Economist explains why Europeans are getting poorer… and happier

[@MoneyMacro]

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[@michaels4255]

Stop looking at per capita GDP. Look at the median hourly private sector wage adjusted for inflation. That tells you how well the average American is really doing. US per capita GDP goes up, up and away, but incomes per worker do not! The gains are all going to the top of the pyramid. Don't look at household income either. It increases by putting more family members to work. Obviously, this strategy has severe limits, and making more money by working more hours does not really represent an improvement in the economy. I swear economists as a group are such dunces!

[@vinniepeterss]

❤

[@ArawnOfAnnwn]

If you look at GDP PPP as this vid does, then you'll find that China is already the biggest economy in the world, and has been for a while. India is 3rd. Depends on you whether you want to believe that.

[@Lukky_Luke]

US spends alot on medical care which then become huge in GDP because its so sooo expensive, and so on. So one need to correct this GDP with some costs that are a lot higher. Since a european would get more money over to do something else with since many countries dont have a 1000 usd helath care insurance per month like americans.

[@matrixfull]

man this is so unfair. USA has higher inflation but their currency is gaining on value while EU has lower inflation but it loses on value. so annoying!

[@hagalathekido]

i think median income is also important. having a gazillionaire doesn't help the average person much beyond the taxes they pay. In norway for example its standard practice to look at median income and not per capita. so perhaps median PPP would be the best metric.

[@steemlenn8797]

Very much so.

[@ac1455]

Also, further digging down, for the Majority of citizens, it’s also important to look at median income, Age/Work experience adjusted, ppp adjusted, Discretionary income adjusted, productivity per hour adjusted as well.

[@ac1455]

The way to represent the comparison of living conditions of most citizens depends on a lot of changing factors each subject to rapid change meaning outdated data or sometimes just plainly incorrect data by some margin of error which together could lead to some significantly different conclusions. Hence why a big metric is important for comparisons though at a cost

[@ekinteko]

Median instead of Mean/Average. However even that is not flawless. If you look at the USA, it basically has two economies. Those people born before 1980 have basically paid off all their debts and own assets which generate more wealth and/or have gone up in value. Their cost of living is also very small while their income is generally high. Those born after this period, they're struggling for higher pay. They have much higher cost of living, and they have debts, and have no assets. So maybe a better way of looking at the economy, at the point where it matters, is to look at the median income and expenses for people aged between 30-40 years old. Those are the "families category". If they are doing bad, it means the country is failing, and it means the future will be that bad. Using that same technique, we could have observed most developed nations basically jumped the shark in mid-2000. So millennials definitely did have to grow up and age with multiple recessions and global crisis, and are footing the bill for the older citizens. And this trend seems to apply to GenZ and GenAlpha as well. Big sweeping tax reforms seem to be in-order: remove tax burden from the lower 50% of the population, and heavily target the large international corporations.

[@nielstoppenberg3839]

My thoughts exactly 😊

[@NikolaT918]

I am a Croat who lives in Germany and works as a train driver. Until a year ago, I worked for a transport company where I earned approximately 63,000 euros net each year. I decided to switch to work for a company where I earn about 39,000 euros net per year and I am much happier. yes, I earn a lot less, but every night I'm in my bed, every day I'm with my wife and children, every weekend I'm with the team in the beer garden. Life is good now! There is a very popular old Croatian song whose chorus says "nije u šoldima sve", which roughly translates as "it's not all about money", which goes very well with this video!😊

[@foreigner299]

Well, what about the time when the kids go to college? Or when the retirement comes in? Just a thought...

[@benjaminmeusburger4254]

@@foreigner299 universities are free - therefore the costs are less than in the US (i guess?)

[@hidden3235]

@@foreigner299 uni is free or very cheap generally somewhere like 500-3000 per year if u study in the eu

[@lancetekk]

​@@foreigner299Education is free, Retirement is not ideal but funded through a mandatory insurance that guarantees a modest standard of living. You can always add by investing privately.

[@aconfusedguy7735]

And you could get funding from the giverment for your study ​@@hidden3235

[@spitezor]

I remember someone explaining to me that if I bought a paperclip for $1,000,000,000, I've just added 1 billion dollars to national GDP. I wonder to what extent the financialization of everything in the US, and the exorbitant costs of education and health care in particular (and even American primary and secondary education is expensive), contribute to an inflated GDP value. Throw in drastically higher levels of inequality and the average American does not feel richer, IMO.

[@rutessian]

Inequality is something that has pretty much always existed. Stop blaming it for... anything..

[@martinthegiraffe7924]

@@rutessian you must be trolling.. the commenter clearly meant that if basic services (health, education) are privatized, they are more expensive and not everyone can afford them. This inequality leads to average lower percieved happiness.

[@spitezor]

@@rutessian The Gini coefficient in the US has risen well past the rest of the developed world since the 70s. From ~1980 until very recently (as in the past few years), real household incomes for most Americans stayed flat. When you offload the costs of education and health care (as well as civic public services - the whole point of Homeowners Associations is for homeowners to pay for neighbourhood upkeep via a private fee so taxes remain "low") - onto a public whose net income hasn't changed and they've taken on more personal debt to maintain their lifestyles, GDP figures can be inflated.

[@HaimRich94]

And that $1,000,000,000 paid another person (and its workers, providers, the gov in form of taxes, other companies who sell them services business services like management apps, accountants, lawyers, etc)... That's why adding that 1 billion dollar to national GDP means people, businesses and the government benefits. The problem with all that growth is when that increment in the GDP is done thru printing money because then the ones who don't have assets will be the ones who suffer the most

[@banqsterz8160]

GDP takes into account gov spending in its calculation so privatization wouldn't matter

[@LBCuracao]

I’m a trucker in NL and have a friend in the US who is also a trucker. He earn 3x more than me but his bills are 5x higher across the board. So I save more at the end of the month than he does. Also recently had a baby and didn’t pay anything, his kid a few years ago had a hospital bill of $25k though his very expensive insurance did pay $20k…

[@Rasarel]

Because USA has only 2 political parties and both are ultra right wing. Nowhere in the world is any party more right wing than democrats and republicans.😊

[@NavaSDMB]

Exactly my experience working on both sides of the Atlantic. In one particularly memorable occasion, my employer moved me to the US, then back 15 months later. On the move back, my salary went down by 20% but I was paying 1/2 as much for a home 2x as large as the one in the USA.

