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US poverty at 13%????

Recently, many would have noticed news items stating that US poverty rate has increased to 12.7%. In numbers, 37 million Americans live in poverty. This number might be astonishing for many. They might be tempted to compare India or China's poverty rate with US.
The poverty rate, as reported in media, varies from country to country and the World Bank uses a reference line called as poverty line for global comparison. The line is set at $1 per day (or $1.08 in terms of purchasing parity terms).
However, countries like UK have their own poverty measure. Poverty is defined as an income less than 60 per cent of average national income after leaving out wealthy individuals. (I don’t have an idea how they set a criteria to leave out wealthy individuals) If this is adopted, one out of five Briton live in poverty. Similarly, in US the poverty line is defined in terms of a number in the range of $ 16,000 for a family of four and $ 12,000 for a family of two. Under the World Bank definition, both these countries showed nil population under poverty.
Recently, I was reading how Britain tackled poverty over the last 200 years, which I plan to sketch in the next blog. From calling people in poverty as 'criminally poor' to welfare state was quite an astounding feet.
From developing countries perspective which have embarked on economic reforms with a hope that economic growth would propel people out of poverty, it is very important to define poverty in realistic terms, to measure poverty (sampling survey) more accurately and to develop policies tailor made to local conditions.

(pls. note the numbers used in this blog was sourced from, World Bank's World Development Indicators Database and BBC)


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