Poverty Statistics & Graphs: Looking Beyond the Numbers

Bad humor set aside, the United Nations - along with other organizations - has been providing a lot of advice and guidelines on how to compute poverty statistics and how to make the most out of them.

Beyond the numbers

Since you can find statistics on how many people live in poverty (current count, extent of the damage on their lives, etc) just about anywhere on the web (and here too), it seems important to show you how to interpret these numbers as well as how easy to manipulate they are.

This helps many governments downplay the problem of poverty and pretend it's not as bad as people say (e.g. in India and many African countries). That’s what this page is about: an overview of the world of poverty statistics... with a poverty graph here and there.

Poverty Statistics: The Numbers

Poverty's death toll

According to the World Health Organization (WHO), poverty accounts for 30% of human deaths (i.e. 18 million) each year.Of course you don’t die of poverty but of its consequences: starvation, bad sanitation-induced disease, other diseases (e.g. HIV/AIDS), lack of water, conflicts over resources etc…

Who lives in poverty?

After plenty of debates and critiques, the World Bank finally recognized that nearly 1.5 billion people are living in extreme poverty. This represents the number of people living below the World Bank’s international poverty line of $1.25 a day - using the 2005 purchasing power parity (PPP) definition. But, if you’re concerned with a more accurate state of poverty in the world, using the brand new $2-a-day poverty line, we then arrive at some 2.6 billion people living below that line - and in poverty. It's often estimated that these people's shortfall could be covered by 1% of global GDP.

And that in order to protect the few people who actually own this much capital, our governments are keeping 2.5 billions of people in a state of destitution such that all the poverty statistics in the world could never reflect.After all, the 1% rich in China earn up to 23 times more than the poorest and the 100 richest men in India own assets equivalent to 1/4 of India's GDP. Of course whether we or our governments are responsible for their living conditions (or whether as humans we should do something) is a whole debate that can’t be addressed here. At least not this humble page on poverty statistics.

No simple, silver-bullet solution

However common affirmations such as "those ten richest people on earth own and earn more than those hundreds and hundreds of poor on earth", albeit probably very true, tend to make you think that the whole problem could be solved by those very rich people only.

As our analysis on absolute poverty shows, the picture is much more complex than that and that if we were to require people in richer countries to pay to end poverty, we would need the help of a lot bigger proportion of the population. Another question of much interest though is whether those living in impoverished countries deserve to be burdened by national debts and restricted access to basic social services and infrastructures while their governments have often much to do with this national mismanagement.

The poverty numbers (as raw as you can find them)

• The 1-10% richest of in any country account for 50% of the country’s wealth (in terms of ownership of capital).
• In poorer countries, inequalities are even worse - i.e. the rich represent much less than 1%. In fact at the world level, in 2000, the top 10% represented 85% of global capital.
• Hunger and malnutrition affect over 850m people, even though the global food production could accommodate a few billions more on earth (some estimates say up to 12-15 billions). The problem is either with the distribution and diffusion of resources (e.g. lack of roads and infrastructure) or insufficient income.
• Bad sanitation threatens the lives of more than 2.5 billion people, while another billion lacks access to clean water. Water-related problems affect half of humanity.
• About 1 billion people can’t read, or even sign their names. At a time when more and more experts talk about investing in computer literacy, achieving basic literacy in some parts of the world is still the priority for so many governments. Lack of education is a major cause of unemployment worldwide.
• As far as women are concerned, the usual view is that “women produce half of the world's food, work two-thirds of the world's working hours, earn only 10 percent of the world's income, and own less than 1 percent of the world's property” (hopeinternational.org). These numbers count altogether paid and unpaid work (or work that would be paid in developed countries) like child-care and elder-care as well as helping in the fields or small family farming.
• More than 350 of the richest people on earth have more money than some 50% of the rest of humanity. This is not even about redistributing resources. This is an issue with the system at large.

If free trade does help in reducing poverty and inequality, the profound hypocrisy of free trade promoters is that even while they push or "force" the opening of frontiers and barriers to trade, they nonetheless keep on protecting their own industries. Thus, they turn the global trade market into a rigged game where they maintain countries in poverty by not allowing them to develop their own industries.

• ‍Click here for more raw poverty statistics.

A quick look at statistics on child poverty

With children representing almost 1/3 of mankind, and half of them - 1 billion - living in poverty, child poverty is no "fad" that strives on images of poor African babies. It is a major, defining aspect of it.