[@lindnerxyz]

This comment is very misleading. America has one of the best median net income to costs ratios in the world. Most Europeans barely save anything after taxes and "social" contributions. Please stop spreading wrong ideas.

[@Rasarel]

@@lindnerxyz bs. There are many countries in the EU where you rent beautiful flat for 200-300$/month. You haven't been yet, right?

[@lindnerxyz]

@@Rasarel I live here, monkey.

[@minischembri9893]

1. GDP does NOT indicate the quality of life of the average American compared to the average European ! 2. If a room contains 1 millionaire and 9 beggars the GDP is 100 000 $ or Euro per person. Tell that to the beggars !!

[@TheTattorack]

Yeah, that's what I was thinking. All the richest people in the world are in the the US (largely because their version of capitalism allows them to be), which would greatly inflate the statistics. That wealth is all in the pockets of the tiny rich upper percentage.

[@raaaaaaaaaam496]

Ok but the median GDP per capita is still much higher than in Europe. A car washer in the US has a better economic well-being than a tech worker in Europe.

[@markmuller7962]

Until a richer external power starts to dominate or even bully you and you don't have any means to stand your ground because you're technologically and financially outplayed

[@Kitajima2]

@@raaaaaaaaaam496Dumbest s*** I've ever heard. You actually think a US car washer is doing better than someone with a degree in Europe? That US carwasher is paying out the a** for health insurance, and a European with a degree who didn't get a job in their field will still have a regular job, like washing cars.

[@seanthe100]

Median income even based on PPP is the highest in the world in the US 😂😂😂 median household income in the US is $85k. For median married couple its $125k.

[@raytrevor1]

I have spent well over 50 years living in UK and people are NOT getting happier. They got richer through the 70s, 80s, 90s and since then poorer and less happy.

[@Jajalaatmaar]

Yeah but the UK is just a uniquely miserable place. No joke, reported happiness is like 20% lower than in many western EU countries.

[@SamuelHauptmannvanDam]

The difference between the UK and the EU is pretty stark.

[@thor.halsli]

UK is the odd ball out

[@Cynicruss2]

It’s a boomer risk averse place with chronic rent seeking mindset.

[@DavidCruickshank]

@@Jajalaatmaar Source? The World Happiness Report 2024, the best data on the subject, puts UK at 20th which is happier than Germany 24th, France 27th, Spain 36th, Italy 41st, etc. The only Western European countries happier than us are Nordic countries and Ireland.

[@degar5340]

I'm european italian and trust me nobody here in the middle class Is happier compared to 30 years ago when we were richer ....

[@MoneyMacro]

I do. Italy went from being well above the GDP PPP of the European Union to below it. data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=IT-EU&most_recent_value_desc=true

[@MarketsDriveTheWorld]

Indeed... happier? who is happy? I'm making 1300/1400 as a developer and anywhere else in Europe is at least 2000. Seriously no one is happier now than in the 90s. I calculated the purchasing power parity and my father was making 30% more as a generic factory worker 20 years ago than I do now as a software engineer 😂😂😂😂 We are soo screwed in Italy.

[@privat6558]

If your main goal is making money I would agree with you. However I'm enjoying the culture without earning too much money and I'm very happy.

[@MarketsDriveTheWorld]

​@@privat6558next time I ask the supermarket if they accept culture in exchange for pasta👍.

[@rutessian]

@@privat6558 How do you pay for your enjoyment?

[@pyrrhat]

Moral of the story: Do your own haircut. I do mine since the pandemic and feeling richer every time.

[@blakereid5785]

Just go bald like i did. True frugal strategy. Thats why i did it, not because of genetics….

[@hihaveaniceday8590]

I started doing my own hair cut even before Covid 😂

[@1wun1]

A rare case of lower GDP causing more happiness.

[@ArawnOfAnnwn]

If you look at GDP PPP as this vid does, then you'll find that China is already the biggest economy in the world, and has been for a while. India is 3rd. Depends on you whether you want to believe that.

[@patrickferguson7603]

I can’t imagine being so desperate I would try and cut my own hair.

[@MoneyMacro]

5:27 correction! It should be tradeable (rather than non-tradeable) goods & services could be as low as 22% for a big country like the US.

[@VoidVerification]

What I found missing from this picture is some aspects of higher economic security that Americans do not have: low to no educational cost/debt, no risk of getting into medical debt due to universal healthcare, stronger labor law protections, depending on the area lower cost for transportation (using public transit instead of having to own a car)...

[@carnivore_scalper]

My thoughts exactly. The "real" graphs should take into account the 3 most "subsidized" areas (education, health, transportation or social welfare - the last one depending on what is higher in each country seperately). Once that is done, it's even possible that the EU line will be above the US line.

[@bhangrafan4480]

Here in the UK there has been a marked and continuing deterioration in quality of life and satisfaction since the 2008 financial crisis. I assume this is not confined to the UK, but is found throughout the western world, including the USA. Everywhere we see increased interest in far-right politics and extremism. This is a sure sign that people feel their share of the pie is shrinking and are starting to fight with others over it.

[@damiendeecee]

I believe that Brexit has also had a negative impact on the UK, due to reductions in trade with the EU trading block?

[@Bolmer1]

Disposable incomes in the UK in PPP terms have been reducing since 2008.

[@duckpotat9818]

YSK that Britain has an overly banking dependent economy which adds to it.

[@Chris-pq3wp]

Or it could be that migration is causing significant problems in the UK

[@happycakes1946]

Most people have been under a lot of financial pressure in the US since 2008 and it has worsened since 2020. Incomes have not been keeping up with productivity and the inflation numbers are understated. I think you can expand the idea of extreme politics to both left and right, at least in the US. Instead of coming together on issues the majority agrees on, and making progress where we can, we fight with each other over issues that divide us. Meanwhile the oligarchs get everything they want and pillage the peasants.

