By Tingli Shi
From the United States to China, rethinking the distance between economic growth and everyday life
Have you ever had this feeling? The news says the economy is recovering, GDP keeps growing, technology keeps advancing, and companies keep creating new wealth. But back in your own life, rent, mortgage payments, healthcare, education, and everyday spending don't seem to have gotten any easier.
In the United States, many people complain about rising prices and heavy housing costs. Even with a job, it can be hard to build up meaningful savings. In China, similar feelings are not uncommon: competition for jobs, uncertain income expectations, an adjusting property market, and worries about future retirement and education costs leave some households reluctant to spend, even when they have income.
This raises a question worth thinking about: if the economy is growing, why don't ordinary people necessarily feel richer?
This isn't unique to any one country. It reflects a deeper issue: there is no automatic equals sign between economic growth and personal quality of life.
I. GDP Is Up. Why Doesn't That Mean Everyone Is Better Off?
When people talk about economic development, one of the indicators we hear about most is GDP, or gross domestic product. It measures the total value of goods and services a country produces over a given period.
GDP growth means economic activity overall has become more vibrant and society has created more wealth. But it can't tell us directly where that wealth ends up. Have ordinary people's incomes risen alongside it? Are people living in better conditions?
Here is a simple example.
Suppose a tech company develops a new technology and earns huge profits from it, and its investors' holdings rise in value. From a macroeconomic point of view, this is clearly a positive sign of growth.
But if the gains from that technology go mainly to the company's shareholders and a small number of highly skilled workers, while ordinary employees see no real change in their pay, then for most people this round of growth may not change their lives in any direct way.
This doesn't mean GDP growth is meaningless. It shows that how much wealth a society creates and how that wealth is distributed are two different questions.
Economists have a useful concept for this: shared prosperity. It focuses not only on growth in the size of the economy, but also on whether the benefits of development reach a broad range of people.
As the Organisation for Economic Co-operation and Development (OECD) has pointed out, GDP measures economic output, but on its own it can't tell us whether life in a society is getting better, or who is actually benefiting from development.
II. The U.S. and China: Different Pressures, Similar Feelings
If we look at the United States and China, we find that the two countries face very different economic conditions. Yet ordinary people in both share some similar worries about the cost of living and the future.
In the United States, one problem is that once prices go up, the cost of living rarely goes back down.
The United States went through significant inflation during the pandemic. Even though the inflation rate later came down, that doesn't mean prices returned to where they were before.
Two ideas need to be kept apart here: a lower inflation rate is not the same as lower prices.
For example, if something that used to cost $10 now costs $12, it won't necessarily go back to $10 even if inflation later falls to a very low rate. For consumers, the price increases built up over the past few years have become the new baseline for the cost of living.
At the same time, spending on housing, health insurance, transportation, and childcare squeezes household budgets even further. According to the Federal Reserve's 2026 report on the economic well-being of U.S. households, at the end of 2025, 73% of adults said they were doing at least okay financially, but 27% said they were just getting by or finding it difficult to get by. Rising prices remained one of the most common financial concerns among respondents.
These numbers are also a reminder: it would be wrong to say that Americans as a whole are in economic hardship, but the cost of living is a pressure many households face continually.
In China, the pressure has more to do with income expectations, changes in asset values, and uncertainty about the future.
For a long time, property was not only a place to live for many Chinese households. It was also a major source of wealth. Rising home prices built up assets and gave some families strong expectations about their wealth.
But as the property market entered a period of adjustment, with home values no longer rising and in some cases falling, households began to see their own wealth differently.
Even if a person's salary hasn't fallen, they may become more cautious because their home is worth less on paper, their future income is uncertain, or they feel insecure about jobs and retirement.
The consumption data show a pattern worth noting here too. According to China's National Bureau of Statistics, in the first half of 2026, per capita disposable income grew 4.2% in real terms nationwide, while per capita consumer spending grew 2.7% in real terms; meanwhile, per capita net property income grew just 1.1%. This shows that income, spending, and property income are not moving in step.
