
Most of Europe Is a Lot Poorer Than Most of the United States (2016) - twsttest
https://fee.org/articles/most-of-europe-is-a-lot-poorer-than-most-of-the-united-states/
======
toberoni
This looks like a heavily opinionated article with a questionable use of data.

Others have mentioned the lacking focus on inequality already, so I want to
add some other points:

While European countries have lower GDPs, their citizens work less hours than
Americans[1] and spend less on health care[2] while having similar or longer
life expectancies. Privatized education might similarly inflate GDP numbers
without improving the actual quality of life.

The author - funnily enough a specialist for tax competition and board member
of the Cayman Financial Review - is way too eager to draw political council
from this apples to oranges comparison.

[1]
[https://en.wikipedia.org/wiki/Working_time](https://en.wikipedia.org/wiki/Working_time)
[2]
[https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS](https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS)

~~~
0xy
Speaking in the very narrow view of tech, if you work in tech in the US you
are likely to make anywhere from 2 to 5 times as much as in Europe, including
taxes and healthcare costs.

There simply is no comparison. Switzerland comes second, with the UK or Canada
next.

Europeans always mention free healthcare. But when your salary in the US is
triple before taxes then the healthcare costs are irrelevant.

The absolute truth is that by choosing to work in Europe rather than the US,
you're losing potentially millions of dollars by time you reach retirement
(with compounding interest investments) -- as an average individual
contributor. If you're a high performer, you might lose far more than that.

Entry level grads in the US can in some cases be paid more than _senior_
developers in the EU.

~~~
toberoni
I agree the US provide a very high materialistic living standard if you are
well-educated or rich - but as you said, focusing on the tech sectors is a
very narrow view on societies as a whole.

As an European working in tech I really don't care about those millions of
dollars. My income - very low on the SV-scale - is more than enough to live a
comfortable life.

Compared to the Anglosphere this also means that there is a lot less pressure
in regard to getting priced-out with a median salary. Public transport &
infastructure is great, university education is cheap and housing is
affordable (not just for me, but also my friends in other industries).

Personally, this feels more egalitarian and I prefer it to a society with
higher GDP that comes with more inequality.

------
kstenerud
I've lived and worked in Canada, USA, UK, Japan, and Germany. I've also done a
fair bit of traveling.

Yes, on a per-capita GDP basis, the USA is technically "ahead", but when it
comes to daily living, it's FAR behind. During my 6 years in the USA, I saw
roads falling apart, terrible infrastructure, litter everywhere, crime and
poverty the likes I've never seen outside of third world countries. The only
thing even close to the USA was urban UK, which (other than parts of Southern
Europe and Paris) is probably the dirtiest of the Western European countries.
But even they weren't as bad as the USA. (Bear in mind I lived in the UK in
the late 90s. Things may have changed since then)

Put simply, the quality of life in America was FAR worse than any other
country I've lived in.

The consumption index is also not the greatest measure, since it has a lot to
do with consumer attitudes & materialism, which are different in most of the
world compared to America and Japan (I've never seen materialistic attitudes
as strong as there).

After moving to Germany, I have no desire to live elsewhere.

~~~
rmellow
As someone in tech who chose to grow their career in Canada instead of the US
(where I could easily make double), I very much appreciate your comment.

I still haven't discarded the possibility to move to Europe, as there are
aspects of the lifestyle here that I have a hard time getting used to. Comes
to mind: the high amount of drug users and mentally ill people screaming on
the streets, completely ignored by the state.

Are there any metrics for quality of life that take into account happiness?

~~~
kstenerud
Hmm, this site might help:
[https://www.theearthawaits.com/](https://www.theearthawaits.com/)

Generally, you want to live in a place with a low disparity between rich and
poor. They'll usually have lower crime, lower social problems, better
maintained infrastructure, lower corruption, better culture. Scandinavia is
probably the best you can get, if you don't mind the cold ;-)

------
kolinko
There is so much wrong with this article.

First of all, a lot of the "yellow" areas in the post-soviet block, that were
catching up in the past 30 years. The standards of living are increasing there
every year.

Secondly - GDP is the weirdest metric possible to measure the quality of life.
Even purchasing power index is not as good, because it ignores the things that
the government gives for semi-free. Growing in one of the poorest Polish
regions, me and my friends' families could buy fewer iPhones, and cars were a
distant dream, but we had free public education, free healthcare, cheap but
decent housing, and the public transit.

I wonder if the post's author has actually been to any of the poor European
regions - even comparing them with rich US, they look seriously decent.