[@ninjam77]

I think another factor in the comparison is also that the US uniquely underperforms in quality of life metrics like life expectancy or HDI because of some unique systemic issues that are somewhat unrelated to the US's economic performance. The US healthcare system is arguably more broken than others for example (although I wouldn't argue that systems in Europe are not broken because they definitely are too, just less dramatically). Things like very high violent crime or the opioid epidemic also seem to be uniquely American.

[@Hasanaljadid]

US HDI is better Then France,Austria,Italy,Spain,Portugal etc.Life expectancy is 79.3 years,It's relatively low Because of High obesity rate

[@chickenfishhybrid44]

There's sections of the US population that do uniquely bad in certain areas and skew the data pretty drastically. Things like inequality and violent crime in the US will still be worse than most of Europe, but it would be much closer. These issues are also nothing close to evenly disturbed across the entire US.

[@xiphoid2011]

Drug overdose has a huge impact on US life expectancy. Since over 100k people die of it every year and most of them young. Obesity is another big cause, never seen any country with such bad eating habits (I'm an asian immigrant, so it's interesting to see poor Asians being skinny due to lack of calories, while American poor are fat because they eat insane amount of calories). I finished graduate school in the US, and is working in healthcare. There is no other country that has ad advanced medical technology as the US, but yes, it is very much over priced. But a part of that is due to the US basically subsidize the rest of the world by paying for most of the R&D and inventing most of the new medical technologies. For example, most of the medicines are invented by the US, and yet most other countries would refuse to pay much or is unable to pay their share of the cost (many of these drugs are basically sold free in 3rd world countries, india just simply refuse to recognize US patents and make their own copies), so the only place US companies can recover their cost is by charging Americans huge prices.

[@szurketaltos2693]

@xiphoid when you look at e.g. drug research costs, they are high but not that insane; furthermore, the US govt itself funds most of the cost outside of late stage clinical trials. What really makes drug prices in the US high is stuff like high advertising costs, meanwhile drug advertising is usually banned in many high income countries.

[@chickenfishhybrid44]

​@szurketaltos2693 I seriously doubt the drug price differences are explained by marketing costs

[@ILLTELLYOUWHY27]

Well, this is a high quality research! However, I wouldn't compare the average EUropean with British or American. The EU consists of 27 DIFFERENT countries with absolutely different backgrounds and levels of economic development. The EU has super rich Luxembourg, Netherlands, Ireland and quite poor Bulgaria, Hungary and Croatia which entered the union only in 2000th.

[@Dominic-hc2fx]

But isn't there a similar disparity in US at state level?

[@duckpotat9818]

@@Dominic-hc2fx yes but the difference is less drastic. Luxembourg is 130K USD (outlier) Ireland is 90k USD, Bulgaria 16k, NY 90k and Mississippi 40k gdp/capita Although if you compare the biggest cities and rural areas of both then it might flatten out again since American states are not evenly urbanised.

[@Betweoxwitegan]

Ireland's wealth isn't too crazy, it's above it's in line with countries like Germany, it's not super rich, It has an inflated GDP figure based on intangible assets like IP from US based corporations to avoid tax, when measuring Irish GDP you should use GNI* like the Irish government uses, this controls for the high density of MNC's intangible assets inflating GDP figures. As someone who lives in Ireland, trust me it's not worth it 😂. This place is more expensive than a country like France but the salaries are lower and the quality of life worse, there's a reason why young people are leaving and it's mostly due to idiocracy.

[@hubris252]

@@duckpotat9818 What do those numbers even refer to?

[@duckpotat9818]

@@hubris252 added

[@TobiWanKenobsen]

It gets really funny when you exclude the richest 1% from those stats

[@stijnvanderveken]

to be fair, shouldn't we also exclude the richest 1% of Europe then?

[@karinland8533]

@@stijnvandervekenthats what he implied

[@account-369]

us is still better for richest 75% than eu is. us middle class is so much better off than european middle class.

[@lilowhitney8614]

​@@account-369 Lol. Source?

[@DenOndeMister]

@@account-369 that's like, your opinion man.

[@adaslesniak]

If simple medical procedure in US costs 5x what it cost in EU (not mentionining that in EU it's covered by state) then it provides 5x value to US GDP, while bringing no real value.

[@ClemensKatzer]

Yes. And that is probably reflected in the GDP vs. PPP discrepancy.

[@FayeRantTheStrong]

That's why healthcare in US is around 18% of GDP while in European coutries it's around 7%

[@tinkerduck1373]

It's never "covered by state". At the end of the day, somebody has to pay for it. The only good thing here in Germany is, that the prices have not reached this insane level like in the US. On the other hand, here we have a high incentive against working hard, since much of the money gets redistributed.

[@FayeRantTheStrong]

@@tinkerduck1373 of course someone has to pay for it, but we can differentiate tax rates so people who have more pay more, and prices don't reach insane levels exactly because of competition from state. Universal healthcare doesn't have to be profitable to exist, thus it lowers overall prices of private healthcare, because private sector has to compete with state. And i don't understand why you think Germans have high incentive to not work hard, while statistics show that Germans are one of the most productive nations on the planet.

[@tinkerduck1373]

@@FayeRantTheStrong You should see how much taxes we pay here. We have high productivity thanks to good education, but for instance, I know several people who rather take more days off instead of salary increases, since there's not enough left. I also know people who only work 4 days a week, since it results in more than 80% net income.

[@voidvector]

Problem is real money can be used as a competitive advantage by multinationals (e.g. US buying out EU tech), while PPP money cannot.

[@MoneyMacro]

@@voidvector absolutely true

[@MusingsOAM]

Kraft buying Cadbury comes to mind.

[@laviklee]

GDP can only indicate whether a country's wealth is growing, but it cannot explain how that wealth is distributed. However, the distribution of wealth is what most people are personally concerned about.

