China's Success in Reducing Extreme Poverty Contrasts with Rising US Inequality
China has dramatically reduced extreme poverty since 1990, when 943 million people, or 83% of its population, lived on less than $3 per day (adjusted to 2021 dollars). By 2019, that number had dropped to zero.
In contrast, the United States currently has over 4 million people, approximately 1.25% of the population, living on less than $3 per day—more than three times the number from 35 years ago. This disparity exists despite the US having a per-capita output six times greater than China's.
Income inequality in the US has worsened over the decades, with the middle-income share of national income declining from about 52.5% in 1980 to 42.5% by 2023. The bottom 10% of US income earners now receive roughly 1.8% of national income, a share comparable to that of poor Bolivians and lower than that of countries like Nigeria, China, and Bangladesh.
The article attributes rising inequality to globalization and automation, which have shrunk labor’s share of income and disproportionately rewarded educated workers while displacing less skilled workers. Policy decisions, such as those under the Trump administration—including the Big Beautiful Bill Act and tariffs—are projected to raise prices on essentials and reduce household incomes for all but the wealthiest, with the poorest facing income declines around 7%.
This pattern of growing income disparity is a persistent feature of US administrations since Carter, with only Clinton and Trump’s first term seeing a relative improvement due to pandemic-related subsidies.
While the article does not endorse China's government, it highlights the paradox that a less democratic regime has been more effective in eradicating extreme poverty than a mature democracy like the US.
