4 ms·

Folks, the equation is quite simple: the US is a high-risk, high (financial) reward society. Unlike the EU, it's optimized for the upside: you have many opportu

Folks, the equation is quite simple: the US is a high-risk, high (financial) reward society. Unlike the EU, it's optimized for the upside: you have many opportunities to create wealth for yourself (and sometimes for others). The EU, conversely, is optimized for the downside: you may not have too many opportunities to climb high, but even if you are the bottom, life can still be relatively comfortable. So, for the averaghe person, the European system is likely (almost definitely) better. For risk-craving entrepreneurs, the US is better (although some other places may have even more and bigger high-risk opportunities nowadays). For you? You decide!

nraynaud 7y ago
How do you decide which country you get born in exactly?
- AlexTWithBeard 7y ago
  You don't, but if the countries are different, you can at least relocate to your liking. If all countries are the same then you're out of luck.
  - nraynaud 7y ago
    poor people can't relocate.
bodono 7y ago
True, but life expectancy is declining here in the UK as well.
cultus 7y ago
That's not actually true at all. The US has lower social mobility than most wealthy European countries. Thus, there are actually fewer opportunities for most people to create wealth for themselves compared to countries with more equality. It's hard to start a business, if, like the vast majority of people, you don't have a bunch of excess money sitting around. https://www.forbes.com/sites/aparnamathur/2018/07/16/the-u-s-does-poorly-on-yet-another-metric-of-economic-mobility/#1dab24b66a7b https://www.forbes.com/sites/aparnamathur/2018/07/16/the-u-s... https://www.economist.com/graphic-detail/2018/02/14/americans-overestimate-social-mobility-in-their-country https://www.economist.com/graphic-detail/2018/02/14/american...
- nostrademons 7y ago
  Quintile graphs obscure absolute magnitudes. Most of the people that have a realistic chance of making it into the upper income/wealth quintiles come from relatively high social strata already (either within the U.S or, if they're an immigrant, within their home countries), but they want that high percentile to mean more in absolute terms. In other words, if you come from the upper end of the distribution, income inequality is a feature not a bug.
  - deleted 7y ago
    [deleted]
- refurb 7y ago
  The is a fatal flaw with the way they measure mobility in these studies because the income quintiles are skewed much higher in the US. Take this scenario: 1. You go from 1st quintile (10K EUR) to 5th quintile (100K EUR) in Europe. 2. You go from 1st quintile ($10K) to 4th quintile ($110K) in the US. By this measure, Europe has better mobility, but the person in the US ends up with a higher income.
  - geocar 7y ago
    I don't think using quintiles is unfair. Consider thinking about it using an extreme: If I'm earning (and spending) in the top percentile in NYC or London, I assuredly have a very nice standard of living, but the effort (personal growth, career, etc) to move to that top percentile from anywhere else is far lower in London than it is in NYC.
    - nostrademons 7y ago
      Is that actually true? In refurb's example, you can move from the 4th quintile in the U.S. to the 5th quintile in London simply by moving from the U.S. to London and holding everything else constant. In my career, the biggest bumps in compensation have been through events that I had little to do with. Pick the right industry and company, pass the hiring bar, have their wage-fixing cartel broken by Facebook, and let stock-price appreciation do the rest. I worked hard, but I worked hard mostly because what else am I going to do with my time? I also feel like there's a difference in working models between your post (and by extension, most middle-class and lower people) and how people actually get to the top income & wealth percentiles. Most people believe it happens through hard work: put in the hours, learn the material, diligently do what you're told, get a steady stream of promotions, and you'll get rich. In practice, this usually results in a series of 6-7% wage increases that keep you roughly where you were within the relative distribution, because everybody else is doing the same thing. All really big fortunes are made through arbitrage: identify a problem that lots of people really want solved, present yourself as the solution to that problem, profit. Work is required for this, but the returns from it are highly non-linear: you might work a little more (or sometimes even less) than someone who slaves away at their career, but get orders of magnitude more return.
rayiner 7y ago
> So, for the averaghe person, the European system is likely (almost definitely) better. I would strongly dispute this. According to the OECD, median household disposable income (adjusted for purchasing power) in the US is $10,000 per year, more than 20% higher than Germany, and $12,000 per year higher than the OECD average. Health care and educational expenses don’t come close to wiping out that difference for the median person. The median American household has no student loan payment, and spends just a couple of thousand per year on out of pocket health care costs: https://www.kff.org/health-costs/press-release/interactive-calculator-estimates-both-direct-and-hidden-household-spending/ https://www.kff.org/health-costs/press-release/interactive-c... > For example, a person with employer coverage earning $50,000 annually spends on average $5,250, or roughly 11% of her income, on health care. This includes $800 per year in out-of-pocket costs, a $1,400 premium contribution, and $3,050 in state and federal taxes to fund health programs. (The OECD disposable income statistic is after taxes, so the $3,050 in taxes above should be excluded from the comparison.) The US system is optimized for the top 60%, and further optimized so the middle 40% doesn’t have to pay EU-level taxes to bankroll a safety net for the bottom 40%. It’s optimized at maximizing material comfort for the majority of people who never get seriously ill before they’re eligible for Medicare, as opposed to optimizing for raising the floor for people who get unlucky.

nraynaud 7y ago

How do you decide which country you get born in exactly?

