Despite the US’s economic success, income inequality remains breathtaking. But this is no glitch – it’s the system
The Chinese did rather well in the age of globalization. In 1990, 943 million people there lived on less than $3 a day measured in 2021 dollars – 83% of the population, according to the World Bank. By 2019, the number was brought down to zero. Unfortunately, the United States was not as successful. More than 4 million Americans – 1.25% of the population – must make ends meet with less than $3 a day, more than three times as many as 35 years ago.
The data is not super consistent with the narrative of the US’s inexorable success. Sure, American productivity has zoomed ahead of that of its European peers. Only a handful of countries manage to produce more stuff per hour of work. And artificial intelligence now promises to put the United States that much further ahead.
This is not to congratulate China for its authoritarian government, for its repression of minorities or for the iron fist it deploys against any form of dissent. But it merits pondering how this undemocratic government could successfully slash its poverty rate when the richest and oldest democracy in the world wouldn’t.
Is that true? Productivity is usually measured in “value” created per hour worked, not in things that were produced. So if the US produces loads of overvalued crap, it will appear more productive, but isn’t.
You could measure life outcomes instead of economic measures. The economy is the tool to improve life, not the metric itself. Let’s compare the evolution of key quality of life indices like education level attainment, alphabetization, life expectancy, access to healthcare, nutritional values of diets, or even things like government satisfaction.