News Most reliable stat to indicate average wealth?

[ShawnD]

A common complaint I see over and over again about the US is how there's a large gap between poverty and wealth. Rich people are the richest in the world, and poor are some of the poorest (I think they mean in terms of living conditions, life expectancy, health care, etc). Averaging all of these things out, USA has an incredibly high GDP per capita of $41,600. By comparison, Canada is at $33,900. Sweden, often thought of as the best country in the world, has a GDP per capita of $29,800. The conclusion to draw from this is that GDP per capita means essentially nothing in terms of how the average person in that country lives

Is there any statistic or index that can be used to directly compare living conditions between countries? Something like a simple number where bigger means better?

 

[verty]

It sounds like your definition of 'average person' is not well defined. GDP per capita is the average.

 

[ShawnD]

By average person I mean the most common person. If you had 10 people making 10k per year and 10 people making 100k per year, the average is 55k per year, but not a single person makes 55k per year.
The problem with GDP per capita is that it averages the lower and upper classes to give a number for where a middle class should be, even if that middle class doesn't exist. Sure some Americans make 40k per year, but the vast majority make less than that. Same deal with Canada's 33k, but to a lesser extent. Sweden's number is probably more accurate because they're very socialist, which makes the bell-curve a lot more narrow and normal looking. Extreme capitalism does the opposite; it widens the curve and makes it look more 1-sided.

 

[Astronuc]

Is there any statistic or index that can be used to directly compare living conditions between countries? Something like a simple number where bigger means better?

I don't think there is such a standard. Per capita GDP is not a good indicator for the standard of living, although a high GDP may indicate a greater likelihood or potential of achieving a better standard of living or quality of life. But then one has to define 'the standard of living or quality of life'.

One could perhaps use the ratio of per capita GDP with a cost of living.

 

[russ_watters]

Rich people are the richest in the world, and poor are some of the poorest (I think they mean in terms of living conditions, life expectancy, health care, etc).

Poorest in the world or just poorest among western nations?

The conclusion to draw from this is that GDP per capita means essentially nothing in terms of how the average person in that country lives.

Well average is, by definition...average. So what are you asking? Do you want the median? Broken down by 5ths?

By average person I mean the most common person.

That sounds like a median...

If you had 10 people making 10k per year and 10 people making 100k per year, the average is 55k per year, but not a single person makes 55k per year.

That sounds like breaking it down by 5ths...

By 5ths, here is the average income for a household in each 5th:
1st: $10,655
2nd: $27,357
3rd: $46,301
4th: $72,825
5th: $159,583

And the average of the 3rd fifth is approximately the median.

And here are the limits of each fifth:
1st: $19,178
2nd: $36,000
3rd: $57,660
4th: $91,705
5th: $166,000 (limit to get to the top 5%)

So...

The problem with GDP per capita is that it averages the lower and upper classes to give a number for where a middle class should be, even if that middle class doesn't exist. Sure some Americans make 40k per year, but the vast majority make less than that.

Based on the numbers above, that is simply not correct. And I know where you get that flawed understanding: the Democratic party has been pounding it into the American votor for a decade that the middle class is dying. It simply isn't true. I don't know where you would draw the lines, but from the above data, 20% of households make less than $19k, 20% make between $19k and $36k, 20% make between $36K and $57k, etc... It is not a two-peak bell curve as the Democratic party would have you believe (with the lower peak vastly larger than the upper peak).

 

[ShawnD]

By 5ths, here is the average income for a household in each 5th:
1st: $10,655
2nd: $27,357
3rd: $46,301
4th: $72,825
5th: $159,583

That's pretty much the kind of stat I was looking for. Thanks Russ.

 

[russ_watters]

Regarding that opening premise, http://www.free-europe.org/blog/english.php?itemid=327" site has an interesting graph about halfway down that shows that the poor in the US have a roughly equal standard of living to the poor in other western countries. The primary difference between us and them, then, is that the right side of the income distribution is stretched. So while you could argue that the American system doesn't do much to pull up the lower classes (*big caveat), it doesn't make the poor poorer to make the rich richer. *The big caveat, of course, is that in those socialist countries like Finland and Sweden, the government pulls up the poor - so in the US, it must be the free market economics that pulls the poor up to the same level.

 

[Anttech]

Poorest in the world or just poorest among western nations?

You wouldn't see what happened in New Orleans happen in any other Western Country. Perhaps in the East Bloc of Europe, but that's about it.

THAT site you link to is some FAR right think tank, its anti-european union, in fact its anti-european (Full stop).

Its a UK Based site that probably has some affinity with UKIP, which we all know are a bunch of xenophobic racists, are completely fringe and are aligned with the BNP party. Whom nobody takes seriously, but hey if you want to link to that then by all means do it.

