
'Extreme poverty' to fall below 10% of world population for first time - hliyan
http://www.theguardian.com/society/2015/oct/05/world-bank-extreme-poverty-to-fall-below-10-of-world-population-for-first-time
======
andrewmutz
This is an issue where there is widespread misunderstanding. Here is a great
opinion piece about how the way news is reported contributes to this chronic
misinformation:

[http://www.nytimes.com/2015/10/01/opinion/nicholas-
kristof-t...](http://www.nytimes.com/2015/10/01/opinion/nicholas-kristof-the-
most-important-thing-and-its-almost-a-secret.html)

"One survey found that two-thirds of Americans believed that the proportion of
the world population living in extreme poverty has almost doubled over the
last 20 years. Another 29 percent believed that the proportion had remained
roughly the same.

"That’s 95 percent of Americans — who are utterly wrong. In fact, the
proportion of the world’s population living in extreme poverty hasn’t doubled
or remained the same. It has fallen by more than half..."

~~~
api
That's because the experience for the American middle class has during this
same period been wage stagnation coupled with inflation in food, energy,
housing, medicine, and tuition. The American middle class finds it difficult
to believe things are getting better around the world because for them it's
been getting worse since about 1970.

~~~
jahnu
> wage stagnation coupled with inflation in food, energy, housing, medicine,
> and tuition

Is that wage stagnation not adjusted for inflation?

~~~
api
The numbers I've seen are adjusted for inflation and show that _real_ wages
have been largely stagnant since the early 70s. There have been periods of
modest gain, usually when the economy is absolutely roaring like the late 90s,
but the general trend has been flat to downward. The lower you are on the
totem pole the worse it's been: the upper middle has seen some gain, the
middle none, and the lower middle has lost ground.

I'm also not sure that I fully believe the inflation numbers. It's not
necessarily that I think they're fraudulent, but I don't think the methodology
for calculating inflation has caught up with reality. The models I've seen
assume inflation to be consistent across the economy, which may have been
largely true in the 20th century but is true no longer.

The problem is that inflation since the early 2000s has been extremely uneven.
We've had massive deflation in some areas, like manufactured goods. But
necessities -- especially real estate, health care, and college tuition --
have almost hyper-inflated.

You can go without gadgets and toys but not without food and a place to live.
We've had near-hyperinflation in necessities but it doesn't show in the stats
because the stats average those numbers in with the deflationary numbers you
get if you look at TV sets, appliances, and computers.

Real estate is utterly insane. I cannot even comprehend how it can possibly be
so high. How can you have a market for real estate at these prices? Who's
buying it and what parallel universe of limitless wealth do they come from?

I'm not talking about areas like the Bay Area, which has peculiar
circumstances at work, or always-hot areas like Manhattan. There will always
be "bubbles" of high prices vs. the rest of the market. If you look across the
average of the market, real estate is crazy when compared to wages. I suppose
it may be a function of historically cheap money causing larger home loans and
jacking up prices, but it's essentially locked anyone out who isn't rich or
willing to sign up for a crazy mortgage.

~~~
danielweber
Some real estate is a positional good, which has the price set by how much
money the richest people have.

There is no way around this. If everyone wants to live as close to (say) Times
Square as possible, that land will be expensive.

But you don't have to enter that zero-sum rat race. There are lots of places
to live that aren't the only places the very rich want to live. They still
enjoy decent schools and low crime.

