Is the EU truly richer than the US in terms of overall quality of life?

[oldtobor]

Is EU richer than the US ?

For those of you who know both country - continents, is the EU richer than the USA from the point of view of the general wealth and well being of the majority of the population ?

I know the statistics say the US is very rich, but the real day to day life of Americans seem much poorer from a real life experience point of view. Am I wrong ?

I list why :

1) Free health care in the EU, don't have to worry too much if you get sick.
In the US if you are laid off you may lose health insurance that doesn't even cover all things, so constant fear and worry. And many companies want to get rid of all health expenses, so you pay all in the end which could be more than 200 dollars a month etc.

2) Job security is higher in the EU, the unions have more power, the system seems to have more protection, the hire , fire system is much softer in the EU. In the US anyone can get fired at any moment for any reason at all, even no reason. So the system is very "free" as hire and fire, but takes a high toll on stress, etc.

3) College education is almost free, costs very little. In the US you pay much more compared to the EU, at least 2,000 dollars a year. Then there is never any guarantee that your "skills" aren't worthless and "out of date", hence back to school, etc.

4) Taxes in the US are actually quite high and just about as high as EU. Property taxes, and others do add up to the Eu of almost 30%.

5) The US pensions are lower, even much lower and there is no security in what you will get. The US may give 1,000 dollars a month for 30 years labor (social security), the EU is higher, maybe 1,300 dollars.

6) Home prices in the US are coming close to being as expensive as the EU. In the EU an average house is about 250,000 dollars and the US is about there. With much worser build quality of European homes. US McMansions seem to almost fall apart because of bad build quality, the EU is all stone - concrete (but much smaller homes).

7) No vacations for American workers, the EU has almost 2 months. The American workers fear being a slacker and getting fired - laid off if they take any time off hence worry - stress.


Just some ideas, but all and all the EU seems to have a higher standard of living working less hours and enjoying. I know it is a complex debate but do any of you know both places and have any ideas ?

 

[jim mcnamara]

I'm less than sure about the numbers you gave.

I do know that in the US the distribution of wealth in the population has changed, with an increase in inequality over time:
http://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/stratification/income&wealth.htm

shorter tem view:
http://www.levy.org/pubs/wp_502.pdf

What I think you are talking about is the fact that the lower ownership group - 40% of the US only has about $$1/2$$ of the pie. I don't think that is the case in EU.

 

[oldtobor]

I know that in the US the rich get richer and poor poorer. That the idea of trickling down wealth is at the end of the road. Just the single problem of health insurance is enough to eventually make the US into a third world country, (some third world countries have free health care but maybe not very good).

It is a general sensation that the US workers are losing out. You can more easily find jobs in the US and you may land one that pays you 5,000 dollars a month, but you can be sure that 2 years down the road you won't be in that job anymore because of layoffs and downsizing etc. In the EU the pay is much lower but much more static and stable. There is the fact that there are no starter homes in the EU, they all start at about 250,000 dollars whereas in the US you can find a home for 100,000 dollars but maybe with a long commute to work. All in all I have a feeling the US is becoming poorer for the majority and is losing out as average wealth to the EU.

 

[oldtobor]

I find it incredible that such a rich country like the US with such a rich infrastructure, homes etc. gets bogged down on something like health care which is a fundamental thing just like water and bread. It is as if the system (and not only the US but in general) finds ways of creating an artificial scarcity to keep people moving or working, to break the economic equilibrium. It is as if something always has to give, either the house prices start going up or health care becomes insanely expensive and before you know it even food can get insanely expensive (as it may become given the use of food as gasoline for cars, biofuel etc..). Even though the US is rich enough to give it almost all for free to everyone, the system automatically creates scarcity, it automatically creates rich and poor, it constantly breaks the equilibrium, and it increasingly targets the FUNDAMENTAL BASIC GOODS LIKE HOMES AND HEALTH.

Another thing is that the more money flows around in the world, the more the rich don't know what to do with it, thus the more speculation in homes and other goods and the poorer the weaker classes become. Paradoxically the richer the rich get, the poorer the poor risk getting, like if all the rich pump in money into real estate to make the prices go crazy like in London where a 30 square meter home can cost easily 500,000 dollars. The richer the rich, the more money in the world (chinese central banks, stock market etc.) , the poorer the poor.

 

[Economist]

I know that in the US the rich get richer and poor poorer.

Actually, this is a commonly held myth. In the US, both the rich and the poor are getting richer. This has nothing to do with the "trickle down" effect you referred to either. Rather, this is what happens when a country makes economic progress, which creates more wealth for everybody. As JFK said, "A rising tide lifts all boats."

 

[Economist]

Is EU richer than the US ? ?

Probably not.