[@thomasjgallagher924]

I love this subject. I'm an American expat in Europe for much of the last ten years (Ukraine presently), a business owner on both sides of the Atlantic, and an economic development professional. Europe is a lot more economically diverse, even at the EU level, when you're lumping together Bulgaria and Luxembourg in the same group. We don't have that disparity at the state level in the US. (Interestingly the poorest US state is wealthier than most EU members simply at the GDP/capita level, and I don't think PPP would favour Europe over Mississippi.) I love living in the cheaper parts of Europe. An American could live quite nicely on investment income in large swaths of Europe... provided you don't want to own a car, like walking within your city, and don't mind a small home. And this is among the challenging parts of comparing opportunities in various environments. If you want to have a car and a big home and don't mind driving everywhere beyond the edge of your hour-to-mow lawn, then the US is going to be much easier. If you want urban living with walkability, well that's where the US gets expensive. In this case, despite it being against what I personally choose and prefer, I think Snr Draghi is more on the right track than our favourite KZbin economist. We have serious problems confronting the European project and it's mostly from what I would designate as structural and cultural issues that discourage investment in Europe and encourage it in the US. This boils over into my personal life and my fear that Europe has neither the heart nor the stomach to genuinely support Ukraine now or after the end of hostilities, and I see isolationism on the rise. Every national government is pleading poverty in Europe today, and populism seems to be fashionable all over again. I'll leave it at that, but if you asked me where I would want to go to start a career or build a business, it wouldn't be a contest (unless we were to include a place like Australia among the choices.)

[@thomasjgallagher924]

Let me just reiterate how much I love this channel, Joeri, and that I got visibly excited to see the new video come up.

[@MoneyMacro]

No worries. Actually, I think the ageing trend, and lack of investment are very serious threats. I just wanted to set the record straight on the 'getting poorer' narrative, which, as argued at the end, is true in an international sense, but not where it really matters... at least not yet.

[@greentoby26]

This has to be the most mature and informative comment i have *ever* seen in a KZbin comment on the issue. I tip my European hat.

[@thomasjgallagher924]

@@MoneyMacro I reckon the salons were better value in Cape Town. I always get my hair cut before returning to the States.

[@thomasjgallagher924]

@@greentoby26 Aw, mate, thanks. I can be verbose and so I'm glad you had the patience to go through it.

[@aliceberethart]

I'd like to factor in the fact that from my own experience being "poor" isn't as bad in Europe compared to other places because i get so much support from tax payers that i can get by and have good life despite not being well payed. Of course having money makes things easier, but i generally never have to worry about having to search garbage bins or live in some run down shelter. The systems set in place generally work quite well when you need a helping hand, not to mention a lot of things are cheap or "free", such as a doctors visit or a ride on public transport.

[@gambagamba6505]

And now its dismantled like in Italy if people like you dont become more active in politics

[@tealkerberus748]

This part. How the bottom 10% live isn't just about how the bottom 10% live, either. It's about what the other 90% either have nightmares about, or don't. If losing a job and becoming part of the bottom 10% doesn't mean becoming homeless, doesn't mean going hungry, doesn't mean being denied access to health care, doesn't mean your kids being denied a usable education, then the upper 90% can get on with their lives without that fear hanging over them. The whole society's mindset changes when people know that being poor isn't a death sentence.

[@Lamalas]

Another thing that might play a role: I asume that in the US the money is spread less evenly among the entire population. Here in Belgium the income of a lawyer or docter is higher than that of a tradesman in construction (or factory worker) but the margin is not as wide as it is in the US.

[@silviahristiyandraganovi3289]

What about the Balkans? I think with us it is going the other way around. We are becoming rich on paper, which means assets have been appreciating, wealth inequality is on the rise and with that there's social unrest hence the "unhappiness".

[@ersankuneri4815]

It's not just in paper. Wages are skyrocketing in EU member Balkan states. It was way too worse in the past. That's just nostalgia.

[@q1337]

​@@ersankuneri4815wage rocketship + inflation warp speed = same old life. A chocolate bar of 300g cost 1.3€ before covid Same bar now costs 3.6€ and is no longer produced in the 300g size but only 220g You tell me how much richer you can get when life itself costs beyond 200% of before

[@cristianandrei5462]

I think how the state manages the economic growth is wrong in the region (I speak from the perspective of Romania). It's a heaven for businesses, especially small without many employees and a hell for those employees. Taxes are very low for firms, regulations don't matter since state agencies are corrupt or incompetent. At the same time, taxes on salaries are pretty high, sales tax is 20% and basic state services like healthcare, public transportation, roads and schools are not the best. The effects of economic growth get distributed unequal, governments belive mostly in trickle down economics and the rich tend to be greedy.

[@jonskislo1]

@@ersankuneri4815 hmmm depends, i mean obviously a lowkey semi isolated state capitalist with socialist tendencies economy performed worse in certain areas, not all stuff from sfry should be disregarded that easily. Average housing was quite good and affordable for the time in slovenia. Nowadays, in LJ, if you have an average salary, you will blow more than 50% of your income on one room apartment. If you are minimum wage, the only option is shared rooms. Or let s put it in another way - you get more money and spend less on housing and groceries in Gradec/Graz. Or vienna if you get in their non profits, which are afaik easier to get into compared to LJ.

[@tamaslaszlo2932]

​@@q1337Same in Hungary, we was 1st in Europe on the wiew of avarage inflation. It was more than 25% 😅 with about 66% food inflation/year. We definetly get poorer.

[@youcantata]

As a complete foreigner (Korean) I think that average Western Europeans are better off than average Americans. On my personal experience and impression as a frequent business traveler on both US & Europe, I feel that European cities and streets are less flashy than USA, but Europeans are generally look happier and satisfied with their life. I see more poor and unhappy 'meicans than poor Europeans. If I was asked where do I wanna live for rest of my life, I definitely choose Europe over USA. Hey, Europeans, count your blessings. The grass is always greener on the other side of the fence.