Some college education is positional, too. If you want "Ivy League Education"
for your kid, well, there are just about as many slots as there were 30 years,
but a lot more rich people, so the price will get bid up to infinity. Here the
real shame is that the non-gold-star educational system is still getting more
and more expensive, for many many reasons.

~~~
nostrademons
Interestingly, most of the Ivy League has incredibly generous financial aid
packages, enough that most middle-income people pay _zero_. When I went to
college, having had 2/3 of my tuition paid for by the college, I remarked that
higher ed in elite universities was basically socialism subsidized by a very
capitalist minority that was willing to pay any amount. Not a bad system, but
it unfortunately only works at those institutions where rich people will
enroll their kids at virtually any price.

------
cjbenedikt
"More and more analysts, though, are pointing out that this claim is little
more than an accounting trick: UN officials have massaged the numbers to make
it seem as though poverty has been reduced, when in fact it has increased."
[http://ssir.org/articles/entry/using_design_thinking_to_erad...](http://ssir.org/articles/entry/using_design_thinking_to_eradicate_poverty_creation)

~~~
ef4
That article is highlighting deeply misleading facts. For example: "between
1990 and 2010 there was an increase of 371 million people living on less than
$5 a day". But during the same time period, the world added 1.6 billion
people, and even using your source's own data, that implies that the fraction
of people living on less than $5 a day dropped from 75% to 60%.

In short, the claim that poverty is getting worse is utter bullshit. It
requires either climate-change-denialist levels of willful ignorance, or a
xenophobic definition of "poverty" that only counts people living in your own
much-richer-than-global-average country.

~~~
mbostleman
"...or a xenophobic definition of "poverty" that only counts people living in
your own much-richer-than-global-average country."

In which case you are no longer measuring poverty. You are measuring
inequality.

~~~
collyw
Agan it probably depends how you define poverty. If you live somewhere where
the land provides enough food for your needs every day, you probably don't
need $2 per day.

If you define poverty as never knowing if you will have enough for the next
meal then the $2 cutoff is again probably fairly irrelevant.

------
ctdonath
For all the discussion (i.e.: heated biased arguing) about poverty, seems
nobody has addressed an objective definition of what constitutes "poor". Why
is the world poverty line at $1.25/day, but the US poverty line is 20x that?
We need a quantitative analysis, starting with basic
caloric/nutritional/BTU/water/power/data/etc needs (independent of arbitrary
numbers imputed by fiat/floating currencies) for cost of bare sustenance, then
work from there recognizing that varying geography, demographics, et al
adjusts that cost, then admitting that different cultures further adjust those
basic costs.

Without such objective analysis of basic sustenance, fudging numbers is
trivial.

~~~
devinhelton
Yes, exactly. The numbers I would like to see measured would be:

\- percent of people who can afford 2,500 calories of food and 60 grams of
animal protein a day (where afford has some standard definition, such as can
pay for the consumption using less than half of their income).

\- percent of people who have access to clean water

\- percent of people with indoor plumbing

\- percent of people with access to electricity in the home.

\- percent of people who can access and afford 500MB of internet data a month

It is impossible to know what "$2 a day" actually means. The number gets
adjusted for purchasing power, but there is an infinite amount of room in that
calculation for governments to fudge the data. Many people in the third world
can afford a cell phone, but not afford enough protein in their diet, does
that mean they are richer or poorer than someone one hundred years ago without
a cell phone but who can afford meat? There is no objective way to answer that
question. Since I do not know all the subjective decisions made in doing the
purchasing power adjustment, the ultimate number tells me nothing.

~~~
swampthinker
Honestly, I would take out the internet requirement. All the others can
significantly improve quality of life in a home, but I can't truely say the
same about internet access.

I'd love to hear the counterpoints, but I just can't imagine a farmer needing
internet access to live a comfortable lifestyle, as opposed to clean water and
electricity, which is necessary.

~~~
GordonS
Internet access could certainly help, for example, a farmer, as it could give
access to information on better farming techniques, where to source better
value fertilisers, where to get the best price for produce etc.

But I certainly agree that it doesn't play any part in the definition of
'extreme poverty'.

~~~
phil21
I was going to make a similar comment, but this boils down to information
asymmetry. For how cheap it is to deliver reasonable Internet access to
everyone, I put it up there with the same importance as most utilities. If
you're building out electricity to a farmer, you can certainly add Internet
infrastructure onto that for very little relative cost.

Why should giant corporations buying the farmers products have access to
nearly limitless amounts of information, while the farmer is relegated to
maybe an industry periodical and the local cafe gossip. That worked before the
1900's, but these days information moves too quickly.

