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Cake day: July 30th, 2023

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  • This is the author’s post at Oxford: https://www.rsc.ox.ac.uk/news/global-poverty-trends-through-a-new-lens-olivier-sterck-article-for-voxdev

    Has global poverty fallen since 1990? Depending on which poverty line you use, the answer ranges from “we’ve made huge progress” to “nothing has changed”.

    Using the World Bank’s extreme poverty line of US$2.15/day (in 2017 PPP), the share of people in poverty fell from 38% of the world’s population in 1990 (about 2 billion people) to 8.5% in 2024 (690 million people) (Figure 1). This is often cited as a historic success.

    But raise the line – say to $21.5/day, as suggested by Pritchett and Viarengo (2025), or $30/day, as argued by Roser (2024) – and the picture changes entirely. The poverty rate is then extremely high, above 75%, and has barely budged since 1990. In absolute terms, the poverty headcount has even increased, from over 4 billion poor people in 1990 to over 6 billion poor people in 2024. Based on these numbers, the fight against global poverty appears to have failed.

    This divergence is not just a statistical quirk. All mainstream poverty measures share the same fundamental feature: they ignore everyone above the chosen line. With the extreme poverty line of the World Bank ($2.15/day), someone earning $2.16/day is treated as equally non-poor as someone earning $10, $100, or $1,000/day. Billions of low-income people – who most would agree still live in poverty – are therefore excluded from the statistics. And because there is no consensus on where to set the line, it is tempting to pick the one that tells the story you want.

    In Sterck (2026), I propose to measure income poverty without a poverty line. The idea is to measure poverty across the entire income distribution, rather than classifying people as poor or non-poor based on an arbitrary threshold.

    The measure’s key intuition is simple: if person A earns half as much as person B, then A is twice as poor. Poverty is therefore simply measured as the reciprocal of income, and its unit is simply inverted. If incomes are measured in dollars per day ($/day), poverty is measured in days per dollar (days/$).

    Average poverty is simply the average time it takes to earn $1 in a given population.

    In 2024, that value was equivalent to:

    • 1 day in DR Congo, Madagascar, South Sudan, and Mozambique
    • 12 hours in Haiti
    • 2 hours in China
    • 85 minutes in the US
    • 25 minutes in Switzerland.

  • In a remarkable 24 hours in Washington, House Republicans snubbed a bipartisan funding deal cut by their own Senate GOP counterparts and instead approved an entirely different plan — prolonging the Department of Homeland Security shutdown.

    Then, they left town.

    Now, there’s no end in sight for the 42-day shutdown that has hobbled airports across the country with TSA shortages. With the House GOP’s plan going nowhere in the Senate, even Republicans acknowledge it’s not clear how to end the standoff until there’s a breakthrough with at least some Democrats.

    Both chambers of Congress are now out on a two-week recess. In a 213-203 vote, Speaker Mike Johnson and his House Republicans voted Friday night to effectively jam the Senate with their plan, fully funding DHS for eight weeks – including with border and immigration money that the prior deal left out. Three Democrats crossed party lines to vote in favor of the bill. In the meantime, Republicans say the Senate should return from its recess to approve the plan, while President Donald Trump makes his own unilateral attempt to fund TSA without Congress’s help.

    It’s a surprisingly aggressive move for the House speaker, who is directly challenging his Senate Republican counterpart, even as he sought to blame Democrats for what he called an “unconscionable” bill. Instead of the House voting on Friday to send a bill to the president’s desk, House GOP lawmakers escalated an intra-Congress feud that scrambles any chance of reopening the department anytime soon. It’s an act of defiance by House GOP leaders, who insist they didn’t agree to Senate Majority Leader John Thune’s middle-of-the-night agreement that withheld funding for border patrol or immigration enforcement.