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Median (not average) PPP income is highest in the US. See: https://en.m.wikipedia.org/wiki/Median_income https://en.m.wikipedia.org/wiki/Median_income While it

by rank0 3y ago

Median (not average) PPP income is highest in the US. See: https://en.m.wikipedia.org/wiki/Median_income https://en.m.wikipedia.org/wiki/Median_income While it’s true our income inequality is larger, the fact still remains that the median American makes more money than the median European (or any other comparable region). Ask yourself: Is it better for everyone to be richer and have high inequality? Or is it better for everyone to be poorer but more equal? EDIT: Switzerland is a good point. They are a prosperous and highly educated society! It’s just tough to compare in my mind because the US or EU is hundreds of times larger.

PaulDavisThe1st 3y ago
Comparing absolute numbers for income is a bit of a fool's errands, even when you use PPP. The philosopher John Rawls has a famous thought experiment of choosing a form of social and economic organization without knowing where you personally might end up on whatever heirarchy it generates or contains. Rawls' point was that in such circumstances, most even semi-rational people will choose the one that makes it the most likely that they will not end up in a non-disadvantaged position, which is the fundamental concept behind an egalitarian to oppurtunity and inequality. Given that, faced with a choice between: 1) a society that carries out substantive income/wealth redistribution so that few people (if anyone) has issues with a broad set of "basic" needs 2) a society that offers limited substantive income/wealth redistribution in the name of "high rewards for high achievement" or something similar most people in Rawls thought experiment will choose the former. You only choose (2) when you have reason to believe you will be a high achiever, which in a truly meritocratic society, you cannot know in advance. So, the US is a society in which median (PPP) income is highest, but low income redistribution ensures that large numbers of people struggle to enjoy the things that US society considers "normal". By contrast, social democratic societies in Europe have lower median (PPP) income, but higher income redistribution means that far fewer people face such struggles. Rawls would maintain that a rational person with a belief in justice would always pick (1), and that only irrationality or some (unfounded) conviction of one's own certainty of outsize success would lead someone to pick (2).
- rank0 3y ago
  I appreciate the response! > By contrast, social democratic societies in Europe have lower median (PPP) income, but higher income redistribution means that far fewer people face such struggles. The idea that EU citizens do not face poverty is simply false. The EU sheltered homelessness rate is very close to the US, both under 0.2% which is phenomenal honestly… Poverty rate statistics are quite tricky to decipher. But all the data I can find says that there isn’t an outsized difference between the regions. Rates in US states vary as much as EU member countries with plenty of states from both regions exceeding or below US/EU averages. I’m not trying to be a blind patriot stereotype or even claim that the US is “better” than other portions of the world. My only point is that objectively speaking, living standards in America are PHENOMENAL. We should not “redistribute wealth like other western nations” because I can’t think of any G20 nations that have a clearly preferable economic system. Also to your point about Rawls, if you go too far with redistribution you remove the incentive for people to do difficult or unpleasant work. We’ve witnessed this countless times over the past century in all the failed socialist/communist societies. In a less extreme example we just witnessed France default on its pension obligations! Nobody is going to work for free. The US spends more money than any other nation on social welfare programs. It’s inefficient and unsustainable. How can we honestly consider expanding wealth distribution programs when we can’t even afford what we have now? If you can think of a particular nation’s system we should emulate I’d love to hear the argument with an open mind. I honest to god cannot think of any.
  - jinjin2 3y ago
    How about Denmark? Seems like a smooth running country. Hardly any national debt. Free healthcare and education for all. Consistently rated as one of the happiest countries on earth.
    - rank0 3y ago
      I don’t know much about Denmark but it sounds like a great place! I’d be concerned that policy in Denmark wouldn’t work in the US due to the enormous differences in size, culture, geography, etc. That’s why I think it really only makes sense to compare G20 countries or entire regions like US:EU
alex_young 3y ago
Let's look at France then. They have lower numbers on paper when you look at things like per capita GDP, but they live longer lives, work about half the hours we do, take a full month of vacation, have access to free higher education and healthcare, etc. The estimates for their overall wellbeing are very similar to ours [0]. At to income distribution - in France the lowest quintile controls 8% of incomes [1], while in the US that number is less than 3% [2]. In fact, the second quintile in the US controls only 8%, which means that for the bottom 40% of income earners, one is very likely to be better off living in France. Income inequality does indeed matter when you have many millions of people living in abject poverty, and it is a very relevant thing to consider when comparing economies. [0] http://klenow.com/Jones_Klenow.pdf http://klenow.com/Jones_Klenow.pdf [1] https://www.indexmundi.com/facts/france/income-distribution https://www.indexmundi.com/facts/france/income-distribution [2] https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-05.html https://www.census.gov/data/tables/time-series/demo/income-p...
- rank0 3y ago
  There’s a lot of great things about the French economy. There’s also plenty of areas where they lag behind the US. The French labor force participation rate is ~74% compared to ~62% in America. The French homeless rate is 3x the US rate. France just defaulted on its national pension obligations a few months ago. What policy exactly should we copy from France? If we’re still arguing about wealth redistribution policies I want a clearly articulated example of a superior system. I don’t see where it is in France but please lmk if I’m missing something.
  - alex_young 3y ago
    Sure, I’m not suggesting we copy any one policy, but the assumption that people in the US are better off than everyone else and that it is somehow because we don’t tax wealth is kind of silly. By some measures many European nations are better off economically than we are. And many of these countries have wealth taxes. We’d also be remiss to overlook that the US had a tremendous advantage in not having our infrastructure destroyed in the middle of the 20th century.
jltsiren 3y ago
Those numbers are not what you say they are. > The following table represents data from OECD's "median disposable income per person" metric; disposable income deducts from gross income the value of taxes on income and wealth paid and of contributions paid by households to public social security schemes. The figures are equivalised by dividing income by the square root of household size. According to that metric, public healthcare, public pensions, and subsidized education and childcare lower disposable income, while private versions of the same services don't. Additionally, cultures where adult children often live with their parents have higher incomes by that metric than those where they move out earlier.
- rank0 3y ago
  The OECD definition says this: "Information is also presented for gross household disposable income including social transfers in kind, such as health or education provided for free or at reduced prices by governments and not-for-profit organisations." See: https://data.oecd.org/hha/household-disposable-income.htm https://data.oecd.org/hha/household-disposable-income.htm