So yes, I think Internet is probably not quite _yet_ essentially a basic need
to participate in the economy and society - but it's pretty damn close. And
it's only going to continue to get more important as "old world" services are
turned off in favor of those on-line. In my lifetime I will see the DMV close
it's last in-person renewal desk. And the private world is already there in
requiring online-only transactions to do certain forms of business.

------
leroy_masochist
I think a per-capita statistic is a bit flawed in this case, although I
understand why they use it -- the math is very simple.

The problem with per-capita measurement of income for very poor people is that
what you really care about is per-family income because of the economies of
scale involved in so many of the goods they consume -- cooking fuel, etc.

In places where poverty like this exists, a family of 8 living on $8/day ($1
per capita) is often better-off than a family of 4 living on $5/day ($1.25 per
capita).

Regardless of whatever methodological flaws exist in various metrics, this is
a positive trend that is (hopefully) only going to get better as technology
increases the efficiency of various systems of distributing goods and
services.

------
henryaj
It's incredibly exciting to think that an end to global poverty could be in
sight.

Shameless plug: GiveWell [0] and Giving What We Can [1] are non-profits that
evaluate the effectiveness of development and global poverty charities. Some
are hundreds or thousands of times as effective as others when it comes to
saving and extending lives.

Those groups help you decide where your money should go to maximise your
impact.

[0]: [http://www.givewell.org/](http://www.givewell.org/)

[1]: [http://givingwhatwecan.org/](http://givingwhatwecan.org/)

------
alienjr
Thank you globalization.

~~~
legulere
I don't think globalisation plays that big a role in preventing poverty. Big
causes are wars and mismanagement by unjust governments.

~~~
ctdonath
Nay, a huge role. People who were far outside major economic activity can now
participate in global markets, improving their ability to sell goods &
services (and obtain tools & connections).

A few days ago I ordered & received a cheap scarf via mail. US$0.95 -
delivered! from _China_! obviously whoever was involved didn't make much off
the transaction, yet they WERE able to make & sell & deliver something to an
idiot on the other side of the planet. Where there was no market before,
Amazon & USPS & other businesses have pursued "globalization" to the point
that a manufacturer & buyer a world apart could engage in profitable
transactions.

The way out of poverty is capitalism, sellers & buyers making mutually
profitable agreements, and globalization eliminating barriers of distance &
borders.

------
marincounty
Two days ago we had an article about this topic, maybe the same article?

This article claims they just changed the baseline poverty rate. I think they
changed other numbers, but can't prove it.

Two days ago, I went to the world bank calculator and the poverty calculations
were based on $1.25. I and other HN'ers noticed the calculator didn't seem to
account for inflation.

Two days ago I played around with the calculator and used $1.90 and $2.00 as a
"the input for the poverty line". I was getting final poverty levels that were
doubling. With my numbers the poverty level was not below 10%.

I did the same experiment today, and someone updated all the numbers, or just
changed them? Or, I my memory is wrong. (I have not confirmed this on The
wayback machine.)

My point is two days ago at $1.90 the poverty rate was close to 20%? Today, my
calculations are not close to what they were two days ago?

[http://iresearch.worldbank.org/PovcalNet/index.htm?1](http://iresearch.worldbank.org/PovcalNet/index.htm?1)

------
myth_buster
I'm always wary of the numbers that are put out. There has been long history
of fudging numbers to fit a narrative. The unemployment numbers in the US
comes to mind as such an example.

So, the question is how realistic is the extreme poverty line. And this
doesn't help it much:

    
    
      The World Bank first introduced a global poverty line in 1990, 
      setting it at $1 a day. 
      It was adjusted last in 2008, when the group raised it to $1.25 a day.
    

$1 seems like such a convenient number to pick!

An interesting graph will be to plot the extreme poverty threshold against
inflation _in_emerging_countries_.

