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Chart: The End of World Poverty is in Sight

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The End of World Poverty is in Sight

End of World Poverty is in Sight

The number of people in extreme poverty has been cut in half since 1990.

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The world is not a perfect place, and there are many injustices that still must be combatted. Just some of these include racism, sexism, income inequality, climate change, terrorism, soaring debt, corruption, and food and water security.

Many groups of people have it rough, and they deservedly have an axe to grind. There’s plenty of work to still be done.

However, sometimes we get so caught up in our day-to-day battles and the negative news stories that we forget to look at the big picture – and the big picture actually provides a lot of optimism.

Despite the majority of Americans being pessimistic about the future, the world is actually getting better as a whole: people are living longer and healthier lives, crime and violence are down, and living standards are generally improving.

Could an End to World Poverty be near?

One particular area that is fascinating to look at is poverty.

In absolute terms, the total amount of people living in extreme poverty peaked in 1970 when 2.2 billion of the world’s 3.7 billion people lived on less than $1.25 per day.

Today, in an astonishing reversal, only 0.7 billion of 7.3 billion people are below this poverty-line worldwide.

While progress has been made in many countries, the story of China is of particular interest: after market reforms started being introduced in 1978, the country grew at an average pace of 10% per year until 2010. Over this period of time, at least 800 million people were lifted out of absolute poverty.

And while there is still much work to be done, this is an undeniable step in the right direction. The U.N. even has a bold target to end extreme world poverty by 2030.

Based on the progress so far, this doesn’t seem unrealistic.

Contributing Factors

Why have we made so much progress in this realm?

One of the most important factors is very simple: it’s estimated that two-thirds of poverty reduction comes from good old-fashioned economic growth. For every 1% increase in GDP per head, poverty is reduced by 1.7%.

From 1960 to 2000, developing nations grew at an average pace of 4.3% – and from 2000 to 2010, they grew at an even faster pace of 6.0% per year. This helped lift a lot of people out of extreme poverty.

The other factor for the remaining one-third? It’s income distribution. The degree to which economic growth helps the poorest depends on their chances of getting some of that benefit.

It’s estimated that a 1% increase in GDP per head in the least equal countries only reduces poverty by 0.6%, while it does so by 4.3% in the most equal of places.

More growth and more equality will make it possible for this powerful trend in poverty reduction to continue. And by 2030 – who knows – maybe extreme levels of poverty will be an afterthought for society.

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Visualizing the Wealth of Americans Under 40 (1989-2023)

The wealth of American Millennials hit historic highs after the COVID-19 pandemic.

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This line chart shows the growth of wealth for Americans under 40 over the last 40 decades.

Visualizing the Wealth of Americans Under 40 (1989-2023)

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Millennials have been often referred to as a “broke generation.” Whether in conversations or on the news, it is common to hear how those born in the 1980s or 1990s are struggling in today’s economy, particularly when it comes to entering the housing market or saving for retirement.

However, data shows that the wealth of Americans under 40 years old has hit historic highs after the COVID-19 pandemic, suggesting that millennials have accumulated more wealth by their 40s than previous generations.

To illustrate this, the graphic above shows the average wealth per household, adjusted for inflation, for Americans under 40 years old from Q4 1989 to Q4 2023 (in December 2023 dollars). The data is sourced from the Federal Reserve and accessed via the Center for American Progress.

Post-Pandemic Recovery

Data indicates that younger Americans have reaped the most benefits from the strong economic recovery after the pandemic, enjoying low unemployment rates and rapid wage growth.

The average wealth of U.S. households under 40 was $259,000 in the fourth quarter (Q4) of 2023, compared to $164,000 in Q4 1989 and $182,000 in Q4 2000.

QuarterAverage Wealth for Those Under 40 (USD)
Q4 1990152K
Q4 1995146K
Q4 2000182K
Q4 2005184K
Q4 2010100K
Q4 2015148K
Q4 2020231K
Q4 2023259K

Looking specifically at millennial households, inflation-adjusted wealth has more than doubled during the same period.

The increase in younger Americans’ wealth is not concentrated in a single area. Average housing wealth—house values minus mortgage debt—rose by $22,000 from 2019 to 2023. Younger Americans also saw gains in liquid assets, such as bank deposits and money market mutual funds, business ownership, and financial assets, mainly stocks and mutual funds.

Additionally, non-housing debt, such as credit card and student loan debt, fell for this age group after the pandemic.

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