[@Cassp0nk]

America to earn money, Europe to spend it…

[@chanceriordan]

My experience was the total opposite. The Europeans seemed depressed. The Americans seemed far happier.

[@maxramlau6459]

@@chanceriordan yes same experience

[@luxraider5384]

@@chanceriordan he talked about western europe, not southern europe.

[@holmiumh]

The thing about the US is it's quite reversed to the other nations when it comes to where the upper middle class and wealthy people are. In most places, the well-off people usually live in the cities and close to the city centers and poor people live in the country side or outskirt of the cities. In the US it's the complete opposite. Poor people live in the "inner cities" and well-off people live in the outskirts (suburbs) or rural areas (country side) So if you are used to the normal distribution and you go to the US city centers you think "wow, the well-off people in the US are searching for food in the trash bin, can you imagine how bad the rest of the country is?" while the well-off people in the US are literally flying their personal airplanes and helicopters going places. Now, I'm not saying that the US people live better than Europeans. Far from it. But I'm saying you have to be careful when you are picking samples. Overall I think people in the US are exteremely happy GIVEN their skill and knowledge level with the quality of living they get. In East Asia you need to be very exceptional to get some of the nicer stuff where most Americans pretty much take granted for the stuff you work so hard for. I've met quite a few people around me who migrate to the US from the wealthy part of Europe, so let's say some Europeans still find it worth while.

[@Ikbeneengeit]

Joeri its €25 for a men's haircut in the Netherlands, you're getting a good deal in België at €15 😊

[@headsuphockeypodcast2707]

Mine was 12 Euros 💶 in Mottola , Italy 🇮🇹 and the barber and his colleague were very happy with me giving them business. I felt great seeing them happy even though most of Southern Italy is not very wealthy, the people are wealthy in happiness.

[@virgilesme6658]

​@@headsuphockeypodcast2707 yeah same here in France, about 10 or 12 euros for a cut

[@thevoid5503]

Another reason why I now have long hair.

[@uncreativename9936]

I think I pay $25 (including tip) in the US. I need a haircut, I might go today and report back. Edit: It was $22 and then a $3.30 tip (15% was the lowest option on the machine) to a total of $25.30

[@santostv.]

15€ if you go to a “new age” barber, 10€ if you go to a normal one before was 5€ at home only the cost of the machine ~20€😂

[@bone4k]

As a European with two children were both my wife and I are almost working full-time. I can tell you we are not that happy at the moment. It is stressful, but probably a lot less stressful than in the US comparably.

[@dadaistaingegniere]

It's more stressful in EU. Believe me. Just one word: EU pensions will be miserable when we'll get old if staying in the public pensions system. You can manage it yet in US.

[@Dihyyy]

​@@dadaistaingegniere When you say EU thats clueless statement from the start. You can live in Romania, Germany, Poland, norway or switzerland and its different everywhere. I would not say its more stressful in any major Economy in the eu, less crime, health insurance and less working hours & more vacation. Ill take that and earn 1k usd less to my american counterpart job.

[@Dihyyy]

​@@dadaistaingegniereif you only think about pensions, go live in switzerland, germany, norway. If you also only depend on goverment with pension and have 0 investments, thats not very smart

[@dadaistaingegniere]

@@Dihyyy The Switzerland Confederation is not in EU, Norway doesn't participate in Eurozone. Germany is a failure right now, it doesn't grow anymore and Poland is been harassing politically by the European Comission. You don't have a clue about european situation. General speaking, the median ratio, laborers in EU are factually stalled, US workers do not, the market is changing, just like that. Nobody cares about a single perception.

[@dadaistaingegniere]

@@Dihyyy You know nothing about economics, aren't you? Most europeans states have compulsive pensions system. You can't get out of it.

[@DerToasti]

The biggest squeeze across the western world i feel is coming from housing costs. Sure, inflation has been hitting all sectors pretty bad, but a house or rent suddenly getting 50% more expensive coupled with non-negligable interest rates will hit much much harder than any grocery bill increase. It is legitimately getting impossible to live anywhere close to a city in most of europe and the US. Even natives that are supposed to enjoy that nice middle class existence are feeling their living standards deteriorate to that of poor immigrants from a few decades ago who could at least still just barely afford a house sometimes.

[@jonchedgy6654]

Also important is how the income pie is split. If you look at the GDP per head of Northwest Europe (Germany, The British Isles, France, Scandinavia, the Low Countries and Alpine Countries) is around 85% of the US. However, according to the world inequality database, the top 10% gets 45% of total income in the US compared to 35% in Europe. This means that the top 10% (for which a lot of the doomsaying argument articles are written) have incomes much higher than their European counterparts whilst the incomes of the remaining 90% are identical.

[@РэйЧехов]

GDP is a terrible metric to measure economics due to services like banking. Made through transaction rises up your GDP statistics like in Ireland without creating a value.

[@sleepyjoe7843]

And more than 50% of that income in EU is taken by the government. (taxes, vat etc)

[@neonovalis]

and in the USA many people buy 'shit' Europeans just do not need ... things like guns (most Americans have a gun ... most Europeans do not have a gun) ... cars in the US are very large etc etc etc

[@jonchedgy6654]

@@sleepyjoe7843 Yup, and then that money is returned in the form of free or subsidised healthcare, childcare, college education etc, etc

[@jonchedgy6654]

@@РэйЧехов Oh I agree, but GDP has the advantage of easy and timely availability. One of the best measures is Actual Individual Consumption'

[@monkeeseemonkeedoo3745]

I think like you have shown in this video, this difference is most relevant in the global sense, not in the local sense. From a geopolitics pov, yes Europe is falling behind because in the global sense, their economy IS smaller, meaning it can buy less of what 'the world in general' deems valuable (dollar terms). But for common people just living their lives and buying groceries, haircuts etc, that difference is not very noticeable, within the EU block. That said, the second international goods are involved (oil, technology) yes, it will be felt even for individuals not involved in world politics, finance, etc.