With the falling emerging market currencies and extreme inflation (hyper-
inflation perhaps), I don't think that $1.90 a day cuts it.

~~~
roymurdock
Your point about the semi-arbitrary nature of the poverty line is good, but
the figure is already inflation-adjusted. There is a general confusion on HN
when it comes to real vs. nominal statistics. [1]

I find it's generally safe to assume that most of the well-respected
development organizations are made up of smart people that know what they are
doing and will not overlook something so fundamental as inflation, even if
they do use statistics to advance their agendas from time to time.

[1]
[https://news.ycombinator.com/item?id=10335838](https://news.ycombinator.com/item?id=10335838)

~~~
myth_buster
I'm not questioning their intelligence just their approach.

    
    
      well-respected development organizations are made up of smart people 
      that know what they are doing
    

Well, that was the thought about the financial industry, FCC, S&P etc before
2007.

~~~
ptaipale
Would the incentives of people working in well-respected development
organisations be equally twisted to those of S&P etc before 2007? I don't
think so.

------
theworstshill
Thats a good measure, but I am pessimistic about poverty ever being rooted out
completely (absent of a technological invention that creates abundant energy
for very cheap, e.g. fusion, antimatter later on).

The reality is, poverty can be cultural. In the west a saying like "they can
pay me little but I'll work even less" would be considered absurd. In certain
countries - its a folk tradition.

Another problem is a self-inflicted brain drain. Smart people with potential
don't want to live in festering shitholes where property rights are not
respected, rule of law unexistant and hence economic opportunity absent.

------
gpestana
According to this article what's the extreme poverty threshold for World Bank,
after all? It says first:

"Extreme poverty has long been defined as living on or below $1.25 a day, but
the World Bank’s adjustment now sets the poverty line at $1.90 a day."

And then, at the end:

"The World Bank first introduced a global poverty line in 1990, setting it at
$1 a day. It was adjusted last in 2008, when the group raised it to $1.25 a
day."

Got a bit confused.

~~~
gpestana
More info about it (and clearer) here:
[http://data.worldbank.org/news/extreme-poverty-rates-
continu...](http://data.worldbank.org/news/extreme-poverty-rates-continue-to-
fall)

------
briantakita
Their definition of poverty is earning below a certain dollar amount
($1.90/day).

Their measure of poverty has nothing to do with the access to quality water,
quality food, land, quality of life, freedom, personal autonomy, health,
safety, etc.

Many indigenous people lived on $0.00/day yet had a higher quality of life;
before outside influences (i.e. civilization, imperial, western) disrupted
their ecosystems & way of life.

~~~
afsina
Still, this is a relative improvement. There are many other indications (such
as infant death ratio) supporting this.

~~~
briantakita
As some of the quantitative metrics improve, many of the metrics (particularly
of qualitative nature) degrade. Think ecosystems, our usage of resources,
quality of life for the average person, etc.

> There are many other indications (such as infant death ratio) supporting
> this.

This is one of the many metrics that matter; much more than the percentage of
people making > $1.90/day.

~~~
frgewut
I'm not so sure about infant deaths - this might be a "fail early" mechanism
evolved in nature.

~~~
hugh4
Not really, if you look at the statistics of people who have had difficult
births they're not much more likely to grow up to be disabled. Especially if
you exclude certain categories.

------
littletimmy
Very skeptical of this idea. Were more than 10% of humans were in "extreme
poverty" when we lived as hunter-gatherers? Were all humans in "extreme
poverty" at that time?

"Extreme poverty" is caused when capitalism invades an area, appropriates all
assets, and then the people basically either have to sell themselves into
extremely-low-paid labor or starve.

~~~
raymondgh
Agreed! First time below 10% since mankind's creation of poverty. I can't
comment on the causality of capitalism, but I agree with Mandela that poverty
is manmade.

~~~
wyager
Are you one of those people who believes in the biblical history where people
lived to be 200 years old and such?

