Sorry, but 'third world' is really only offensive to people from first world countries who find the term 'third world' offensive. Oh, and it might also be offensive to people in developing countries who can afford developed countries' lifestyles.
I may not agree with the usage either, but that's what I see all around the third world countries that I've been to, and the one where I have lived since I was born. No one really cares, and no one is offended (except see previous paragraph).
- "third world" should include Switzerland and Austria, as they were neutral during the cold war
- "developing countries" should not include places in major wars or civil wars (such as for example not Yemen), as they're clearly not developing, but rather deteriorating.
- as you point out, "global south" should include the wealthy Australia.
It also expands into other examples of hypocrisy, such as the term "African-American", which is just an euphemism for black Americans (which itself suggest that being black is bad somehow), but due to its clumsiness also includes lots of non-black people, such as Tunesian-Americans (no black people there).
Yes, that's it. You said it better than I did.
I had no idea it was related to the USSR at all and had just assumed third world strictly meant a poor nation
There is one article talking about the effect on local industry. The gist of it is that you help people out by giving them free stuff, but you kill the local food/clothing/shoe industry and therefore trap the very communities you intend to help into a cycle where they can never start businesses and raise their standard of living because nobody will buy their stuff because they get it for free through aid.
Also, the term "third world" is not offensive and most people are tired of playing this game where some group declares some term offensive and we are all expected to stop using it. You don't get to dictate the language people use to talk and think about the world around them.
I personally wear almost exclusively second hand clothes. The only things I buy new are shoes and underwear.