Poverty is defined as not having enough material possessions or income to cover a person’s basic personal needs, sometimes so extreme where a person lacks food, clothing, and shelter. The poverty rate is the ratio of the number of people in a given age group whose income falls below the poverty line.
Poverty can be a cyclical trap. For people to rise above poverty, they need education, medical facilities, access to clean water, and job opportunities that will help their financial situation. Unfortunately, many people in poverty are too poor to afford education or are stuck in areas that do not have these resources. If a natural disaster or conflict strikes an impoverished area, then the already scarce resources are even more depleted.
Around the world, poverty is on the decline. Since 1990, one-quarter of the world has risen above extreme poverty. Today, estimates for global poverty are approximately 8.6% of the world. People who live in extreme poverty live on $1.90 or less per day.
Progress does not exist across all countries, as some countries with political instability or conflict, or are plagued by natural disasters have seen an increase of people living in poverty.
The Organization for Economic Co-operation and Development (OECD) collected data from its member countries around the world to see what the poverty rate was in each country. The OECD defines the poverty rate as the ratio of the number of people in a given age group whose income falls before the poverty line, determined as half the median household income of the total population. The ten countries with the highest poverty rates are:
- South Africa (26.6%)
- Costa Rica (20.9%)
- Israel (17.9%)
- United States (17.8%)
- Korea (17.4%)
- Turkey (17.2%
- Lithuania (16.9%)
- Latvia (16.8%)
- Mexico (16.6%)
- Chile (16.5%)
South Africa ha the highest poverty rate in the world of 26.6%. South Africa has the largest wealth inequality gap in the world, where the top 1% of earners take home almost 20% of income, and 90% of South African earners take home only 35% of all income. The United States has the fourth-highest poverty rate of 17.8%. Despite being the largest economy in the world, the U.S. also has a significant wealth inequality gap. The current poverty threshold in the United States is $25,700 for a family of four. This means that households of four that have a pre-tax income under $25,700 are considered to be living in poverty. Some regions and cities in the United States are more impoverished than others, and their poverty is exacerbated by high unemployment rates and a lack of high-paying jobs.
While poverty rates have made significant improvements over the past few decades, there are still 736 million people living in extreme poverty, surviving on less than $1.90 per day. 413 million of these people live in sub-Saharan Africa. Organizations such as World Bank and World Vision are actively working to reduce poverty around the world.