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 [2] https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS
This trend is just expected to accelerate. No to mention the strengthening of the dollar and flight towards the Dollar is another wealth transfer from ROW to the US.
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.
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.
Here most people I know first save up for 10 years and then pay back 1300-2000k€ a month for 30 years for their house. And that's with lots of construction work done by themselves.
Most devs I know make less than 3.5k€ a month before taxes, end up with about 2.5k€.
I work for a US startup and while they all got big houses in Boston, we struggle to find anything below 600k€ here in some small Mountain town ;) , and that's usually not more than 1000 square feet.
I do earn more than twice what I did before. Working only part time and fully remote. Devs usually earn less than the business people. We got lots of free education in that regards so you can easily get a cheap 19 year old coder with 5 years from a technical school.
But if you're not out for money you can have your relaxed 38.5h/week job with 5 weeks paid vacation, obviously unlimited sick pay, up to 3 years paid maternity/paternity leave and lots and lots of protection (for example my wife is protected from being dismissed from her job until our kid is 8 years old).
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.
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?
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 ;-)
In no places I’ve ever lived has infrastructure been a problem. Crime has been a slight problem, but not much.
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.
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.
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.)
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.
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.
Censorship should be rarely and carefully used.
* https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
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...
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
And let's not forget that these per capita numbers are averages:
* https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
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.
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...
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
Also, there are measures like food insecurity that I suspect would be very telling.
Disposable Income is a better indicator of "money you get and can actually use" than total median income or wealth. The US is easily #1 in this category by PPP mean [1], and only drops to #3 by median.
[1] https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
It is common knowledge that in the USA, they will pay you extra in the corporate world, but that extra money goes to family health care, education, transport, and other things that are covered by European taxation schemes.
If you look at discretionary income, the median corporate employees are making similar incomes.
And of course, SWEs are outperforming in USA, and manual laborers are outperforming in EU
Also, the numbers in the article are from 2014 when the oil boom was in still full swing. That's what provided a lot of the highest paying jobs in the state. Drilling levels today are less than 10% of what they were at the peak, and consequently many of those jobs have gone with it.
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.
Another way of putting your point is that 91% of Americans have medical insurance, whether through their employers, or government programs like Medicare/Medicaid. That's compared to 95-97% in other developed countries because there are always some people who fall through cracks, like (say) a Canadian who doesn't get a new provincial health care card after moving, or a German who neglects to buy into a new sickness fund after changing careers. The only such systems with actual 100% (or as close to it as possible) coverage is something like the UK NHS, which does not have a requirement to show a membership card (because, well, there isn't one) to receive treatment.
PS - Obamacare did not greatly expand coverage. 85% of Americans had medical insurance pre-Obamacare.
>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.
Indeed. There are things I'd certainly improve about the US system—decoupling primary healthcare coverage from employment, for one—but the way people online lie^H^H^Hexaggerate it's not surprising that so many non-Americans believe that every American is one hangnail away from bankruptcy.
Speaking of which, another common lie^H^H^Hmisrepresentation about Americans and health care: Only 4% of US bankruptcies are because of medical bills (https://www.washingtonpost.com/blogs/post-partisan/wp/2018/0...). A tipoff that [insert large percentage here] of bankruptcies aren't actually because of medical costs is that only 6% of bankruptcies by those without health insurance are because of that cause. The biggest cause of bankruptcies is lack of income, which health insurance doesn't affect.
In reality, every single person is at risk for a medical situation that will bankrupt you.
Ever drive? You're at risk for getting into a car accident that could lead to thousands or hundreds of thousands of medical costs.
One of the biggest lies of the american health care system is that your risks of medical costs is solely connected to your health.
You can be the healthiest person in the world, and a drunk driver can still lay your ass out. And that is being truly the healthiest person. Many people only seem like they're perfectly healthy, because diseases like heart disease and cancer can be lurking without symptoms for long periods of time.
The biggest cause of bankruptcy in the US is medical costs. STILL. The idea that most people are at risk of going bankrupt from a health care emergency is just false.
That's wrong.
Medicaid covers the poor, Medicare covers the aged, blind, and disabled. (You can be both and be covered by both—and by either or both plus private insurance in some cases—which is a contribution to high healthcare administrative costs because of coordination of benefits.)
TL;dr 41% can cover a $1k emergency with savings. Others would get in debt. Sure, there are some ways for the very low end to get help. But that still leaves a massive number of people exposed.
> my out of pocket maximum spending is capped at $1000 per year, worst case.
Is that for any medical help from any source, or does that involve the in-network / out-of-network provider billing dance?
The other thing I'd like to point out is that their sample set is entirely from California which is materially different from many other states in the US, so it's possible the 4% rate varies state-to-state.
[1] https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most...
>A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work.
(My emphasis.) In other words, people going bankrupt because health problems = lack of work = lack of income. That does not contradict the fact that only 4% of US bankruptcies are because of medical bills (https://www.washingtonpost.com/blogs/post-partisan/wp/2018/0... that is, bills for health care treatment exceeding available income.
Your article goes on to quote a study author who carefully elides the difference between the two. Oh, by the way, he is a prominent proponent of Medicare for All! Imagine that.
And my anecdotal experience only muddies my understanding even more. Things have always worked out pretty well for me. Even the time I got a $45,000 bill because the surgeon was covered by my insurance but the anesthesiologist was not, somehow in the end after a few phone calls to the billing department my portion was lowered to just an extra $400 on top of the expected copay. I have no clue how any of it works, but these insane numbers seem to often just go away as mysteriously as they appeared. I don't personally know anyone who has actually had to pay the absurd amounts of money that get quoted, it's like it's all some kind of fake money. (I do realize that I am probably in a very privileged bubble, most people I know are at least not uninsured for instance).
