China's Dramatic Poverty Reduction Contrasts with Rising US Income Inequality
China has achieved remarkable success in reducing poverty over the past three decades. In 1990, approximately 943 million people in China lived on less than $3 a day (measured in 2021 dollars), representing about 83% of the population. By 2019, this number had fallen to zero.
In contrast, poverty in the United States has worsened over a similar period, with more than 4 million Americans now living on less than $3 per day, about 1.25% of the population—more than three times the number 35 years ago. Income distribution in the US has deteriorated as well: the share of middle-income earners relative to the top 90th percentile has declined from 52.5% in 1980 to 42.5% in 2023, after being around 48% around 2000.
The poorest 10% of Americans receive roughly 1.8% of the national income, a share comparable to poor Bolivians, and lower than countries such as Nigeria (3%), China (3.1%), and Bangladesh (3.7%). This growing inequality is linked to globalization and automation, which have disproportionately benefited skilled workers while displacing less skilled jobs through technological change.
Policy proposals in the US such as former President Trump's Big Beautiful Bill Act and tariffs are projected to raise prices and reduce access to health coverage and nutrition aid. According to the Yale Budget Lab, these measures would reduce household income for all but the richest 20%, with the bottom 10% seeing income fall by about 7%.
Inequality has been a persistent feature of US capitalism for roughly the last 50 years, with only limited improvements for poorer income groups during the Clinton administration and in Trump's first term, largely due to COVID-19 subsidies.
China's substantial reductions in poverty occurred under an authoritarian government, leading to reflection on how a non-democratic state has been able to aggressively reduce poverty more effectively than the US, without the endorsement of political repression.