2) Job security is higher in the EU, the unions have more power, the system seems to have more protection, the hire , fire system is much softer in the EU. In the US anyone can get fired at any moment for any reason at all, even no reason. So the system is very "free" as hire and fire, but takes a high toll on stress, etc. ?

You're forgetting that these issues give EU employers and incentive to be very selective about who they hire, which is exactly why it is more difficult to get a job in the EU. Furthermore, the people who are most hurt by these policies are low-skill and less educated workers (in other words, these policies disproportionally hurt poor people).

 

[Economist]

the system automatically creates scarcity, it automatically creates rich and poor

I hate to tell you this but scarcity is a fact of the world. People have unlimited wants and needs, yet there are only a limited amount of resources to fulfill these unlimited wants and needs. No body "creates scarcity." In all actuality, people try to figure out ways to use these resources more efficiently, which creates wealth and leads to progress.

If you guys actually care about getting some facts on the comparison of the EU and US, then I suggest you check out this book by German reporter Olaf Gersemann:
https://www.amazon.com/dp/1930865783/?tag=pfamazon01-20

 

[russ_watters]

I know that in the US the rich get richer and poor poorer.

That's a very popular lie perpetrated by democratic politicians in the US, but it simply isn't true.

The correct statement would be that the poor get richer but the rich get richer faster.
To some this may be regrettable, but it is also a basic economic reality that exists in virtually every country in the world.

Anyway, for the US, here are the stats (you've probably seen them before since I post them every time someone makes this claim...): http://www.census.gov/hhes/www/income/histinc/h01ar.html

Boiled down to the main point, the bottom 20% of the population has seen a 30% increase in income (inflation adjusted) over the past 40 years. Over the same period, the top fifth has seen a 78% increase in income. And that's household income, by the way - it does not reflect the fact that the average household size has gotten smaller over the past 40 years, so the improvment in living condition is actually greater than the 30% improvement in income.

It is a general sensation that the US workers are losing out. You can more easily find jobs in the US and you may land one that pays you 5,000 dollars a month, but you can be sure that 2 years down the road you won't be in that job anymore because of layoffs and downsizing etc.

That doesn't make any sense. The unemployment rate in the US is low now and has been for quite some time (compared to most other western nations. Are you making the prediciton that in the next two years it is going to get drasticly higher? Or are you commenting on the high turnover rate in the US? That is largely due to the workers knowing they have other options and the lack of the rediculous controls that other countries (France) have.

For comparing the US and Europe, Europe has seen some major improvements in a lot of areas due to the creation of the EU and the combined economic power competing with the US in certain areas (the dropping value of the dollar is largely the result of this). But the US economy is growing faster than Europe's and has been for quite some time. And that isn't likely to change any time soon.

Is your purpose for posting this thread just general USA bashing via popular myths? There's really no value in that. It isn't a discussion, just a rant with people correcting you afterwards.

 

[wildman]

Actually, this is a commonly held myth. In the US, both the rich and the poor are getting richer. This has nothing to do with the "trickle down" effect you referred to either. Rather, this is what happens when a country makes economic progress, which creates more wealth for everybody. As JFK said, "A rising tide lifts all boats."

The poor have actually gotten a little poorer in the US for the last 6 years in an absolute sense (when adjusted for inflation) and the rich have become very much richer.

In general it is true though.

 

[wildman]

I mean in general the Economist is correct.

 

[Economist]

The poor have actually gotten a little poorer in the US for the last 6 years in an absolute sense (when adjusted for inflation) and the rich have become very much richer.

You're right that some studies have shown this, but most of those studies have shown to be flawed. One main reason, is that they don't account for things like fringe benefits and self-employment which have become an increasing role in our economy.

Here's a pretty good article on this exact topic:
http://www.minneapolisfed.org/pubs/region/07-09/wages.cfm

 

[russ_watters]

The poor have actually gotten a little poorer in the US for the last 6 years in an absolute sense (when adjusted for inflation) and the rich have become very much richer.

Not true. If you look at the data I provided, you will see that in the past 6 years, the earnings of the top 5% bracket has increased by only 2.5%, and all of that in the past year.

 

[oldtobor]

It is a general sensation that the US workers are losing out. You can more easily find jobs in the US and you may land one that pays you 5,000 dollars a month, but you can be sure that 2 years down the road you won't be in that job anymore because of layoffs and downsizing etc. In the EU the pay is much lower but much more static and stable. There is the fact that there are no starter homes in the EU, they all start at about 250,000 dollars whereas in the US you can find a home for 100,000 dollars but maybe with a long commute to work. All in all I have a feeling the US is becoming poorer for the majority and is losing out as average wealth to the EU.

