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> GBP 37k What is that percentile wise? As an American, I am perpetually shocked at how low UK salaries sound when I hear them, especially given that I know c

> GBP 37k What is that percentile wise? As an American, I am perpetually shocked at how low UK salaries sound when I hear them, especially given that I know consumer goods are more expensive on your side of the pond. Is it made up for by comparatively lower cost of housing or other essential items or what? Or is there a huge transatlantic income gap that I never really hear about (mostly it's cost of living differences that seem to draw attention)?

hnhg 16y ago
I don't know for sure but I suspect that people in the UK paid more attention to total personal wealth including property asset values, which were rising at a pretty ridiculous rate. To put this into perspective with an anecdote, I know a family who bought a house about 10 years ago to rent out in an up and coming area for £60k. Two years later they bought the house next door for 220k. Now each house is worth around £400-500k. This isn't even in London/the South where the rises were even greater. So property assets perhaps made up for relatively low income, and I feel that the government at the time played up to this. I also know a lot of people who took debts against their homes to increase their cash flow and buy cars, kitchens, etc with it. EDIT: Of course, now the situation is different, with the property market being flat. Who knows what will happen from now on, but our new government has made noises about making sure the property market less important to the economy.
ladon86 16y ago
Well it's definitely not cost of housing, which is very expensive here. For the most part you can expect to pay a lot more for a much smaller house in the UK compared to the US. I'm not sure where it is that we make up the difference in costs, or if indeed we do.
- Mz 16y ago
  As a guess: Healthcare. My understanding is that it is largely covered by the government in the UK but consumes somewhere in the neighborhood of 20% of US incomes (figure remembered off the top of my head -- I really want to say about 22% but that implies more accuracy than I feel confident implying). So that one item alone should make a quite large impact on actual outcomes.
  - hga 16y ago
    But, assuming we've been talking about before tax incomes, the mechanism by which you pay for your health care doesn't matter for the purposes of this discussion, does it? I.e. the U.K. has higher individual tax rates in part to cover the NHS's expenses. That said, the U.K. spends a lot less as a percentage of GDP on health care, but then they have a substantially lower per capita GDP. ADDED: off the top of my head, U.K. health care spending is 6-7% of GDP, US is 17%.
    - Mz 16y ago
      That said, the U.K. spends a lot less as a percentage of GDP on health care, but then they have a substantially lower per capita GDP. As someone who has a life-threatening medical condition (and also spends a lot of time talking to others with serious conditions), I will note that being unhealthy has a great many costs involved that go far beyond whatever is spent on doctors and drugs. The very high healthcare costs in the US are not merely a financial cost. They are an indicator of general poor health in the US: High levels of obesity, high blood pressure, heart disease, diabetes and on and on. People who are ill have less energy and mental focus for the tasks of day-to-day living and often spend more money on lower quality products, like eating microwave meals and fast food instead of cooking from scratch. In fact, the degree to which my local grocery store is an utter madhouse right before American holidays that revolve around a big meal where extended family is typically invited suggests to me and others that I have spoken with that most Americans just don't much cook. I was a homemaker for 2 decades and the degree to which I shopped daily for fresh meats and produce and cooked for dinner what I had bought fresh earlier that afternoon drew frequent remarks from people who worked at the grocery store and who wished their wife would cook like I did. I have gotten myself a great deal healthier than doctors think is possible for my condition and dietary changes are a big part of how I accomplished that. It is well known that Europe has a food culture in a way that is unknown here in the US. I strongly suspect that the emphasis on eating well in Europe is linked both to having a high quality of life without a very high salary and to lower overall healthcare costs. /soapbox
    - cstross 16y ago
      Note that UK healthcare costs are lower than US healthcare expenditure in part because there's no parasitic insurance industry. (Or rather, there is, but it's tiny: private healthcare accounts for <10% of UK healthcare expenditure). Instead, there's a single payer that funds everything and doesn't bother with assessing individual eligibility for treatment except in edge cases (foreign visitors, or rare and horrendously expensive cancer cases, mostly).
- tesseract 16y ago
  I know in some European countries (I'm thinking specifically of Germany) it's much more common for employees to be issued a company car than it is in the US. Is that true in the UK as well? Or are there other things commonly provided as in-kind employment benefits that would otherwise cost a lot of money?
Jabbles 16y ago
The top 1% income-wise threshold is ~£100,000, rising to £350,000 for the top 0.1%. £37,000 is very close to the top 10% threshold. http://www.ifs.org.uk/bns/bn76.pdf http://www.ifs.org.uk/bns/bn76.pdf Page 9
rmc 16y ago
Remember exchange rates aswell. It almost to to £1 = $2
- tesseract 16y ago
  Google says that today, £37k = $60k. In the US that's above the median but no one would call a $60k household income "rich".