[@SeanEustace-zk3mc]

Yes, but you guys could just set up nuclear power plants like the French too, and you could avoid a lot of that not so much with the Germans since the stock material for the fertilizer industry is petro chemicals but because of technology and the general intelligence of Europeans, you’re not in a bad position. You’re a peasant northern European plane in France to grow a bunch of food and some of it made up for in the off-season by the Spanish with a little greenhouses on the Mediterranean you have Italy and Greece and all these countries that can grow different varieties of food than the north , as long as you’re trading with each other, they should not be a problem if you start getting your up by having your own children.

[@johnyannakakis9868]

Great video as always Dr. Joeri. I think what's interesting to know is what % of the total divergence / variance is due to : (1) Slide of Euro vs. Dollar (which you covered) (2) Deficit spending in the US over the past ten years vs. relative fiscal austerity in Europe as a whole / the Eurozone since the Euro crisis. (3) Cheap energy / shale gas revolution in US vs. European expensive energy crisis due to the invasion of Ukraine by Russia. Obviously American tech competitiveness plays a big role, but I think less than often clamoured because of 1-2-3 above.

[@heronimousbrapson863]

A high GDP per capita in the USA means little when getting sick and/or needing medication could bankrupt you.

[@luisenrique9015]

Because theres no such thing as insurance right?

[@raoul_Silva]

Hey Dr. Joeri, I think a topic that confuses many people today is the US debt pile, the deficit, high interest rates and how that can affect future generations as well as the dollar as the reserve currency. A video explain these topics I think would greatly benefit many people. Thank you!

[@TheisKrarupHansen]

There is also the 'small' issue with these data that they don't account for the distribution of wealth, it's all due to the 'lie of averages'. In the US the generated wealth is concentrated on quite few hands, where as in Europe the wealth is generally more spread out. So on *average* the people of the US are wealthier than the Europeans, but a few very wealthy, and probably quite happy, people can't really outweigh the misery of the rest. Add to that the PPP, and the fact that feeling poor in a society is a matter of comparison with the people around you, and it's fairly easy to see why there is this difference in happiness between the US and the EU.

[@parsifal40]

Hey! Could you make a video on why most Americans feel like the economy has gotten worse recently while economists say it's gotten better?

[@MoneyMacro]

Yes: kzbin.info/www/bejne/pWKodZiFr9afbbcsi=k_6MYTqhlr1rvbTQ

[@laurencefraser]

Seen a lot of debate about this. Conclusion is generally a mix of scarmongering by politicians and reporters, and the improvements affecting a narrower slice of the population than the things that got worse. If your cost of living's gone up and your income hasn't, you generally don't rarely care that people in the next tax bracket up in the next state over are making substantially more money than they used to, and the like.

[@zmojofoot76]

Economists do a lot of prosocial lying if it keeps people investing to keep money circulating despite that not being the lived reality of common people like myself. It doesn't have to benefit us but just have to keep business owners profit margins at a comfortable level for them. I'm not an expert so I'm mixing in my opinion with things that economists actually do. The fact that the strength of a currency or an economy is based on peoples confidence like the people's optimism or pessimism towards the economy is what leads me to this conclusion. Call it simplistic or reductive but that's why I take what they say with a grain of salt

[@uncreativename9936]

He did do a video about that in 2022 or so. But one specific thing I'll mention (I don't remember if he did in the video) is foreign investment. The dollar is the world reserve currency so rich people around the world have lots of dollars that they need to do something with and a lot of them wind up getting invested into the US in bonds, stocks and treasuries.

[@MrMezmerized]

The US economy is bigger than ever, but because inflation was high after the covid crisis a lot of people don't get to enjoy it. Economy and personal purchase power are not the same. And there's also the fact that rightwing talking heads and Trump constantly lie about the economy being terrible, and many millions believe them.

[@Zei33]

One other thing to take into account is the amount of ultra wealthy Americans that drag the entire population’s GDP per capita up. If you took only Americans that make less than 1 million a year and the same with Europeans, it wouldn’t be quite as bad.

[@joaomiguelgoncalvesdematos6135]

lmao the difference is 45 to 35%. The disparity would still be quite high.

[@account-369]

@@joaomiguelgoncalvesdematos6135 the difference is stark, most americans are doing better than most europeans, americans on average live in bigger houses, have more rooms, have rooms not closets full of clothing. if you look salaries by professions, difference is stark, it’s like comparing 1st world to 2nd world country.

[@joaomiguelgoncalvesdematos6135]

@@account-369 that is what I am saying. The americans are much richer on average, and thinks cost the same or less. For reference, the average salary in my country, a below average EU country, is about equivalent to 1 iphone pro max, which costs 1500€. Thing is, you still have to pay taxes, so you can't buy the iphone with a full average salary. In a below average american country, not only are you able to afford multiple 1500€ phones, the phone doesn't even cost 1500, but 1200. The same goes for Gas, electricity, car, any other tech, clothing, etc. Only really lose on services.

[@Xavitu86]

European living in US here. In my opinion an experience is that the economy in US is in a way better situation and for me has been easier to enjoy a degree of prosperity hard to achieve in europe. Having said that, I love spending my vacation time over there thou.

[@ericbergman7546]

We usually associate happiness with wealth or financial security, but in Europe, there's been this shift towards a simpler, more balanced lifestyle. People are finding happiness in non-material things like family, free time, and community engagement. But still, it’s tough

[@georgeearling905]

I think it has a lot to do with economic trends like stagnant wages and the rising cost of living. Housing prices, especially in big cities, are skyrocketing, and energy costs have surged too, especially after recent geopolitical issues like the war in Ukraine

[@DianaTownsend-kj5kj]

But what’s fascinating is how people are adjusting their expectations moving away from consumerism and focusing on well-being instead. It's like they’re trading material wealth for a different type of richness.

[@RandyColby-mj1zm]

That’s true, and it’s partly cultural too. Europeans tend to value work-life balance more than, say, Americans. They're not as obsessed with the grind, which can lead to more happiness even if they’re not earning as much or don’t have as much purchasing power

[@LoydJohnson-kp3jv]

The emphasis on things like universal healthcare, long vacations, and social safety nets may play a big role. Even if income levels aren’t rising, there’s still that baseline level of support that makes people feel secure.

