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>Considering Germany is an economic powerhouse this law probably isn't harming the economy US median household annual disposable PPP income is around $34,000.

>Considering Germany is an economic powerhouse this law probably isn't harming the economy US median household annual disposable PPP income is around $34,000. German median household annual disposable PPP income is around $25,000. Note PPP means adjusted for cost of living, so that is not hiding the difference. There is likely some differences in household makeup, etc., but it seems unlikely that any demographic difference is going to make up for Germans having ~25% less disposable income. So somehow the US system is generating significantly more disposable income for its people. [1] https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income

jamroom 8y ago
Being median income I have a feeling that the US median is "pulled up" significantly by the top .01% of earners in the US - I have a feeling they account for a far larger amount than the top .01% of German earners. Also - this does not take into account additional costs such as healthcare that will pull down the US amount.
- ummonk 8y ago
  That's not how the median works though. You're thinking of mean.
- cal5k 8y ago
  I’d have to dig into the numbers, but the wealthiest Americans get their income via capital gains and dividends, which I’m not sure would be included in those figures.
- sacheendra 8y ago
  I think you are mistaking median for mean. Mean gets pulled up, median doesn't. It's literally what the guy at 50% mark has.
- deleted 8y ago
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- penpaul 8y ago
  Since this is the median and not the mean, it seems that the top .01% should have no impact or bias here. The statistic here tells us that the person right in the middle of the American income distribution makes more than the person in the middle of the German income distribution, even when disregarding the actual incomes at other points in that distribution.
- nine_k 8y ago
  It's not an average, it's a median. That is, there are as many people who have incomes higher than that as having incomes lower than that. How much higher is already inconsequential, a few may have astronomical incomes without affecting the median.
- beberlei 8y ago
  The definition of median is precisely that the top 0,1% affect it only 0,1%. But household income is very tricky to measure and for example its unclear if they include health expenditure in exactly the same way
ummonk 8y ago
Well, it probably comes out to a wash after you subtract copays, deductibles, and other out of pocket healthcare expenses from the US after-tax income.
- adventured 8y ago
  If you factor in all benefits, the US compensation level is drastically higher than in Germany. US healthcare is far more expensive than in Germany, nearly double in fact. Per capita it's equal to over 20% of the median full-time wage ($50k).
  - null000 8y ago
    I think the point was more - if you take the average American paying $1-2k for healthcare per month vs Germany's $0 for healthcare per month, then that alone wipes out the difference in compensation (ignoring the fact that they have cheaper schools, more holiday, a tighter social safety net, better transportation systems, and so on)
orf 8y ago
All that while producing a significantly higher happiness index than the US. Amazing.
- quotemstr 8y ago
  You know what else produces "happiness"? Morphine. Happiness never built a bridge, cured a disease, or discovered a new particle. Productivity matters more, since it leads to satisfaction with a life well-lived, and ultimately more fulfilment than "happiness". Your happiness dies with you. What you accomplish lives forever.
  - genericid 8y ago
    I don't think Germans are happier than Americans because we take more opiates. Your claim that productivity (or, for that matter anything else) is more important than happiness is plain absurd. I prefer a good life over one that ends with me jumping off a bridge I built.
    - quotemstr 8y ago
      You know very well that I didn't mean that Germans literally medicated themselves into happiness. (AIUI, that's more an American thing.) My point is that a life of comfort is not the ideal to which we should aspire, and that humanity's accomplishments have not come from people who didn't want to bother exerting themselves. As I've said previously, European social policy is basically rest-and-vest at civilization scale.
      - genericid 8y ago
        A life of comfort is very much an ideal we should aspire to. There will always be people who have the intrinsic motivation to accomplish grander things. People don't accomplish great things because they are forced to.
      - danans 8y ago
        > My point is that a life of comfort is not the ideal to which we should aspire You are equating a life of comfort with happiness. A lot of people have a more nuanced ways of evaluating their lives, where they value facing challenging and meaningful problems while also seeking stability and comfort. It's why we have better adjectives to describe a good life than "happiness", i.e "fulfillment". > humanity's accomplishments have not come from people who didn't want to bother exerting themselves. Many of humanity's greatest breakthroughs came from people who were specifically insulated from the uncertainties of daily survival. From aristocrats experimenting with physics, to lifetime tenured monks (and later academics) who were given the day to day security to pursue lines of thought that otherwise wouldn't be considered. Despite the oft-repeated cliche, necessity is more often the enemy of invention. Necessity serves as a pruning mechanism to select the best hypothesis of the many that were created when resources were plentiful.
pjc50 8y ago
> somehow the US system is generating significantly more disposable income for its people. Then why are so many people complaining about the cost of living, housing, healthcare, education etc? Could someone remind us what is and what isn't included in "disposable"?
- adventured 8y ago
  Primarily because people love to complain, it's the number one sport of all of humanity. The US median cost of living is lower than in: Germany, France, UK, Australia, Sweden, Finland, Canada. Healthcare is a very legitimate complaint. It's plainly outrageous. Even in the case where the bill is often mostly footed by an employer, that comes out of wages to one degree or another. Housing is not a legitimate complaint (everyone doesn't live in NYC, LA, Seattle and SF). The median US costs on rent and housing are lower than any comparable disposable income nation, and you get far larger accomodations (space) in the US than the other nations. Education is not a legitimate complaint. The US is overflowing with modestly priced, high quality in-state university choices, including quite affordable state schools. If you spend $160,000 on a shit paying degree from a tier two school for no good reason, that's on you. You don't get to bitch about doing something that dumb when you could have gotten the exact same degree for $40,000 and paid for half of it with a part-time job over four years.