Furthermore, read the actual question they asked. They didn’t ask if people could pay the expense from savings. They asked how people would pay the expense.
The options include things like “reduce spending in other areas” aren’t mutually exclusive with being able to draw down on savings accounts. Many people prefer to reserve their savings for retirement unless necessary.
You can sell your house in France within a month, than land California with that wealth in your bank account.
Net wealth is good measure precisely because you can't transfer it into money and move around with it.
Home equity is not liquid. It's locked up. There's a reason finance distinguishes between liquid and fixed assets - they are different classes with different dynamics.
If we want to compare wealth. As in being rich or poor, then net wealth is the proper way to compare stuff.
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.
Could you link the source? I'd like to see what is included in "ordinary expenses." Is it just CPI associated things?
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:
That data neither proves nor disproves what your parent comment said.
Additionally disposable income doesn't account for "optional" spending on healthcare etc. by the individual.
When you look at median disposable household income, the US still comes in somewhere at the top, but the top 15 countries all have about the same ballpark figure (~30k USD), with US being the only country among them that doesn't have unemployment benefits, affordable healthcare, etc.
https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
You keep responding to people with at best tangentially related data that is not relevant to the discussion.
Now suddenly we're looking at median gross income. And this time I don't know at all how to respond to that in a manner that will somehow make it relevant to the discussion again.
I do not know why I wrote it that way, really. I am aware the US has some social security and unemployment benefits, but not much compared to many other rich western countries. It's pretty much at the bottom right next to Germany, which has a comically low (cash) benefits imho.
I realize those numbers may be skewed by stuff like:
- Food stamp programs (US)
- The state directly paying for apartments etc. in some cases (Germany)
- Whatever else infrastructure etc. you get to use for free as an unemployed person.
In any case "social security" is hard to quantify, and depending on how and who does it you'll see countries jumping all over the place in rankings. So I'm pretty much just going by what the general perception of social security is in various countries.
[1] https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
Wow.
What's the median gross income, and level of tax, that is based on?
This number is deceptive in that the US is geographically massive and the economies, State governments (taxes), and cultures vary widely across thousands of kilometers. The difference between the median income of the highest and lowest States is almost 2x, so your experience will be very different depending on which State you live. Also, in terms of discretionary income, cost of living varies a lot so disposable income isn't the entire story.
Note that the average discretionary income (money left over after all ordinary expenses) in the US is ~$2k/month whereas the median discretionary income is $1k/month. This implies that high income earners (think $100k, not FAANG) have a few thousand dollars left over each month after expenses.
I've worked in Europe for several years and the differences in discretionary income are stark, both due to income levels and taxation. Americans are kind of oblivious to just how freely they spend money due to having so much discretionary income; we tend to assume the rest of the developed world is similar when that really isn't the case.
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.
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.
https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...
Here’s about the $1.1M bill for the 62 days treatment https://www.seattletimes.com/seattle-news/inspiring-story-of...
They charged $2,835 a day for the ventilator. Seriously? You may buy brand new ventilator for 29,000 PLN in Poland which is around $7500, hospital usage certified ‘PHILIPS RESPIRONICS TRILOGY 100’. You may rent brand new top model of Lamborghini in Los Angeles for around $2500 a day. In Europe they won’t even charge for the ventilator. The room, which costs on that bill $9,736 a day should be already equipped in everything what’s necessary to support life. If the room price doesn’t cover the equipment, does it mean it’s just 9k for the bed a day?
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.
My larger point is that, contrary to your and others' claims, income rankings that show the US at or near the top do not suddenly greatly change the US's position once healthcare expense is included. See mdorazio's comment elsewhere regarding median disposable income.
Disposable income (except confusingly on some US tax forms) does not account for private healthcare expenses (the figure that is post other necessary expenses like health insurance is called discretionary income).
In countries where a huge chunk of insurance is private or people are paying out-of-pocket, subtracting such healthcare expenses from disposable income can drastically change the picture:
Your average American spent about $5000 of their disposable income on just private health insurance and out-of-pocket expenses in 2018[1]!
It's hard to reconcile averages with a median (I still refuse to use numbers that can be easily skewed by a handful of billionaires), but since healthcare costs should be more or less constant regardless of your income bracket, it would likely be a huge chunk of the median disposable income figure. Which was the point of the person you originally replied to.
[1]: https://www.cms.gov/files/zip/national-health-expenditures-t...
As I already stated, the OECD definition of disposable income (https://stats.oecd.org/glossary/detail.asp?ID=46) explicitly accounts for "social transfers in kind", in both directions.
You've already been called out for claiming that the US "doesn't have unemployment benefits"; when challenged your response was more or less "feelz over realz". No matter how often you try to claim that using median income would invalidate OP's point, as I and others keep telling you, it does not. "since healthcare costs should be more or less constant regardless of your income bracket, it would likely be a huge chunk of the median disposable income figure" doesn't even attempt to be coherent. Please stop.
Again. This does not include private health insurance and out of pocket expenses as stated on the very site you posted: https://stats.oecd.org/glossary/detail.asp?ID=2498 (if you're now wondering what NPISHs are: https://stats.oecd.org/glossary/detail.asp?ID=1827 )
Private health insurance and out of pocket expenses are the two numbers I used to come up with the $5000 a person.
There's an old publication that more or less contains the same math, but it's from 2010 and healthcare costs have more than doubled since then: https://www.econstor.eu/bitstream/10419/203035/1/1040711413....
Go to Appendix B and have a look at the table if you're in a hurry.
I'll give you a chance to re-phrase the thoughts in the latter half of your post in a more polite manner, since I have been patient and am prepared to be so a while longer. I'm not looking forward to this conversation degrading in that way.
