China's Extreme Poverty Eradication Contrasts with Rising US Inequality
China has successfully reduced extreme poverty from 943 million people in 1990, representing 83% of its population, to essentially zero by 2019, using a poverty line of $3 per day in 2021 dollars. In contrast, the United States currently has over 4 million people, about 1.25% of its population, living on less than $3 per day, which is roughly triple the level seen 35 years earlier.
Despite the US having an economic output per person approximately six times that of China, it still has more individuals living near poverty. Additionally, income inequality has worsened in the US, with the middle-income group's share of income relative to the top 90th percentile falling from about 52.5% in 1980 to 42.5% in 2023. The poorest 10% in the US receive about 1.8% of the national income, a share similar to that of poor Bolivians. By comparison, countries like Nigeria, China, and Bangladesh have bottom-10 income shares around 3%, 3.1%, and 3.7%, respectively.
Factors contributing to increased inequality in the US include globalization and technological changes that have reduced labor’s share of income and favored skilled workers. Policies under the Trump administration, such as tariffs and legislation, are projected to lower household incomes for all but the richest 20%, with the bottom 10% potentially facing income cuts of around 7%, along with significant reductions in Medicaid, ACA subsidies, and SNAP benefits.
The article highlights long-standing inertia in US policy regarding inequality, noting that only during Clinton’s presidency and Trump’s first term—with pandemic-era subsidies—was there some relief for the poor. It also raises questions about how China managed to cut poverty under an authoritarian system.