What was meant by this is that if you take 10 people who have been downsized, outsourced, laidoff or whatever, and they were making 5,000 dollars a month, maybe, after finding another job, only one of them is still making that amount, maybe one is even making 10,000 dollars a month but you can be sure that most of the others are making much less, between 2,000 and 3,000 for example. So I don't have precise numbers, but the general impression I have is that if you do lose a good job - company it is not at all easy in the US to get to where you were. Some do but most don't. I know many people who have been through such a change. Am I wrong ? maybe. Do you know of a lot of people who have been getting better and better situations ? Thanks for letting me know then. But you know it isn't true, that most get hosed.

Economy is a numbers game, no one knows for sure how it is for everyone, no one knows every single situation, but the impression I get is that given all the original points in the first post, it isn't so easy to keep on saying yes the US is still much richer than the EU. In many cases it seems the exact opposite.

 

[Economist]

What was meant by this is that if you take 10 people who have been downsized, outsourced, laidoff or whatever, and they where making 5,000 dollars a month, maybe, after finding another job, only one of them is still making that amount, maybe one is even making 10,000 dollars a month but you can be sure that most of the others are making much less, between 2,000 and 3,000 for example. So I don't have precise numbers, but the general impression I have is that if you do lose a good job - company it is not at all easy in the US to get to where you were. Some do but most don't. I know many people who have been through such a change. Am I wrong ? maybe. Do you know of a lot of people who have been getting better and better situations ? Thanks for letting me know then. But you know it isn't true, that most get hosed.

No, what you're saying is not true. People generally make more money as they get older (because job experience allows people to get higher paying jobs). Most people don't get laid off and then get stuck with an incredibly low paying job (unless it's just for a really short time while they look for another job). For example, if someone is an accountant and they are paid $100,000 a year, they are paid this amount of money for a reason, precisely because they are very productive and they are worth $100,000 to the company. If they get laid off, it is unlikely that they'll only find a job paying $50,000. You have to realize that it was no accident they made $100,000 to begin with.

Also, considering that it is tougher to land a job in the EU, I think your analysis above may apply to the EU better than the US. If someone is laid off in the EU, then it will be tougher to get hired.

 

[jim mcnamara]

Not true. If you look at the data I provided, you will see that in the past 6 years, the earnings of the top 5% bracket has increased by only 2.5%, and all of that in the past year.

Just as a matter of clarification -
Russ, is net wealth the same thing in your view as net income?
For net wealth the reverse of what you found for net income appears to be true.
(See the post above).

 

[russ_watters]

What was meant by this is that if you take 10 people who have been downsized, outsourced, laidoff or whatever, and they were making 5,000 dollars a month, maybe, after finding another job, only one of them is still making that amount, maybe one is even making 10,000 dollars a month but you can be sure that most of the others are making much less, between 2,000 and 3,000 for example. So I don't have precise numbers, but the general impression I have is that if you do lose a good job - company it is not at all easy in the US to get to where you were. Some do but most don't. I know many people who have been through such a change. Am I wrong ? maybe.

Yes. As the numbers clearly show, you are wrong. There must be people making more, otherwise the average incomes would be decreasing due to the job turnover and they aren't.

Instead of making up statistics to fit your perceptions, how about acutally looking at the statistics and then dealing with the reality that your perceptions are just perceptions? They aren't real.

Do you know of a lot of people who have been getting better and better situations ?

Virtually everyone I know who has changed jobs on purpose or by layoff fits into that category. Several have seen truly enormous raises. But then, I'm 31 and most of my friends are also young and moving up quickly.

One friend of mine was probably making $35k as a mindless office drone. He got laid off 4 years ago, langushed on unemployment for a year, not really trying to get a new job (why bother if the government will pay you not to work?). When that ran out, he got trained to be a paralegal (takes about 3 months), found a job immediately, and now he makes in excess of $50k.

 

[russ_watters]

Just as a matter of clarification -
Russ, is net wealth the same thing in your view as net income?

No, certainly net wealth is not the same as net income. But "wealth" is really a pretty useless measure since an awful lot of people actually have negative net wealth. And often it's the richer who are the most negative.

For net wealth the reverse of what you found for net income appears to be true.
(See the post above).

I don't see a post discussing that.

 

[jim mcnamara]

How about #2? Follow the links, I guess, if I hashed the text my apologies.

I flat out do not buy your negative wealth argument, except in terms of the US tax laws.
The point I was trying to make was that measuring income and measuring how well off you are are not synonymous. Again equating your argument about 'negative net wealth'
with high net income is also essentially non-productive.

EXample of how true net worth affects your life postively IMO:
My brother owns a well-run store, his net income is below $US50000. The store grosses about $US1800/day. This means his cash flow is good. He taps into the store cash as needed, and then replaces it. People on a $50000 salary cannot do that. Example: find $2500 to fix a roof leak. Salaried folks borrow instead, increasing debt load.

His true net wealth on paper is currently large. As far as the tax roles go, his net worth is negative. He owes more on the store than it is assessed. And his ability to purchase things matches that figure of his true net worth. His net income does not.

 

[oldtobor]

How about #2? Follow the links, I guess, if I hashed the text my apologies.

I flat out do not buy your negative wealth argument, except in terms of the US tax laws.
The point I was trying to make was that measuring income and measuring how well off you are are not synonymous. Again equating your argument about 'negative net wealth'
with high net income is also essentially non-productive.

EXample of how true net worth affects your life postively IMO:
My brother owns a well-run store, his net income is below $US50000. The store grosses about $US1800/day. This means his cash flow is good. He taps into the store cash as needed, and then replaces it. People on a $50000 salary cannot do that. Example: find $2500 to fix a roof leak. Salaried folks borrow instead, increasing debt load.

His true net wealth on paper is currently large. As far as the tax roles go, his net worth is negative. He owes more on the store than it is assessed. And his ability to purchase things matches that figure of his true net worth. His net income does not.

Interesting real life example of how things work. The other poster said he was 31 and getting better like all his friends. So the older you are the harder it is to find the good job ? Then if all you need is 3 months para-legal course to land 50,000 dollars why go to college ? I think it is a fluke case. The point is they are all fluke cases, maybe the concept of generalizing in economics is fundamentally flawed. There are a million examples showing hard lives and poverty even after "working hard" and a million examples of the opposite. There probably is no general rule.

But the benefits thing is BS. If you get sick your hospital bill can become 200,000 dollars, there goes all your money! even if you are insured by your IBM company for example they will maybe pay 20,000 dollars because other things aren't covered.

Then the guy who is worth 100,000 dollars to his company, does that imply 80 hour work weeks? then he is actually making 50,000 dollars for a standard 40 hour week. And how much is the stress and surely crappy boss that just wants him to stay until midnight cost ? I am just guessing but there are many variables. Your statistics don't mean a thing. If you got a thousand people making 1000 dollars a year and one making a billion, then the average is a million dollars a year but no one is making it. So beware of numbers and false impressions and generalizations and economic theories in general. They are all deeply flawed.

 

[Gilligan08]

Interesting real life example of how things work. The other poster said he was 31 and getting better like all his friends. So the older you are the harder it is to find the good job ? Then if all you need is 3 months para-legal course to land 50,000 dollars why go to college ? I think it is a fluke case. The point is they are all fluke cases, maybe the concept of generalizing in economics is fundamentally flawed. There are a million examples showing hard lives and poverty even after "working hard" and a million examples of the opposite. There probably is no general rule.

But the benefits thing is BS. If you get sick your hospital bill can become 200,000 dollars, there goes all your money! even if you are insured by your IBM company for example they will maybe pay 20,000 dollars because other things aren't covered.

Then the guy who is worth 100,000 dollars to his company, does that imply 80 hour work weeks? then he is actually making 50,000 dollars for a standard 40 hour week. And how much is the stress and surely crappy boss that just wants him to stay until midnight cost ? I am just guessing but there are many variables. Your statistics don't mean a thing. If you got a thousand people making 1000 dollars a year and one making a billion, then the average is a million dollars a year but no one is making it. So beware of numbers and false impressions and generalizations and economic theories in general. They are all deeply flawed.

Actually I think you are alittle misguided here. Your example of the average person making a million dollars is misleading becaue economics can tell us a bigger picture. You happened to give a statistic that is infact misleading strictly to back you own point. Surely there are others that would paint a better picture of your given scenario such if you found the median wealth and I'm sure there are plenty more. Sure statistics can never predict on an idividual's circumstances but then again you asked the question about the average American wealth. You seem to have more of a problem about our health care, as if that defines our wealth. I personally don't know anyone that has encountered the problems you suggeseted. I know they are out there but you make it seem like they are rampent.

 

[oldtobor]

I personally don't know anyone that has encountered the problems you suggeseted. I know they are out there but you make it seem like they are rampent.

So of those initial points I made all together in my first post, health care expenses, job security, college costs, tax costs, little vacation, home costs etc. and that compared to the EU, you suggest that all those points are not very important in the US in the larger scheme of things ? I accept being completely wrong, really. I just thought that all those points in my first point do add up and comparing them to the EU, it gives me a sensation of the US being actually poorer.

Granted there are more choices in the US for jobs, you can move more easily from state to state, each state - market is different and you can find a nice corner to make good, I agree. But all those points I made do add up and the US is starting to resemble the EU more and more in many subtle ways like home prices near big cities having high paying jobs. This was not the case for the US 10, 20 years ago, you could find affordable homes in LA or NYC, but things started to resemble London or Tokyo, high home prices and rents etc. I may be all wrong, but if you all have examples where things are much better than as I see them I accept and appreciate these other views.

 

[Economist]

Then if all you need is 3 months para-legal course to land 50,000 dollars why go to college?

Because college grads have the ability to move up and make more money 5 - 10 years after graduation, and get paid more than $50,000. Besides, people don't only make decisions about careers based on money. Many people would rather have a job paying $30,000 in a field they love, as opposed to a $50,000 job in something they don't like. Most PhDs can make more money in the private sector, but they choose to work in academia where the pay is not so high. It's no mystery why they choose academia, they go into academia because they find the career choice personally more rewarding.

If you got a thousand people making 1000 dollars a year and one making a billion, then the average is a million dollars a year but no one is making it.

Do you understand the difference between median and mean? The reason you mentioned above is the exact reason they use the median income. In your example above, the mean income would be $1 million, while the median income would be $1000.

So beware of numbers and false impressions and generalizations and economic theories in general. They are all deeply flawed.

Maybe. Or maybe you're generalizations, impressions, logic, and reasoning is deeply flawed. I wonder which is more likely?

 

[Economist]

So of those initial points I made all together in my first post, health care expenses, job security, college costs, tax costs, little vacation, home costs etc. and that compared to the EU, you suggest that all those points are not very important in the US in the larger scheme of things ? I accept being completely wrong, really. I just thought that all those points in my first point do add up and comparing them to the EU, it gives me a sensation of the US being actually poorer. .

You should really read this book, as it discusses most of the issues you discussed above:
https://www.amazon.com/dp/1930865783/?tag=pfamazon01-20

In my opinion, it is not clear that health care is worse in the US. This topic is currently being heavily debated, and I'd rather not get into it, because there is a post elsewhere on this forum which discusses this exact topic. You should check it out if you want to hear some of the arguments.

Job security is probably not as sound as you think in the EU. It may be more difficult to get fired, but it's also more difficult to get hired. I'd take our labor market any day.

As far as tax costs, we probably have lower tax rates then most (all?) of the EU.

I'm not sure about home prices. You'd have to compare places both in and out of cities. My guess is that people get more home for their money in the US.

I also doubt that the US is poorer. However, everyone has different tastes/preferences, so if you prefer life in the EU, then great. I however, think I'd enjoy living in the US more. When you are talking about standards of living for the median person though, it seems to me the US does better.

But all those points I made do add up and the US is starting to resemble the EU more and more in many subtle ways like home prices near big cities having high paying jobs. This was not the case for the US 10, 20 years ago, you could find affordable homes in LA or NYC, but things started to resemble London or Tokyo, high home prices and rents etc. I may be all wrong, but if you all have examples where things are much better than as I see them I accept and appreciate these other views.

Well, these major US cities probably have high rents and home prices for multiple reasons. Some are just that fact that many people want to live there because they like it and enjoy the job opportunities and the big city feel. Some economists claim that the reason property is very expensive in some of these major US cities, is because of regulation/government/policy. Zoning laws and building restrictions have made home prices go up, because in effect it's made homes more scarce, and more people have wanted to move there, but these regulations have made it more difficult to house these people.

 

[Gilligan08]

I just thought that all those points in my first point do add up and comparing them to the EU, it gives me a sensation of the US being actually poorer.

Oh so you were going on a sensation. Well I have been to quite a few countries in the EU and I would say in general I felt right at home (besides cultural differences). Everything was alittle smaller like rooms, streets, food portion sizes hahaha (this I actually hated, I go hungry in Europe). I have never lived over there but there doesn't by my preception seem to be a huge difference. Though I can't say what I would have noticed going over to the EU 50 years ago. Maybe I would have noticed huge difference.

Well of course the EU and the rest of the world is catching up to the US. It's called the Law of diminshing returns. The richer a country gets the harder it gets to continue in a positive direction. I don't think the US economy is going down, but rather EU is coming up. Certainly creating the euro helped. US wasnt going to be head for ever.

 

[russ_watters]

I flat out do not buy your negative wealth argument, except in terms of the US tax laws.

You know what - yeah, I was wrong about that. I was thinking about it incorrectly - people don't often have negative wealth due to their loans, just very near zero (as shown in your link). Many young people (like me) buy houses on virtually no downpayment, which puts them in a lot of debt, but the equity in their house is still there, for a slightly positive net worth.

The point I was trying to make was that measuring income and measuring how well off you are are not synonymous.

Your income determines how nice of a car and house you can buy, how many toys you can buy, etc. It seems pretty obvious to me.

