Opinion | We Need a New Global Measure for Poverty

Until fairly recently the majority of humanity lived in what we would now consider extreme poverty. Just two centuries ago, about three-quarters of the world were extremely poor. In the words of the development researcher Michail Moatsos, who painstakingly produced this historical estimate, most people “could not afford a tiny space to live, food that would not induce malnutrition and some minimum heating capacity.” Hunger was widespread, and around the world, for much of human history about half of all children died before reaching adulthood.Today, that picture has changed dramatically. Entire nations have largely left the deep poverty of the past behind.

But poverty is not history. People around the world are still struggling to afford housing, heating, transport and healthy food for themselves and their families. To keep us moving in the right direction, we have to make global poverty more visible by finding a better way to measure it.

This week, the world’s heads of state are gathering in New York City for the annual United Nations General Assembly. The goal at the very top of the U.N.’s sustainable development agenda is to “end poverty in all its forms everywhere.” Given that all 193 U.N. member countries have pledged to achieve the U.N.’s development goals by 2030, we should expect to hear where the world stands in this critical effort.

What we will hear — this year, as every year — is only half an answer.

The international poverty line, which the U.N. uses to measure global poverty, is very low. It tells us how many people live on less than $2.15 per day. This low poverty line reveals that a large number of people continue to live on extremely little, as the map below shows. Seventy-three percent of people in Mozambique live in extreme poverty; in the Democratic Republic of Congo, it is 75 percent. The international poverty line is valuable because it has succeeded in drawing the world’s attention to the extreme poverty of the world’s very poorest people.

But to end poverty in all its forms everywhere, studying this poverty line alone is not enough. Economists have tried offering alternatives, but those can also fall short. For example, one widely used and much-cited framework, known as doughnut economics, aims to define “a safe and just space for humanity to thrive in” and assess whether people have what they need to live “a life of dignity and opportunity.” The line that this framework promotes, however, is just barely higher than the U.N.’s measure of extreme poverty. It posits that just $3.10 per day gives people a chance to live such a life.

This claim is clearly at odds with our conception of poverty. An income of $3.10 per day means just $93 per month, or $1,131 per year. Few people would think of themselves as thriving on that income.

The misuse of low poverty lines as a criterion for what is sufficient for a good life distorts our perception of people’s living conditions. The reality is that we live in a world in which billions are struggling to pay for the bare necessities: Three billion people cannot afford a healthy diet. Three and a half billion do not have access to sanitation facilities. Most of them live on more than two or three dollars a day, but they are still living in deep material destitution. To claim that they can live “a life of dignity and opportunity” I find ethically repulsive. It negates the misery of billions.

To make global poverty’s true extent visible, the U.N. should add a second, higher poverty line and give it equal importance, setting it at a level that makes the poverty in every country visible while matching our sense of what it means to be free from poverty.

Where would this poverty line be drawn? The existing international poverty line is based on an average of the poverty lines of several very poor countries. The development economist Lant Pritchett has suggested following the same logic to draw a higher international poverty line. I followed this suggestion, collecting nationally set poverty lines from a wide range of high-income countries, as well as considering proposals for universal basic incomes, social security payments and survey results about where poverty lines should be drawn.

Taking these references into account, my suggestion is to set a higher poverty line at $30 per day. Based on this cutoff, the map below shows where things stand today. In most countries, almost everyone lives in poverty. And it also shows that, as we all know, even in the world’s richest countries, a substantial share of the population lives in poverty.

Although it may seem daunting to measure poverty across vastly different countries with a single metric, the excellent data the World Bank provides makes it possible. Its approach takes into account that many of the world’s poorest people are subsistence farmers who don’t have monetary income. In these cases, the statisticians estimate the value of the food they produce for their own consumption, adding it to their income. In addition, global data on poverty is adjusted for price differences between countries, so that an income of $30 per day in Bolivia, Nigeria or India tells us what a person can afford in his or her home country based on what costs $30 in the United States.

One way to see whether this higher poverty line is reasonable is to check whether it aligns with established national poverty assessments. In the United States, for instance, despite U.S. poverty statistics not being directly comparable to the World Bank data, the estimates align closely. According to the line I am proposing, 16 percent of the U.S. population lives on less than $30 per day, while the official U.S. data indicates that 11 percent of Americans live in poverty.

To see where we are going, we need to understand where we are coming from. When people were surveyed before the pandemic about how global poverty is changing, the majority answered that they believe the share of extreme poverty has increased in recent decades. This is wrong. No matter which poverty line you choose, the share of people living below that line has decreased.

Over the last two centuries, we have learned that it is possible for entire countries to lift millions of residents out of poverty. The United States is one of them. We have seen that today 16 percent of Americans live on less than $30 per day. In 1964, when President Lyndon Johnson announced the War on Poverty, this was true for almost half of Americans, according to World Bank data. Two centuries ago, the majority of Americans still lived in extreme poverty.

Other countries have been even more successful. In Denmark, Switzerland and the Netherlands, between 7 percent and 8 percent of people live on less than $30 per day. In Norway, just 6 percent do. We know that a world in which no one lives in poverty is possible, but we are still far away from such a world.

The U.N.’s current poverty line tells us that almost one in 10 people is living in extreme poverty. The higher poverty line for which I make the case tells us that if you live on more than $30 a day, you are among the most fortunate 17 percent of the world.

The U.N. is right to make it our shared global ambition to achieve a world where no one lives in poverty. But the first step toward this goal is to make the poverty that exists visible. For this, we need an appropriately ambitious poverty line that receives the same attention as the low international poverty line. The fight against poverty is far from over.