Of course, spending growing more slowly than income doesn't by itself prove that people are less willing to spend. It may also reflect saving, how income is distributed, and changes in what people buy. But at the very least, it shows that rising incomes are not turning into spending at the same pace.
The two countries' situations can't simply be equated. In the United States, the pressure shows up more as a high cost of living and fixed expenses that can't be cut. In China, it is also shaped by the property adjustment, job expectations, and changing expectations about household wealth.
But they point to the same question: when people judge whether they are well off, they don't look only at what they earn today. They also think about what they'll have to spend tomorrow, and whether they'll be able to weather risks in the future.
III. Why Do Some People Keep Getting Richer While Others Barely Feel the Growth?
Beyond the cost of living, there's another factor that is easy to overlook: people take part in economic growth in very different ways.
For people who own assets such as stocks, property, or equity in a business, economic growth can mean rising asset values, higher investment returns, and more opportunities to build wealth.
But for people who live mainly on wages, whether growth turns into personal wealth depends on wage increases, job opportunities, and room for career advancement.
These two groups build wealth by different logic.
For example, when a company becomes more productive through automation and artificial intelligence, it may cut costs and grow revenue, and its investors may earn higher returns. But if those productivity gains don't translate into higher pay for employees, ordinary workers won't necessarily share in them directly.
This isn't to say that technological progress always hurts workers. New technologies can also create new industries and new jobs. But how the gains from technology are divided among capital, companies, and workers determines whether economic growth truly benefits more people.
Young people feel this difference especially sharply.
They may not yet have built up much in the way of assets, yet they already face pressures around housing, education, career development, and starting a family. Even in a more developed economy, they may not be able to build steady wealth the way the previous generation did, through similar paths of work and saving.
So to judge whether a society is truly becoming more prosperous, we can't look only at the wealth of a few. We also need to ask whether ordinary people have more opportunities to improve their lives.
IV. What Should We Actually Use to Measure Economic Progress?
If GDP doesn't fully reflect how people are living, what else should we pay attention to?
The answer may not be another single indicator, but a set of measures closer to ordinary people's lives.
For example:
Real income: After adjusting for price changes, has people's purchasing power actually gone up?
Income distribution: Are the gains from growth shared by a broad range of people?
Housing affordability: Can ordinary families get stable, affordable housing?
Financial security: Do people have enough savings to cope with job loss, illness, or emergencies?
Social mobility: Can an ordinary young person still improve their life through education and hard work?
These measures focus on whether economic development actually turns into improvements in people's lives.
Of course, economic growth still matters. Without sustained gains in productivity, investment, and innovation, it is hard for any society to raise incomes and living standards over the long run.
But growth itself is not the end goal. It is more like a means to a better life.
If the economy keeps getting bigger while housing becomes ever harder to afford, young people lose confidence in the future, and ordinary families don't dare make long-term plans, then we need to take a fresh look at how the fruits of development are actually reaching people's lives.
Conclusion: The Point of Economic Development Is a Better Life for People
From the United States to China, from high-income economies to developing ones, more and more people are asking a similar question: why does there seem to be a gap between the economic data and how people feel about their own lives?
That gap doesn't necessarily mean the economy hasn't made progress, nor that everyone's life is getting worse. It reminds us that macroeconomic prosperity and individual well-being are not the same thing.
A country can have a higher GDP, more advanced technology, and more competitive companies, but these achievements still have to be turned into improvements people can feel, through jobs, incomes, public services, and social protection.
Perhaps, to judge whether a society is truly prosperous, we shouldn't only ask how much wealth it creates. We should also ask:
As the economy keeps moving forward, can ordinary people live with more security, plan for the future with more confidence, and genuinely share in the fruits of development?
After all, the point of economic growth is not just to make a country's numbers look better. It is to give the people who live there a better life.
