Poverty is a state of being in which a person lacks the income (or other means of support) to reliably meet their basic personal needs, such as food, shelter, and clothing. Poverty exists in every country in the world, though it is a more pressing issue in some countries than in others. The poverty rate is the number of people (usually expressed as a percentage) in a given demographic group whose income falls below the poverty line.
Poverty has a wide range of possible causes, from the amount of fresh water and arable land in a region to government policies or ongoing armed conflict. Additionally, natural disasters such as the COVID pandemic or the 2020 earthquakes in Puerto Rico can further strain an impoverished area's already scarce resources.
Poverty can be a cyclical trap. For people to rise above poverty, they need education, proper health care and sanitation, access to clean water, and job opportunities that can help them improve their financial situation. Unfortunately, people in poverty often live in areas low on these resources. Therefore, the people become trapped in a vicious cycle in which they can't get better jobs until they improve their situation (education is particularly helpful), but they can't afford to improve their situation until they get better jobs.
To help break the cycle of poverty, organizations including the United Nations, World Vision, and Global Citizen have worked alongside various governments to improve impoverished people's access to clean water, adequate food, affordable education and health care, and other needs.
Country-wide poverty is typically measured in one of two ways. The first is to determine the percentage of people whose daily income falls below specific baseline amounts, such as $10 per day. These baselines remain the same for every country, enabling a slightly different perspective on country-to-country comparisons.
The most widely used baseline amount is $1.90 per day, measured in 2011 PPP international dollars (INT), a theoretical unit of currency used to make country-to-country comparisons easier. People who make less than this amount are considered to be in "extreme poverty", which is to say they are the poorest of the poor. Additional baselines such as $3.30/hr and $5.90/hr are often employed to help count people whose poverty is slightly less extreme.
The second way to measure a country's poverty level is to determine the percentage of people or families who earn less than the "national poverty line", or poverty threshold—meaning, the annual income below which a person or family is considered impoverished. The national poverty line is calculated independently for each country because each country's economy is different. For example, a person earning $25,000 a year in the United States would have different opportunities than a person who earned $25,000 a year in Somalia.
The majority of countries in the world, as well as organizations such as World Bank, [the OECD](Organization for Economic Co-operation and Development (OECD)), and the European Union, set the national poverty line at 50% of a given year's median income. For instance, the median income in the United States was $67,521 in 2020 so the national poverty line according to the United Nations would be $33,761.
However, some countries use different calculations. The U.S. itself, for example, employs a formula first devised in the 1960s, which calculated the estimated cost of adequate food for a year and multiplies by three to account for additional costs (housing, utilities, medical expenses, etc). For 2020, this formula set the poverty threshold at $26,246(US) for a family of four—significantly lower than the more widely used World Bank method.
This discrepancy—coupled with the fact that those above the poverty threshold are often ineligible for aid programs—is the main reason that many anti-poverty advocates and policy experts including the Washington Post argue that the U.S. formula is badly outdated and has failed to keep up with the rising cost of housing and other expenses.
Globally speaking, the number of people living in extreme poverty has been on the decline for several decades, from 1.94 billion in 1982 to 696 million in 2017. This decrease is particularly encouraging because the Earth's population rose considerably during this same time period, from roughly 4.5 billion people in 1981 to more than 7.8 billion in 2021.
While overall poverty rates have improved considerably in recent decades, several individual countries have experienced a rise in poverty. As previously mentioned, 696 million people still live in extreme poverty, surviving on less than $1.90 (INT) per day. More than 430 million of these people live in Sub-Saharan Africa, the poorest region in the world, where more than 40% of people lived in extreme poverty as of 2018. Many countries in which poverty is rising have been plagued by political instability or conflict. Others are hampered by frequent natural disasters or ongoing environmental stresses (increased drought in particular) caused by climate change. Several countries in Sub-Saharan Africa face both of these concerns.
The poverty rate in the United States varies depending upon the method of measurement. According to the U.S. Census Bureau, the official 2017 poverty rate in the U.S. was 12.3%. However, other sources placed it as high as 17.8%. Despite being the largest economy in the world, the U.S. also has a significant wealth inequality gap. The 2021 poverty threshold in the United States is $26,246 for a family of four. This means that households with two adults, two children, and a pre-tax income of less than $26,246 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.
According to World Bank, the countries with the highest poverty rates in the world are: