The dollar-a-day poverty line never literally meant one US dollar
When the World Bank introduced its famous dollar-a-day poverty line in 1990, it did not mean converting a dollar at the exchange rate. The figure uses purchasing power parity, asking how much local money buys what a dollar would buy in America. The line has since been revised several times, and critics say it remains far too low.
From 1993 to 2005 the Bank set absolute poverty at 1.08 dollars a day in 1993 prices. It moved to 1.25 dollars in 2009 and to 1.90 dollars in 2015, with moderate poverty drawn at 2 or 5 dollars. Some experts call any such cut-off arbitrary and argue for at least 7.40 dollars, or even 10 to 15, as the minimum for basic needs and normal life expectancy. One estimate puts 4.3 billion people, 59 percent of humanity, below 5 dollars a day, and UN rapporteur Philip Alston called the 1.90 line fundamentally flawed.
By 2019 figures, 85 percent of people lived on under 30 dollars a day, two-thirds on under 10 and a tenth on under 1.90. More than 40 percent of the poor lived in conflict-affected countries, according to the World Bank in 2020. Economists distinguish absolute poverty, measured against the cost of food, clothing and shelter, from relative poverty, judged against others in the same society; the European Union, for instance, uses relative income lines within each member state. Another measure, ultra-poverty, means getting under 80 percent of minimum calories while spending over 80 percent of income on food.
Definitions reach beyond money. The UN describes poverty as a denial of choices and opportunities and a violation of dignity, from lacking a school or clinic to having no land, job or credit. The World Bank stresses pronounced deprivation across many dimensions, including health, education, clean water, security and voice.
Poverty interacts with other problems. Gender, disability, race and ethnicity deepen it, with women, children and minorities carrying heavier burdens. The poor are more exposed to industrial pollution, climate change and disasters, and economic pressure can drive deforestation and conflict. The word comes via Norman French poverté from Latin pauper. Since 2015, the UN's first Sustainable Development Goal has been No Poverty.
Source: Poverty