 

[Severian]

That graph isn't very useful, since it just shows the percentage of median income, ie. factors out the actual median inclome. What we really need is a graph (or table) which compares (RPI adjusted) median incomes for different counties. Can anyone find one?

 

[russ_watters]

You wouldn't see what happened in New Orleans happen in any other Western Country. Perhaps in the East Bloc of Europe, but that's about it.

That really isn't relevant to this thread.

THAT site you link to is some FAR right think tank, its anti-european union, in fact its anti-european (Full stop).

Yes, I know. I used it anyway, since the graph isn't theirs.

Its a UK Based site that probably has some affinity with UKIP, which we all know are a bunch of xenophobic racists, are completely fringe and are aligned with the BNP party. Whom nobody takes seriously, but hey if you want to link to that then by all means do it.

Well, namecalling is easier than looking at the data...

 

[Anttech]

That really isn't relevant to this thread.

It is, I was referring to the lack of support you gave the most desperate in your community.

Well, namecalling is easier than looking at the data...

No Russ your source manipulate data to make anything to do with the EU a *bad* thing. Its Euroscepticism to the extreme. They are trying to make the EU look like the new USSR, which you seem to do also, at least in as much as you try to make France the new Soviets.

 

[cristo]

the BNP party. Whom nobody takes seriously,

Are you sure about that?, because I'd say that support for UKIP and the BNP was growing. Is that not a sign that *some* people are taking them seriously?

 

[devil-fire]

i think the UN does a ranking of quality of life among nations that includes things like access of health care, levels of freedom of speech, costs of living, median and average yearly wages, access to eduction and other factors that contribute to a high quality of life.

 

[Anttech]

Are you sure about that?, because I'd say that support for UKIP and the BNP was growing. Is that not a sign that *some* people are taking them seriously?

No its not, just in some places where racial hatred is being stired up, and "islamaphobia" is rife, like blackburn.

Nick Griffin is a holocaust denying fascist, who is a lucky man not to be behind bars. In fact he would have been but the law for inciting racial hatred didnt apply to Religions.

Go and "you tube" Nick Griffin and u can see what that man is all about.

The BNP and UKIP are fringe, and has NO support from the mainstream of society.

 

[cristo]

When the BNP won seats in Blackburn then, yes, I agree this was due to racial hatred, however, this happened three or four years ago.

More recently, a growing proportion of the population are getting worried by the increasing immigration problem, and are more and more frustrated by the fact that the major parties seem to refuse to do anything about this. UKIP's main policy is to withdraw from the EU; a policy which many people will see as a definite solution to this problem.

I must add, I am in no way supporting these parties, but it is naive to think that only extremists will vote for them. These parties represent themselves in a way which seems like a good alternative option to solve the worries that many people of Britain hold. The longer that these parties are around, and the longer these problems continue, the more votes the BNP and UKIP will obtain. It's a worrying thought, but people vote on the issue that concerns them most, and many will not realize that the candidates for these parties are not the clean-cut politicians with clear ideas of how to solve the problems that are around, but are, in fact, much worse.

 

[russ_watters]

That graph isn't very useful, since it just shows the percentage of median income, ie. factors out the actual median inclome.

Not quite. The graph relates incomes in each country to the median income - not of each country - to the US median income. It is normalized for standard of living. That's much more useful than just comparing median incomes.

What we really need is a graph (or table) which compares (RPI adjusted) median incomes for different counties. Can anyone find one?

I really don't think it is relevant (ShawnD was correct about that), but I'll pull a few together...

 

[McGyver]

Rather than use the average (total wealth/total pop) of the country's wealth to measure average wealth, might I suggest you develop an INDEX of 5 or so "indications of prosperity" items that can be measured, so that each country around the world can be more accurately compared. You must also make consideration for home ownership, as a ratio of housing costs as a percent of total income (which can be factored into a weighted index). You then "weight" each item in the index according to consensus views on what is considered prosperity.

 

[russ_watters]

Work got in the way... Here's an article that has individual (as opposed to household) median income for several western countries: http://www.tcf.org/Publications/economicsinequality/wasow_middleclass.pdf

Of the major western nations listed, only Switzerland is higher. But like the OP's main point, it doesn't tell you how typical (probably what he really meant by "average") people are doing.

 

[russ_watters]

Rather than use the average (total wealth/total pop) of the country's wealth to measure average wealth, might I suggest you develop an INDEX of 5 or so "indications of prosperity" items that can be measured, so that each country around the world can be more accurately compared. You must also make consideration for home ownership, as a ratio of housing costs as a percent of total income (which can be factored into a weighted index). You then "weight" each item in the index according to consensus views on what is considered prosperity.

PPP is supposed to do that, but I agree that it would be interesting to measure things like percentage home/car ownership, computer ownership, tv's per household, etc.