AlexTWithBeard 7y ago
You don't, but if the countries are different, you can at least relocate to your liking. If all countries are the same then you're out of luck.
- nraynaud 7y ago
  poor people can't relocate.

bodono 7y ago

True, but life expectancy is declining here in the UK as well.

cultus 7y ago

That's not actually true at all. The US has lower social mobility than most wealthy European countries. Thus, there are actually fewer opportunities for most people to create wealth for themselves compared to countries with more equality. It's hard to start a business, if, like the vast majority of people, you don't have a bunch of excess money sitting around. https://www.forbes.com/sites/aparnamathur/2018/07/16/the-u-s-does-poorly-on-yet-another-metric-of-economic-mobility/#1dab24b66a7b https://www.forbes.com/sites/aparnamathur/2018/07/16/the-u-s... https://www.economist.com/graphic-detail/2018/02/14/americans-overestimate-social-mobility-in-their-country https://www.economist.com/graphic-detail/2018/02/14/american...

nostrademons 7y ago
Quintile graphs obscure absolute magnitudes. Most of the people that have a realistic chance of making it into the upper income/wealth quintiles come from relatively high social strata already (either within the U.S or, if they're an immigrant, within their home countries), but they want that high percentile to mean more in absolute terms. In other words, if you come from the upper end of the distribution, income inequality is a feature not a bug.
- deleted 7y ago
  [deleted]
refurb 7y ago
The is a fatal flaw with the way they measure mobility in these studies because the income quintiles are skewed much higher in the US. Take this scenario: 1. You go from 1st quintile (10K EUR) to 5th quintile (100K EUR) in Europe. 2. You go from 1st quintile ($10K) to 4th quintile ($110K) in the US. By this measure, Europe has better mobility, but the person in the US ends up with a higher income.
- geocar 7y ago
  I don't think using quintiles is unfair. Consider thinking about it using an extreme: If I'm earning (and spending) in the top percentile in NYC or London, I assuredly have a very nice standard of living, but the effort (personal growth, career, etc) to move to that top percentile from anywhere else is far lower in London than it is in NYC.
  - nostrademons 7y ago
    Is that actually true? In refurb's example, you can move from the 4th quintile in the U.S. to the 5th quintile in London simply by moving from the U.S. to London and holding everything else constant. In my career, the biggest bumps in compensation have been through events that I had little to do with. Pick the right industry and company, pass the hiring bar, have their wage-fixing cartel broken by Facebook, and let stock-price appreciation do the rest. I worked hard, but I worked hard mostly because what else am I going to do with my time? I also feel like there's a difference in working models between your post (and by extension, most middle-class and lower people) and how people actually get to the top income & wealth percentiles. Most people believe it happens through hard work: put in the hours, learn the material, diligently do what you're told, get a steady stream of promotions, and you'll get rich. In practice, this usually results in a series of 6-7% wage increases that keep you roughly where you were within the relative distribution, because everybody else is doing the same thing. All really big fortunes are made through arbitrage: identify a problem that lots of people really want solved, present yourself as the solution to that problem, profit. Work is required for this, but the returns from it are highly non-linear: you might work a little more (or sometimes even less) than someone who slaves away at their career, but get orders of magnitude more return.

rayiner 7y ago

> So, for the averaghe person, the European system is likely (almost definitely) better. I would strongly dispute this. According to the OECD, median household disposable income (adjusted for purchasing power) in the US is $10,000 per year, more than 20% higher than Germany, and $12,000 per year higher than the OECD average. Health care and educational expenses don’t come close to wiping out that difference for the median person. The median American household has no student loan payment, and spends just a couple of thousand per year on out of pocket health care costs: https://www.kff.org/health-costs/press-release/interactive-calculator-estimates-both-direct-and-hidden-household-spending/ https://www.kff.org/health-costs/press-release/interactive-c... > For example, a person with employer coverage earning $50,000 annually spends on average $5,250, or roughly 11% of her income, on health care. This includes $800 per year in out-of-pocket costs, a $1,400 premium contribution, and $3,050 in state and federal taxes to fund health programs. (The OECD disposable income statistic is after taxes, so the $3,050 in taxes above should be excluded from the comparison.) The US system is optimized for the top 60%, and further optimized so the middle 40% doesn’t have to pay EU-level taxes to bankroll a safety net for the bottom 40%. It’s optimized at maximizing material comfort for the majority of people who never get seriously ill before they’re eligible for Medicare, as opposed to optimizing for raising the floor for people who get unlucky.