America Is Regressing into a Developing Nation for Most People
ineteconomics.org
ineteconomics.org
This assertion is completely unsupported, and as it turns out wrong: https://www.pewresearch.org/fact-tank/2017/06/05/through-an-....
> Overall, regardless of how middle class fortunes are analyzed, the material standard of living in the U.S. is estimated to be better than in most Western European countries examined.
The median disposable household income in the US is $60,000, versus $44,000 in France. That’s the median—it’s not skewed up by the very high incomes at the top. (Even that requires some adjustment. The median age in the US is 38, versus say 47 for Germany. The median German is at the top of their lifetime compensation curve, the median American is not there yet.)
At least in Maryland, California, etc., at that income level, a family qualifies for ACA subsidies that limit health insurance premiums to 8-10% of income, comparable to the health insurance payroll taxes in many european countries.
There is an attempt to popularize the idea that in the US it’s the top breaking away from everyone else, and that doesn’t happen in Europe. If you dig into the data, where the US diverges the most noticeably is actually the bottom 10-20%. And that’s a direct result of the middle 70%. The pay far lower taxes than in Europe, which funds a much less generous welfare state.
That’s an apples-to-oranges comparison, since the French household receives many essential services - such as comprehensive health care and low-cost higher education - that the US household does not.
I wonder if anyone has done a study that attempts to quantify and compare benefits across countries, or whether such comparisons are even possible.
1. The median person doesn't graduate college in either country. So how much is free college worth to them? Even if you do go to college, the average tuition at a public college in the U.S. is about $40,000 over four years. Would you trade 33% higher income over your entire career for a $40,000 one-time savings?
2. For households in the middle of the income band in the U.S., they spend on average 7.9% of their income on out-of-pocket healthcare expenditures. For the median U.S. household income of about $60,000, that's less than $5,000 annually.
3. Childcare in France isn't free, although it's subsidized. For a median household, it's about 15% of average income in France versus 30% in the U.S. A difference of about $11,000/year at the median, but something you might pay for only 6-8 years over a 35-year working life.
4. Transit is better in France. But average commutes are 50% longer than in the U.S. https://www.oecd.org/els/family/LMF2_6_Time_spent_travelling.... Is the cost-savings from better public transit worth the almost half-hour per day extra spent commuting?
5. The French have state-subsidized pensions, but Americans have Social Security and 401ks. Median income for retirement-aged people in France is about 21,600 euro ($24,600), much higher than in Germany, the U.K., Italy, or Spain: http://www.seniorobservatory.com/in-france-the-median-annual.... The median income for those 65+ in the U.S. is $23,400: https://acl.gov/sites/default/files/Aging%20and%20Disability....
People assume that Americans are just irrational that they won't vote for these things that Europe has. But the median U.S. voter makes somewhere north of $70,000 household income, spends less than $5,000 of that on out-of-pocket medical expenses, lives in a suburb with less than a 30-minute commute, has 3 TVs and 2-3 cars, lives in a 2,000+ square foot house, etc. For those people, the French way of life would yield perhaps more security, but a significant pay cut, not much lower out-of-pocket health expenses, one less TV, one less car, a 35% smaller house, etc.
That sounds intentionally oversimplified. Sure, the median is often better than the arithmetic mean to summarize a population, but in this case, you're misapplying the median to falsely imply that graduation rate is irrelevant as long as it's less than 50% of the population. The reality is that tuition is a barrier to enrollment and completion, so eliminating it with public funding makes sense if you care about investing in your country's future. Besides, even if you yourself would never attend college and would never dream of encouraging anyone in your family to go, you still indirectly benefit when your studious compatriots have ample opportunity to study, graduate, and find work in the country.
> 4. Transit is better in France. But average commutes are 50% longer than in the U.S.
Did you misread the source you linked to? It shows a bar plot of "average" (probably mean) commute times. France's average commute looks like maybe 3-5% longer than the USA, and this difference disappears when you blur your eyes and compare men and women.
For a more meaningful glimpse into the reality of these countries' commutes, check out this worldwide ranking of the 10 best and 10 worst cities by commute experience [1]. France takes 4 out of the 10 best spots (Nice, Toulouse, Lyon, Strasbourg). Only one US city landed in the worst 10 (Miami), but the reality is that on average, commuting in the US sucks compared to France. I'd rather read on a train than die a little inside a car.
You're right: transit is better in France.
[1] https://www.expertmarket.co.uk/focus/best-and-worst-cities-f...
We're doing a snap-shot comparison of the life of someone around the middle of the income demographic. The median person does not complete college in either the U.S. or France. (Even among those 25-34, college attainment rates are less than 40% in both countries.) In reality, most people don't really need to go to college, or aren't cut out for tertiary education.
