Poor Americans better off than Europeans

[j]

If you are a poor American, don't despair. Just move to Europe. You won't be better off, but you might not feel as poor, because chances are you'll be better off than most of your neighbors.

Two Swedish economists have produced a 50-page analysis of the standard of living in Europe compared to the United States, and found that poor Americans have better living conditions than the average European.

European countries surveyed include Austria, Belgium, Denmark, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the UK.

One of the starkest differences is the amount of living space Americans have, compared to our European friends. The latest housing surveys find that the average size of a European dwelling is 976 square feet, compared to 1,875 in the United States. The average size for poor households in the U.S. is 1,228 - or about 25 percent larger than the average European home. When you break it down to dwelling space per person, the differences are comparable - 395 feet for the average European to 721 for the average American and 428 for the average POOR American.

While poor people in the U.S. have more space in which to live than the average European, Americans also have more stuff in their space - the stuff that generally constitutes creature comfort.

Economist Fredrik Bergstrom and Robert Gidehag of Stockholm compared the number of households that have modern conveniences, including clothes washers, dishwashers, microwave ovens, TVs, personal computers, VCRs and automobiles. In 11 of the 13 categories, Americans households were more likely to have the convenience than households in ANY of the European countries. In Sweden, people have more phones and cell phones than Americans do. Americans have more of everything else.


Bergstrom and Gidehag report, "Major living standard surveys carried out in the USA show the poor to have a surprisingly high standard of living."

For instance, 46 percent of poor American families own their own homes. More than three out of four have air conditioning. Seven in 10 have a microwave oven and 97 percent own a color TV. Six in 10 have cable or satellite TV.


Why such a big difference? The two economists cite taxes as the first reason. We complain about high taxes here, and we should, but the tax burden in the U.S. rose just 1.5 percent from 1970 to 1999, while most of the European countries saw double-digit percentage increases. More important, the tax bite on the last dollar earned (the marginal tax rate) in European countries ranges from 60 to 90 percent. Bergstrom and Gidehag refer to this as the "tax wedge." Six of the European countries have tax wedges of 80 percent or more. Bergstrom and Gidehag report the high tax wedges result from Europe's "extensive welfare system."

American also work more. The report uses a figure the economist call a labor supply (LS) ratio. In simple terms, if everyone age 16 to 64 worked full time, the LS ratio would be 100. In the U.S. the LS ratio is 74. In the European countries, it ranges from a low of 48 to a high of 67.

The natural result of more labor and lower taxes in the United States is more private wealth. Gross domestic product per capita in the U.S. is about $32,000. The highest of any European country is $28,000 for Switzerland. Bergstrom and Gidehag project that, using the year 2000 as the base, it would take the European countries between five and 23 years to catch up to the U.S. if the U.S. economy did not grow at all.

The moral of the story is that aggressive welfare systems, funded by high taxes, has proven to lower the standard of living in Europe to the point that even the poor in the United States enjoy more comfort than that of the average European.

If Americans won't learn from Europe's mistake, we are likely to repeat it.

Source:
http://www.ralphbristol.com

[CaptinCrunch]

Thanks, I feel RICHER already

[Guest]

Numbers do not tell how good is living in Europe.
We can drink a beer in the outside and even carry beer in our cars (not in the trunk), while we hardly have metal detectors to check students in their school's entrances...
Pay a visit here J, then make your statement. Meanwhile:
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

[j]

the post is about the standard of living, not whether you can drink and drive.

Give me a break!

[Amanzi]

I have friends from London who have just left my house from visiting. They were amazed at how big my garden was, and the "ease" of living here. London especially is very expensive to live and the property's are very small.. they do however have great free health care.

[streetsoldier]

Yes, Amazing...the Brits DO have fairly good health care, but they also suffer under a "65-80%-of-your-income" tax rate to pay for it. This will get WORSE if Prince Charles accedes to the throne, as he wants to abolish the monarchy and institute a socialist state a' la Sweden (which failed, and is just now coming back from the brink due to more conservative policies).

No, thanks...I'd rather die sick and poor, but FREE from more intrusive governmental waste; and I probably will, soon enough.