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The average person in the US maybe. And the third world. In Western Europe? Not so much. I mean, yes, there are poor people, but the middle class mostly doesn

The average person in the US maybe. And the third world. In Western Europe? Not so much. I mean, yes, there are poor people, but the middle class mostly doesn't live paycheck to paycheck.

rsynnott 2y ago
Most Western European countries do have higher savings rates than the US, but, disregarding Switzerland, Ireland and the Nordics (ie small wealthy countries with very high cost of living), it’s not a _dramatic_ difference. People may be less likely to be living paycheck to paycheck, but being able to just take two years off not working, unless you had very low living costs, would still be very unusual.
- jajko 2y ago
  A lot of people adjust their lifestyle to paycheck, so little is left afterwards. Concept of savings is quite foreign to them, they want to enjoy life now. So paycheck to paycheck, while sporting newest highend phone or other gizmos, nice package of vacations through the year or just look at fashion clothes they wear and how often they buy new ones. I mean I would fit in this category too for maybe past decade, little cash left over after paycheck but I did like exotic 5 vacations per year and invested rest into mortgage for mountain apartment for rentals.
- swiftcoder 2y ago
  I think the difference in available social services here is also necessary to take into account. Someone laid off in, say, Spain, already has full healthcare provided by the state, and qualifies for an unemployment benefit based on their most recent salary for up to 3 years - this makes for a significantly less precarious position than that same person recently laid off in the US.
  - Fokamul 2y ago
    And if go eg. Germany. Ridiculously, without kids, it's nearly more beneficial to go on unemployment support there. Since, when working, you blow like 50%+ on taxes.
    - throwaway2037 2y ago
      50% effective or marginal? During discussions, only effective is useful. According to the PWC page: https://taxsummaries.pwc.com/germany/individual/taxes-on-personal-income https://taxsummaries.pwc.com/germany/individual/taxes-on-per... Marginal tax rate is 42% on the first EUR after 278K. That would astonishingly high total income in Germany. There might be some remaining solidarity tax from the reunification, but I cannot see how you get to an effective tax rate of 50% on 100K income, which is considered excellent in Germany. Can you share a worked example how effective tax rate can be above 50%?
      - ongy 2y ago
        Kinda useless to reply to a throwaway after 5h but let's see 1. Minor mistake. 42% marginal is at 60k~ish, the 278k number is 45% 2. The effective income tax rate around 100k is in the area of 25%. When there's numbers thrown around above 40% they usually include the 19% sales tax, CO2 tax etc. it's a slightly odd number including government induced cost.
        throwaway2037 2y ago
        VAT is never included in income tax comparisons. So, please tell me: How do you get to 50% effective tax rate in Germany with anything less than a ridiculously high income, like 250K EUR+?
  - Nasrudith 2y ago
    I would have expected the opposite to occur because of that - lesser saving rates because they have more robust available social services and don't need emergency reserves.
cscurmudgeon 2y ago
Not really. 1. Most Americans are not paycheck-to-paycheck. It is what politicians constantly say depending on whether they are in power or not. https://old.reddit.com/r/AskEconomics/comments/1dbpaag/do_the_majority_of_americans_live_paycheck_to/l7swsq5/ https://old.reddit.com/r/AskEconomics/comments/1dbpaag/do_th... 2. Americans have higher disposable income at all income levels than Europeans (Western Europe included). https://www.reddit.com/r/europe/comments/xgoouz/americans_have_a_higher_disposable_income_across/ https://www.reddit.com/r/europe/comments/xgoouz/americans_ha...
- throwaway2037 2y ago
  > Americans have higher disposable income at all income levels than Europeans Most of this is eaten up by higher healthcare and university education costs, combined with a much worse social safety net compared to other G7-like nations. So really, are middle class Americans more financially stable than Europeans from G7-like nations? I doubt it.

The average person in the US maybe. And the third world. In Western Europe? Not so much. I mean, yes, there are poor people, but the middle class mostly doesn't live paycheck to paycheck.

rsynnott 2y ago

Most Western European countries do have higher savings rates than the US, but, disregarding Switzerland, Ireland and the Nordics (ie small wealthy countries with very high cost of living), it’s not a _dramatic_ difference. People may be less likely to be living paycheck to paycheck, but being able to just take two years off not working, unless you had very low living costs, would still be very unusual.

jajko 2y ago
A lot of people adjust their lifestyle to paycheck, so little is left afterwards. Concept of savings is quite foreign to them, they want to enjoy life now. So paycheck to paycheck, while sporting newest highend phone or other gizmos, nice package of vacations through the year or just look at fashion clothes they wear and how often they buy new ones. I mean I would fit in this category too for maybe past decade, little cash left over after paycheck but I did like exotic 5 vacations per year and invested rest into mortgage for mountain apartment for rentals.
swiftcoder 2y ago
I think the difference in available social services here is also necessary to take into account. Someone laid off in, say, Spain, already has full healthcare provided by the state, and qualifies for an unemployment benefit based on their most recent salary for up to 3 years - this makes for a significantly less precarious position than that same person recently laid off in the US.
- Fokamul 2y ago
  And if go eg. Germany. Ridiculously, without kids, it's nearly more beneficial to go on unemployment support there. Since, when working, you blow like 50%+ on taxes.
  - throwaway2037 2y ago
    50% effective or marginal? During discussions, only effective is useful. According to the PWC page: https://taxsummaries.pwc.com/germany/individual/taxes-on-personal-income https://taxsummaries.pwc.com/germany/individual/taxes-on-per... Marginal tax rate is 42% on the first EUR after 278K. That would astonishingly high total income in Germany. There might be some remaining solidarity tax from the reunification, but I cannot see how you get to an effective tax rate of 50% on 100K income, which is considered excellent in Germany. Can you share a worked example how effective tax rate can be above 50%?
    - ongy 2y ago
      Kinda useless to reply to a throwaway after 5h but let's see 1. Minor mistake. 42% marginal is at 60k~ish, the 278k number is 45% 2. The effective income tax rate around 100k is in the area of 25%. When there's numbers thrown around above 40% they usually include the 19% sales tax, CO2 tax etc. it's a slightly odd number including government induced cost.
      - throwaway2037 2y ago
        VAT is never included in income tax comparisons. So, please tell me: How do you get to 50% effective tax rate in Germany with anything less than a ridiculously high income, like 250K EUR+?
- Nasrudith 2y ago
  I would have expected the opposite to occur because of that - lesser saving rates because they have more robust available social services and don't need emergency reserves.

cscurmudgeon 2y ago

Not really. 1. Most Americans are not paycheck-to-paycheck. It is what politicians constantly say depending on whether they are in power or not. https://old.reddit.com/r/AskEconomics/comments/1dbpaag/do_the_majority_of_americans_live_paycheck_to/l7swsq5/ https://old.reddit.com/r/AskEconomics/comments/1dbpaag/do_th... 2. Americans have higher disposable income at all income levels than Europeans (Western Europe included). https://www.reddit.com/r/europe/comments/xgoouz/americans_have_a_higher_disposable_income_across/ https://www.reddit.com/r/europe/comments/xgoouz/americans_ha...

throwaway2037 2y ago
> Americans have higher disposable income at all income levels than Europeans Most of this is eaten up by higher healthcare and university education costs, combined with a much worse social safety net compared to other G7-like nations. So really, are middle class Americans more financially stable than Europeans from G7-like nations? I doubt it.