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But digging deeper, Europe has a bigger middle class than the US, and the US has the largest lower class and upper class, the latter which pulls up the overall

by tensor 9y ago

But digging deeper, Europe has a bigger middle class than the US, and the US has the largest lower class and upper class, the latter which pulls up the overall average. So is the average citizen is probably better off in Europe than in the US. Data: https://www.citylab.com/life/2017/04/euro-vs-american-middle-class/524193/ https://www.citylab.com/life/2017/04/euro-vs-american-middle... Also, Europe is catching up on the US average income too, which is really more relevant than what the past or current average is. It means that recent US policy is not working in favour of the average citizen.

adventured 9y ago
> Europe is catching up on the US average income too ... It means that recent US policy is not working in favour of the average citizen. Western Europe isn't seeing faster wage growth than the US. Economically the US is pulling away from Germany, Britain, Italy and France. US income and GDP growth rates have been far higher the last 10 and 20 years than most of its peers. Economically speaking, Germany's GDP hasn't net expanded since 2007, when it was $3.44 trillion (it was $3.46 trillion for 2016). France and Britain are similar. French GDP was $2.66 trillion in 2007, it was $2.46 trillion in 2016. In that time, 2007 to 2016, the US added GDP larger than the entire German economy (about $4.5 trillion). It's practically impossible to generate broad wage gains if you don't grow the whole economic pie. That's why French wages have been so stagnant for so long, despite all the supposedly labor friendly approaches there. The US middle class has contracted because more people have moved up and out of the middle class and into the upper classes, than have moved down and out (that's true over 10, 20, 30 years of time): https://www.washingtonpost.com/opinions/is-the-middle-class-moving-up/2016/06/24/214dc04a-3a28-11e6-8f7c-d4c723a2becb_story.html https://www.washingtonpost.com/opinions/is-the-middle-class-... https://www.forbes.com/sites/timworstall/2016/06/21/sure-the-middle-class-is-shrinking-30-of-americans-are-too-rich-to-be-middle-class-now/ https://www.forbes.com/sites/timworstall/2016/06/21/sure-the... The formerly extremely poor 1/2 of Europe in the East has seen dramatic improvement since the end of the USSR. You can see that dramatic improvement in several countries like Czech, Slovakia, Romania (more recently), etc. Many are still doing very poorly at growing their economies, including Bulgaria, Moldova, Hungary, Belarus, Macedonia, Albania, Ukraine, Croatia, Bosnia. The median incomes of Latvia and Lithuania are still around 1/4 that of the US, Estonia is closer to 1/3 that of the US.
- JamesBarney 9y ago
  US real median income growth does not look nearly as nice as the picture you paint. http://www.multpl.com/us-median-real-income-growth http://www.multpl.com/us-median-real-income-growth https://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html https://www.nytimes.com/2014/04/23/upshot/the-american-middl...
  - adventured 9y ago
    The second link you reference, exists solely due to the extreme representation of the housing bubble in Canada versus their GDP: https://i.imgur.com/55Y0vZQ.png https://i.imgur.com/55Y0vZQ.png Are you suggesting you think that kind of housing valuation in relation to the size of the economy, is sustainable? The gap between US housing vs Canadian housing vs economic size, is not subtle, it's extreme. The same kind of housing debt vs economic size representation, is why Sweden's median net wealth level is lower than the US median. Having housing be such an extreme share of the economy, usually has predictable consequences (which the US previously took a hit for). You'll also need to adjust that 2014 middle class story, for the fact that Canada hit an economic skid shortly thereafter when oil imploded, and the dollar went up a lot (as have most US assets). That occurred almost immediately after that story. The dollar going up a lot by itself is enough to have dramatically altered the wealth balance in question. The Canadian Dollar was around 0.95 to 1 at that time, it's now at 0.78.
- dragonwriter 9y ago
  > The US middle class has contracted because more people have moved up and out of the middle class and into the upper classes, than have moved down and out The study cited directly in the Washington Post opinion piece (and indirectly, by way of a WSJ opinion piece, in the Forbes piece -- good effort there passing off the same underlying study as if it were two independent sources) excludes adult children living with parents from the analysis, which makes it completely broken, since that's a living pattern that is known to be more common among adults with lower income relative to the cost of living, and which has been observed to increase over the time period the study addresses. [0] So, yeah, if you ignore a growing share of young adults that are unable to afford to live independently, the share of the remaining population that is in higher economic strata by income is greater. Clever spin, but not really a good representation of the reality. [0] See, e.g., http://www.fanniemae.com/resources/file/research/housingsurvey/pdf/nhsjuly2014presentation.pdf http://www.fanniemae.com/resources/file/research/housingsurv...

