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, proper health care, access to clean water, and job opportunities to help their financial situation. Unfortunately, many people in poverty are too poor to afford education or are stuck in areas without 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 total population's median household income.
Among OECD countries, South Africa has the highest poverty rate of 26.6%. South Africa has the largest wealth inequality gap worldwide, 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. Costa Rica follows at 20.9%, then Romania at 17.9% and the United States at 17.8%.
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 with a pre-tax income under $25,700 are considered to be living in poverty. Some 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, 736 million people live in extreme poverty, surviving on less than $1.90 per day. 413 million of these people live in sub-Saharan Africa. Nineteen countries worldwide have poverty rates over 50%. Organizations such as World Bank and World Vision are actively working to reduce poverty around the world.
According to World Bank, the countries with the highest poverty rates in the world are: