
Rich countries tend to have a bigger middle-class, except the USA - eoinmurray92
https://kyso.io/eoin/rich-countries-tend-to-have-a-bigger-middle-class-except-the-usa
======
rayiner
It's worth reading the underlying OECD report: [https://read.oecd-
ilibrary.org/social-issues-migration-healt...](https://read.oecd-
ilibrary.org/social-issues-migration-health/under-pressure-the-squeezed-
middle-class_689afed1-en)

Two points based on the charts on page 44, 46.

1) Looking at just "middle income" people exaggerates the situation in the
U.S. because part of the reason the U.S. has a smaller middle class is because
it has a bigger upper class. About 15% of the U.S. is "upper income" versus 5%
in countries like Denmark, Norway, or France. At the other end, about 35% of
the U.S. is "lower income" or below. That's on the high side, but Sweden,
Ireland, and the U.K. are not that far off, at about 30%. Even Norway and
Denmark are in the 25-26% range.

The more concerning thing (and the OECD report focuses on that) is that almost
20% of the U.S. is poor (below 50% of median income) versus say 10% in Sweden
(or 5% in Denmark).

2) Being "middle income" means different things in different countries. The
lower threshold for the U.S. is $23,416 PPP-adjusted 2010 dollars per year.
That's right around the median income for Germany. Put differently, someone
who is right at the boundary between "middle income" and "lower income" in the
U.S. is right at the median income in Germany. Many of the people in the U.S.
classified as "low income" in the U.S. would still qualify as "middle income"
in Germany.

~~~
runako
You obviously know this, but for those who are not familiar with America,
regarding #2 above, the experience in the US is vastly different from other
rich countries.

> The lower threshold for the U.S. is $23,416 PPP-adjusted 2010 dollars per
> year.

A person that makes this in the US usually will not receive health insurance
at work. Depending on the specifics of the person's demographics/state/income,
a worker at the boundary between "middle income" and "lower income" may not be
eligible for ACA subsidies and may not make enough to pay premiums. The
middle/lower part of the income range is where a lot of the uninsured live.
Jobs that pay near this boundary also tend not to come with real health
insurance. So the frequent debate about repealing the ACA means that even if
they are insured today, these folks do not have any healthcare security as the
nation actively debates repealing their lifeline. (IIRC the Supreme Court will
decide this summer whether millions of people lose their insurance this year.
It's not a sure thing either way.)

My personal take is that not until you're fairly rich (upper middle class) can
you attain roughly the level of healthcare security that comes with residency
in other rich countries. And even that requires you to stay employed, so it's
still a lesser quality of security.

Similar factors apply to the rest of the safety net. The US might be the worst
rich country to live in if you're low-income/modest income.

~~~
hackeraccount
Wait. Hold on. You're acting like Medicaid doesn't exist. Firstly I bet that
in most states if you're making $23,000 a year don't make enough for the ACA
not too much so that you end up on Medicaid.

~~~
runako
I specifically didn't go to this level of analysis because I was responding to
a post that uses 2010 PPP-adjusted numbers. I have no idea how to quickly
compare that to today's benefits & costs.

But there are millions of families that fall on that border between "low-
income" and "middle class" who are not eligible for subsidies, get crappy
insurance, and have trouble paying for even that (which they lose if the
employee gets sick).

------
ixtli
My intuition about this as someone who grew up in America and has traveled
internationally quite a bit is that nowhere else on earth are the middle
classes so convinced that one day they will be "millionaires" than here. This
causes them to act against their own best interests.

(This was observed by Engels long ago:
[https://en.wikipedia.org/wiki/False_consciousness](https://en.wikipedia.org/wiki/False_consciousness)
)

~~~
the_economist
They aren't completely wrong.

76% of Americans spend a year of their life in the top 20%, 56% in the top
10%.

[https://www.aei.org/publication/evidence-shows-
significant-i...](https://www.aei.org/publication/evidence-shows-significant-
income-mobility-in-the-us-73-of-americans-were-in-the-top-20-for-at-least-a-
year/print/)

~~~
RobAtticus
The top 10% for individuals is 114k[0] and for a household is 178k[1]. They
may eventually get to millionaire status, but there's still a long way to go.
Basically, getting to 100+k at the end of a long career and plenty of saving &
investing (which Americans are not great at [2]) may get you there, but I
don't think those stats you provided really bear out the case.

[0] [https://dqydj.com/income-percentile-
calculator/](https://dqydj.com/income-percentile-calculator/)

[1] [https://dqydj.com/united-states-household-income-brackets-
pe...](https://dqydj.com/united-states-household-income-brackets-percentiles/)

[2] [https://www.cnbc.com/2019/03/14/heres-how-many-americans-
are...](https://www.cnbc.com/2019/03/14/heres-how-many-americans-are-not-
saving-any-money-for-emergencies-or-retirement-at-all.html)

~~~
castlecrasher2
I find it strange you're pulling out stats to refute the person you're
responding to and prove an oddly specific quote that I believe misses the
point entirely.

~~~
RobAtticus
Why? A bit of context to clear up a misconception or a misleading stats isn't
a bad thing.

------
yardie
In all my travels no one is more deluded about the middle class than in the
US. Healthcare is cheaper in Europe therefore it must be worse, somehow. The
government is completely dysfunctional and we are worse off for it. Rather
than pay slightly more to fully fund a working city/state/federal government
everyone would rather pay slightly less and have a government that can't work
at all. Then, complain about the fact the government doesn't work at all. Yes,
the DMV sucks, but guess what, that is the level of service voters decided
they wanted and that is what the DMV can deliver based on it's funding; 1-2
hour wait times with 2 or 3 agents at the counter.

~~~
ixtli
Don't even get me started. I did a year and a half of university in Tokyo and
I used and paid for the health care system there a few times. Cavities filled
for 20 dollars at high end central Tokyo offices. Skin doctors for zero
dollars and prescribed creams for 800 yen. I knew a brain surgeon there who
told me that the max price you could pay for his services was equivalent to
700 dollars. He didn't even bother going to conferences in America, and this
was 10 years ago.

Oh, and people love to talk about wait and access to doctors: not only did
none of my experiences have a wait they didn't even have a _schedule._ I
simply walked in to an office and was seen immediately, and the Tokyo metro
area has 35 million people living in it.

~~~
umvi
I don't have anything to prove it but I swear countries like Japan and Germany
are very good at this sort of thing because the people have a culture of
strict obedience to authority be it the government or whatever. They love
having and following well defined rules and are nonplussed (in the original
sense of the word) when people break the rules.

People in USA have the opposite attitude towards authority and rules.

Go someplace in Europe that doesn't have this culture and it breaks down.
Italy's healthcare is a circus. When I was in Italy not even that long ago a
doctor came in to see me with a lit cigarette in his mouth.

~~~
whatever_dude
The USA's ethos in based in the motto of doing it their own way. Sometimes
that's good: when everybody is doing the same, it breaks from the status quo
and can become a leader in an industry, or just generally break ground in
scientific and civil progress. That has happened many times in the past.

The flipside is that there are many things are a consensus worldwide because
they _are actually better_ but that the US still refuses to adopt, generally
because it would mean following others' lead, or because there are special
interests in keeping the current status quo.

To me nothing is more emblematic of this problem than the country's refusal to
adopt the metric system: the alternative is objectively worse, but the country
is pretty much the last developed country on earth to refuse to use it.

~~~
mjevans
It's more short-term pain avoidance based.

The reason we aborted the conversion to the metric system is because a
generation of idiots couldn't stand the pain of switching, and the longer we
delay the more painful it will be.

------
somethoughts
Interestingly it seems from this articles figures that the actual disposable
income of the middle class and lower class of the US is much higher than in
Europe [1].

"The United States’ smaller middle income group still earns more than almost
all its Western European counterparts. The average disposable income among
middle income Americans in 2010 was $60,884, placing it comfortably ahead of
Norway, which averaged $56,960. The one exception to Western Europe’s income
trends was Luxembourg."

[1] [https://www.citylab.com/life/2017/04/euro-vs-american-
middle...](https://www.citylab.com/life/2017/04/euro-vs-american-middle-
class/524193/)

~~~
standardUser
One would hope so, given the astronomical cost of healthcare and the near-
universal requirement that every household own and maintain at least one car
in order to work and attend school.

~~~
dmix
What is the average healthcare costs for an American?

Aren't the majority of people in the US covered by Medicare or their employers
plans?

I'm from Canada so I'm curious what the yearly costs would be like. I
typically lean libertarian on most areas of gov-run organizations but, much
like prisons, public health insurance makes far more sense to be completely
centralized vs the US random centralization and countless layers of
legislation over their pretend private market.

They are wasting money:
[https://upload.wikimedia.org/wikipedia/commons/thumb/0/0a/He...](https://upload.wikimedia.org/wikipedia/commons/thumb/0/0a/Health_care_cost_rise.svg/800px-
Health_care_cost_rise.svg.png?1556055036730)

~~~
standardUser
Having employer-provided health insurance in the United States does not mean
it does not cost the employee as well. Many companies require the employee pay
part of the premiums, especially for families, and there are many, many out-
of-pocket costs that people must pay even when they have insurance.

In the US, there were about 1.4 million bankruptcies every year before
Obamacare. There are around 700,000 per year now. But the majority of those
are still widely considered to be related to medical costs (though exact
statistics don't exist). That should give an idea of the burden most Americans
face in terms of healthcare costs.

More anecdotally, my own costs this year - as a single adult having employer-
provided health insurance - is already about $800 out-of-pocket for a few
office visits and tests.

~~~
dogma1138
$800 is less than the 15-25% health tax you’ll pay in Europe.

~~~
majewsky
You forgot to factor in that he's also paying indirectly for employer-provided
health insurance. How much is that in comparison?

~~~
dogma1138
Same goes for Europe, my national insurance contribution(which doesn't even
technically cover healthcare) is £6,664 a year, my employer pays an additional
£17,281.19 in NICS a year.

Do you think that you and your employer pay more than $30K a year for
healthcare?

Don't get me wrong there are a lot of things wrong with US healthcare
including the costs for uninsured but Europeans pay through the nose direct
and indirectly for their health insurance as well.

With marginal tax of nearly of over 50% of your income when you include
NI/Health Tax contributions, 20-25% VAT and much higher indirect taxes on
everything from fuel to sugar you end up paying for it one way or another.

~~~
majewsky
> Do you think that you and your employer pay more than $30K a year for
> healthcare?

If I add the costs for my grandmother, then that sounds very likely.

The important thing about universal healthcare is that workers pay for those
who cannot pay themselves, so it's to be expected that a 30yo developer would
pay way more than he gets back out. It's only fair, I'm gonna be old someday
and I definitely want my health insurance to cover my expenses when I cannot
pay premiums anymore.

~~~
dogma1138
Universal healthcare doesn’t have anything to do with progressive taxation.

Half of the EU doesn’t have single payer and use a public private mix, many of
them allow you to not pay for the public system at all above a certain gross
pay.

All health insurance schemes are based on the fact that young and healthy
individuals pay more than they get, it has nothing to do with universal
healthcare or a single payer system.

------
Isamu
The middle income group in the US has shrunk to around 48% of population.

The lower income group has grown a bit and this is the real problem. This
group is defined as below 75% of median.

The upper income group has also grown significantly. This is defined as above
200% of median. While we complain (rightly) about the share going to the upper
few percent, the percentage of population that is upper income in the US may
be significant compared to other "rich" countries. But we aren't given that
graph for comparison.

~~~
return1
That is the case

[https://www.pewresearch.org/fact-tank/2018/09/06/the-
america...](https://www.pewresearch.org/fact-tank/2018/09/06/the-american-
middle-class-is-stable-in-size-but-losing-ground-financially-to-upper-income-
families/)

~~~
padobson
Wow. According to that first chart, the middle class has shrunk 10% since
1971, with the upper class getting 5% larger and the lower class getting 5%
larger.

~~~
rukittenme
Consider the number of retirees on fixed incomes in 1971 versus 2016. The US
is getting wealthier _and_ older.

------
dragonwriter
I don't really like calling 75% to 200% of median income “middle class”, both
because it's not really capturing an economic class distinction and because
proportional symmetry suggests 50%-200% or 75%-133% would be properly centered
middle income segments.

But that doesn't change that it's interesting how much the US is an outlier in
terms of the aggregate performance vs. distribution measure used.

~~~
ranie93
Could you expand a bit on how its not really capturing economic class
distinction ?

------
willvarfar
This reminds me of a TEDx talk titled "Where in the world is it easiest to get
rich?"

Spoiler: Scandinavia, which happens to be top-right in this chart too.

That talk has been discussed on HN before:
[https://news.ycombinator.com/item?id=14542391](https://news.ycombinator.com/item?id=14542391)

------
gok
The actual OECD report is a good read: [https://www.oecd-
ilibrary.org/sites/689afed1-en/index.html?i...](https://www.oecd-
ilibrary.org/sites/689afed1-en/index.html?itemId=/content/publication/689afed1-en)

The more complete quote is:

> There are two striking exceptions to the positive relationship between
> absolute median income and the size of the middle-income class:

> The United States. Although it boasts the fourth-largest median income, it
> has only the 31st-largest middle-income class of all OECD countries. Related
> statistics are that its population has the third-largest share of people in
> poverty and the fourth-largest in the upper-income class.

> The Central European countries of the Czech Republic, the Slovak Republic,
> Hungary and, to a lesser extent, Poland and Slovenia. In these countries,
> the shares of the population in the middle-income class exceed what might be
> expected from their median income levels.

------
CompelTechnic
[https://read.oecd-ilibrary.org/social-issues-migration-
healt...](https://read.oecd-ilibrary.org/social-issues-migration-health/under-
pressure-the-squeezed-middle-class_689afed1-en#page21)

The graph cites the report linked above. Middle income is defined as household
income between 75% and 200% of median on page 19 of the report.

------
cperciva
I'd be interested to see how this graph looks if the USA were replaced by data
points for each of the states. The USA is unusually big as countries go, and
that will tend to increase the dispersion.

(Or conversely: Replace all the European countries with a single EU data point
-- you'll probably see an even smaller "middle class" for the EU than for the
USA.)

~~~
somethoughts
Here it is from a GDP perspective: [http://www.aei.org/publication/putting-
americas-enormous-19-...](http://www.aei.org/publication/putting-americas-
enormous-19-4t-economy-into-perspective-by-comparing-us-state-gdps-to-entire-
countries/)

------
rukittenme
Note: caps are for emphasis not yelling.

Household income is a stupid metric. In America, the top 20% of households
contains TWICE as many PEOPLE as the bottom 20% of households. The top 20% of
households contains FOUR times as many income earners as the bottom 20% of
households. The top 20% of households contains THREE times as many children
and HALF as many retirees as the bottom 20% of households.

So when someone says America has too many "poor" households. Consider that
those poor households EXIST because they are WEALTHY enough to afford it!

Consider Italy. More households in the middle income share than America. Is
that because Italy is an economic paradise? Or because of a strong,
centralized bureaucracy capable of administering income distribution schemes?
Maybe. But it could be the case that the old and young can not afford to
establish their own households. So they continue to live with the working
members of their family and enjoy the "benefit" of being a middle class
household.

I don't mean to imply that America is perfect and that Italy is not. I only
want to say that this chart is an awful way to represent data and is, in my
opinion, intentionally misleading.

------
hartator
This is misleading. Every countries in Europe would have a smaller middle
class if you take the $32-33k median US income.

~~~
dlp211
If you mean the whole world, then yes that is (mostly) true, but it is true
for every high income nation, and therefore not really informative.

If you mean against other high income nation's, then it is only true in the
most superficial sense, as once you include all benefits available to people,
and social and economic mobility, the US quickly falls down the charts.

~~~
hartator
> If you mean the whole world, then yes that is (mostly) true, but it is true
> for every high income nation, and therefore not really informative.

Just against Europe (France, Germany, and UK). If everyone is poorer, I don't
see the win. Remember Europe used to have a higher GPD per capita than the US
not so long ago.

------
diogenescynic
Healthcare, college, and childcare are all exceptionally expensive in America.
Those are the fundamentals to having a middle-class life. You're better off as
a middle class person in Western Europe than an upper-middle class person in
the US. We have virtually no safety nets either. At least Europeans have a
better sense of community and family and a welfare state to offer a safety
net. I think being an average American is definitely more stressful than being
your average Western European. I blame republicans like Reagan, Newt Gingrich,
Bush Sr. and Jr., Mitch McConnell, and Paul Ryan for the hollowing out of the
middle class and giving trillions in tax cuts to billionaires. Vote Bernie if
you want this to change and vote for Medicare for all.

------
WalterBright
Yet the chart shows that the US middle class is much wealthier than the middle
class of other countries.

~~~
ranie93
And also smaller, that can't be forgotten.

Reading this through the lens of income inequality; I don't think having a
smaller, yet richer middle class, is necessarily something to be proud of.

~~~
pathseeker
Eliminating people at the higher income brackets until the average has lowered
enough that you have a large middle class isn't something to be proud of
either.

~~~
ranie93
Is it? In the scenario you say we shouldn't be necessarily proud of more
people would be economically well-off (e.g. less people choosing between food
and rent). Are you sure that wouldn't be something to be proud of?

~~~
WalterBright
The graph has nothing to say about the relative prevalence of people choosing
between food and rent.

~~~
ranie93
I have not read the report entirely so I can't say if it does, but I don't
know for a fact either which is why I left it as a parenthetical. I am fine
with my comment being interpreted without the parenthetical.

------
m0zg
Middle class is a meaningless term even within the US, let alone in comparison
to other countries. What is "middle class"? Nowadays it seems that if you can
afford to buy a house and reliably put food on the table, and have a couple of
kids, while putting any money away for retirement you're considered "upper"
middle class at least. To me that's just a baseline requirement for not being
poor.

------
drocer88
Top 20 congressional districts by income are Democratic. Proof :
[https://finance.yahoo.com/news/midterms-one-party-
controls-w...](https://finance.yahoo.com/news/midterms-one-party-controls-
wealthiest-184200649.html)

When the alternative is an "opposition" party that is suffering from
"affluenza" , it's unlikely real fixes will happen anytime soon.

~~~
ixtli
This is a bit misleading. It doesn't mean that the rich are predominantly rich
(though this could be the case): that map is also basically a population
density map which is, according to what i've seen, the only clear predictor of
whether or not a county is likely to be "blue."

------
eoinmurray92
Also interesting is looking at GDP per capita vs equality (GINI coefficient)

I've posted the graph here: [https://kyso.io/eoin/gdp-per-capita-vs-
gini](https://kyso.io/eoin/gdp-per-capita-vs-gini)

And a discussion link here:
[https://news.ycombinator.com/item?id=19732909](https://news.ycombinator.com/item?id=19732909)

------
pwinnski
I'm not sure how they're setting the points, exactly, but the US is certainly
an outlier.

------
wnevets
That's ok, everybody in the lower class are just temporarily embarrassed
millionaires.

------
blissofbeing
Is there a full dataset somewhere? I would like to see where NZ is on this.

------
ucaetano
Another way to look at it is median income x Gini index. Essentially, higher-
income countries tend to have lower inequality, but the US is an exception,
with significantly higher inequality than other developed countries.

------
crushcrashcrush
I have a real, honest to goodness question. I live in the Bay Area. I make
$200,000 a year. I just had a mini-exit where I netted about $300K after
taxes.

I still rent for $2700/month. I don't want to buy an overpriced home in the
bay in the suburbs (I wish we had for-sale condos like Toronto everywhere...
still don't know why)

I do well. I'm 32. I'm on an upwards path. But I don't feel upper class. I
feel middle class. Maybe upper-middle. But I don't feel like I'm killing it.
Should I?

~~~
victoriasun
I would fathom a guess that you feel middle class for 2 reasons:

1\. Your life doesn't fit in line with your expectations of upper class.

2\. 200k a year in the Bay Area is, in its weird, sad way, middle class.

3\. The feeling of "killing it" is pretty difficult to obtain when you are an
ambitious person.

But you are doing well. You are probably doing better off than most people,
even in the Bay Area. I hope that you can find some peace within yourself,
because the only person who can make you feel successful is yourself. It seems
to me that you need to learn how to set trajectories for yourself with success
outcomes that resonate with you.

~~~
crushcrashcrush
Can you expand on "set trajectories for yourself with success outcomes..." ?

------
marcoperaza
This is very deceptive. Under this methodology, people too poor to be called
“middle class” in the US would be called middle class or higher in the other
countries. Note how much higher the median income in the US is than in any
other very large country (UK, Germany, France). There is no doubt the US is
more unequal, but absolute wealth for the vast majority is higher.

~~~
friday99
The graph isn't about absolute levels, but income distribution. The point I
think they are trying to make is that higher total income countries tend to
have a more equal income distribution. The US doesn't fit that trend, though
also some of the lower total income countries such as the Czech Republic have
more equal distribution as well.

~~~
marcoperaza
It’s incredibly deceptive because not only is almost everyone in the US
wealthier than their counterparts in the distribution in Europe, but they have
much higher purchasing power due to much lower prices.

~~~
dblotsky
But they might also spend more of that money on things that are free in
Europe.

~~~
acchow
There should be data available for distributions of income including
government transfers. But I would expect that the median for US would still be
faring much better than the median for France.

~~~
dblotsky
Based on what data would you expect that?