  - smnrchrds 8y ago
    > The US median cost of living is lower than in: Germany, France, UK, Australia, Sweden, Finland, Canada. Could you please refer me to a source for cost of living comparison? I am not disputing this assertion, I have just been unable to find a good source comparing cost of living between countries.
    - deleted 8y ago
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cryoshon 8y ago
and yet that disposable income doesn't provide a longer life expectancy or more happiness; germany beats the US in both categories (and others): https://en.wikipedia.org/wiki/World_Happiness_Report#2018_World_Happiness_Report https://en.wikipedia.org/wiki/World_Happiness_Report#2018_Wo...
Krakadero 8y ago
It's almost like Germany had to integrate a poor "foreign" nation less than three decades ago...
TulliusCicero 8y ago
IIRC according to OECD data, American workers average ~1800 hours/year, Germans ~1400/year, which maps closely to that income difference. So basically Germans are equally productive, hour for hour, but have collectively chosen more free time over more purchasing power. (Also that chart has 2016 data for the US and 2013 data for Germany, making the comparison somewhat awkward)
smnrchrds 8y ago
Disposable income is income after tax. Europe has higher tax rates that the US, so this is to be expected. It also has better services. So what you don't see in this comparison is that in return for their higher taxes, they for example get free or cheap higher education and healthcare. If the German government cuts funding for those two sectors, passes on the savings to people by reducing tax rates, and requires them to pay for those services out of pocket like the US, the disposable income may reach parity, but the people would probably be worse off in real terms.
- gt_ 8y ago
  Right. It’s a moot comparison. They all have healthcare when they need it and have no health-related bankruptcies or anxiety over such. Having a part-time job isn’t crippling to their health and safety. Their transportation systems are cutting edge as well. If you combine only the tangible cost benefits of healthcare and transportation availability, that should account for approximately the difference in disposable income.
- ChrisLomont 8y ago
  >So what you don't see in this comparison is that in return for their higher taxes, they for example get free or cheap higher education and healthcare. Household disposable income is net including those social benefits, so the complaint is incorrect. Here's the definition used in these datasets: https://data.oecd.org/hha/household-disposable-income.htm https://data.oecd.org/hha/household-disposable-income.htm
Loic 8y ago
But in the US, kids below 15 are not counted, this means that the population is artificially set at 80% of its real number. These PPP income are pretty hard to compare. You have so much local variability within a country that you can only really compare the same kind of family situation in the same kind of city. You also need to compare against what you get from the system. For example, in the US, a part of your revenue is in your PPP if you are not ill, but if you get a cancer, you are good for a good stack of expenses depending on your health insurance, in the EU, the health insurance will cover all the costs. If you are in Denmark, you get access to free education (you even get paid to study), in Germany education is free. As a French who has been working/living is several countries in the EU and have friends nearly all over the world, I can say, the real factor, if you are an engineer, is where you live, that is, the cost of housing. Because the salary as an engineer will be nearly the same in the country you live but the cost of living can vary a lot.
quotemstr 8y ago
Another thing to keep in mind is that Germany doesn't fund its own defense. (The tiny amount Germany spends is insignificant; the German airforce doesn't even bother keeping its aircraft airworthy.) We in the US fund our defense and Germany's defense (and cover the rest of the free world too) and still end up with more post-tax income than Germany does. That's a massive productivity gap.
- kartan 8y ago
  > We in the US fund our defense and Germany's defense (and cover the rest of the free world too) I agree that the USA has used its military to keep a kind of pax americana. But that is not the complete story. The super expensive wars on Afghanistan and Irak didn't had anything to do with "the free world" and a lot with oil. BTW That may have changed nowadays, but it was a very good idea that Germany had a low military budged.
  - quotemstr 8y ago
    Right. We're able to fight two stupid wars at the same time and provide blanket defense coverage for our allies. It's a huge financial burden. Bringing up the US's stupid expensive wars of choice just reinforces my point. We're so productive that we can afford these follies.
    - nickserv 8y ago
      But not single payer health care, free education, modern transport infrastructure, parental leave, and renewable energy It's all about priorities.
    - mrguyorama 8y ago
      Looking at how those wars have ballooned our national debt, I disagree that we can afford those follies
- orf 8y ago
  Your point is a valid one, but Germany has a lot of restrictions on what military force it can have. It's not necessarily a choice. What's the point of 'bothering' to keep a token airforce airworthy when your total military personnel is capped to far below a useful amount (350,000) for any reasonable attempt at defence, and for historical reasons you are incredibly adverse to using them overseas?
r00fus 8y ago
> So somehow the US system is generating significantly more disposable income for its people. Disposable income doesn't factor in the higher cost of healthcare (huge) or other "taxes" that aren't taken into account. Purchasing power is a metric that needs to be adjusted by actual cost of living and quality of such living.
- ChrisLomont 8y ago
  It is accounted for. PPP stands for Purchasing Power Parity.
- malandrew 8y ago
  1980s quality healthcare has been dropping in cost. The problem with healthcare prices today is that it covers many new advances that are still expensive. The only fair way to compare healthcare over time is if the exact same quality of care drops in price over time.

