Comparing Poverty and Income Inequality in China and the US
Between 1990 and 2019, China achieved a dramatic reduction in extreme poverty, lowering the number of people living on less than $3 per day from 943 million to zero by 2019 (in 2021-dollar terms). In contrast, the United States currently has more than 4 million people, about 1.25% of its population, living under the same poverty line—a figure that has more than tripled over the past 35 years.
Despite US output per person being approximately six times that of China, poverty remains a more pronounced issue in the US relative to China. The US middle-income group's share of national income declined significantly from around 52.5% in 1980 to 42.5% in 2023 when measured against the top 90th percentile. From 2000 to 2023, income growth disproportionately favored individuals in the top 90th percentile at least twice as much as those in the bottom 10th percentile.
The poorest 10% of Americans control roughly 1.8% of national income, a figure comparable to poor Bolivians and below percentages seen in countries like Nigeria (3%), China (3.1%), and Bangladesh (3.7%). According to Yale's Budget Lab, recent policies such as Trump-era tariffs and the Big Beautiful Bill are projected to reduce household incomes for all segments except the richest quintile, with the bottom 10% potentially facing a 7% cut.
This pattern of income disparity and poverty in the US is argued to be a reflection of systemic aspects of American capitalism rather than isolated or accidental phenomena. This contrasts sharply with China's approach, where government policies have played a central role in the effective eradication of extreme poverty.