EXample of how true net worth affects your life postively IMO:
My brother owns a well-run store, his net income is below $US50000. The store grosses about $US1800/day. This means his cash flow is good. He taps into the store cash as needed, and then replaces it. People on a $50000 salary cannot do that. Example: find $2500 to fix a roof leak. Salaried folks borrow instead, increasing debt load.

You aren't comparing apples to apples. Income stats are gross, and your brother therefore has a very large income, but also very high expenses.

His true net wealth on paper is currently large. As far as the tax roles go, his net worth is negative. He owes more on the store than it is assessed. And his ability to purchase things matches that figure of his true net worth. His net income does not.

Worth and wealth are the same thing. If he owes more than the value of the store, it is negative. Also, if he's borrowing against his store, that's still debt. He still has to pay it back (otherwise, he's just taking more income, which then also blows your theory out of the water).

Anyway, the semantics of that aside, are you making the argument that the income distribution shows that the poor are getting poorer? Because you haven't shown that. Just like with income, the fact that the wealth distribution is getting wider does not imply that the poor are getting poorer. That's that myth again.

 

[russ_watters]

Interesting real life example of how things work. The other poster said he was 31 and getting better like all his friends. So the older you are the harder it is to find the good job ?

Sort of. The younger you are, the lower your salary because your experience level is low. People don't get the benefit of the doubt and start off earning less than they are really worth. The ones who prove themselves quickly move up. Think about it this way: someone with 2 years of experience has twice the experience as someone with 1 year. Someone with 6 years of experience only has 20% more than someone with 5.

Also, the younger you are, the more of a clean slate you are. You can try 50 different jobs for your first job, all at about the same salary. If you've worked in one job for a long time, you expect a certain salary for your next job based on your experience - but if you change to a completely new career, you would be starting over from scratch. You pigeonhole yourself when you select a career. How old are you? - this is a simple fact of life that anyone who has worked a real job really should know, regardless of what country they are from.

Then if all you need is 3 months para-legal course to land 50,000 dollars why go to college ?

$50k isn't enough for him (it wouldn't be enough for me either) - so he's applying to law school. And I think most paralegals have college degrees (not certain of that).

I think it is a fluke case.

It isn't, but...

The point is they are all fluke cases, maybe the concept of generalizing in economics is fundamentally flawed.

Bingo. And that's what you are doing - generalizing based on a few anecdotes. You need to start looking at statistics (I only provided anecdotal counterexamples because you asked, to show they do exist).

There are a million examples showing hard lives and poverty even after "working hard" and a million examples of the opposite. There probably is no general rule.

There is a general rule - you just can't get it from anecdotes.

Then the guy who is worth 100,000 dollars to his company, does that imply 80 hour work weeks? then he is actually making 50,000 dollars for a standard 40 hour week. And how much is the stress and surely crappy boss that just wants him to stay until midnight cost ? I am just guessing but there are many variables. Your statistics don't mean a thing.

You're making up anecdotes and saying statistics don't mean a thing? No - your made-up stories don't mean a thing. Statistics tell what is really going on.

If you got a thousand people making 1000 dollars a year and one making a billion, then the average is a million dollars a year but no one is making it. So beware of numbers and false impressions and generalizations and economic theories in general. They are all deeply flawed.

You didn't even bother looking at the statistics I posted, did you? Any idiot knows that just taking an average of a wide set of data gives a useless answer. That isn't what the statistics I posted show (it is more than just median - they break up the country into blocks of fifths). Look at them.

If you keep your blindfold on, you will never be able to see the truth (and maybe that's what you want...?).

 

[russ_watters]

So of those initial points I made all together in my first post, health care expenses, job security, college costs, tax costs, little vacation, home costs etc. and that compared to the EU, you suggest that all those points are not very important in the US in the larger scheme of things ? I accept being completely wrong, really. I just thought that all those points in my first point do add up and comparing them to the EU, it gives me a sensation of the US being actually poorer.

Your sensation is not real information. It doesn't mean anything. It exists only in your head. Echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo, echo,echo, echo, echo, echo, echo.

I have also visited a number of places in Europe and I also got the "sensation" that I have a nicer car and a bigger house than most people my age. Does that mean anything? No.

 

[oldtobor]

Thanks for the views. Some are interesting, so I am probably wrong on some things, ok.

I think it is a question of how inequality is viewed. In the US the dominating view is that inequality between people is a kind of motor to drive yourself to prove yourself and do better and work and study for goals. You have less social protection maybe but more freedom to try other jobs, to study and work and compete against others and therefore climb a social ladder. You can move around the country and the individual "responsability" and freedom to do and choose is the strength of the system.

