The poor in the US and China live different lives

With the Biden administration in place, some fear that the generous social welfare policies Democrat governments tend to implement will further deplete the US’s dwindling coffers. Even as some Americans have a knee-jerk reaction to what they perceive to be socialism, can the Chinese example offer any learning points for the Americans? How were they able to industrialise so quickly and move towards poverty alleviation?
A worker plants an American flag along the National Mall in Washington, DC, US, on 18 January 2021. (Stefani Reynolds/Bloomberg)
A worker plants an American flag along the National Mall in Washington, DC, US, on 18 January 2021. (Stefani Reynolds/Bloomberg)

The US government already chalked up a national debt of around US$20 trillion before Donald Trump took office as US president in 2017. Due to the Covid-19 pandemic and the China-US trade war, national debt increased by more than US$7 trillion during Trump’s four-year term, bringing the total to nearly US$30 trillion. Before Joe Biden was officially inaugurated as the next US president on 20 January, he already had plans for a stimulus plan worth nearly US$2 trillion. The Democratic Party of the US has always been known for “splashing the cash”, and has funded many social relief projects. This is also the reason why the poor in America’s urban areas are huge fans of the Democratic Party. Now that it has gained control over the federal government, the Senate, and the House of Representatives, the Democratic Party will be even more generous in helping the poor without having to face obstruction from the Republicans.       

To achieve economic stability in a country, two things must be done: increase its revenue and cut down on wasteful expenditure. The Democratic Party’s modus operandi for increasing revenue is to raise taxes on the rich, but the Republican Party which represents the rich have often stopped them from doing so. As the Democrats show no restraint in spending money on poverty relief, their efforts in these areas are usually also met with obstruction from the Republicans. The social base of the Republicans lies in the rich and a portion of the middle class. They tend to implement tax cuts for the wealthy and stinge on poverty relief while pushing for an increase in military spending. Both the Democrats and Republicans have their own targets of increasing revenue and cutting expenditure, but the groups who benefit or suffer from their policies are different.       

Low-wage workers in the US — many of whom are Trump’s supporters — look down on the poor who survive on social welfare and who mostly support the Democrats because they think these people are parasites.

Democrat policies encourage more people to rely on social welfare

While the Democratic Party’s poverty relief policies have a long-standing history, they have actually failed miserably. As a Chinese saying goes: “Meet the urgent needs and save not the poor (救急不救贫).” While it is the government’s responsibility to help those who are faced with temporary problems, it is difficult for them to lift the poor out of poverty. One can only get out of poverty through one’s own effort. To say that the poor in the US are poor because they are lazy is politically incorrect, because many poor people are indeed poor not because they are lazy. That said, social welfare policies in the US do the opposite of “rewarding the diligent and punishing the lazy”. People are unable to survive on the minimum wage in the US, and most minimum wage jobs come without health insurance. Once employed, workers become ineligible for social assistance, and neither can they enjoy free health insurance. In that sense, being on social welfare is not much different from earning a minimum wage. As people can only choose one or the other, those who are only able to find minimum wage jobs — especially single mothers — are forced to quit their jobs and apply for social welfare. Over time, these people become “parasites” in some way. 

A family with Covid-19 carries free groceries inside which had been delivered by the non-profit Family Centers on 22 December 2020 in Stamford, Connecticut, US. (John Moore/Getty Images/AFP)
A family with Covid-19 carries free groceries inside which had been delivered by the non-profit Family Centers on 22 December 2020 in Stamford, Connecticut, US. (John Moore/Getty Images/AFP)

Low-wage workers in the US — many of whom are Trump’s supporters — look down on the poor who survive on social welfare and who mostly support the Democrats because they think these people are parasites. They rationalise that they work extremely hard but the taxes they pay go to the poor and foreign immigrants who contributed nothing. They do not loathe the rich who evade taxes but instead hate the Americans who are even poorer than them. They say that the Democratic Party is practising socialism in the US and nurturing a society of lazy people. They think that socialism means “working hard but having other people steal the fruits of your labour”.         

Many of the US’s social welfare mechanisms — food stamps, welfare funds, unemployment bonus, pension, and free healthcare services targeted at the aged and children from low-income families — are socialism-tinged products of the New Deal that former US President Franklin D. Roosevelt implemented in response to the Great Depression of the 1930s. Later, American society was again in turmoil with the civil rights movement of the 1960s. Former US President Lyndon B. Johnson proposed the “Great Society” policy aimed at the total elimination of poverty, thereby strengthening the country’s welfare system. These policies were meant to be emergency measures, but a characteristic of American democracy is this: once you have given the people a piece of cheese, it is difficult to take it away.         

Under its socialist development, China has been able to mobilise its people to participate in the labour force.

Brutal hard work

Americans have a biased understanding of socialism. This is partly due to propaganda materials from the Central Intelligence Agency (CIA) and the picture painted by CIA-supported Chinese dissidents and Falun Gong members. The Americans believe that socialism perpetuates a lack of motivation; excessive egalitarianism, that is equal reward for unequal contribution; the mentality of an iron rice bowl or guaranteed job security; and lazy people who do nothing. However, this is not true. Under its socialist development, China has been able to mobilise its people to participate in the labour force. As a result of China’s reform and development, people who did not engage in honest work initially — the idle and unemployed, human smugglers, drug traffickers and drug abusers, criminals, bandits, hooligans, and women forced into prostitution — became workers under the socialist system. This actually helped solve the problem of the so-called parasites in society, and made it fairer for those who truly worked for their share of the pie. 

How did China industrialise? How did it go from a nation of starving souls to one that is self-sufficient in food? By working. Some say that tens of millions of people starved to death during the Great Leap Forward.* But 84,000 reservoirs, as well as other flood control and water storage mechanisms, were built during the same period, far exceeding the total number in history, benefiting the Chinese people until today.

If the US fails to come up with a better solution apart from handing money to the poor, it will sink deeper into its debt crisis and completely collapse in the end.      

Workers pour concrete on a pavement in the village of Caiqutang, officially created as a relocation site for rheumathritis patients, Damxung county, during a government-organised tour of the Tibet Autonomous Region, China, 16 October 2020. (Thomas Peter/Reuters)
Workers pour concrete on a pavement in the village of Caiqutang, officially created as a relocation site for rheumathritis patients, Damxung county, during a government-organised tour of poverty alleviation efforts, Tibet Autonomous Region, China, 16 October 2020. (Thomas Peter/Reuters)

The US spends over US$1 trillion on social welfare every year, nearly double the amount it spends on the military. It is a bottomless pit in the US economy. If the US fails to come up with a better solution apart from handing money to the poor, it will sink deeper into its debt crisis and completely collapse in the end.      

The Chinese government recently often talks about its poverty alleviation achievements. My American colleagues have different thoughts about this and sat down for a discussion with me. I told them that strictly speaking, nobody in China is living in extreme poverty. Even the poorest farmer has a piece of land, is able to grow sufficient food, and has a roof over his head, even if his house is in a bad condition. The situation in the US is different. The poor do not have enough food or a home to return to. If the US government leaves them in the lurch, tens of millions of people would be homeless. The Chinese government’s poverty alleviation programme just helps the relatively poorer people live a little better.

*During the Great Leap Forward between 1958 and 1961 during the Mao era, communes were set up in the countryside and villagers were directed to build backyard furnaces to produce steel while they continued their agriculture activities. Amid a rampant misreporting of grain harvests, a devastating famine known as the Great Famine soon ensued between 1959 and 1962. According to Jonathan Spence’s The Search for Modern China, the famine claimed 20 million lives or more.  

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