The extreme poverty measure is also corrected for different price levels in different countries and adjusted for price changes over time (inflation) – poverty is measured in so-called international dollar that accounts for these adjustments.
The first chart shows the estimates for the share of the world population living in extreme poverty.
That is a huge achievement, for me as a researcher who focuses on growth and inequality maybe the biggest achievement of all in the last two centuries.
It is particularly remarkable if we consider that the world population has increased 7-fold over the last two centuries – switch to the ‘Absolute’ view in the visualization below to see the number of people in and out of poverty.
In a world without economic growth, such an increase in the population would have resulted in less and less income for everyone; A 7-fold increase in the world population would have been enough to drive everyone into extreme poverty. In a time of unprecedented population growth our world managed to give more prosperity to more people and to continuously lift more people out of poverty.
Increasing productivity was important because it made vital goods and services less scarce: more food, better clothing, and less cramped housing.
The countries that are rich today were very poor just very recently and were in fact worse off than the poor countries today.
To avoid portraying the world in a static way – the North always much richer than the South – we have to start 200 years ago before the time when living conditions really changed dramatically.
With this empirical data on the reduction of poverty we can make it concrete what a media that would report global development would look like.
The headline could be “The number of people in extreme poverty fell by 130,000 since yesterday” and they wouldn’t have this headline once, but every single day since 1990, since, on average, there were 130,000 people fewer in extreme poverty every day.