------
gshdg
Yeah, looking at GDP per capita rather than median income totally disregards
the inequality that makes $54k/person ludicrous to describe as typical in the
US.

~~~
nabla9
Usually rich and poor means net wealth, not income.

Median net wealth per adult, in US dollars is relatively good measure. US is
ranked 22 globally. Source: "Global wealth databook 2019" (PDF). Credit
Suisse. [https://www.credit-
suisse.com/media/assets/corporate/docs/ab...](https://www.credit-
suisse.com/media/assets/corporate/docs/about-us/research/publications/global-
wealth-databook-2019.pdf)

European countries ahead of the US: Luxembourg, Belgium, Ireland, France, UK,
Spain,Austria, Italy, Malta, Norway. Interesting how many countries (France
for example) is ahead of Germany in both mean and median net wealth per adult.

In the US 34.5% of population has wealth between 100,000 USD and 1 million, In
UK 44.8%, France: 46.3%. US has significantly more people with wealth over 1
million. German Gini index is 81.6, France 69.6. USA 85.2.

EDIT:

Table 3-3 is super interesting. Membership of top wealth groups for selected
countries, 2019. (absolute number of people).

Over USD 100,000; Number of adults (thousands)

    
    
       China           113,410  
       United States   103,198
       Japan            55,370
       Germany          26,012
       United Kingdom   25,388
       France           25,110
       Italy            23,284
    

China already has more people with wealth over 100,000 USD. (20.8% of total)
than any other country. No wonder why US companies want to stay in Chinese
markets.

~~~
gshdg
And yet more than half of Americans don’t have $400 to cover an emergency. I
wonder how the US would stack up in 25th percentile wealth against European
countries?

Also, there are measures like food insecurity that I suspect would be very
telling.

~~~
jandrewrogers
Per the government, the median American household has >$1000 remaining every
month after all ordinary expenses, far more than enough to cover a $400
emergency. The "can't cover $400" trope doesn't imply what you think it does,
it is pulled out of context from a survey about _how_ people would cover an
emergency, not whether they could. Many popular financial stats used in the
media are misleading in service of a narrative.

As another example, you'll see many articles stating some large percentage of
Americans don't have any savings, which is only true because they define
"savings" as having a savings account, which many Americans with plenty of
money don't even have (myself included). And then there is the one about
Americans having no retirement savings, where "retirement savings" _excludes_
any real estate investments, taxable brokerage accounts, etc which is where
many Americans have the majority of their retirement savings.

The "food insecurity" surveys are a similar story. Same with "food deserts".
If you dig into the underlying studies none of them imply what the media tries
to imply with them. It is a hazard to uncritically accept statistics from the
media. They have an incentive to paint the most dire story possible.

~~~
ianleeclark
> Per the government, the median American household has >$1000 remaining every
> month after all ordinary expenses

Could you link the source? I'd like to see what is included in "ordinary
expenses." Is it just CPI associated things?

~~~
jandrewrogers
The term of art for this is "discretionary income". I think it is a more
informative than disposable income, but it is much harder to find for many
countries. The US Bureau of Labor and Statistics (BLS) publishes surprisingly
detailed statistics on consumer expenditure at decile resolution which allows
it to be easily computed.

Discretionary income is defined as disposable income after you subtract
housing, utilities, food, clothing, healthcare, and transportation costs based
on actual survey data. Roughly speaking, discretionary income is the amount of
money available for saving or spending on fun. If you want to know the mean
and distribution of how much a person spends on eggs or fresh vegetables in
each decile, the BLS can tell you that. It also tracks a lot of non-essential
expenditures. It is a great resource.

Here is the combined report from BLS for 2018:

[https://www.bls.gov/cex/2018/combined/decile.pdf](https://www.bls.gov/cex/2018/combined/decile.pdf)

------
jeroenhd
I have my doubts about some of the statistics in this article (Groningen the
number 6 wealthiest place in Europe? I'm not so sure about that) but I can't
deny that wages and freely expendable income in the US are much higher than
most of Europe.

However, with the work ethic and the hours many US workers pull to maintain
those standards, I'm not so sure if I'd want Europe to move towards the rich
American standard.

From a rich man's perspective, which many of HN's readers are very likely to
know because this crowd is seemingly highly educated or intelligent through
their own pursuit, the US does allow for a better standard of living than most
of Europe. The wages are higher, the taxes are often loert and there's better
access to luxury items.

However, in pursuit of happiness, I'd prefer less work and more free time to
enjoy the fruits of my labour over amassing wealth. Having access to expensive
laptops instead of needing to cheap out is nice, but what's the point if you
barely have time to enjoy your purchase?

There's also the perspective of poor, uneducated people. In a lot of cases I'd
much rather be jobless or stuck in uneducated labour in Europe than in the US
with the Labour rights situation in a lot of states. The right to work system
means you have a lot more power if your boss depends on your skill, but if you
don't have any unique skills or can't sell them, the same power can be turned
against you to limit your options. The employee-oriented labour protection a
large part of Europe enjoys is worth more to me than he ability to get a raise
or leave for another employee tomorrow.

I wonder what this article would look like if it weren't written by an
economist, but rather by someone researching general happiness. I'll take poor
and happy over being rich and unhappy any time, and wealth can only add so
much to your hapiness.

------
anonymfus
The argument in this article is double stupid. The obvious reason why it's
stupid (economic metrics vs quality of life metrics) is already pointed out by
other comments. The not so obvious one is that the article compares current
metrics but to really compare effect of the policies on the economics you need
a long term measures of change because European countries and USA obviously
had a very different starting places cos WW2 and USSR collapse.

------
galuggus
What about health care costs? A big difference in much of the eu is that a
health emergency won't bankrupt you.

~~~
PragmaticPulp
I fully agree that we need to fix health care for the uninsured and
underinsured in the United States.

However, do you ever wonder why so many Americans aren’t voting for socialized
healthcare? In reality, most of us aren’t at risk of going bankrupt from a
health care emergency. Again, I fully agree that _too many_ people are at risk
of going bankrupt from a healthcare emergency, but it’s not the norm for the
average American like you might read online.

The United States does actually have government health care programs for low
income and disable people (Medicaid, covers approximately 23% of the US
population) and for elderly (Medicare, covers people 65 and over). We also
have government subsidies for lower income people (up to 400% of the federal
poverty level) who need to buy their own health care plans through the
marketplace.

Again, it’s not perfect and I agree that improvements are necessary, but the
reality of the situation is a bit different than many of the reductionist
comments you read online.

When you’re earning 2x or even 3x as much as European counterparts (using my
real-world experience managing international remote teams), paying the health
insurance premiums doesn’t feel like as much of an inconvenience. In my case,
my employer pays my premiums and my out of pocket maximum spending is capped
at $1000 per year, worst case.

~~~
chrismatheson
But most of Europe aren’t spending 20-30% of their income on healthcare. If
you take that into account I wonder how these numbers stack up

~~~
PragmaticPulp
Neither are Americans. I think you have some flawed numbers:
[https://www.cnbc.com/2019/10/09/americans-spend-twice-as-
muc...](https://www.cnbc.com/2019/10/09/americans-spend-twice-as-much-on-
health-care-today-as-in-the-1980s.html)

The average American spends about $5000 on healthcare per year. That’s only
20-30% if your income is $15,000 per year.

If you’re making $100K per year or more (median SWE compensation) or even
$200K or more (upper end SWE compensation) then it’s really not a big deal.

EDIT: This is why I loathe discussions about politics ok HN. Would appreciate
some responses rather than downvotes for citing the corrected numbers.

~~~
truckerbill
Most people aren't on that kind of wage though..

~~~
PragmaticPulp
Your 20-30% claim is still way too high for even the median wages, ignoring
typical SWE comp. it’s not clear where you got your numbers, but they’re not
supported by the data.

The median US wages are covered by the subsidies above. Again, I want to
emphasize that I support health care reform to improve coverage at the lower
wages, but I’m trying to explain the discrepancy between the dire picture
painted online and the seemingly irrational voting patterns of most Americans.
The idea that you can move to a median European country and come out ahead
financially due to government healthcare doesn’t really add up.

~~~
truckerbill
I wasn't the grandfather poster you're responding to. But I'll give you my
perspective as a Brit. It seems to me a conflation of two separate things. The
pro-business environment over the pond allows a lucky minority to capitalise
and have a higher standard of living than most places in the world. That is a
plus for people who can make it in the U.S. for sure. Glossing over the
unlucky majority for the sake of the argument; this state of affairs doesn't
seem entirely dependent on the lack of a national healthcare system. It just
so happens that a slice of those lucky few don't want to lose their various
golden geese, so they have been campaigning to keep the status quo.

Socialised healthcare is cheaper but my understanding. You could have your
cake and eat it. I'm open to reading data pointing to the contrary.

------
new2628
Having lived all over Europe and US for varying amounts of time, this is true.
Yet, the subjective quality of life is higher in most of Europe than in most
of the US.

Funnily, this is true within Europe as well. Most of Northern Europe is richer
than most of Southern Europe. Yet, the subjective quality of life is by and
large higher in the south. (This last part is my opinion, take it with a grain
of salt.)

