The World’s Average Income

May 1 2013 @ 7:46am

Charles Kenny asks, “What is a reasonable ‘income floor’ above which we should hope all people worldwide live?”

At the moment, we define $1.25 [a day] as extreme poverty and $2 as poverty, plain and simple. According to MIT economists Abhijit Banerjee and Esther Duflo, among those living on $2 a day or less in urban areas of Tanzania, only 21 percent have a water tap in their house. In rural areas, it is less than 2 percent. The number with access to electricity is similarly dire. In rural areas, nearly one in 10 children die before their first birthday—most from easily preventable diseases. Two dollars is not nearly enough to ensure the basics of the good life.

The global median income is around $3 to $4 a day. Despite the fact that 50 percent of the population of the planet lives on less than that today, that’s still an insufficient floor. Why? In part because it’s less than the cost of a vente caramel frappuccino at Starbucks, and it seems wrong that most of the planet would subsist for a day on what many happily throw away on a caffeinated milkshake. More significantly, that level of expenditure still doesn’t guarantee people a quality of life we should all deserve.

He goes on to argue for between $10 and $15 a day.