China's Dramatic Poverty Reduction Contrasts with Persistent US Inequality
Between 1990 and 2019, China achieved a remarkable reduction in extreme poverty, cutting the proportion of people living on less than $3 a day from 943 million (83% of the population) to essentially zero. Meanwhile, the United States saw its poverty level under the same threshold exceed 4 million people, accounting for about 1.25% of the population—more than three times higher than 35 years earlier.
Despite the US having a per-capita output approximately six times that of China, poverty is more widespread in the US, underscoring significant wealth inequality. From 1980 to 2023, the middle-income share of national income in the US declined from about 52.5% to 42.5%, while the top 90th percentile captured an increasing share. The bottom 10% of Americans earn a paltry 1.8% of income, a figure comparable to poor populations in Bolivia. In contrast, Nigeria, China, and Bangladesh have bottom decile income shares of about 3%, 3.1%, and 3.7%, respectively.
The rise in inequality has been intensified by globalization and automation, with policy choices playing a crucial role alongside market forces in shaping wealth distribution. Criticism has been directed at Trump-era policies, including tariffs and the so-called Big Beautiful Bill, which raised costs and cut subsidies. According to estimates by the Yale Budget Lab, these policies would reduce overall household income for all but the richest fifth of Americans, with the bottom 10% suffering an income loss of about 7%.
This analysis highlights a stark contrast: China’s success in reducing poverty under its authoritarian regime versus the United States’ slower progress despite greater wealth. It argues that the US has not made the choice to equitably share its national riches with its poorer citizens.
