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US stagnation

2014 article on how the US poor and middle class are falling behind their counterparts in social democracies. Low-tax, low-service policies are bad for almost everyone, who knew?
Assume ellipses between almost all the paragraphs below, I'm excerpting.

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html

"After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.

A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

Median per capita income was $18,700 in the United States in 2010 (which translates to about $75,000 for a family of four after taxes), up 20 percent since 1980 but virtually unchanged since 2000, after adjusting for inflation. The same measure, by comparison, rose about 20 percent in Britain between 2000 and 2010 and 14 percent in the Netherlands. Median income also rose 20 percent in Canada between 2000 and 2010, to the equivalent of $18,700.

But other income surveys, conducted by government agencies, suggest that since 2010 pay in Canada has risen faster than pay in the United States and is now most likely higher. Pay in several European countries has also risen faster since 2010 than it has in the United States.

Americans between the ages of 55 and 65 have literacy, numeracy and technology skills that are above average relative to 55- to 65-year-olds in rest of the industrialized world, according to a recent study by the Organization for Economic Cooperation and Development, an international group. Younger Americans, though, are not keeping pace: Those between 16 and 24 rank near the bottom among rich countries, well behind their counterparts in Canada, Australia, Japan and Scandinavia and close to those in Italy and Spain.

Top executives make substantially more money in the United States than in other wealthy countries.


But both opinion surveys and interviews suggest that the public mood in Canada and Northern Europe is less sour than in the United States today.

“The crisis had no effect on our lives,” Jonas Frojelin, 37, a Swedish firefighter, said, referring to the global financial crisis that began in 2007. He lives with his wife, Malin, a nurse, in a seaside town a half-hour drive from Gothenburg, Sweden’s second-largest city.

They each have five weeks of vacation and comprehensive health benefits. They benefited from almost three years of paid leave, between them, after their children, now 3 and 6 years old, were born. Today, the children attend a subsidized child-care center that costs about 3 percent of the Frojelins’ income.


Even with a large welfare state in Sweden, per capita G.D.P. there has grown more quickly than in the United States over almost any extended recent period — a decade, 20 years, 30 years. Sharp increases in the number of college graduates in Sweden, allowing for the growth of high-skill jobs, has played an important role.

And tax records collected by Thomas Piketty and other economists suggest that the United States no longer has the highest average income among the bottom 90 percent of earners.

See the comment count unavailable DW comments at http://mindstalk.dreamwidth.org/415583.html#comments

Comments

( 4 comments — Leave a comment )
ice_hesitant
Feb. 11th, 2015 04:01 am (UTC)
Drive-by comment:

The NYT article is based on the CAD-USD and other exchange rates. CAD recently collapsed alongside the oil prices, falling from a high of $1 CAD to $0.93 USD last July to $1 CAD to a low of $0.79 USD just recently. This means US is likely leading us on the median income measure again.

The Euro has also fallen significantly relative to the US dollar in the past year.
mindstalk
Feb. 11th, 2015 04:22 am (UTC)
No, the article is based on PPP.

http://www.nytimes.com/2014/04/23/upshot/about-the-data.html
"To compare incomes across countries, the researchers applied a common adjustment known as purchasing power parity."

Of the countries mentioned only the Dutch and Finnish are on the euro; UK, Norway, Sweden, and of course Canada aren't.
heron61
Feb. 11th, 2015 04:57 am (UTC)
But both opinion surveys and interviews suggest that the public mood in Canada and Northern Europe is less sour than in the United States today.

I was going to mention the fact that Eurozone northern european nations are benefiting (at least indirectly) from deliberate impoverished southern european nations, but as you say, none of that applies to most of the nations mentioned above.

And tax records collected by Thomas Piketty and other economists suggest that the United States no longer has the highest average income among the bottom 90 percent of earners.

I'd assumed that this had been true for US incomes for at least the last 15 years. I'm also betting if you go with the lowest 80% it was, but am far from certain where to get the needed data.
mindstalk
Feb. 11th, 2015 05:02 am (UTC)
Ask Piketty. :)

as for the euro... Even for Germany... someone's been doing well by the low euro and high export surplus, but it's not clear it's the German people, with those suppressed wages. Where's that surplus going? With a higher exchange rate or inflation, they be closer to balance and German standard of living would probably be higher.
( 4 comments — Leave a comment )

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