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- cross-posted to:
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It was early this summer, before Americans started crossing the Atlantic to savor the sweetness of European life. Prices are very much affordable for them there, and the Wall Street Journal gave the reason as being Europe’s inexorable impoverishment: “Europeans are facing a new economic reality, one they haven’t experienced in decades. They are becoming poorer,” wrote the business daily. In 2008, the eurozone and the US had equivalent gross domestic products (GDP) at current prices of $14.2 trillion and $14.8 trillion respectively (€13.1 trillion and €13.6 trillion). Fifteen years on, the eurozone’s GDP is just over $15 trillion, while US GDP has soared to $26.9 trillion.
As a result, the GDP gap is now 80%! The European Centre for International Political Economy, a Brussels-based think-tank, published a ranking of GDP per capita of American states and European countries: Italy is just ahead of Mississippi, the poorest of the 50 states, while France is between Idaho and Arkansas, respectively 48th and 49th. Germany doesn’t save face: It lies between Oklahoma and Maine (38th and 39th). This topic is muted in France – immediately met with counter-arguments about life expectancy, junk food, inequality, etc. It even irks the British, who are just as badly off, as evidenced in August by a Financial Times column wondering, “Is Britain really as poor as Mississippi?”
Europe has been (once again) stalling since Covid-19, as it does after every crisis. The Old Continent had been respected as long as Germany held out. But Germany is now a shadow of its former self, hit by Russian gas cuts and China’s tougher stance on its automotive and machine tool exports. The Americans don’t care about these issues. They have inexhaustible energy resources, as the producers of 20% of the world’s crude oil, compared with 12% for Saudi Arabia and 11% for Russia. China, to them, is a subcontracting zone, not an outlet for high-value-added products. The triumph of Tesla is making Mercedes and BMW look outdated.
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France is between Idaho and Arkansas,
…and…
Germany doesn’t save face: It lies between Oklahoma and Maine
Then shame on the USA, not Europe. So even with such a lower GDP European nations are providing high quality social services and security to their citizens, why these US states citizens fall father behind.
GDP is a useless metric. Most USA GDP grown is from stupid shit like housing prices being super inflated.
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This is an interesting visual:
https://www.reddit.com/r/REBubble/comments/w3b3dr/unbelievable_how_much_of_this_economy_relies_on/
And I think the only reason some of the US states even compare to some European countries is more or less the US economically brute-forcing a higher QoL versus actually planning and spending money wisely which seems more common in Europe and the UK.
The former can’t last forever and will hit a wall once something gets costly enough, the latter should be able to scale decently well as population grows.
Is the massive growth making people happier, healthier?
Im sure it’s making the very few people who actually receive that wealth happier.
The common man ain’t seeing a dime of it though, so the rest of us ain’t
Is it really though? It’s not like their quality of life is actually improving with more money (at this point they have access to whatever they want, how could it improve any more no matter how much they leech from the rest of society). They’re just perpetually trying to make their capitalist “score” go higher and higher in a desperate attempt to fill the gargantuan black hole that exists where their empathy should be.
Fatter, yes!
This is yet another proof that economics as a study really has no connection to real world.
It really depends on the type and field of economics you’re looking at. Macro and micro are very very different fields. There are also a lot of different ways to present these facts. In general gdp means very little for normal people, and something like the Gini coefficient at least gets a little closer to a metric that actually represents the economic health of a country.
I was about to say you need to look at gdp per capita not just gdp, but I googled it and the eurozone has about the same population as the USA.
With such a large gdp difference, looks like Americans will be doing a lot of travel to Europe, and even more Europeans may be coming over here for jobs. It seems like half the people I work with are from Germany.
I am notsurprised. I am from Germany. The salary for the job i am doing has been stalling the last 10 years. Even though i am “doing a career”, my salary raises are weak compared to inflation. I am in middle management of a big company and cant afford a fckn house, while people on this position 20 years ago have 3 now. I hate it.