 

[Anttech]

I must add, I am in no way supporting these parties, but it is naive to think that only extremists will vote for them. These parties represent themselves in a way which seems like a good alternative option to solve the worries that many people of Britain hold. The longer that these parties are around, and the longer these problems continue, the more votes the BNP and UKIP will obtain. It's a worrying thought, but people vote on the issue that concerns them most, and many will not realize that the candidates for these parties are not the clean-cut politicians with clear ideas of how to solve the problems that are around, but are, in fact, much worse.

You are not wrong, however I never said extremists, I said non-mainstream. There is a difference.

 

[EL]

Regarding that opening premise, http://www.free-europe.org/blog/english.php?itemid=327" site has an interesting graph about halfway down that shows that the poor in the US have a roughly equal standard of living to the poor in other western countries.

An important point is though made by "GT" under "Comments":

...As poor americans have to pay for, as well as living costs such as food and shelter, healthcare, education, and other state services that are generally provided for free in European countries, the standard of living of the poor in the US is indeed very much lower than those in Europe.

Redistribution through the tax system does not work through taxing the rich to give direct income subsidies to the poor. The state is not and cannot be Robin Hood. Redistribution works through the state providing essential services that would otherwise have to be paid for out of the income of the poor allowing them to spend more of their income on basic goods of subsistance.

This makes the conclusions drawn from "Figure 8D" quite missleading, doesn't it?


Btw, I'm somewhat amazed Sweden is still often pictured as some ideal socialistic country.
First of all, Sweden is not socialistic. Of course we have a free market, not very different from US, and are at the moment run by a right wing government.
Second, I'm suprised (or should I say flattered) Sweden is still considered "a good country" despite the economic crises during the 90th (massive negative budget, interest of 500%, huge unemployment, etc). We went through some hard years of extensive welfare cuts, and it's really not until recent years the economy has shaped up. (In fact, we're going increadibly well at the moment!) Point is, Sweden's situation in year 2000 (which is the year considered in Figure 8D) is not something to be satisfied with. A much better choice is Norway.

 

[EL]

Most reliable stat to indicate average wealth?

Percentage of population accepting the theory of evolution?

 

[russ_watters]

An important point is though made by "GT" under "Comments":

This makes the conclusions drawn from "Figure 8D" quite missleading, doesn't it?

I'm really not sure if that's true or not. In the US, many (most?) "entitlements" (gawd, I hate that word) are doled-out as income and recorded as such. I suspect it is the same way in those socialist countries, otherwise the spectacularly high unemployment would show up in the data. I'm really not sure though.

Btw, I'm somewhat amazed Sweden is still often pictured as some ideal socialistic country.
First of all, Sweden is not socialistic. Of course we have a free market, not very different from US...

Sorry, sometimes when I say "socialist", I mean "social welfare". I realize that the driving force in the economy is still market economics, the main difference is just that the government takes a far larger piece of everyone's earnings to redistribute it and runs a larger part of that market. Though it sort-of let's market rules run, it still is the entity that spends most of the money and employs most of the people.

...and are at the moment run by a right wing government.

I rather suspect that what you call "right wing" in Sweden is a lot more like Clinton than Bush.

Second, I'm suprised (or should I say flattered) Sweden is still considered "a good country" despite the economic crises during the 90th (massive negative budget, interest of 500%, huge unemployment, etc). We went through some hard years of extensive welfare cuts, and it's really not until recent years the economy has shaped up. (In fact, we're going increadibly well at the moment!) Point is, Sweden's situation in year 2000 (which is the year considered in Figure 8D) is not something to be satisfied with.

I used Sweden as an example because it is the typical example socialists/social welfare types use. Though it may not be truly socialist, it is seen as the most socialist of western countries. It is used as an example for ideological reasons, not because it is a success story. Of course to ideologues, whether the ideology works is irrelevant to measuring success - they just want the ideas implimented, whether they really work or not.

A much better choice is Norway.

And I used Norway as an example because it seems to be doing the best of any such nations. But cognitive dissidence prevents ideological types from accepting any less than the most socialist you can get, which is why people still try to argue using Sweden as the model.

But then, as I said, using Norway as the model is flawed for other reasons. That's why, IMO, Sweden (and the USSR and France and Germany) really is a good model of what happens when you go too far with social welfare. The model just doesn't show what social welfare types/ socialists wish it would.

 

[russ_watters]

I must admit my knowledge of Sweden's actual economic practices and status is pretty thin. Here's an article I just read on it, though... http://www.washingtontimes.com/commentary/20040425-102740-9436r.htm

 

[EL]

I'm really not sure if that's true or not. In the US, many (most?) "entitlements" (gawd, I hate that word) are doled-out as income and recorded as such. I suspect it is the same way in those socialist countries, otherwise the spectacularly high unemployment would show up in the data. I'm really not sure though.