In the EU and most countries in the world being that they all seem to have a more socialist influence, inequality is more similar to injustice, to someone who gets more or has more while not really deserving it. The freedom the individual has (or imagines he has) in the US is not really there in the EU, you land a job if you are fortunate and just glide by, like in France with the 35 hour work week. The concept of hard work to identify yourself and show how much you are worth and get ahead is much weaker in most other countries.

So it is a cultural - ideological view of life. Are you freer in the US when you are climbing a social ladder but tied down to your job 80 hours a week, but you love your job (or maybe you are fooling yourself that you love it ?) or are you freer in the EU with less pay but you can get by with a 35 hour work week ? I don't know, which is better. You are more on your own, your personal responsability is more important in the US, in the EU you have government welfare or free health care etc, that covers you, but it is ultimately an ideological - philosophical outlook that produces the laws of both regions.

Of course capitalism and the rich and powerful corporations prefer people having the "hard work" and deserving mentality the US has, it can squeeze people more because people think they are going to get ahead although it is never gauranteed. Probably both systems generally suck and rip you off one way or another, there is no free lunch, just some random thoughts, anyways my sensations are probably all flawed so that is OK.

On the taxes, if you add in the US property taxes, you will see that it is quite close to the EU of 30% of your income. Property taxes in the US have gone up a lot in a lot of areas as a result of home prices going up. I think you are paying from 200 to 300 dollars a month in the better suburbs of the US, am I wrong ? If you compare almost free daycare for children in the Scandinavian countries while mommy goes to work compared to the US average of another 200 to 300 dollars a month you have to pay in the US for daycare centers, this also adds up to another form of "hidden" tax in the US.

 

[oldtobor]

I would also concede that Northern Europe aka Ireland, UK, Norway, Sweden, Finland, Denmark, Holland is very different from Southern Europe aka Portugal, Spain, Italy and Greece. So it is a gross incorrection to put them all in one basket called the EU. Just to set the record straight, Southern Europe SUCKS a whole lot more compared to Northern Europe.

 

[Gilligan08]

Well, if you have ever taken any economics class then you have surely heard this before but this relates to the theory of maximization of utility. Basically in life you have a choice of lots of money and no free time or no money and nothing but free time. Of course you can also choose to be anywhere in between. I guess culturally maybe Americans prefer to have more money and less free time. I guess we look to our retirement as our eventual free time. By then we will have accumalated enough money, hopefully, to live nicely. It all just depends on what it is you want.

 

[Economist]

Thanks for the views. Some are interesting, so I am probably wrong on some things, ok.

I think it is a question of how inequality is viewed. In the US the dominating view is that inequality between people is a kind of motor to drive yourself to prove yourself and do better and work and study for goals. You have less social protection maybe but more freedom to try other jobs, to study and work and compete against others and therefore climb a social ladder. You can move around the country and the individual "responsability" and freedom to do and choose is the strength of the system.

In the EU and most countries in the world being that they all seem to have a more socialist influence, inequality is more similar to injustice, to someone who gets more or has more while not really deserving it. The freedom the individual has (or imagines he has) in the US is not really there in the EU, you land a job if you are fortunate and just glide by, like in France with the 35 hour work week. The concept of hard work to identify yourself and show how much you are worth and get ahead is much weaker in most other countries.

So it is a cultural - ideological view of life. Are you freer in the US when you are climbing a social ladder but tied down to your job 80 hours a week, but you love your job (or maybe you are fooling yourself that you love it ?) or are you freer in the EU with less pay but you can get by with a 35 hour work week ? I don't know, which is better. You are more on your own, your personal responsability is more important in the US, in the EU you have government welfare or free health care etc, that covers you, but it is ultimately an ideological - philosophical outlook that produces the laws of both regions.

Of course capitalism and the rich and powerful corporations prefer people having the "hard work" and deserving mentality the US has, it can squeeze people more because people think they are going to get ahead although it is never gauranteed. Probably both systems generally suck and rip you off one way or another, there is no free lunch, just some random thoughts, anyways my sensations are probably all flawed so that is OK.

On the taxes, if you add in the US property taxes, you will see that it is quite close to the EU of 30% of your income. Property taxes in the US have gone up a lot in a lot of areas as a result of home prices going up. I think you are paying from 200 to 300 dollars a month in the better suburbs of the US, am I wrong ? If you compare almost free daycare for children in the Scandinavian countries while mommy goes to work compared to the US average of another 200 to 300 dollars a month you have to pay in the US for daycare centers, this also adds up to another form of "hidden" tax in the US.