jamroom 8y ago

Being median income I have a feeling that the US median is "pulled up" significantly by the top .01% of earners in the US - I have a feeling they account for a far larger amount than the top .01% of German earners. Also - this does not take into account additional costs such as healthcare that will pull down the US amount.

ummonk 8y ago
That's not how the median works though. You're thinking of mean.
cal5k 8y ago
I’d have to dig into the numbers, but the wealthiest Americans get their income via capital gains and dividends, which I’m not sure would be included in those figures.
sacheendra 8y ago
I think you are mistaking median for mean. Mean gets pulled up, median doesn't. It's literally what the guy at 50% mark has.
deleted 8y ago
[deleted]
penpaul 8y ago
Since this is the median and not the mean, it seems that the top .01% should have no impact or bias here. The statistic here tells us that the person right in the middle of the American income distribution makes more than the person in the middle of the German income distribution, even when disregarding the actual incomes at other points in that distribution.
nine_k 8y ago
It's not an average, it's a median. That is, there are as many people who have incomes higher than that as having incomes lower than that. How much higher is already inconsequential, a few may have astronomical incomes without affecting the median.
beberlei 8y ago
The definition of median is precisely that the top 0,1% affect it only 0,1%. But household income is very tricky to measure and for example its unclear if they include health expenditure in exactly the same way

ummonk 8y ago

Well, it probably comes out to a wash after you subtract copays, deductibles, and other out of pocket healthcare expenses from the US after-tax income.

adventured 8y ago
If you factor in all benefits, the US compensation level is drastically higher than in Germany. US healthcare is far more expensive than in Germany, nearly double in fact. Per capita it's equal to over 20% of the median full-time wage ($50k).
- null000 8y ago
  I think the point was more - if you take the average American paying $1-2k for healthcare per month vs Germany's $0 for healthcare per month, then that alone wipes out the difference in compensation (ignoring the fact that they have cheaper schools, more holiday, a tighter social safety net, better transportation systems, and so on)

orf 8y ago

All that while producing a significantly higher happiness index than the US. Amazing.

