Pew Study: U.S. Middle Class Smaller But Richer Than Europe’s "The Pew Research Center recently released an ambitious study tracking the changing fortunes of the middle class in Western Europe and the United States from 1991 to 2010. Among the findings: the American middle class is smaller than Europe’s (and declining), but it nonetheless remains substantially richer than almost any other European country’s." More below. "More: Compared with Western Europe, the U.S. middle class is smaller. Among the countries examined, the U.S. is the only country in which fewer than six-in-ten adults were in the middle class in 2010. Meanwhile, compared with many Western European countries, greater shares of Americans were either lower income (26%) or upper income (15%). […] Incomes of middle-class households in the U.S. are greater than the incomes of most Western European middle classes. Financially, the American middle class is ahead of the middle classes in the Western European nations in terms of disposable (after-tax) household income, with the exception of Luxembourg. Middle-income households in Luxembourg lived on $71,799 annually in 2010, at the median, followed by $60,884 in the U.S. The middle class in Italy lived on a median income of $35,608, the most modest means among the countries analyzed." Well, this is technically correct, but fails, spectacularly, to note that America's middle class is shrinking up, invading the upper class. And the American lower class is also shrinking upwards! This is not happening in Europe. Yes, the middle class has been disappearing, but they haven't fallen into the lower class, they've risen into the upper class • AEI "The Pew study does not break down U.S. income data on a state-by-state basis, complicating any direct comparisons between American states and EU countries along its methodology. But a look at 2010 U.S. census data reveals the general trend: even the poorest U.S. states beat the poorest European countries when it comes to median household income, while only Luxembourg tops the richest states." Well, they didn't be we have that data: If Sweden and Germany Became US States, They Would be Among the Poorest States "Once purchasing power among the US states is taken into account, we find that Sweden's median income ($27,167) is higher than only six states: Arkansas ($26,804), Louisiana ($25,643), Mississippi ($26,517), New Mexico ($26,762), New York ($26,152) and North Carolina ($26,819). We find something similar when we look at Germany, but in Germany's case, every single US state shows a higher median income than Germany. Germany's median income is $25,528. Things look even worse for the United Kingdom which has a median income of $21,033, compared to $26,517 in Mississippi. Meanwhile, Colorado ($35,059) has a median income nearly identical to Switzerland ($35,083), and ten states (Connecticut, Iowa, Maryland, Minnesota, New Hampshire, North Dakota, South Dakota, Utah, Virginia, and Washington State) show higher median incomes than Switzerland. Luxembourg ($38,502), on the other hand, shows a median income higher than every state except New Hampshire ($39,034). None of this analysis should really surprise us. According to the OECD's own numbers (which take into account taxes and social benefits, the US has higher median disposable income than all but three OECD countries. Sweden ranks below the US in this regard, as does Finland and Denmark. The fact that the median level in the US is above most OECD countries thus makes it no surprise that most of these countries then rank below most US states. The US states that have income level above the median US level will, not surprisingly, outpace many OECD countries by a considerable margin." Mark Perry has an even more comprehensive graph comparing various nations to the US, and the various states on a PPP basis, here: US GDP per capita by state vs. European countries and Japan, Korea, Mexico and China Timbro has its own data, and report here: EU versus USA All of this data is interesting, and provides necessary perspective, but the following provides the data necessary to understand how people in each income strata directly compare nation to nation. PPP | Coyote Blog Here is a graph showing disposable household dollars after tax, by income decile. Notice how only at the very lowest levels do Swedes compare with Americans of similar income levels. Middle income Americans do much better than all but the highest income Swedes. This is true throughout Europe, although in much of Europe it is much more stark then it is in wealthy Sweden. Here is an earlier article I wrote on the subject.
whenever I travel in Europe, I am always amazed . . . The real problem Europe faces is that America will streamline our regulatory state, lower corporate taxation, and personal income taxation (or go to a consumption tax), and the result will be Americans quickly becoming wealthier than the Europeans, and much of the rest of the world. The Pew study hides the ball, and tries to soft shoe this element by sounding like the American middle class is shrinking downward, it is not. Both the American lower class, and middle class are quickly shrinking into the upper class.
Comments
|
AuthorMaddog Categories
All
|