Look, in my own personal opinion you have once again mentioned many things which I think are confused and incorrect. I think you should really check out these old PBS documentaries, titled "Free to Choose" by Dr. Milton Friedman. The link I am posting is a website where you can watch them for free. I'd start with the 10 episodes that aired in 1980 as they are the original series. After that you can also watch the 5 episodes that he updated in 1990. You can watch them all for free here: http://ideachannel.tv/

If you look on the right side of the screen you will see all the episodes listed. They cover many of the topics we've been discussing. I'd say it's one of the best ways for someone to get an elementary understanding of economics and economic concepts.

By the way, when you were mentioning taxes, you only brought up income taxes and property taxes. To really get to the bottom of this debate you would have to include and compare ALL taxes (sales, property, wealth, widfall profits, etc.). And when you said that a women in the US pays a "hidden" tax for daycare, that's simply not true. That is not a "tax" at all, it is a decision to purchase something. She has the choice to pay for daycare, and she can choose the daycare that's cheapest or best or whatever, or she can try to work out another arrangement, like letting her mom watch the kid, or taking turns with other parents. But it's definitely not a tax.

 

[vanesch]

Well, if you have ever taken any economics class then you have surely heard this before but this relates to the theory of maximization of utility. Basically in life you have a choice of lots of money and no free time or no money and nothing but free time. Of course you can also choose to be anywhere in between. I guess culturally maybe Americans prefer to have more money and less free time. I guess we look to our retirement as our eventual free time. By then we will have accumalated enough money, hopefully, to live nicely. It all just depends on what it is you want.

I think this is about correct: in general, in the EU, one is a bit less "eager to be rich" and a bit more desirefull of "a peaceful quiet life" - maybe the war-ridden past of Europe is responsible for this up to a point. As such, even with entirely "free choice" options (and they are being instored more and more: the European commission is working a lot towards more capitalism and free choice), the spending pattern of Europeans would probably not change that much from their taxes-imposed spending for public service: they would probably invest about as much in the same kinds of services as are provided for by public services right now. The only difference is probably that if certain services are transferred to the private sector, they might (but not always!) become more efficient with their money. So it is not clear to me how a complete privatisation of all public services might change radically the economy in Europe. In any case, the EU is evolving slowly in that direction, so we'll find out.

 

[jim mcnamara]

Recent analysis of the US Dept of Energy datasets shows that one part of deregulation privatizing, free markets (specifically: removing government controls on utility rates, allowing free markets) results in an average higher price (10% - 25%) for energy based on EIA data 1991 - 2007.

http://www.ppinet.org/PDFs/PPI-rp-INDjul07data-nov07.pdf

Large power wholesalers, of course, view this study as flawed. Power wholesalers are 100% behind the free market idea.

I'm sure conservative PF posters will find a major flaw in the study, but since I've been in the utility industry for 20+ years, everybody in the business recognizes this as pretty close to correct. And wants to get on the bandwagon, too. After all, increased profits for a utility do allow them to expand into green power, which right now is far more expensive per kWh than coal-fired generation. And the Public Utility Commissions everywhere are starting to mandate green power generation. Even for privately owned companies.

 

[russ_watters]

Is certainly correct (and I'm a conservative), but I don't see how that relates to this thread. Are you saying that in general the free market results in higher prices? Power companies are a very special case - they must be government-regulated monopolies and couldn't function any other way. Even "deregulated", they aren't deregulated and the "competition" isn't real. All the deregulation did was make it easier for the monopolies to act like monopolies.

 

[oldtobor]

Take the subprime mess. I don't know of any place in Europe or Japan where thousands of workers have been layed off from banks as in the US. Why ? I think it is a kind of cultural "superstructure" that is on top of the economy. The US has constant hire - fires, constant changes in companies, this provokes many moves, winners and losers etc. This actually contributes somewhat to the GDP. But if you look at Japan and the EU, they have a GDP that is not too far behind that of the US but without so much turmoil and stress on the individual workers as in the US. Why ? because maybe the economy is a kind of "automatic" machine, given a certain level of wealth many of the cultural artifacts that economists like to talk about do not influence the economy anymore. The idea of "hard work", of research and development etc. of "competition" seems just excuses to hose workers in the US. The economy is an automatic machine determined by its level of technology and infrastructure.

99% of work in these economies is in mostly average activities like stores, constructions, nurses, teachers etc. These are similar throughout the world.
I read that the Japanese tried to imitate the american style of meritocracy amongst workers, the better and more skilled worker gets ahead, the others are left behind etc. for some time but found it "unsatisfying". It didn't make their country richer but just created more stress and conflict between workers. They reverted back to their traditional heirarchy salary man (aka "slave") model with the guys showing their presence in the office until 10:00 pm without actually producing anything. The fact is it didn't change anything, either way. Now that is interesting, how economies reach the same level of wealth independently of the way the workers "act".