China's Dramatic Poverty Reduction Contrasted with Persistent US Income Inequality
China has achieved a remarkable reduction in poverty, lowering the number of people living on less than $3 a day from 943 million (83% of the population) in 1990 to effectively zero by 2019, adjusted to 2021 dollars. In stark contrast, more than 4 million people in the United States—about 1.25% of the population—lived below this threshold in 2019, a figure that has more than tripled over the past 35 years despite the US having a per-capita output roughly six times that of China.
Income inequality in the US has worsened over recent decades. The middle-income share of income relative to the top 90th percentile declined from about 52.5% in 1980 to 42.5% in 2023, after peaking near 48% around 2000. The bottom 10% of Americans earn roughly 1.8% of the national income—a share comparable to countries such as Bolivia, Nigeria, China, and Bangladesh.
Factors such as globalization and technological change have played a role in increasing US inequality by disproportionately rewarding skilled workers while automating low-skill jobs. Policy proposals under the Trump administration, including the Big Beautiful Bill Act and tariffs, have been described as measures that would raise prices and reduce household incomes for all but the wealthiest fifth of Americans, with the bottom 10% potentially facing around a 7% income cut.
The persistence of income inequality is framed as a longstanding feature of US policy across both Democratic and Republican administrations. There have been limited protections for the poorest, with brief exceptions such as pandemic-era subsidies during the Clinton administration that helped boost incomes for lower-income households.
While the analysis does not endorse China’s governance, it questions how China has succeeded in dramatically reducing poverty under an authoritarian regime while the US, despite its vast wealth, has not managed to better share its prosperity.