~~~
abnry
And if you read the comments here, you'd think the subjective quality of life
in the US is lower than in Europe.

~~~
benjohnson
I think it really depends on what you appreciate in your life.

Europe is better for a stroll down to the pub to grab a pint with friends and
then going to a museum .

America is better for using some snow-mobiles with friends and driving around
in a fancy car.

As an American, there's some things that I just couldn't do in Europe: I'm
making my own aluminum plane and learning to fly it. That's basically
impossible in Europe.

~~~
new2628
More so in Eastern Europe -- the other day there was an article about an
entire bootleg helicopter factory in Moldova.

------
mping
If you said to me: you are gonna die and reborn, no guarantees about what your
life will be in terms of health, education, personal wealth or personality
traits, in which country do you want to be born? Most probably not the US for
me.

------
tluyben2
Most people in my village are making around E500/month and they are pretty
happy ; is that possible anywhere in the US? I think that would explain
something; it's basically that people can afford to live happily because the
things that _really_ matter are from the gov. Public transport, healthcare and
food if you really cannot pay for it (500 is enough actually to get to
restaurants here a few time per month and a drink at the bar daily). But if
something goes wrong (fridge breaks etc), you don't end up under a bridge.

------
superjan
It is no news that average income is higher in the US, compared to Europe. The
point of social safety nets is not to improve your gross national product, but
to reduce poverty.

------
cs702
This is a highly opinionated piece that selectively uses a tiny bit of data
while ignoring a _ton_ of inconvenient data to make a persuasive argument that
does not stand up even to mild scrutiny. It is cleverly disguised as objective
research.

In other words, this is political propaganda of the highest quality. I mean
that as a compliment.

It doesn't belong on HN. I flagged it.

~~~
locacorten
It might be flawed, wrong, stupid, etc. but that’s not a reason to flag it.
Argue against, bring more light into the discussion. Censoring it brings no
good.

Censorship should be rarely and carefully used.

~~~
cs702
It was NOT intended as "censorship." According to the HN guidelines, as I
understand them, this kind of writing simply does not belong on HN. As I wrote
above, that's why I flagged it. Please don't attack a straw-man. For
reference, see
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
bane
Average is a difficult measure to use in isolation. Gini also has to be
considered. While the average income (even figuring in PPP) in say, Czech
Republic, is far lower than in the U.S., the poorest people in the U.S. are
far poorer.

------
jinushaun
Sweden and South Korea are poorer than Mississippi? This article really bad.

------
aww_dang
Here's a well known site that promotes free-market ideals. Unlike the other
one, fee.org has not been shadow-banned.

------
throw0101a
A comparison of GDP per capita _per hour worked_ :

* [https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(PPP\)_per_hour_worked)

Many EU countries are with-in 80-90% of the US by this measure. Also, the US,
nationally- / federally-speaking, has no mandatory annual leave; countries in
the EU have many days, and people tend take them:

* [https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_b...](https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_by_country)

Further, using OECD data on labour productivity, the US is down the list, so
it seems that when Europeans are working, they get more done:

> _GDP per hour worked is a measure of labour productivity. It measures how
> efficiently labour input is combined with other factors of production and
> used in the production process._

* [https://data.oecd.org/lprdty/gdp-per-hour-worked.htm](https://data.oecd.org/lprdty/gdp-per-hour-worked.htm)

And let's not forget that these per capita numbers are averages:

* [https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...](https://en.wikipedia.org/wiki/List_of_countries_by_income_equality)

And from the article:

> _I’m simply making the modest — yet important — argument that Europeans
> would be more prosperous if the fiscal burden of government wasn’t so
> onerous._

That does not necessarily follow. Given that in capitalism the 'excess' value
created goes to Capital and not Labour, it is debatable whether Joe the
Plumber or Jacques the Baker would see more money in their pockets.

~~~
uniqueid
I searched the page for "health" and "med" and could not find any mention.
Then I looked up "Foundation for Economic Education" on wikipedia, and
understood why: it's a libertarian think tank. To factor in healthcare would
weaken their message.

------
op00to
It’s almost as if you don’t need to be filthy rich, standing on the shoulders
of the poor like in America to have an acceptable quality of life in Europe
due to social programs that make sure everyone has what they need.

~~~
bromuro
When i was living in italy, most of my local friends were “poor” (no money)
but they had everything they need - they were not even trying to become
richer. A different idea of “personal success”, i guessed.

