A World of Vulnerability

Rising unemployment and falling incomes demonstrate that poverty is not an unchanging attribute of a fixed group; it is a condition that threatens billions of vulnerable people. But most people living below, or just above, the internationally recognized poverty line lack basic social protection, making them even more vulnerable.

ROME – In 2010, global leaders achieved the Millennium Development Goal (MDG) of reducing the share of the world’s poor to half of its 1990 level – five years ahead of schedule. But rising unemployment and falling incomes underscore the enduring threat of poverty worldwide. After all, poverty is not an unchanging attribute of a fixed group; it is a condition that threatens billions of vulnerable people.

Despite their shortcomings, income measures are useful in gaining a better understanding of the extent of poverty and vulnerability worldwide. But the World Bank’s poverty line of $1.25 per day (in purchasing-power-parity terms), which is used in measuring progress toward the MDGs’ poverty-reduction target, is not the only relevant threshold. When the poverty line is raised to per capita daily spending of $2, the global poverty rate rises from 18% to roughly 40%, suggesting that many people are living just above the established poverty line, vulnerable to external shocks or changes in personal circumstances, such as price increases or income losses.

Three-quarters of the world’s poor live in rural areas, where agricultural workers suffer the highest incidence of poverty, largely owing to low productivity, seasonal unemployment, and the low wages paid by most rural employers. In recent decades, vulnerability and economic insecurity have increased with the rise of transient, casual, and precarious employment, including self-employment, and part-time, fixed-term, temporary, and on-call jobs. At-home positions, frequently filled by women, are also on the rise.

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