Saturday, June 12, 2004

BAMA - Stolen shamelessly from

If you're not reading WindsofChange, you are behind the curve. Nonpartisan, but very aggressive thinkers.
EU, USA and the Economic Gap
Robin Burk

A new report by a Swedish thinktank shows that the economic gap between the US and the European Union countries (not counting the new entrants, who are poorer) is much larger than Europeans would like to admit:

France, Italy, Great Britain and Germany have lower GDP per capita than all but four of the states in the United States. In fact, GDP per capita is lower in the vast majority of the EU-countries (EU 15) than in most of the individual American states. This puts Europeans at a level of prosperity on par with states such as Arkansas, Mississippi and West Virginia. Only the miniscule country of Luxembourg has higher per capita GDP than the average state in the USA.

And that is because the GDP includes cash flows into Luxembourg's banks. Moreover, there are some arresting comments about the poor in the US:

Poverty is a highly relative concept .... 40% of all Swedish households would rank among the low-income households in the USA and an even greater number in the poorer European countries. .....
The media image of the American poor is that they have great difficulties to contend with, that they are dossers and junkies and in various ways marginalized. There are of course such groups in the USA and they are relatively large, but -and this is an important "but" - such groups exist in European countries too. There is another image of poverty in the USA, namely that the great majority of those considered to be poor have a relatively good material standard of living. .....

What does it mean to be poor in the USA? Major living standard surveys carried out in the USA at regular intervals show the poor to have a surprisingly high standard of living. A large proportion (45.9%) own their own homes and have one or more cars. Domestic appliances of different kinds are also relatively common, as are one or more TV sets with video or DVD. Material prosperity, in other words, is relatively high and not associated with the material standard of living which many people in Europe probably associate with poverty ....

poor households in the USA have slightly more dwelling space than the average European. The average American household has a home that is 80 per cent larger than its average European counterpart.

It is sometimes argued by Europeans that they simply choose more leisure than Americans. The authors of this study suggest otherwise: Americans work more at work, but there are reasons to believe Europeans make up for their lighter work loads on the job by having to do more at home or by moonlighting. The result, along with differing tax policies: the gap between the US economy and that of the EU-15 is large and is growing.

The whole report is worth reading. Some individual statistics about per capita GDP, i.e. the country's economic productivity per person:

If Belgium were a US state, it would be the 6th poorest in the union, ahead only of Alabama, Oklahoma, Arkansas, Montana, West Virginia and Mississipi.

France would be the 5th poorest state, as would the UK, Italy, and Germany.

In other words, the GDP per person of Alabama outranks each of those 4 EU economies.

The implications of this - and the acceleration of this gap - has major consequences for common defense commitments, incentives to dismantle trade barriers and a whole host of other international issues.

Posted by Mahmoud the Weasel at 12:37 PM |

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