quotemstr 8y ago
You know what else produces "happiness"? Morphine. Happiness never built a bridge, cured a disease, or discovered a new particle. Productivity matters more, since it leads to satisfaction with a life well-lived, and ultimately more fulfilment than "happiness". Your happiness dies with you. What you accomplish lives forever.
- genericid 8y ago
  I don't think Germans are happier than Americans because we take more opiates. Your claim that productivity (or, for that matter anything else) is more important than happiness is plain absurd. I prefer a good life over one that ends with me jumping off a bridge I built.
  - quotemstr 8y ago
    You know very well that I didn't mean that Germans literally medicated themselves into happiness. (AIUI, that's more an American thing.) My point is that a life of comfort is not the ideal to which we should aspire, and that humanity's accomplishments have not come from people who didn't want to bother exerting themselves. As I've said previously, European social policy is basically rest-and-vest at civilization scale.
    - genericid 8y ago
      A life of comfort is very much an ideal we should aspire to. There will always be people who have the intrinsic motivation to accomplish grander things. People don't accomplish great things because they are forced to.
    - danans 8y ago
      > My point is that a life of comfort is not the ideal to which we should aspire You are equating a life of comfort with happiness. A lot of people have a more nuanced ways of evaluating their lives, where they value facing challenging and meaningful problems while also seeking stability and comfort. It's why we have better adjectives to describe a good life than "happiness", i.e "fulfillment". > humanity's accomplishments have not come from people who didn't want to bother exerting themselves. Many of humanity's greatest breakthroughs came from people who were specifically insulated from the uncertainties of daily survival. From aristocrats experimenting with physics, to lifetime tenured monks (and later academics) who were given the day to day security to pursue lines of thought that otherwise wouldn't be considered. Despite the oft-repeated cliche, necessity is more often the enemy of invention. Necessity serves as a pruning mechanism to select the best hypothesis of the many that were created when resources were plentiful.

pjc50 8y ago

> somehow the US system is generating significantly more disposable income for its people. Then why are so many people complaining about the cost of living, housing, healthcare, education etc? Could someone remind us what is and what isn't included in "disposable"?

adventured 8y ago
Primarily because people love to complain, it's the number one sport of all of humanity. The US median cost of living is lower than in: Germany, France, UK, Australia, Sweden, Finland, Canada. Healthcare is a very legitimate complaint. It's plainly outrageous. Even in the case where the bill is often mostly footed by an employer, that comes out of wages to one degree or another. Housing is not a legitimate complaint (everyone doesn't live in NYC, LA, Seattle and SF). The median US costs on rent and housing are lower than any comparable disposable income nation, and you get far larger accomodations (space) in the US than the other nations. Education is not a legitimate complaint. The US is overflowing with modestly priced, high quality in-state university choices, including quite affordable state schools. If you spend $160,000 on a shit paying degree from a tier two school for no good reason, that's on you. You don't get to bitch about doing something that dumb when you could have gotten the exact same degree for $40,000 and paid for half of it with a part-time job over four years.
- smnrchrds 8y ago
  > The US median cost of living is lower than in: Germany, France, UK, Australia, Sweden, Finland, Canada. Could you please refer me to a source for cost of living comparison? I am not disputing this assertion, I have just been unable to find a good source comparing cost of living between countries.
  - deleted 8y ago
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- deleted 8y ago
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- 8y ago

cryoshon 8y ago

and yet that disposable income doesn't provide a longer life expectancy or more happiness; germany beats the US in both categories (and others): https://en.wikipedia.org/wiki/World_Happiness_Report#2018_World_Happiness_Report https://en.wikipedia.org/wiki/World_Happiness_Report#2018_Wo...

Krakadero 8y ago

It's almost like Germany had to integrate a poor "foreign" nation less than three decades ago...