So it's really important to ask how much college is worth to someone in the middle when, statistically, that person won't be going to college, and may not be qualified to go to college.
That is especially important when you're talking about asking people in the middle to pay for something that disproportionately benefits people in the top half. France's tax system is quite regressive: https://www.oecd.org/tax/revenue-statistics-france.pdf. While the U.S. collects almost half its tax revenue from income and corporate taxes (which are disproportionately paid by the upper classes), France collects just 23% of revenue from those sources. France relies much more heavily on payroll and sales taxes, which are disproportionately paid for by the middle class. So, statistically, someone right at the median is paying for this free college system, but is unlikely to actually take advantage of it.
> The reality is that tuition is a barrier to enrollment and completion, so eliminating it with public funding makes sense if you care about investing in your country's future.
Graduation rate is only relevant to the extent that it increases your country's average income. If you can, like Germany, maintain a high average income with a relatively low graduation rate, that's better than having to send more people to college (which imposes a large opportunity cost) to achieve the same average income. Regardless, college degree attainment rates in the U.S. have been much higher than in France for decades. France only catches up in the youngest demographic (29-34): https://www.in.gov/che/files/DMatthews.pdf. Your median voter is still in a demographic (35-44), where the college attainment rate in the U.S. is 39% versus just 23% in France.
> For a more meaningful glimpse into the reality of these countries' commutes, check out this worldwide ranking of the 10 best and 10 worst cities by commute experience [1]. France takes 4 out of the 10 best spots (Nice, Toulouse, Lyon, Strasbourg).
You're reading it wrong. The first chart is data from 1999 to 2010. I'm referencing the table after that, which focuses on 2008-2010. For all commuters, France has an average commute of 73 minutes, versus 48 minutes for the U.S.
> For a more meaningful glimpse into the reality of these countries' commutes, check out this worldwide ranking of the 10 best and 10 worst cities by commute experience [1]. France takes 4 out of the 10 best spots (Nice, Toulouse, Lyon, Strasbourg).
The OECD data set is a much better basis of comparison. Comparing commutes in big cities is not particularly relevant in the U.S., because most Americans do not live in a big city. Commute times in New York or Washington, D.C. are 70+ minutes round-trip, as similar to the average in France: https://www.census.gov/content/dam/Census/library/visualizat... (note the data is one-way, so double it to compare to the OECD chart above). Although, Paris is even worse at 90+ minutes round-trip: https://www.thelocal.fr/20160418/parisians-spend-23-days-a-y.... But even by the time you get to Atlanta you're significantly better than the French average, and in Iowa or North Dakota you're looking at a commute that's half as long as the average in France.
> I'd rather read on a train than die a little inside a car.
Have you been in a French metro during commuting times? It's not like you can really sit down and read. You're standing up the whole time scrunched up against other people.
This is also being done at the expense of those who are not eligible for subsidies on the Health Care marketplace, but do not receive employer subsidized health care.
That's definitely a trade-off. How much do you value the security versus the increased consumption possible with more money. But it is a trade-off. It's not some irrational choice that Americans made that doesn't yield a tangible upside for them.
The median person might not, but for "employment-threatening health issue" a quite big percentage of people get into them, and for life threatening ones a large enough percentage to matter (I'd say 10% or more easily, due to cancer and heart attacks alone).
https://www.commonwealthfund.org/publications/newsletter-art...
And of course the key words here are "during their working life". If we imagine that until 60-65 or so, this has been extended by people unable to get pension in a reasonable age or with savings eaten by health and such issues and forced to come back into working life.
The idea that the top is breaking away is being popularized because it is irrefutably true, as the income growth of the top percentiles is accelerating at the expense of the lower percentiles (from data available from a wide range of sources, but probably best expressed in this chart: https://www.nytimes.com/interactive/2017/08/07/opinion/leonh...). But I agree that Europe is not immune. However, unlike the US, Europe provides essential services like transportation and healthcare to its citizens, so that even someone with no income enjoys better healthcare and transportation than many middle-class Americans.
It's hard to contest, however, that the lower 10-20% of people are better off in Europe.
"But to the extent that governments in Western Europe are more likely to provide services to households that may not be captured in household income, such as the National Health Service in the UK, it is possible that differences in the quality of life between the U.S. and Western Europe are narrower."
When you figure in the massive student loan debt and catastrophic impact of medical bills on many middle class families, this can only be regarded as a gross understatement.
You can't compare raw numbers. What's the cost of life? Cost of transport? Cost of healthcare? Job security? Quantity and quality of public services?
Are California's ACA plans any good? Ours are all still ruinously expensive if you happen to actually get sick and are poor enough to qualify for any help with the premium. Even the more expensive "good" ones suck.