At what point in the past was the average person better off than they are now?

~~~
raymondgh
Before you posted this comment :)

In all seriousness, I'm interpreting poverty as lacking the basic capacity to
participate in society. In that sense, the average score of something like the
human development index is not relevant to whether or not systemic exclusion
of classes of people in society is prevalent. The organization of resource-
controlling groups in industry and government are generally what determines
the social and economic mobility of a population. Before some point in
civilized history, these constructs did not exist to create such vast
disparity in human dignity and wealth. In other words, neither the cause nor
the existence of poverty is measurable by the average standard of living.

------
waroc
While the statistics are updated, the definition of "extreme poverty" just
fails to keep up. The moment people have food, they want lots of food, then
they want delicious food, then they want more exclusive food, and so on.
There'd be no problem if the supply of food (resources) can keep up with
human's greed, which never happens.

------
amelius
A lot of numbers in this article, but how much would it cost us to solve
poverty? And for different values of the poverty line?

~~~
Shivetya
you solve property by having governments that respect citizen's property
rights, having good rule of law, and a sound money policy usually with freedom
of exchange. government managed economies tend to only benefit those in power
or already well off.

in other words, you create an environment where entrepreneurs can successfully
operate as people tend to strive more when they see their efforts pay off and
those pay offs are not subject to the whims of others

~~~
amelius
Obviously, yes, this is the preferred long-term solution. This doesn't buy
anything for the people suffering at this very instant. Also, if you are
struggling to survive, how are you going to even think about getting
education?

~~~
jpadkins
Give a man a fish, he becomes dependant on your fish. Yes, teaching him to
fish takes longer, but it's better.

> how are you going to even think about getting education? You start with an
> education on how to survive better. You don't need to start with an advanced
> education.

~~~
Matumio
You can teach people how to pull yourself up by your bootstraps, but some of
them have no boots, so it's not entirely fair.

~~~
swasheck
life's not fair ... but expecting someone to pull themselves up by their
bootstraps when they have no boots is cruel and denies the advantage that
"you" (the teacher) most likely started with a pair of boots, at least.

------
tkinom
Does the "Amish" fit into the poor or Extreme poverty category? (by US
standard)

I believe they are happier than most of the population. Gov might not like
them too much as their contribution to gdp/Tax might be less than the "normal"
folks. On the other hand, their demand on "gov service" should be a lot less
too.

~~~
TheCoelacanth
What makes you think that Amish are poor? Many of them are quite wealthy.

~~~
notdonspaulding
I don't think the GP was saying the Amish are poor per se.

I think the GP's point is that, from the perspective of the survey, the
Amish's income and/or expenditures might look the same as someone in poverty,
even though their quality of life is much better.

~~~
lkbm
The line they use isn't "what percentage of people can't afford a TV". It's
more along the lines of "what percentage of people can afford adequate food
and clean water".

------
DigitalSea
I hate to sound cynical here, but is it possible that "extreme poverty" is
expected to drop below 10% because many of those unfortunately in such a
bracket have low life expectancy due to poor diet and living conditions? I
hope not.

~~~
pvaldes
I was thinking the same. Maybe poors are dying faster than before.

Or maybe the world bank is simply wrong.

"The number of people in extreme powerty could be greatly underestimated":
[http://www.theguardian.com/global-
development/datablog/2015/...](http://www.theguardian.com/global-
development/datablog/2015/apr/21/number-people-extreme-poverty-overseas-
development-institute-report-could-be-greatly-underestimated)

------
werber
Have any groups outside of the World Bank confirmed this statistic?

------
mrbig4545
that's terrible. 10% is far too high

------
arca_vorago
While the middle class is being gutted, pushing more people into "just barely
poverty".

~~~
nugget
That's the thing though: in the US, inequality between rich and poor is
widening, but globally, it is narrowing. There are more global middle class
now than ever before. It's hard to have this both ways until we approach
closer to a post scarcity economy.