TulliusCicero 8y ago

IIRC according to OECD data, American workers average ~1800 hours/year, Germans ~1400/year, which maps closely to that income difference. So basically Germans are equally productive, hour for hour, but have collectively chosen more free time over more purchasing power. (Also that chart has 2016 data for the US and 2013 data for Germany, making the comparison somewhat awkward)

smnrchrds 8y ago

Disposable income is income after tax. Europe has higher tax rates that the US, so this is to be expected. It also has better services. So what you don't see in this comparison is that in return for their higher taxes, they for example get free or cheap higher education and healthcare. If the German government cuts funding for those two sectors, passes on the savings to people by reducing tax rates, and requires them to pay for those services out of pocket like the US, the disposable income may reach parity, but the people would probably be worse off in real terms.

gt_ 8y ago
Right. It’s a moot comparison. They all have healthcare when they need it and have no health-related bankruptcies or anxiety over such. Having a part-time job isn’t crippling to their health and safety. Their transportation systems are cutting edge as well. If you combine only the tangible cost benefits of healthcare and transportation availability, that should account for approximately the difference in disposable income.
ChrisLomont 8y ago
>So what you don't see in this comparison is that in return for their higher taxes, they for example get free or cheap higher education and healthcare. Household disposable income is net including those social benefits, so the complaint is incorrect. Here's the definition used in these datasets: https://data.oecd.org/hha/household-disposable-income.htm https://data.oecd.org/hha/household-disposable-income.htm

Loic 8y ago

But in the US, kids below 15 are not counted, this means that the population is artificially set at 80% of its real number. These PPP income are pretty hard to compare. You have so much local variability within a country that you can only really compare the same kind of family situation in the same kind of city. You also need to compare against what you get from the system. For example, in the US, a part of your revenue is in your PPP if you are not ill, but if you get a cancer, you are good for a good stack of expenses depending on your health insurance, in the EU, the health insurance will cover all the costs. If you are in Denmark, you get access to free education (you even get paid to study), in Germany education is free. As a French who has been working/living is several countries in the EU and have friends nearly all over the world, I can say, the real factor, if you are an engineer, is where you live, that is, the cost of housing. Because the salary as an engineer will be nearly the same in the country you live but the cost of living can vary a lot.

quotemstr 8y ago

Another thing to keep in mind is that Germany doesn't fund its own defense. (The tiny amount Germany spends is insignificant; the German airforce doesn't even bother keeping its aircraft airworthy.) We in the US fund our defense and Germany's defense (and cover the rest of the free world too) and still end up with more post-tax income than Germany does. That's a massive productivity gap.

kartan 8y ago
> We in the US fund our defense and Germany's defense (and cover the rest of the free world too) I agree that the USA has used its military to keep a kind of pax americana. But that is not the complete story. The super expensive wars on Afghanistan and Irak didn't had anything to do with "the free world" and a lot with oil. BTW That may have changed nowadays, but it was a very good idea that Germany had a low military budged.
- quotemstr 8y ago
  Right. We're able to fight two stupid wars at the same time and provide blanket defense coverage for our allies. It's a huge financial burden. Bringing up the US's stupid expensive wars of choice just reinforces my point. We're so productive that we can afford these follies.
  - nickserv 8y ago
    But not single payer health care, free education, modern transport infrastructure, parental leave, and renewable energy It's all about priorities.
  - mrguyorama 8y ago
    Looking at how those wars have ballooned our national debt, I disagree that we can afford those follies
orf 8y ago
Your point is a valid one, but Germany has a lot of restrictions on what military force it can have. It's not necessarily a choice. What's the point of 'bothering' to keep a token airforce airworthy when your total military personnel is capped to far below a useful amount (350,000) for any reasonable attempt at defence, and for historical reasons you are incredibly adverse to using them overseas?

r00fus 8y ago

> So somehow the US system is generating significantly more disposable income for its people. Disposable income doesn't factor in the higher cost of healthcare (huge) or other "taxes" that aren't taken into account. Purchasing power is a metric that needs to be adjusted by actual cost of living and quality of such living.

ChrisLomont 8y ago
It is accounted for. PPP stands for Purchasing Power Parity.
malandrew 8y ago
1980s quality healthcare has been dropping in cost. The problem with healthcare prices today is that it covers many new advances that are still expensive. The only fair way to compare healthcare over time is if the exact same quality of care drops in price over time.