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Comparing Poverty in India and America May Surprise You

Being poor is much more than the lack of money and possessions.

A homeless man sleeps under an American Flag blanket on a park bench on September 10, 2013 in the Brooklyn borough of New York City. (Photo: Spencer Platt/Getty Images)

A homeless man sleeps under an American Flag blanket on a park bench on September 10, 2013 in the Brooklyn borough of New York City. (Photo: Spencer Platt/Getty Images)

The Covid-19 pandemic threatens to impoverish millions of people around the world, in both developing and advanced countries. But many Americans refuse to allow their nation to be compared to a developing country. Their poverty definitions are simplistic, based on globally calculated "dollars per day" numbers that ignore critical aspects of day-to-day survival in the world's poorest communities. This dependence on absolute numbers leads to some astoundingly misleading conclusions, as when the foundation of multi-billionaire Charles Koch claimed that Americans earning $34,000 per year are among the wealthiest 1% in the world. That amount of money is not enough to sustain a middle-class family of four in America.

Defining Poverty

It's absurd to put a number on the quality of life. Poverty is not just the lack of money and possessions. The World Bank defines poverty as the pronounced deprivation of well-being. The UK's Poverty and Social Exclusion project lists numerous indicators of deprivation that contribute to poverty.

In the United States, pronounced deprivation of well-being is brought on by unmanageable debt, inferior or nonexistent health care, increases in homicides and suicides and drug and alcohol deaths, unaffordable housing, outlandish higher education costs, growing painkiller dependencies, steadily diminishing work opportunities, the stress of uncertain paychecks, the threat of incarceration, the pervasiveness of elevated pollution levels and food deserts, and especially the absence of the form of social cohesiveness that supports very poor residents of villages in developing countries.

But how does this compare to the worst forms of poverty in other countries?

Extreme Poverty in India

From a dollar-value point of view India has much more poverty than the United States. The great majority of India's people are in the world's poorer half, and about one-eighth of adults have less than $135 in total wealth [Table 3-4]. The impoverishment reaches extreme depths. Daily life in India's worst slums is described by Katharine Boo in her book "Behind the Beautiful Forevers." As a New York Times review summarizes:

Many of the slum dwellers, including Abdul, gain their sense of upward mobility by contrasting their lot with that of their less fortunate neighbors, "miserable souls" who "trapped rats and frogs and fried them for dinner" or "ate the scrub grass at the sewage lake’s edge." ... A 2-year-old girl drowns suspiciously in a pail, and a father empties a pot of boiling lentils over his sick baby. As Boo explains, "sickly children of both sexes were sometimes done away with, because of the ruinous cost of their care." ... Adults, too, drop like flies. One of Abdul’s friends ends up as a corpse with his eyes gouged out. Injured men bleed to death, unattended, by the road to the airport. Maggots breed in the infected sores of the scavengers Boo hangs out with. "Gangrene inched up fingers, calves swelled into tree trunks, and Abdul and his younger brothers kept a running wager about which of the scavengers would be the next to die." ... "The poor," she explains further, "blame one another for the choices of governments and markets, and we who are not poor are ready to blame the poor just as harshly." ... In places like Mumbai, "the gates of the rich...remained un­breached."

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But there's another side to poverty in India, which primarily applies to adults with total wealth of $1,000 to $7,000, nearly half the country [Table 3-4]. Economist Angus Deaton explains: "There are necessities of life in rich, cold, urban and individualistic countries that are less needed in poor countries... An Indian villager spends little or nothing on housing, heat or child care, and a poor agricultural laborer in the tropics can get by with little clothing or transportation... Indeed, it is precisely the cost and difficulty of housing that makes for so much misery for so many Americans, and it is precisely these costs that are missed in the World Bank’s global counts."

Other first-hand accounts attest to the value of social connections that are often missing in American life. Polish-born Karolina Goswami speaks of "Happy, friendly, and joyful people. In Indian slums you can find them everywhere, all the time. On the other hand, in America and also in many other western nations, you tend to find anger and unrest when you visit the poor areas." Urban planning expert Jim Chappell suggests that India has "managed to provide work that is necessary for society and meaningful enough to the individuals that they do it. And the people have a place to live, very substandard though it may be...It seems in many ways as though America’s destitute are worse off than the most destitute people of the country we believed set the standard for the world’s most destitute people."

America, Sliding Backwards

Most Americans assure themselves that our nation's levels of poverty could never sink to the depths of the Mumbai slums. But there are clear signs of deterioration in our self-described "exceptional" nation, which owns 30 percent of the world's wealth but has one-eighth of its adults in debt-ridden poverty. There are disturbing parallels between the U.S. and India in the essentials of human survival.

In a review of United Nations goals and a 2016 report by the Organization of Economic Cooperation and Development, Quartz found that "the US...scores dismally in most areas—such as healthcare, education, and violence." Our country also has a dismal record on poverty and inequality. According to the Credit Suisse 2019 Global Wealth Databook, 34 million American adults are among the world's poorest 10%—because of debt. That's one out of every eight adults, approximately the same ratio as in India. It's unclear which is worse, the absence of material goods in India or unmanageable debt in America.

Another measure of well-being is relative poverty, defined as "poverty defined in comparison to other people’s standing in the economy." According to the World Bank, the World Population Review, and Credit Suisse, the U.S. has greater inequality than India. In both the U.S. and India, according to Credit Suisse, the richest 10% own about three-quarters of their country's wealth.

Other comparisons relate to the World Bank's definition of poverty as the pronounced deprivation of well-being:

  • Homicides: Numerous sources report a higher homicide rate in the U.S. than in India.
  • Suicides: Numerous sources report a higher suicide rate in India than in the U.S. (although WHO shows a higher male suicide rate in the U.S. than in India).
  • Alcohol Abuse: All sources report a higher alcohol-related death rate in the U.S. than in India.
  • Homelessness: Based on the best available data, the U.S. has a slightly higher rate of homelessness than India. The numbers may be understated for both countries.

The Pandemic's Effect on Poverty in India and America

The Economist, in its inimitable way, is in denial about the likelihood of a "generalised rise in poverty" in the U.S., even amidst the continuing loss of jobs and housing for millions of Americans. While crediting the stimulus plan for sustaining the poor (and flippantly referring to it as a "covid bonus"), they question "whether extra stimulus would help those at the very bottom of America’s socio-economic ladder."

There's little question of a worldwide economic decline. Economic projections by three global organizations—OECD, IMF, and World Bank—show an expected downturn in 2020 for both the U.S. and India, followed by slight upturns in 2021. For each projection the degree of economic loss in 2020 is more severe for the U.S. than for India.

The state of health care in both countries has been thrust into chaos because of the pandemic. The poorest citizens of India have some hope: in 2018 a program called Ayushman Bharat was set up to provide 500 million Indian families with health insurance. In America, with nearly 28 million people uninsured in 2018 and over 5 million losing insurance because of COVID, states quibble over who's eligible for Medicaid, and the whole country waits for its millionaire Congressional members to address an issue that means survival for the very people they're supposed to be serving.

Paul Buchheit

Paul Buchheit

Paul Buchheit is an advocate for social and economic justice, and the author of numerous papers on economic inequality and cognitive science. He was recently named one of 300 Living Peace and Justice Leaders and Models. He is the author of "American Wars: Illusions and Realities" (2008) and "Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income" (2017). Contact email: paul (at) youdeservefacts.org.

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