by tensor 9y ago

adventured 9y ago

> Europe is catching up on the US average income too ... It means that recent US policy is not working in favour of the average citizen. Western Europe isn't seeing faster wage growth than the US. Economically the US is pulling away from Germany, Britain, Italy and France. US income and GDP growth rates have been far higher the last 10 and 20 years than most of its peers. Economically speaking, Germany's GDP hasn't net expanded since 2007, when it was $3.44 trillion (it was $3.46 trillion for 2016). France and Britain are similar. French GDP was $2.66 trillion in 2007, it was $2.46 trillion in 2016. In that time, 2007 to 2016, the US added GDP larger than the entire German economy (about $4.5 trillion). It's practically impossible to generate broad wage gains if you don't grow the whole economic pie. That's why French wages have been so stagnant for so long, despite all the supposedly labor friendly approaches there. The US middle class has contracted because more people have moved up and out of the middle class and into the upper classes, than have moved down and out (that's true over 10, 20, 30 years of time): https://www.washingtonpost.com/opinions/is-the-middle-class-moving-up/2016/06/24/214dc04a-3a28-11e6-8f7c-d4c723a2becb_story.html https://www.washingtonpost.com/opinions/is-the-middle-class-... https://www.forbes.com/sites/timworstall/2016/06/21/sure-the-middle-class-is-shrinking-30-of-americans-are-too-rich-to-be-middle-class-now/ https://www.forbes.com/sites/timworstall/2016/06/21/sure-the... The formerly extremely poor 1/2 of Europe in the East has seen dramatic improvement since the end of the USSR. You can see that dramatic improvement in several countries like Czech, Slovakia, Romania (more recently), etc. Many are still doing very poorly at growing their economies, including Bulgaria, Moldova, Hungary, Belarus, Macedonia, Albania, Ukraine, Croatia, Bosnia. The median incomes of Latvia and Lithuania are still around 1/4 that of the US, Estonia is closer to 1/3 that of the US.

JamesBarney 9y ago
US real median income growth does not look nearly as nice as the picture you paint. http://www.multpl.com/us-median-real-income-growth http://www.multpl.com/us-median-real-income-growth https://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html https://www.nytimes.com/2014/04/23/upshot/the-american-middl...
- adventured 9y ago
  The second link you reference, exists solely due to the extreme representation of the housing bubble in Canada versus their GDP: https://i.imgur.com/55Y0vZQ.png https://i.imgur.com/55Y0vZQ.png Are you suggesting you think that kind of housing valuation in relation to the size of the economy, is sustainable? The gap between US housing vs Canadian housing vs economic size, is not subtle, it's extreme. The same kind of housing debt vs economic size representation, is why Sweden's median net wealth level is lower than the US median. Having housing be such an extreme share of the economy, usually has predictable consequences (which the US previously took a hit for). You'll also need to adjust that 2014 middle class story, for the fact that Canada hit an economic skid shortly thereafter when oil imploded, and the dollar went up a lot (as have most US assets). That occurred almost immediately after that story. The dollar going up a lot by itself is enough to have dramatically altered the wealth balance in question. The Canadian Dollar was around 0.95 to 1 at that time, it's now at 0.78.
dragonwriter 9y ago
> The US middle class has contracted because more people have moved up and out of the middle class and into the upper classes, than have moved down and out The study cited directly in the Washington Post opinion piece (and indirectly, by way of a WSJ opinion piece, in the Forbes piece -- good effort there passing off the same underlying study as if it were two independent sources) excludes adult children living with parents from the analysis, which makes it completely broken, since that's a living pattern that is known to be more common among adults with lower income relative to the cost of living, and which has been observed to increase over the time period the study addresses. [0] So, yeah, if you ignore a growing share of young adults that are unable to afford to live independently, the share of the remaining population that is in higher economic strata by income is greater. Clever spin, but not really a good representation of the reality. [0] See, e.g., http://www.fanniemae.com/resources/file/research/housingsurvey/pdf/nhsjuly2014presentation.pdf http://www.fanniemae.com/resources/file/research/housingsurv...