hnhg 16y ago

I don't know for sure but I suspect that people in the UK paid more attention to total personal wealth including property asset values, which were rising at a pretty ridiculous rate. To put this into perspective with an anecdote, I know a family who bought a house about 10 years ago to rent out in an up and coming area for £60k. Two years later they bought the house next door for 220k. Now each house is worth around £400-500k. This isn't even in London/the South where the rises were even greater. So property assets perhaps made up for relatively low income, and I feel that the government at the time played up to this. I also know a lot of people who took debts against their homes to increase their cash flow and buy cars, kitchens, etc with it. EDIT: Of course, now the situation is different, with the property market being flat. Who knows what will happen from now on, but our new government has made noises about making sure the property market less important to the economy.

ladon86 16y ago

Well it's definitely not cost of housing, which is very expensive here. For the most part you can expect to pay a lot more for a much smaller house in the UK compared to the US. I'm not sure where it is that we make up the difference in costs, or if indeed we do.

Mz 16y ago
As a guess: Healthcare. My understanding is that it is largely covered by the government in the UK but consumes somewhere in the neighborhood of 20% of US incomes (figure remembered off the top of my head -- I really want to say about 22% but that implies more accuracy than I feel confident implying). So that one item alone should make a quite large impact on actual outcomes.
- hga 16y ago
  But, assuming we've been talking about before tax incomes, the mechanism by which you pay for your health care doesn't matter for the purposes of this discussion, does it? I.e. the U.K. has higher individual tax rates in part to cover the NHS's expenses. That said, the U.K. spends a lot less as a percentage of GDP on health care, but then they have a substantially lower per capita GDP. ADDED: off the top of my head, U.K. health care spending is 6-7% of GDP, US is 17%.
  - Mz 16y ago
    That said, the U.K. spends a lot less as a percentage of GDP on health care, but then they have a substantially lower per capita GDP. As someone who has a life-threatening medical condition (and also spends a lot of time talking to others with serious conditions), I will note that being unhealthy has a great many costs involved that go far beyond whatever is spent on doctors and drugs. The very high healthcare costs in the US are not merely a financial cost. They are an indicator of general poor health in the US: High levels of obesity, high blood pressure, heart disease, diabetes and on and on. People who are ill have less energy and mental focus for the tasks of day-to-day living and often spend more money on lower quality products, like eating microwave meals and fast food instead of cooking from scratch. In fact, the degree to which my local grocery store is an utter madhouse right before American holidays that revolve around a big meal where extended family is typically invited suggests to me and others that I have spoken with that most Americans just don't much cook. I was a homemaker for 2 decades and the degree to which I shopped daily for fresh meats and produce and cooked for dinner what I had bought fresh earlier that afternoon drew frequent remarks from people who worked at the grocery store and who wished their wife would cook like I did. I have gotten myself a great deal healthier than doctors think is possible for my condition and dietary changes are a big part of how I accomplished that. It is well known that Europe has a food culture in a way that is unknown here in the US. I strongly suspect that the emphasis on eating well in Europe is linked both to having a high quality of life without a very high salary and to lower overall healthcare costs. /soapbox
  - cstross 16y ago
    Note that UK healthcare costs are lower than US healthcare expenditure in part because there's no parasitic insurance industry. (Or rather, there is, but it's tiny: private healthcare accounts for <10% of UK healthcare expenditure). Instead, there's a single payer that funds everything and doesn't bother with assessing individual eligibility for treatment except in edge cases (foreign visitors, or rare and horrendously expensive cancer cases, mostly).
tesseract 16y ago
I know in some European countries (I'm thinking specifically of Germany) it's much more common for employees to be issued a company car than it is in the US. Is that true in the UK as well? Or are there other things commonly provided as in-kind employment benefits that would otherwise cost a lot of money?

Jabbles 16y ago

The top 1% income-wise threshold is ~£100,000, rising to £350,000 for the top 0.1%. £37,000 is very close to the top 10% threshold. http://www.ifs.org.uk/bns/bn76.pdf http://www.ifs.org.uk/bns/bn76.pdf Page 9

rmc 16y ago

Remember exchange rates aswell. It almost to to £1 = $2

tesseract 16y ago
Google says that today, £37k = $60k. In the US that's above the median but no one would call a $60k household income "rich".