Two thirds of those one billion children don't have a proper shelter, and half of them have no access to safe water.

Among the 10 million children who die each year, 1.5 million of those deaths are due to inadequate water and sanitation. Besides a third of children in poverty suffer from malnutrition or starvation.

HIV/AIDS is not without correlation with those numbers as in 2005 it was estimated that the disease had orphaned some 15 million children.

Going Beyond Poverty Statistics & Graphs

Rigged poverty lines

Time and again, the World Bank has been setting its international poverty line in a way that benefited itself: it fixed the poverty statistics so that they would show the less poor as possible. That way, it would look like the Bank has been doing its job of reducing poverty worldwide! Genius.In 2005, the $1.25 a day poverty line has been created as simply the mean of the poverty lines of the fifteen poorest countries, most of which are tiny African states.

See the trick? By taking the mean of the very poorest countries which also happen to be the tiniest, it puts a significant number of other poor people just above that poverty line. The poverty line of bigger neighboring countries in Africa might be of $1.30 a day for example, and then with 5 cents more, you’re not including millions of poor anymore. It's a miracle!

Sugarcoating poverty statistics

As economics Nobel Prize Joseph Stiglitz and his colleagues put it in a book (link to come in the near future), the Bank’s poverty line “sugarcoats the poverty trend”. But this is also the problem of poverty lines at large; it would a better depiction of poverty to consider a sort of range around that line that includes variations of poorness.Because the Bank is using the PPP system (purchasing power parity) it’s not always – if not seldom – very clear what its poverty line represents in any country’s own currency.

Taking the example of the United States if you convert the most recent international poverty line into the local currency… It makes about $1.4 per day. Now you may not live in the US, but you sure can imagine that with that kind of money you can’t afford the most basic of your needs. Still if you’re slightly over that line, you’re considered safe from poverty. Well… not safe from poverty statistics manipulation.

The consequences of this little game

Of course the World Bank might say whatever it want, what we all see in our daily lives tells a different story. Where this becomes a real problem is that this institution provides inaccurate and yet vital data to policymakers around the world.And the consequence is that a great number of poverty-related issues risk being overlooked and taken less seriously because on some flawed poverty graphs it doesn't look that bad. Luckily, most countries have come to compute their own poverty lines nowadays, which doesn't mean that those numbers are safe from other political manipulations.

The veil of technocracy

If the Bank acknowledged over time (and pressure) several miscalculations in poverty statistics, it still hasn’t corrected all of its "mistakes". Several experts have argued for more human judgement (via transparent public participation) in defining what the basic needs of people in terms of food and services are in different parts of the globe.

The World Bank hides behind a veil of technocracy that allows it some opacity as well as to reject public consultation. This is not to say that expertise is not needed, not at all.

Other experts and economists had to come in and analyze its practices to realize how its official numbers were manipulated. The technocratic approach has been very useful for decades in helping them say “oh no, no, let the experts take care of it. You don’t need to understand, it’s too complicated anyway”.

The World Bank hides behind a veil of technocracy that allows it some opacity as well as to reject public consultation. This is not to say that expertise is not needed, not at all.Other experts and economists had to come in and analyze its practices to realize how its official numbers were manipulated. The technocratic approach has been very useful for decades in helping them say “oh no, no, let the experts take care of it. You don’t need to understand, it’s too complicated anyway”.

REFERENCES

• Header image courtesy of Ed Yourdon
• Poverty, Time and Vagueness: Integrating the Core Poverty and Chronic Poverty Frameworks, David Clark and David Hulme, Cambridge Journal of Economics 2010
• International Comparisons of Income Inequality and Poverty: Findings from the Luxembourg Income Study, Michael Forster and Koen Vleminckx, Socio-Economic Review 2004
• An Overview of Personal Wealth, James B. Davies, Personal Wealth from a Global Perspective 2008
• Place-Based Policy and Rural Poverty: Insights from the Urban Spatial Mismatch Literature, Mark D. Partridge and Dan S. Rickmany, Cambridge Journal of Regions, Economy and Society 2008
• The World Distribution of Household Wealth, James B. Davies, Susanna Sandström, Anthony Shorrocks, Edward N. Wolff, Personal Wealth from a Global Perspective 2008
• Handbook on Poverty Statistics: Concepts, Methods and Policy Use, United Nations 2005

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