Yes, I guess the money you get as unemployed/ill/whatever-makes-you-need-support-from-society is counted as income in Sweden's case too. But that wasn't really my (or GT's) point here. The point is that a lot of the money coming from the taxes are not distributed directly to the unemployed/ill/wmynsfs but instead goes to other things like the free healthcare we enjoy here. Hence just looking at the income (including "state distributed income") may not be a very proper way of determining the standard of living.

Sorry, sometimes when I say "socialist", I mean "social welfare".

It wasn't just you I was aiming for. It's a common fault. (Just like mixing us up with Switzerland.)

I realize that the driving force in the economy is still market economics, the main difference is just that the government takes a far larger piece of everyone's earnings to redistribute it and runs a larger part of that market.

I'm not that sure how big difference there is compared to US. We pay about 30% income taxes, 6-25% VAT, plus that the employer has to pay an additional social fee of about 30% of what he has payed in total to his employee. What are the typical numbers in US?

Though it sort-of let's market rules run, it still is the entity that spends most of the money and employs most of the people.

If you by the "entity" mean "public sector", then you're wrong...
Roughly 70% works in the private sector in Sweden. What are the stats for US in this case?

I rather suspect that what you call "right wing" in Sweden is a lot more like Clinton than Bush.

Hey, we're not extremists here!
It's hard to really compare two countries politics like that, but at least I would say they are definitely closer to Clinton than Bush.

I used Sweden as an example because it is the typical example socialists/social welfare types use.

Yes, but the socialists are definitley false in identifying Sweden as socialistic.

Though it may not be truly socialist

It just don't may not. It simply isn't!

it is seen as the most socialist of western countries. It is used as an example for ideological reasons, not because it is a success story. Of course to ideologues, whether the ideology works is irrelevant to measuring success - they just want the ideas implimented, whether they really work or not.

But as I said, thay are using the wrong country anyway...

And I used Norway as an example because it seems to be doing the best of any such nations.

Norway isn't socialistic (= "any such") either...

But cognitive dissidence prevents ideological types from accepting any less than the most socialist you can get, which is why people still try to argue using Sweden as the model.

If they want to find a socialistic country, why can't the choose Cuba or China or something, instead of spreading lies about us!

But then, as I said, using Norway as the model is flawed for other reasons. That's why, IMO, Sweden (and the USSR and France and Germany) really is a good model of what happens when you go too far with social welfare. The model just doesn't show what social welfare types/ socialists wish it would.

Please don't even try to equate Sweden (or France, of Germany) with the USSR...
On one of these popular scales from 0 to 10, where USSR is a 0 and US a 10, I'd say Sweden is a 9, or maybe an 8.
But I totally agree with you it's important to not go too far with social welfare. The crisis during the 90th in Sweden was partially due to that, but mainly because of foreign speculations with the Swedish currency, as well as a new (right wing) government who didn't have the budget in balance.

We have now tightened up (well, I guess not near the US level) the welfare (and it was the former left wing government who did so), have a positive budget (!), low inflation, decreasing unemployment, low interests, and generally doing really well at the moment, so I don't think it's fare at all to view Sweden as some kind of failure.
That's why I cannot recognize myself in the wt article you provided. To me it seems to be some twisted far right wing propaganda...
(Btw, I've seen it here before, and in fact I thought you were the one bringing it up that time too...)

 

[EL]

And Russ, if this

Richard W. Rahn is a senior fellow of the Discovery Institute and an adjunct scholar of the Cato Institute.

doesn't ring a bell about the reliability of the article, I don't know what will do... I guess you didn't see that...

 

[loseyourname]

Aint the Discovery Institute the main think tank behind the intelligent design movement?

 

[EL]

Aint the Discovery Institute the main think tank behind the intelligent design movement?

Exactly.
http://en.wikipedia.org/wiki/Discovery_Institute
And you could say Cato institute is "somewhat" ( ) biased.
http://en.wikipedia.org/wiki/Cato_Institute

 

[Anttech]

Sorry, sometimes when I say "socialist", I mean "social welfare". I realize that the driving force in the economy is still market economics, the main difference is just that the government takes a far larger piece of everyone's earnings to redistribute it and runs a larger part of that market. Though it sort-of let's market rules run, it still is the entity that spends most of the money and employs most of the people.

Well Say Social Welfare then.

Are you trying to say the Government in France is the largest employer? I say this because you seem to think France is also some sort of Socialist Country

 

[Anttech]

That's why, IMO, Sweden (and the USSR and France and Germany) really is a good model of what happens when you go too far with social welfare.

Actually Russ that is why we all know you haven't got a clue what you are talking about when it comes to the economic models of Europe. Lumping the USSR and France in the same sentence is funny at best.

 

[EL]

Coming back after a Christmas break with no Internet connection, I hoped russ_waters would have commented my last postings in this thread. Hence this reminder...