Does Being "Relatively" Poor Inflict Severe Psychological Damage?

Here's a letter to the Washington Post:

Robert Samuelson reports that Pres. Obama's wants to redefine poverty such that "People are automatically poor if they're a given distance from the top, even if their incomes are increasing.  The idea is that they suffer psychological deprivation by being far outside the mainstream" ("Why Obama's poverty rate measure misleads," May 31).  And while he offers sound objections to this attempt to redefine poverty as a relative concept, Mr. Samuelson misses...