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.
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.
Mapped: How Much Does it Take to be the Top 1% in Each U.S. State?
An annual income anywhere between $360,000-$950,000 can grant entry into the top 1%—depending on where you live in America.
How Much Does it Take to be the Top 1% in Each U.S. State?
There’s an old saying: everyone thinks that they’re middle-class.
But how many people think, or know, that they really belong to the top 1% in the country?
Data from personal finance advisory services company, SmartAsset, reveals the annual income threshold at which a household can be considered part of the top 1% in their state.
Some states demand a much higher yearly earnings from their residents to be a part of the rarefied league, but which ones are they, and how much does one need to earn to make it to the very top echelon of income?
Ranking U.S. States By Income to Be in the Top 1%
At the top of the list, a household in Connecticut needs to earn nearly $953,000 annually to be part of the one-percenters. This is the highest minimum threshold across the country.
In the same region, Massachusetts requires a minimum annual earnings of $903,401 from its top 1% residents.
Here’s the list of all 50 U.S. states along with the annual income needed to be in the 1%.
|Rank||State||Top 1% Income|
|Top 1% Tax Rate
(% of annual income)
California ($844,266), New Jersey ($817,346), and Washington ($804,853) round out the top five states with the highest minimum thresholds to make it to their exclusive rich club.
On the other end of the spectrum, the top one-percenters in West Virginia make a minimum of $367,582 a year, the lowest of all the states, and about one-third of the threshold in Connecticut. And just down southwest of the Mountain State, Mississippi’s one-percenters need to make at least $381,919 a year to qualify for the 1%.
A quick glance at the map above also reveals some regional insights.
The Northeast and West Coast, with their large urban and economic hubs, have higher income entry requirements for the top 1% than states in the American South.
This also correlates to the median income by state, a measure showing Massachusetts households make nearly $90,000 a year, compared to Mississippians who take home $49,000 annually.
How Much Do the Top 1% Pay in Taxes?
Meanwhile, if one does make it to the top 1% in states like Connecticut and Massachusetts, expect to pay more in taxes than other states, according to SmartAsset’s analysis.
The one-percenters in the top five states pay, on average, between 26–28% of their income in tax, compared to those in the bottom five who pay between 21–23%.
And this pattern exists through the dataset, with higher top 1% income thresholds correlating with higher average tax rates for the wealthy.
|State Ranks||Median Tax Rate|
These higher tax rates point to attempts to reign in the increasing wealth disparity in the nation where the top 1% hold more than one-third of the country’s wealth, up from 27% in 1989.
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