by rank0 3y ago

PaulDavisThe1st 3y ago

Comparing absolute numbers for income is a bit of a fool's errands, even when you use PPP. The philosopher John Rawls has a famous thought experiment of choosing a form of social and economic organization without knowing where you personally might end up on whatever heirarchy it generates or contains. Rawls' point was that in such circumstances, most even semi-rational people will choose the one that makes it the most likely that they will not end up in a non-disadvantaged position, which is the fundamental concept behind an egalitarian to oppurtunity and inequality. Given that, faced with a choice between: 1) a society that carries out substantive income/wealth redistribution so that few people (if anyone) has issues with a broad set of "basic" needs 2) a society that offers limited substantive income/wealth redistribution in the name of "high rewards for high achievement" or something similar most people in Rawls thought experiment will choose the former. You only choose (2) when you have reason to believe you will be a high achiever, which in a truly meritocratic society, you cannot know in advance. So, the US is a society in which median (PPP) income is highest, but low income redistribution ensures that large numbers of people struggle to enjoy the things that US society considers "normal". By contrast, social democratic societies in Europe have lower median (PPP) income, but higher income redistribution means that far fewer people face such struggles. Rawls would maintain that a rational person with a belief in justice would always pick (1), and that only irrationality or some (unfounded) conviction of one's own certainty of outsize success would lead someone to pick (2).

