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The math adds up when you notice a couple of things: 1. The EU added Bulgaria, Romania and other new member states in 2007 that expand the population and thus
by dzink 2y ago
The math adds up when you notice a couple of things:
1. The EU added Bulgaria, Romania and other new member states in 2007 that expand the population and thus markets to 440 million in the EU vs 300-something in the US.
2. Government makes money from every transaction by its residents (and companies, but for per capita metrics, we look at residents)- income, employment, purchases, etc. The US grows by immigration - but fresh immigrants usually jump into employment in lower skilled / paid jobs. However the EU with its social policies enables more women to be in the workforce due to better childcare availability and hours and allows individuals to carry less savings because of low cost healthcare and other available safety nets. Poorer people with income buy a lot more staples, food and spend a lot more of their income, boosting the local economy. Wealthier middle class is more likely to save or spend money on bigger things- from real estate to investments to education, but that doesn’t trickle into the GDP as much (education is often non-profit and real estate has capital gains rates). When more people are employed in a country - you see a bigger rise to middle class and more spending per capita and income per capita.
To raise GDP per capita, just enable more childcare and support for employment of women. However, since the US government uses unemployment of only people who became recently unemployed and are still looking for jobs instead of all unemployed, to measure all unemployment they would irreversibly damage their performance in their favorite self-improving metric, and would have to do more for their citizens.
- ajross 2y agoYeah, this is entirely down to the explosive growth of low-GDP mostly-eastern-Europe[1] nations as they approach parity with the rest of the EU. The countries that made up the "EU" of 2000 have generally done poorer than the USA[2] in GDP per capita growth. Great data here if you want to explore: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=US https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [1] And also Ireland, who have really done well the past two decades. [2] The UK in particular really fell off its mark.
- Rinzler89 2y ago> And also Ireland, who have really done well the past two decades. Ireland was excluded form the original article statistics since it's skews the data a lot, due to all the multinational companies being HQ there. It's kind of like the Delaware of the EU.
- dzink 2y agoEspecially after Brexit.
- s_dev 2y agoIreland is certainly wealthy but not as wealthy as her GDP suggests. What is required is other measures like GNI, GNP et al. All I do these days is point out the limitations of GDP but people insist on using it everywhere for for any comparisons. Start using these and you'll see Ireland settle in around Denmark in terms of wealth.
- _1_1_1_1_1_1_ 2y ago[dead]
- disgruntledphd2 2y agoFirstly, I completely agree with your more general point. > Start using these and you'll see Ireland settle in around Denmark in terms of wealth. Secondly, as an Irish person who grew up during the 80s, this is phenomenally good. Ireland was so very poor when I was a kid, and has gotten so much richer. People actually move to Ireland for work! This is not something that has happened in the past few hundred years. We have lots and lots of problems, but they're mostly problems of success rather than those of failure.