Friday, July 24, 2015

Some statistics on who is poor

The cheer-leaders of capitalism boast that during the first decade of the 21st century, about 700 million people were lifted out of poverty. That is a 14 percent reduction in poverty. The bad news is that moving into, and staying within, the global ‘middle class’ is a significant challenge. The emergence of a truly global ‘middle class’ is still more promise than reality. Although there was growth in the middle-income population from 2001 to 2011, the rise in prosperity was concentrated in certain regions of the globe, namely China, South America and Eastern Europe. The middle class barely expanded in India and Southeast Asia, Africa, and Central America.
A recent data analysis on the Global Middle Class by the Pew Research Center found that 71 percent of the global population is either poor (15 percent) or low income (56 percent). The ‘middle class’ is only 13 percent of the total population. To put some hard numbers on those percentages, with a world population of 7.2 billion humans, about 936 million are ‘middle class’. A little more than a billion (1.08) are impoverished, and more than half the world's population, a giant 4.03 billion people, are low income.

84 percent of the world’s population, including those defined as ‘middle class’, lives on less than $20 a day. Surviving on the maximum in the U.S. or Europe would be difficult for an individual -- about $7,300 a year.

Pew divided the world’s population into five groups: Poor, low income, middle income, upper-middle income, and high income. Less than $2 in daily per capita income is considered poor, based on data showing it takes that much to meet bare minimum human needs. Low income is between $2 and $10, and to be part of the global middle-income group takes $10 to $20 a day. Note that for a family of four in the U.S., the poverty line is about $16.65 a day per capita. Income of $20 to $50 a day puts you in the upper-middle income range. More than $50 a day, or about $73,000 a year for a family of four, and you are in the global high income group.

$10 is the lower threshold for middle-income status, it is about the median daily per capita income of U.S. households living in poverty. Pew reports that “a large share of poor people in the U.S. would also fail to meet the global middle-income standard.”

Consider the 71 percent of the world's population that falls into the poor and low-income categories. This group devotes a very large share of its income to food, medicine, clothing, housing, education and energy.  Think of it another way. More than fourth-fifths of world’s population live on less than $20 a day.