rank0 3y ago
I appreciate the response! > By contrast, social democratic societies in Europe have lower median (PPP) income, but higher income redistribution means that far fewer people face such struggles. The idea that EU citizens do not face poverty is simply false. The EU sheltered homelessness rate is very close to the US, both under 0.2% which is phenomenal honestly… Poverty rate statistics are quite tricky to decipher. But all the data I can find says that there isn’t an outsized difference between the regions. Rates in US states vary as much as EU member countries with plenty of states from both regions exceeding or below US/EU averages. I’m not trying to be a blind patriot stereotype or even claim that the US is “better” than other portions of the world. My only point is that objectively speaking, living standards in America are PHENOMENAL. We should not “redistribute wealth like other western nations” because I can’t think of any G20 nations that have a clearly preferable economic system. Also to your point about Rawls, if you go too far with redistribution you remove the incentive for people to do difficult or unpleasant work. We’ve witnessed this countless times over the past century in all the failed socialist/communist societies. In a less extreme example we just witnessed France default on its pension obligations! Nobody is going to work for free. The US spends more money than any other nation on social welfare programs. It’s inefficient and unsustainable. How can we honestly consider expanding wealth distribution programs when we can’t even afford what we have now? If you can think of a particular nation’s system we should emulate I’d love to hear the argument with an open mind. I honest to god cannot think of any.
- jinjin2 3y ago
  How about Denmark? Seems like a smooth running country. Hardly any national debt. Free healthcare and education for all. Consistently rated as one of the happiest countries on earth.
  - rank0 3y ago
    I don’t know much about Denmark but it sounds like a great place! I’d be concerned that policy in Denmark wouldn’t work in the US due to the enormous differences in size, culture, geography, etc. That’s why I think it really only makes sense to compare G20 countries or entire regions like US:EU

alex_young 3y ago

Let's look at France then. They have lower numbers on paper when you look at things like per capita GDP, but they live longer lives, work about half the hours we do, take a full month of vacation, have access to free higher education and healthcare, etc. The estimates for their overall wellbeing are very similar to ours [0]. At to income distribution - in France the lowest quintile controls 8% of incomes [1], while in the US that number is less than 3% [2]. In fact, the second quintile in the US controls only 8%, which means that for the bottom 40% of income earners, one is very likely to be better off living in France. Income inequality does indeed matter when you have many millions of people living in abject poverty, and it is a very relevant thing to consider when comparing economies. [0] http://klenow.com/Jones_Klenow.pdf http://klenow.com/Jones_Klenow.pdf [1] https://www.indexmundi.com/facts/france/income-distribution https://www.indexmundi.com/facts/france/income-distribution [2] https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-05.html https://www.census.gov/data/tables/time-series/demo/income-p...

rank0 3y ago
There’s a lot of great things about the French economy. There’s also plenty of areas where they lag behind the US. The French labor force participation rate is ~74% compared to ~62% in America. The French homeless rate is 3x the US rate. France just defaulted on its national pension obligations a few months ago. What policy exactly should we copy from France? If we’re still arguing about wealth redistribution policies I want a clearly articulated example of a superior system. I don’t see where it is in France but please lmk if I’m missing something.
- alex_young 3y ago
  Sure, I’m not suggesting we copy any one policy, but the assumption that people in the US are better off than everyone else and that it is somehow because we don’t tax wealth is kind of silly. By some measures many European nations are better off economically than we are. And many of these countries have wealth taxes. We’d also be remiss to overlook that the US had a tremendous advantage in not having our infrastructure destroyed in the middle of the 20th century.

jltsiren 3y ago

Those numbers are not what you say they are. > The following table represents data from OECD's "median disposable income per person" metric; disposable income deducts from gross income the value of taxes on income and wealth paid and of contributions paid by households to public social security schemes. The figures are equivalised by dividing income by the square root of household size. According to that metric, public healthcare, public pensions, and subsidized education and childcare lower disposable income, while private versions of the same services don't. Additionally, cultures where adult children often live with their parents have higher incomes by that metric than those where they move out earlier.

rank0 3y ago
The OECD definition says this: "Information is also presented for gross household disposable income including social transfers in kind, such as health or education provided for free or at reduced prices by governments and not-for-profit organisations." See: https://data.oecd.org/hha/household-disposable-income.htm https://data.oecd.org/hha/household-disposable-income.htm