> When the Western European countries the Center analyzed are viewed through the lens of middle-class incomes in the U.S., the share of adults who are middle class decreases in most of them. The greatest decline is in Italy, where the middle-class share in 2010 falls from 67% under that country’s national income standard to 44% under the U.S. income standard. In other words, 44% of Italians had the same standard of living as 59% of Americans who were in the middle class in 2010.
The research is a bit old, but I couldn't find a more recent source. I imagine the relationship hasn't changed much as US has experienced significantly growth since 2010 relative to Europe.
[0] https://www.pewresearch.org/fact-tank/2017/06/05/through-an-...
addendum - Our country is wildly diverse, probably moreso than even most Americans realize.
I grew up in poverty. A family with 9 kids, a widow, an underemployed older step-father, living on SSI and survivor benefits. We had to drink powdered milk because our welfare couldn't afford real milk. We didn't have any money for school or college. We didn't have any medical benefits or healthcare, so when we got sick or needed stitches, our mom would have to use butterfly bandages and hope we got better.
I worked hard, had a job since I was 12 delivering newspapers, and somehow saved enough to go to school without going into massive student debt. I moved out of flyover country to the NYC area. Today, I'm an accomplished software engineer with a wife and 2 kids, making $500K+ and saving over 50% of my income because I'm not going to make my kids have to live in the poverty I grew up in.
Very few other places in the world allow this upward mobility, in a single generation, from poverty, to upper middle class. All you have to do is work hard and educate yourself. You can learn how to be a software engineer from free material online, and even if you don't have enough money to buy a computer to do so, you can wash dishes or deliver newspapers like I did to save up enough money to do so.
People do it all the time. I'm living proof. The wealth gap is troubling, but to act as if there is no upward mobility is disingenuous.
I don’t think median disposable incomes are very comparable across countries because of what people chose or have to use this money for.
Either gross or discretionary income is a somewhat more useful point of comparison, disposable seems the least informative / most misleading comparison possible.
Which would probably a better point of comparison as disposable income is greatly skewed by how necessities are taken care of (aka how much is handled by the state — and thus through taxes — versus left to the individual).
The link has nothing to do with proving the claim wrong. Not to mention the research itself is totally bogus, as it hints at at the end:
"Overall, regardless of how middle class fortunes are analyzed, the material standard of living in the U.S. is estimated to be better than in most Western European countries examined. But to the extent that governments in Western Europe are more likely to provide services to households that may not be captured in household income, such as the National Health Service in the UK, it is possible that differences in the quality of life between the U.S. and Western Europe are narrower."
Not only they are narrower, but the low wage life in the US is nothing like much lower wage life in Europe. I've been to both European countries (where I live) and poor US states (e.g. Alabama, Mississippi, South Dakota, and so on) and the former is more like third world conditions...
I only visited the US a few times in my childhood, and it stood out like a fairytale land in my dreams. Today, the standard of living in the US is even more advanced than when I was a child 30 years ago. The US is still a mythic land of legend for most of the world today.
Developing nations don't have a long queue of people trying to get in unless a really hard issue comes along (think Venezuela and Syria level problems)
This was on PBS a while back, I think it gets at some of the differences pretty well: https://www.pbs.org/newshour/economy/do-you-live-in-a-bubble...
Is this what a 'industry that can't fill its positions' looks like? Is this what unemployment being 'too low!' looks like? All these indicators seem fraudulent, and the facts on the ground seem more akin to what this author is postulating. It is hard to imagine what the economy used to be like at its peak, where one could allegedly find a reasonable job at the median pay-rate for the industry, when you are pretty much qualified, without applying to several hundred places.
Location - the tier 1 or 2 metro areas will have more jobs available and they will pay much more than areas with lower demand.
Skills - either really hot (today, JS/fullstack I suppose) or really niche (know COBOL?) skills will boost your chances at landing a good high paying job early in your career.
Credentials - anything with gatekeeping such as a security clearance or tons of required certs will tend to pay well.
There are probably others. Networking is a great way to get past HR goalkeeping and connect with people who are one or two degrees away from a hiring manager. Go to meetups!
...in English.
If nothing is done about this we are going to get someone way worse than Trump. Whether it's a right or left totalitarian probably depends on which side can field a compelling demagogue first. Ultimately the politics won't matter much as long as pitchforks are handed out.
I would add a qualifier here, lower taxes for themselves. The Wall Street had no problem taking handouts from big government in 2008 made possible by taxes.
There are multiple ways to get a point across. Some people respond well to stories. Some people respond better to data.
Some people are helpful. Some people are condescending.
It's a wonderfully diverse world.
Contrary to what this paragraph implies, this is a misperception that both parties exploit. All too often does the left claim that white privilege lets one go through life on easy-mode [1].
[1] https://www.politifact.com/truth-o-meter/statements/2016/mar...