[@rodgertim2881]

That’s a big factor. The social safety nets in Europe really help people feel less stressed about financial instability, even if their wages aren’t keeping pace with inflation

[@Samson373]

Europe redistributes wealth and income to a greater degree -- both within nations and across nations. That likely accounts for some of the shortfall vis-a-vis the US.

[@szurketaltos2693]

I suspect that Mississippi gets much more in payments from the US federal government than Bulgaria gets from the EU.

[@szurketaltos2693]

$6880 net federal spending per capita for Mississippi, vs 255€ net EU spending per capita for Bulgaria.

[@viinisaari]

@@szurketaltos2693 within countries, the numbers are the other way round

[@szurketaltos2693]

@@viinisaari the US has lower social spending per capita than the nordics and some other EU countries, but higher than say Italy, UK, Netherlands, and Spain. You could definitely argue that the US gets less for its money than say Spain, and you would be right -- for PPP reasons as well as having a much less efficient healthcare sector, mostly.

[@seneca983]

"both within nations and across nations" Within nations? That's believable. Across nations? I very much doubt it. The US federal budget is much, much bigger than the EU budget and thus does much more significant redistribution of income across the US states than the EU does across its member states.

[@FNDMA]

I have no seen the video yet, but I can already say that no, as an european, I am not getting happier. My parents generation lived so much better than mine.

[@CRegensche1n]

You will own nothing and you will be happy

[@PandaPanda-ud4ne]

@@CRegensche1n The problem is not ownership but quality of life. Both correlate, but only moderately.

[@WillSavage]

This narrative has to stop. The quality of life we have today was almost unimaginable only 50-100 years ago. Affordable air travel, much higher life expectancy, much lower infant mortality, healthcare availability and quality, food standards, hygiene standards, building materials, education levels, technological advancements etc etc etc. I’m sick of people saying their parents or grandparents had a better life, reality disagrees. It’s your own fault for being woefully uninformed and blind about the world we live in today. If you want to go back to a life of tobacco smoke-filled rooms, post-World war trauma, rationing, polio, coal soot everywhere, apartheid, nuclear apocalyptic propaganda everywhere then go right ahead. Trust me you’ll regret it

[@AN0NYM00S]

@@WillSavage True that. The only thing really making a dent in all this is extremely high rents and the rise of nazis all over europe. And social media. Other than that, I'm living a happy life in northern Germany.

[@tijmen6947]

Ask your parents about the lead in their bones

[@Brattoes]

Netherlands mentioned, I am happy. Looking good Joeri!

[@Iskelderon]

And not in the context of porn or drug trade, which makes the occasion even more of a rarity.

[@theplaylistpsycho]

@@Iskelderon You guys are also known for urban planning :)

[@Iskelderon]

@@theplaylistpsycho Designing lanes so visiting French can capitulate faster when a Mercedes is in sight is a unique feature.

[@Descriptor413]

@@theplaylistpsycho Very much this. When I think of the Netherlands now, it's entirely in terms of "Dang to they have good bike stuff. And not just bikes, either!

[@persiathiest1963]

If you're happy you're either s...pid or privileged who don't need to work hard

[@myleshungerford7784]

As an American I would gladly trade some of my American GDP for your European benefits. My American GDP is mostly going to rich people anyway.

[@CRegensche1n]

The benefits are worth shit if you are a regular person and not a welfare queen My generation will probably not see anything for what we are paying into retirement systems Even now the average post tax (they even tax your damn retirement) is just at 1384€ in germany

[@Pensandoci9]

As an American, you can easily move to the EU.

[@nas4apps]

Great presentation!! Love it. I have a few themes too (as a past US and current EU resident). What comes to mind: GDP: you forget the costs. Take the 2% US overhead due to legal costs (and insurances). Quality legislature can lower these costs. The costs of coming to a transaction in the US are also higher due to the inefficiencies of Credit Card payments (1-5% per retail transaction). Extensive toll road systems in the US (like in Florida) add to high transaction costs. Dit not even touch health care, which in the US is far more expensive for a smaller group of health care insured individuals - who may later require 'free' emergency health (or a more expensive solution). On the other hand, the US open market has great advantages, while after Brexit, the UK-EU transactions have become more costly without any added value.

[@RoberttheWise]

Isn't it problematic to use the exchange rate conversion when comparing anything to the US? When comparing e.g. Vietnam to Paraguay, sure, convert to US dollar and compare away. But I feel that making the same comparison to the US itself is much more difficult because the US dollar's exchange rate is pretty weird with it being the world's reserve currency, it doing well more or less independently from the US economy, and the US being able to basically take unlimited debt because of it. Did I get something wrong here?

[@seneca983]

Did you watch the video? The main point was that PPP adjusted figures mean more than the nominal figures.

[@roanora7853]

That means china is the biggest economy in the world. ​@@seneca983

[@jsbrads1]

Being a reserve currency definitely helps somewhat, but we still can’t print money without facing inflation.

[@RoberttheWise]

@@jsbrads1 Yeah, it definitely has its limits. I'm just wondering how much exactly does the US dollar's unique position impacts the whole "compare GDP in US dollar to get a sense of relative geopolitical power" thing.

[@jsbrads1]

@@RoberttheWise the US military also has geopolitical power…

[@maryanchabursky9148]

For the non economists: when you see comparisons of wealth and the figures aren’t not PPP then they are useless. That data is useful if you are interested in trade or some forms of monetary policy.

[@emraef]

aren't not?

[@TheBooban]

PPP or Purchasing Power Parity is just currency conversion. Even GDP PPP per capita doesn’t help. Because neither care about inequality. Maybe the entire economy of a country is held by just 100 families. GDP looks good but everyone else has nothing. We just assume it’s not all that extreme, but we don’t know with these numbers. But we feel it. It’s wrong.

