That is a huge achievement, for me as a researcher who focuses on growth and inequality maybe the biggest achievement of all in the last two centuries. In fact, no matter what poverty line you choose, the share of people below that poverty line has declined globally (see here). The world is also making progress against poverty relative to higher poverty lines. The $1.90 poverty line is very low and focuses on the very poorest in the world. In 2015 – the last year for which we currently have data – the share of the world population in extreme poverty has fallen below 10%. More and more world regions industrialized and thereby increased productivity which made it possible to lift more people out of poverty: In 1950 two-thirds of the world were living in extreme poverty in 1981 it was still 42%. Since then the share of extremely poor people fell continuously. In 1820 only a tiny elite enjoyed higher standards of living, while the vast majority of people lived in conditions that we would call extreme poverty today. The first chart shows the estimates for the share of the world population living in extreme poverty. As a consequence of these adjustments one international dollar has the same purchasing power as one US-dollar in 2011. The extreme poverty measure is also corrected for different price levels in different countries and it is adjusted for price changes over time (inflation) – poverty is measured in so-called ‘international dollar’. These poverty figures take into account non-monetary forms of income – for poor families today and in the past this is important, particularly because many of them are subsistence farmers who live largely from their own food production. This is an extremely low poverty line that draws attention to the very poorest people in the world. The United Nations measure ‘extreme poverty’ as living on less than 1.90$ per day.
To avoid portraying the world in a static way – the North always much richer than the South – we have to start 200 years ago before the time when living conditions really changed dramatically. The countries that are rich today were very poor just a few generations ago. Take a longer perspective and it becomes very clear that the world is not static at all. When you only consider what the world looked during our life time it is easy to think of the world as static – the richer parts of the world here and the poorer regions there – and to falsely conclude that it always was like that and that it always will be like that. Is it possible to make progress against this problem? To see where we are coming from we must go far back in time. Global poverty is one of the very largest problems in the world today.
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