists are now ten times better off than the workers, whereas before they were only five times better off.

    So, in absolute terms, the earnings of capitalists has quadrupled.
    In relative terms (compared to the workers' wages), the earnings of the capitalists is 10 times higher.

    Is that correct?
     

    Thomas Tompion

    Senior Member
    English - England
    So, in absolute terms, the earnings of capitalists has quadrupled.
    In relative terms (compared to the workers' wages), the earnings of the capitalists is 10 times higher.

    Is that correct?
    Assuming prices to remain constant, the standard of living of capitalists has gone up in absolute terms by four times (they can buy four times more with their income than before), but in relative terms it has doubled - the only point of comparison is the workers' earnings, and capitalists are now ten times better off than the workers, whereas before they were only five times better off.
    Look at it again, Notyouraveragematteo.
    You are right about the absolute increase - the capitalists can buy four times as much as before: they are four times better off.

    They are not ten times better off in relative terms. Originally they were five times better off that the workers. For their relative welfare to increase tenfold, they would have now to be 5 x 10 = 50 times better off than the workers in their new position. The workers in the new position are earning $40K, so the capitalists would need to be earning $2,000K.

    My previous argument was correct, I think. The capitalists have gone from earning five times as much as the workers, to earning ten times as much. Their relative standard of living has gone from x 5 to x 10, so it has doubled.
     
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