~~~
ctdonath
The problem with "wealth inequality" complaints is "poor" has an absolute
brick-wall bottom value ($0/yr), but there is no upper limit (short of
$WorldGDP/yr). This isn't a zero-sum game, so the fact that one person is
financially far above others doesn't necessarily mean things must be worse for
others.

~~~
nugget
I completely agree but some (most?) people tend to look at their quality of
life on a relative basis. How much better or worse off they are than others
they see. So despite the fact that there's probably never been a better time
to be poor in the US, there is increasing political pressure to narrow the
wealth gap. Someone told me once that he'd rather have pride than money and
pride was what being on the wrong side of a large inequality gap slowly
destroyed.

------
bluthru
Thank you automation.

------
sp332
Is it because they all died?

------
knieveltech
You could set an arbitrary dollar amount and simply wait for inflation to
bring that number into range. How much of this is real improvement?

~~~
tim333
It's inflation adjusted kind of.

------
lumberjack
>Extreme poverty has long been defined as living on or below $1.25 a day, but
the World Bank’s adjustment now sets the poverty line at $1.90 a day.

That is intentionally misleading.

How about "extreme poverty" = "still suffering malnutrition" \+ "still lacking
even basic education" \+ "still lacking any access to healthcare"

The $1.90 tells nothing and it is also dependant on purchasing power. If
somebody was making $200/month in the US that would also be extreme poverty.

~~~
cuchoi
The poverty and extreme poverty line are adjusted in each country according to
purchasing power.

You are right that somebody making $200/month in the US would be classified as
extreme poor (and someone in India would not be considered extreme poor if he
earns $200/month). I don't see the problem with this.

------
cjbenedikt
The Hypocrisy of ‘Helping’ the Poor
[http://www.nytimes.com/2015/10/04/opinion/sunday/the-
hypocri...](http://www.nytimes.com/2015/10/04/opinion/sunday/the-hypocrisy-of-
helping-the-poor.html?_r=0)

~~~
tim333
That's kind of on a different thing - rich americans giving a bit to charity
after outsourcing US jobs.

~~~
yummyfajitas
That article paints rich Americans as pretty awesome people. First they lift
millions of Chinese out of poverty and reduce inequality by shipping jobs in
China. Then they donate some of the profits to less valuable causes like
reducing relative poverty in the US.

The author of that article is kind of clueless, though - US-style "poverty" is
not remotely like Zimbabwe poverty.

~~~
cjbenedikt
Actually it is. Having worked with NGOs in Africa as well as in Baltimore now
- it's pretty much the same. Life expectancy, purchasing power and income
inequality. Sad to say!

~~~
yummyfajitas
In Zimbabwe, 33% of the country has a flush toilet and over 10% of the country
does open defecation. 75% have access to clean water. (Stats from the first
hit on google.)

Are you asserting that Baltimore has less than 99% flush toilet usage or 99%
clean water access?

[http://www.urbangateway.org/news/more-million-people-
without...](http://www.urbangateway.org/news/more-million-people-without-
toilets-zimbabwe)

------
fiatjaf
That's crazy. Inflation is enourmous (and inflation is not the same as GDP
variations). Any criteria that uses dollars cannot have any value in a
historical series.

If you get a chart of how many people live with less than $2 per month you'll
probably see a continuous steady decline. Why? Inflation.

~~~
ekiru
The World Bank periodically adjusts the threshold upwards for this reason. In
1990, they used $1/day. In 2008, they adjusted it to $1.25/day. Now they are
adjusting it to $1.90/day.

~~~
fiatjaf
And you imagine that in 25 year the total inflation was only of 90%?

~~~
matthewmacleod
I tend to think that the World Bank adjusts this amount in an appropriate
manner. If you think their methodology is wrong, you should explain why.

~~~
fiatjaf
Why shouldn't be you explaning why do you believe in their methodology? That's
crazy. You don't even know what methodology they use and you are taking your
time to defend them here.

~~~
rconti
Because the World Bank is a large organization with many paid staff tasked
with devising and implementing their methodology.

You're two random people on the Internet.

I'm siding with the World Bank, not with the internet commenter who demands
another internet commenter defend experts.

You're the one making the extraordinary claim here.

