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The divergence looks a bit different if you look at Purchasing Power Parity and output per hour worked. As others have noted, population growth helps skew the US numbers.
We do have some advantages in the US which include a large single market of over 330 million people and a large pool of capital to fuel our tech sector. We also have vast internal sources of energy and do not have to worry about the Russian bear getting in the way like the EU countries do.
On a quick skim there is nothing wrong with what you linked but it is heavy on cheerleading.
Here's something that cuts to the chase......at PPP per capita GDP in the US is ~28% higher than the EU. 2/3 of that is due to better overall per hour productivity in the US and 1/3 due to the fact that Euros work less.
Europe is destroying themselves due to big government and nonsensical regulations on energy, agriculture, and immigration. They took in millions of migrants and gave them social services while there aren't much job growth and perspectives there. This is all self inflicted.
On a quick skim there is nothing wrong with what you linked but it is heavy on cheerleading.
Here's something that cuts to the chase......at PPP per capita GDP in the US is ~28% higher than the EU. 2/3 of that is due to better overall per hour productivity in the US and 1/3 due to the fact that Euros work less.
Thanks for the link. I'd add this part of his comment as well:
"But for Germany (and for some other western and northern EU economies), the lower per capita GDP compared to the US level is entirely due to fewer hours worked."
Thanks for the link. I'd add this part of his comment as well:
"But for Germany (and for some other western and northern EU economies), the lower per capita GDP compared to the US level is entirely due to fewer hours worked."
Good post. But we could highlight our best performing states per the stat too. IOW it shouldn't be a surprise that the EU's top economies rate well against the US at the average.
Per Capita GDP at PPP almost entirely misses tax burdens as well. The US tax burden vs. GDP is around 17% the same in Germany 39%+.
Per the OECD, Gross Adjusted Household Disposable Income per capita in 2021 USD......
US - $62,334.....highest in the OECD/much higher than any Euro county.
Germany - $44,444
"But for Germany (and for some other western and northern EU economies), the lower per capita GDP compared to the US level is entirely due to fewer hours worked."
A minor anecdote here.
Many decades ago, I needed to place a US-based electrical engineer on a new product development engineering team in Germany - same US-based F500 company, not at a supplier or customer.
The general manager of the plant in Germany, as part of the process leading up to this, commented:
"Your engineer, even though he will be working here in Germany, must adhere to US labor rules and work 40 hours per week. The rest of the team adheres to German labor rules and only work 37.5 hours per week. Do you think your engineer will be discouraged and depressed because he must work an extra 2.5 hours per week?"
It was all I could do to remain composed and not laugh. Inside, of course, I was saying to myself "he'll feel like he is on vacation, only working 40 hours per week."
Many decades ago, I needed to place a US-based electrical engineer on a new product development engineering team in Germany - same US-based F500 company, not at a supplier or customer.
The general manager of the plant in Germany, as part of the process leading up to this, commented:
"Your engineer, even though he will be working here in Germany, must adhere to US labor rules and work 40 hours per week. The rest of the team adheres to German labor rules and only work 37.5 hours per week. Do you think your engineer will be discouraged and depressed because he must work an extra 2.5 hours per week?"
It was all I could do to remain composed and not laugh. Inside, of course, I was saying to myself "he'll feel like he is on vacation, only working 40 hours per week."
Good post. But we could highlight our best performing states per the stat too. IOW it shouldn't be a surprise that the EU's top economies rate well against the US at the average.
That is a fair point. However, the EU-27 is a diverse, patchwork of an economic region which includes advanced economies that are at the frontier of competitiveness, innovation and productivity along with economies that are still catching up or were never up to par.
Of course, one might argue the US is also a vast economic region but is under one federal union and market and has been for many years. The US also did not have a period where large swaths of it were under an eastern bloc stagnation, etc. So I think it is fair to narrow it down a bit an look at core EU countries.
That said, the slower growth of core EU countries is a legit concern, particularly if it continues to persist.
Quote:
Originally Posted by EDS_
Per Capita GDP at PPP almost entirely misses tax burdens as well. The US tax burden vs. GDP is around 17% the same in Germany 39%+.
Per the OECD, Gross Adjusted Household Disposable Income per capita in 2021 USD......
US - $62,334.....highest in the OECD/much higher than any Euro county.
Germany - $44,444
Not sure how tax burdens play into this. The typical US household may have more disposable income but they may be plowing that into healthcare and/or other items that your typical EU household has secured via public provision.
That is a fair point. However, the EU-27 is a diverse, patchwork of an economic region which includes advanced economies that are at the frontier of competitiveness, innovation and productivity along with economies that are still catching up or were never up to par.
Of course, one might argue the US is also a vast economic region but is under one federal union and market and has been for many years. The US also did not have a period where large swaths of it were under an eastern bloc stagnation, etc. So I think it is fair to narrow it down a bit an look at core EU countries.
That said, the slower growth of core EU countries is a legit concern, particularly if it continues to persist.
Not sure how tax burdens play into this. The typical US household may have more disposable income but they may be plowing that into healthcare and/or other items that your typical EU household has secured via public provision.
I don't agree at all that Europe's advanced economies are on the frontier of competitiveness, innovation and productivity.
Tax burdens and discretionary income are important to discussions about personal well being. The various per capita GDP numbers are important but do not throw much light on how people are doing.
I never pay much attention to pop culture economic analysis like that. I don't know if the producers massaged the inputs more than this or not but they discounted IRA/401K contributions.....which allow legions of well employed Americans to retire rich by world standards and they set the American worker in CO @ 4.55% state income tax. Why not WA, TX or FL at 0%?
The OECD publishes something called the, "Better Life Index" that accounts for all sorts life data points. The US is rated higher than The UK, Germany, France, Austria, Spain, Belgium etc. and in a rough tie with Canada and Australia.
The Better Life Index is based on very high confidence data and large reports.
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