This is so true. The upper middle class in India would probably be lower middle class in the US.
However, let's not kid ourselves. Cost of living in India is equally or ever more cheap. $1-$2 for lunch a day? Rent is only $200/month? My god that's cheap for people earning $20,000/yr as opposed to someone even in Mississippi.
The real losers anywhere are the bottom quintile in a highly unequal society.
I know this will sound unbelievable but I believe the comparison is done at purchasing power parity, so it's adjusting for food and rent as well. Here's the graph I remember, though it unfortunately doesn't confirm or refute my memory that the comparison is at PPP:
The graph makes me suspicious about the PPP component (it looks like normalized to US dollars?). I mean if it is completely adjusted for cost of living and everything (rent, food, etc) this seems off. Half the world is at $2k equiv?
I don't know how you could live in the US if you just made $2k/yr. Even if rent was entirely free. I'm a grad student and eat a lot of lentils, rice, eggs, and beans. $2k a year is pretty easy to blow through on just food (That's $167/mo, which is doable but not reasonable). What am I missing that is being captured here? I literally don't know anywhere in the US (I've lived in some pretty cheap and desolate areas) that you could do $2k for just rent in a year. I mean the poverty level is like $12k and you have to find really really cheap housing and eat a lot of lentils and rice to survive on that.
What am I missing? Is 50% of the world that malnourished? Are things like food and rent not being explicitly bought and thus not included? Combinations?
I too am suspicious. I think it would depend very heavily on what the basket of goods contains used in the calculation. Also purchasing the same things is not at all representative of living a standard lifestyle in each country (trivially consider a country that has religious prohibitions on certain foods, or course the prices will be wildly different). Or different expectations of what constitutes shelter, etc, etc.
That said though, in my experiences traveling, it has been shocking to me how desperately poor people can be in some countries.
> That said though, in my experiences traveling, it has been shocking to me how desperately poor people can be in some countries.
This I fully believe. But also having lived under $15k/yr, I can't fathom how that placed me in the 93(ish) percentile. I could understand being in the 70th percentile just by merit of things like having a cellphone and internet but half (48.9%) the world's population is on the internet (up from 36.6% in 2013) and 35% of people have smartphones (66.5% have mobile devices). So there's something that I'm really missing. I do know that internet and cellphones weren't as ubiquitous in 2013, but if that's what's accounting for the different then there's been a huge and rapid shift but I'd also argue that something is wrong.
Clearly there's something I'm missing here. Because with my past experience this suggests to me that living paycheck to paycheck and being malnourished in the US(living in the <13th percentile in the US) still puts you over the 90% mark (world). I assume this would be similar in Europe. I mean I know we have a SIGNIFICANTLY higher quality of life here, but this suggests to me that 80% of the world has to be extremely malnourished. Lines like this confuse me
> Almost a third of the people had less than $1,000 to spend for the whole year, that's less than $3 per day on average!
Because I can understand that if you're in India or southeast Asia and those are $3 US. But I literally cannot figure out how that would be possible in the US. Assuming everything you have and eat is coming out of your pocket.
I'm really just curious. I'm going to go ahead and assume the economists know more about economics than me. I'm legitimately just trying to make sense of this.
sorry for late reply -- I don't want to over-state my confidence on this, it could be I was wrong about PPP, and even if it is PPP it's possible that the comparison is missing somtehing. But I think part of the answer to your rent question is that many people in the developing world are living 1) multiple people to a room, in 2) informal settlements/structures that would not be legal in the US. And I do think it's possible to live off ~$60 a month for food in the US if you literally eat oats, rice and lentils -- it's terrible, I hope that goes without saying, but if we're just talking about what's possible I think that can explain the numbers.
I would love to know what piketty thinks of him as it sounds like there would be some strong disagreements about the fundamental nature of capitalism.
In piketty's world the "utopia" we now live is a result of anti-capitalist forces that destroyed or reorganized wealth during the chaos of the 20th century.
His "Elephant Curve" is well-know. His book "The Haves and the Have-Nots" is excellent.
I used his dataset to replicate his results to show inequality in an interactive form here:
https://income-inequality.info