some perspective on poverty

In the US, a family of 4 (2 children under the age of 18) was living below the “poverty threshold” in 2011 if their annual income fell below $22,811. On a per person basis, this works out to a bit more than $15 per day. For many families, this money is used to buy necessities such as housing, transportation, child care, food, utilities, medical care, and clothing. (This is pre-tax income, and does not include food stamps, medicaid, housing vouchers and other public assistance programs).

In 2011, about 15 percent (more than 46 million) of the people in the US were living in poverty. Nearly 16 million are children under the age 18, representing 1-in-5 kids. And while the poverty rate is down significantly from 50 years earlier, it has increased slightly in the aftermath of the Great Recession.

This is not good.

But its worse elsewhere. In some cases, much worse. provides an overview of the global poverty situation. Adjusted for differences in costs of living, about 1.4 billion people live on less than $1.25 a day:

Poverty rates have been decreasing in many parts of the world, but the number of people living below the international poverty line remains high, especially in Sub-Saharan Africa. Data on the number of people living on less than $1.25 per day (the international standard of extreme poverty) and on less than $2.00 per day (another international poverty benchmark) is based on dissimilar national studies from a limited number of countries, and thus should be approached with caution. Recent World Bank data estimates the number of people living on under $1.25 a day at about 1.4 billion worldwide. About half of Sub-Saharan Africans live on under $1.25 a day….Over 2.5 billion people live on less than $2 a day, with nearly three-quarters of the population of Sub-Saharan Africa falling into this category. (Note: These figures are calculated for purchasing power parity (PPP), meaning that someone earning “$2 a day” does not literally earn this much but the equivalent of what 2 U.S. dollars could buy in the United States.)

Givewell provides an interesting graph into how income is related to individual self-reported life-satisfaction for a select group of countries. Here it is:

Data based on 2006 Gallup poll

For rich countries (shown in green), there is not much variation in satisfaction as income increases. There is, however, a big difference between life satisfaction in poor countries (shown in pink) and rich countries. Here, money does seem to help people get some satisfaction.


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