A Comparative Analysis of Poverty and Income Inequality in China and the United States
China has dramatically reduced poverty over the past decades. In 1990, approximately 943 million people, or 83% of the population, lived on less than $3 per day (in 2021 USD). By 2019, this figure was effectively zero. In contrast, the United States continues to experience persistent poverty, with over 4 million Americans—about 1.25% of the population—living on less than $3 per day, more than triple the level from 35 years ago.
Despite the US having a per-capita output six times that of China, higher levels of poverty and income inequality persist in the country. The distribution of income in the US has narrowed somewhat; the share of middle-income earners relative to the top 90th percentile declined from roughly 52.5% in 1980 to around 42.5% in 2023. The bottom 10% of earners capture about 1.8% of the national income, a share comparable to poor Bolivians, and lower than in countries such as Nigeria (3%), China (3.1%), and Bangladesh (3.7%).
Policy measures under the Trump administration, including tariffs and proposals known as the Big Beautiful Bill, were projected to increase costs, reduce Medicaid and Affordable Care Act subsidies, and cut Supplemental Nutrition Assistance Program benefits. The Yale Budget Lab estimated income losses for all but the top quintile, with the bottom 10% facing about a 7% reduction in income.
Inequality has persisted through both Democratic and Republican administrations, with only the Clinton and Trump's first terms seeing some income gains for the poorer half, largely due to pandemic subsidies. The analysis argues that Trump's policies would worsen inequality and calls into question the US's commitment to equitable prosperity.
While the article does not endorse China's governance model, it draws attention to how a non-democratic state effectively reduced poverty, offering a point of reflection on differing approaches to poverty alleviation worldwide.
