Eh, What's Happening?

Suppose that like Rip van Winkle you fell asleep in 1997 and woke up in 2017. You asked a friend for a quick summary of what had occurred over the previous 20 years. A complete explanation would obviously take a long time, but this graph (tweeted by Max Roser) provides a very elegant summary of how the world has been progressing:

A few comments:

1. In principle, everyone over the age of 24 lies somewhere along each of those three lines.  You might visualize most Chinese people as progressing up and to the right from the red line to the turquoise line.

2. The figures are adjusted for inflation and international cost of living differences.  Those adjustments are far from perfect, but probably much better than not adjusting the figures.  (Also note the log scale.)

3. The share living in “extreme poverty” has fallen from 29.5% to 9.3%.  That’s pretty incredible, and is largely attributable to neoliberal reforms in places like China and India.

4.  The share of the world living in poverty as defined in rich countries has fallen much more modestly, from about 90% to roughly 86% of the world’s population.  Note how the number of poor people in the world is extremely sensitive to definitions.

5.  The average (mean) income in the world is several times higher than the median income.  That might be viewed as bad news.  However the median income has been rising faster than the average income, which might be regarded as good news.  So at least in the sense of the median/average gap, global income is becoming more equal.

6.  Another way of making the same point is that over the 20 years from 1997 to 2017, poor and middle income areas of the world have made much more progress than rich areas.  Bangladesh has grown a lot, Italy hardly at all.

PS.  I wouldn’t take that $30/day poverty line for rich countries too literally.  Obviously it depends on lots of factors.  Thus a family of five making $50,000 is less poor than an individual making $10,000 due to certain economies of scale in housing expenses, auto transport, etc.

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