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The average net worth in Germany is a couple hundred thousand while the average in the US is over a million. Just taking median it goes to around double for th

The average net worth in Germany is a couple hundred thousand while the average in the US is over a million. Just taking median it goes to around double for the US compared to Germany. There is real social mobility in the US that isn’t there in Germany.

jacquesm 3y ago
Social mobility is why the saying goes that the USA is full of temporarily embarrassed millionaires. Including the ones sleeping on the streets. They're all one lucky break away from the big one. Of course you can't generalize like that across a whole population but if you take out the 'white, male, well educated, from a wealthy background' out of the stats then suddenly the social mobility in the USA looks totally different, exceptions notwithstanding. Your average includes Jeff Bezos, Elon Musk, Bill Gates and Warren Buffet.
- edgyquant 3y ago
  Actually the income distribution for Americans is mostly the same across all races with the exception of native Americans and Pacific Islanders. It’s true there’s a larger wealth gap but even that is changing with time and is mostly due to the white Americans being able to build wealth the longest.
rsynnott 3y ago
So, one thing you have to be careful of here. Germany is one of the few countries where defined benefit pensions (that is, pensions where your pension is a fraction of final salary or similar) are still common; in most developed countries, including the US, peoples' pensions are far more likely to be some sort of tax-advantaged investment, which they probably have restricted access to pre-retirement, which their employer may contribute to or may be required to contribute to, and so on. The latter is clearly wealth, and relatively easy to account for; the former is _much_ harder to account for, as it's an obligation by something to the pensionee, but not stuff actually owned by the pensionee. (Not that people don't try; Ireland, for instance, has additional taxes on pensions worth over 2m, and actually does produce a notional valuation for DC pensions where they exist for this purpose)

jacquesm 3y ago

Social mobility is why the saying goes that the USA is full of temporarily embarrassed millionaires. Including the ones sleeping on the streets. They're all one lucky break away from the big one. Of course you can't generalize like that across a whole population but if you take out the 'white, male, well educated, from a wealthy background' out of the stats then suddenly the social mobility in the USA looks totally different, exceptions notwithstanding. Your average includes Jeff Bezos, Elon Musk, Bill Gates and Warren Buffet.

edgyquant 3y ago
Actually the income distribution for Americans is mostly the same across all races with the exception of native Americans and Pacific Islanders. It’s true there’s a larger wealth gap but even that is changing with time and is mostly due to the white Americans being able to build wealth the longest.

rsynnott 3y ago

So, one thing you have to be careful of here. Germany is one of the few countries where defined benefit pensions (that is, pensions where your pension is a fraction of final salary or similar) are still common; in most developed countries, including the US, peoples' pensions are far more likely to be some sort of tax-advantaged investment, which they probably have restricted access to pre-retirement, which their employer may contribute to or may be required to contribute to, and so on. The latter is clearly wealth, and relatively easy to account for; the former is _much_ harder to account for, as it's an obligation by something to the pensionee, but not stuff actually owned by the pensionee. (Not that people don't try; Ireland, for instance, has additional taxes on pensions worth over 2m, and actually does produce a notional valuation for DC pensions where they exist for this purpose)