Hate to tell you this, it’s no different here in the states. Wages have not been remotely kept track with inflation and home ownership is out of reach of most of the population
that’s true of everywhere in the developed economies.
we value assets more than we value labor. so assets get more expensive and labor is cheaper. and since the rich are getting richer at an unprecedented rate, it’s not going to change unless we have a serious social collapse.
That is mostly true here as well. From what my German coworkers tell me (and from what I see in job postings), salaries here are generally higher, even after paying for medical care etc. this is in the sciences but I’ve heard it’s true in other fields as well.
Yes, they are higher but many calculations say that the end earnings ppl have after all deductions are higher in Germany than in the US. So Americans get payed more but go home with less disposable income. I am no economist though, so… Idk
What you want to compare is how common people are living in a coutry and how much they can actually buy. That’s what PPP is for (“purchasing power parity”).
No, that’s the wrong metric here. PPP compares prices not earnings for the sake of establishing a standardized “currency” to compare against. It doesn’t say how many of the compared products can be bought with a median income or anything.
Ok, you’re right. You’d also need the median income to have an objective overview how people live in the country.
No I think you’re on to something with the per capita point.
US population went from 304million to 333million in that time (+29 million).
Euro population went from 334million to 344 million (+10 million).
3x the population growth probably helps nominal GDP numbers look better than they really are comparatively. It’s not the whole story but it’s some of it.
This article, while interesting, seems a bit sensational.
Bottom line for me as an American: Is it a good time to vacay in the Eurozone?
Yes, the whole place is on sale right now. I’m going in a few weeks. Hotels are insanely cheap compared to the states. I’m staying in renovated monnestaries and castles for less than a low end chain hotel costs at home.
Airfare is fucking brutal though, so it’s almost a wash.
Generally, yeah. I would avoid the summer, though. Europe is not equipped for high temperatures.
It really is. I did a small one this summer and the US dollar went far. Third time in Germany and had a blast. Beer is everywhere there! Imagine walking into a restaurant and getting a craft beer quality drink served to you for $1.50. I can’t get an IPA for that price even at my local liquor store.
Belgium is next on the list. I keep running into people from there telling me how underrated it is.
That is a SUPERDOUBT. I seriously doubt the price was that even for a shitty Heineken/becks/dreher beer. We had inflation growing almost everywhere (except Switzerland but they simply keep repeating it to themselves, hotel prices are at least 15-25% more expensive than pre-covid) Also, euro/dollar exchange rate is now the same as it was pre-covid
I’m not saying you cant find good deals but that beer price in a restaurant is unrealistic.
Don’t know what to say. This is what I paid for house beer at 2 different places in Stuttgart. I guess I got really lucky?
I live in Oklahoma, apparently better than Germany. Out-of-state corporations buy off our politicians. This means they get insane tax cuts among other sketchier tax schemes. Having low pay employees is one of our main draws for new businesses. Unemployment here is very low, but there isn’t much of a reason to stay in state when you are looking for a job. Our education system is getting worse and worse, good teachers leave the state every year and the leaders are doing jack shit to retain them.
Time to get a US remote contracting role then I guess
Oh, you’re mistaking GDP for money going to workers here. Our (federal) minimum wage is still just $7.25/hr (€6.75/hr) and more than 1/3 of the states honor that. I think that’s even lower than Portugal. And there’s no healthcare with that (or any) wage/contract job.
Oh, sure, you can make money here, but it almost certainly won’t be as an average employee.
No one’s remote contracting out to the US for minimum wage, from Europe at least.
I imagine they’re most likely talking about IT and related fields, where this is a legit strategy
I can now cope more and seethe less about our country getting completely dwarfed by the Euros.
It’s because americans are good at capitalism. Americans are so much more willing to put up capital to invest in a start up. In Europe investors are so much more risk averse, that they never hit any big wins. It also makes companies list on the american exchanges over european equivelant ones.
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