Shocking to say the least. These figures dispel a lot of leftist myths!
Were Norway a US state, it would rank between Delaware and California, which are among the US’s more urbanized and wealthy states. Sweden and Germany, on the other hand, place closely to Kentucky, which is sixth from the bottom for US states in terms of median income.
Article:
It has nearly reached the point of dogma with many leftists that European countries enjoy higher standards of living thanks to more government regulation and more social benefits. What the data really suggests, however, is that even after social benefits are incorporated into the income data, the median American still has a higher income than most European countries.
Since I published that analysis last October, the Organization for Economic Co-operation and Development (OECD) based in Paris has updated the numbers. Here is the ranking straight fom the latest “Society at a Glance” report from the OECD:
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The comparisons were based on a measure of income known as “annual median equivalized disposable household income.” The measure attempts to take into account the realities of taxes and social benefits, and thus provide a more practical estimate for differences in household income among countries. The data is also adjusted for purchasing power parity, which means it’s taking differences in purchasing power in different countries into account. Moreover, median income is more helpful when there may be large income inequalities at work. Use of a median measure instead of an average reduces the effect of a small number of extremely rich people skewing up the numbers.
In the updated measure, we can see that the United States is in fourth place behind Luxembourg, Norway, and Switzerland. The US comes in at $29,100, while Luxembourg’s median income level is at 36,400.
The US’s median income is 79% the size of Luxembourg’s while Sweden’s median income (to name one often-touted example) is 83% the size of the US’s.
These comparisons are only at the national level, of course, and one of the largest problems with comparing the US to other countries, is that the US is much larger than every European country. This is true even of Russia, which has less than half as many people as the US.
Many countries — especially the smaller ones, including all the Scandinavian countries — are composed of only a handful of metropolitan areas, often with fewer than ten million people. The US, by contrast is very large, and very diverse in terms of geography and demographics. The US has more than 320 million people. Consequently, any statistic for the “United States” ends up burying within it the often-sizable differences from state to state and from metro area to metro area.
To incorporate individual sttes into the analyis, I have looked at how the Census Bureau’s median income for each state stacks up against the US median income overall. I’ve then adjusted the OECD measure to be proportional to that.1
While it is a rather crude means of adjusting the data, can see that the result is plausible. A wide variety of other measures of state-level wealth routinely put Massachusetts — for example — above national levels, while measures of Arkansas put it below national levels.
The next step, then, is to compare these values to the OECD’s values for each country. Obviously, any country with a disposable income measure above that of the US overall will find itself with an income level above most US states. At the same time, a country with a disposable income measure below that of the US overall is likely to find itself ranked below many US states.
When we graph them all together we find:
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https://mises.org/wire/when-it-comes-household-income-sweden-and-germany-rank-kentucky