[@maryanchabursky9148]

@@TheBooban inequality is indeed another big factor, however in a surface level discussion about “wealth” (by which people usually mean how much stuff an economy has) ppp adjusted real gdp per capita is good enough to very broadly compare countries . Obviously in a holistic discussion on how well off a given person is economically you need to take wealth distribution, development indexes, and ppp adjusted real tsp per capita (as well as some other indicators) to paint a fully accurate picture.

[@TheBooban]

@@maryanchabursky9148 yes I was agreeing with you. It’s good to compare countries. But the title of this video was “Europeans”. That’s people, not countries. It’s a form of misinformation where most think the people must be doing well if the GDP is doing well, which is how it is portrayed in the media generally, which is false.

[@BSFan-c4j]

Nominal comparisons are still important because they describe the countries purchasing power with respect to internationally priced products. For example, advanced military equipment, oil, minerals and metals.

[@marcomagrin7611]

Hi Noeri, I think it would be more useful actually to look at PPP per capita in constant terms, so that it accounts for inflation. The data is also available by the world bank. The reason I say this, is that PPP, essentially, is the equivalent purchasing power per person if they were in the US. So if Germany has a PPP/capita of 67k int. USD, it means that the average german is “worth” the equivalent of 67k in the US (which has a PPP/capita) of above 80k). Problem is, is that it doesn’t necessarily tell if you are getting richer. If you have high inflation, the GDP/capita in the US might go up, but it might be mainly due to inflation instead of real growth. This would also affect the German calculation in this example. I imagine you know this stuff already, but I just think it’s worth pointing out, because it’s no secret that real GDP per capita in the UK and Europe has been increasing quite slowly, and this is visible if you take inflation into account. The graph you showed suggests there has been uninterrupted growth which is definitely not the case.

[@spizganypywak7338]

GDP adjusted by PPP is a real GDP in the first place. So inflation is already taken into consideration. There was a slow, but steady growth.

[@ArawnOfAnnwn]

@@spizganypywak7338 If you look at GDP PPP as this vid does, then you'll find that China is already the biggest economy in the world, and has been for a while. India is 3rd. Depends on you whether you want to believe that.

[@spizganypywak7338]

@@ArawnOfAnnwn China has 1,42 bln people. Why not?

[@marcomagrin7611]

@@spizganypywak7338 No, it isn’t adjusted for inflation. It adjusts for how much a foreign currency can buy compared to the US dollar in the United States. But the US dollar has inflation, which just raw PPP doesn’t take into account. Thats why the world bank uses GDP PPP per capita in both current AND constant prices.

[@spizganypywak7338]

@@marcomagrin7611 what does it mean that "dollar has inflation"? Dollar is losing purchasing power. PPP takes into account levels of prices, so it includes the effects of changes of prices. Current international $ vs constant dollar means simply that in the first method the base is always current US dollar and how much purchasing power it has in the US currently.

[@charlesandrecubas6264]

Thank you, Thom Yorke, not only did you leave us great music, but you also teach us about economics.

[@Steentje06]

Lekker gast, je hebt het algoritme aardig voor je laten werken! Was een van je eerste abonnees. Goed bezig!

[@sephondranzer]

I’m also part of the ‘little faith in GDP as a meaningful figure’ crew. So much nonsense getting counted as GDP.

[@firstwavenegativity6379]

Like what?

[@BrutusAlbion]

Americans live to work Europeans work to live. If my income / productivity grows by 10% that means I can take 10% off my worktime and still enjoy the same living standards. Seems like a good deal too me.

[@victoneter]

Americans earn more $ per hour worked. Not just overall.

[@BrutusAlbion]

@@victoneter the difference is minimal if you compare it to western europe.

[@nightmark2120]

@@BrutusAlbion LOL minimal my ass it's almost double.

[@BrutusAlbion]

@@nightmark2120 are you pulling those claims out of your ass, I live in western europe, the netherlands, our dollar per hour is slightly higher than the US average.

[@nightmark2120]

@@BrutusAlbion Euro stat makes EU average salary of 33 k in the us its 75 k.

[@MagarethWoods]

Last year, I was working full time, budgeting groceries, unable to afford date nights, and missing time with my kids. Now I learned how to make money online. Now am a SAHM, homeschooling, and making profits every week.

[@NatalieDormer-or4jj]

Wow that's awesome 👌

[@NatalieDormer-or4jj]

Everyone needs more than their salary to be financial stable. The best thing to do with your money is to invest it rightly, because money left for saving always end up used with no returns.

[@MagarethWoods]

Cryptocurrency investment, but you will need a professional guide on that.

[@MagarethWoods]

Facebook 👇

[@MagarethWoods]

Evelyn C. Sanders

[@Niveaufriedhofchef]

Such a simple explanation, yet it needed a youtube channel I never watched before to point it out. Thanks a lot, this is high quality content!!

[@eljaytu]

Great video, but it didn't cover the stagnation in European GDP growth, which is what concerns a lot of people.

[@danycashking]

it did, the euro has lost value, so GDP metrics, which rely on the relative value with the USD are tracking lower, that was the whole point of the video, to compare PPP instead

[@eljaytu]

@@danycashking No, the EU measures our own GDP growth in euros, not dollars. And our GDP growth in euros is lower than the US GDP growth in dollars, as I understand it.

[@neodym5809]

@@eljaytubut the graph compares in US$. So the weakened € explains part of it.

[@persiathiest1963]

Great propaganda

[@james_halpert]

@@eljaytu Just look at a GDP graph for Europe in EUR currency and you will see that there is no stagnation. The stagnation only appears when converting to USD, because the exchange rate is being artificially suppressed,

[@IamJules]

as a European I can confirm we're getting poorer, but certainly NOT happier.

[@jansvoboda4293]

EU is basically LARPing the USSR. kzbin.info/www/bejne/baPRmZqVj7eImrM

[@Oinikis]

I would like to add, how about wealth inequality? Since most of the biggest world companies are based in US, I'd expect that to inflate the average, while the median GDP per capita, should tell a bit different story, wouldn't it?

[@maritaschweizer1117]

I lived for 6 years in the USA, the rest of my life in EU plus Switzerland. I totally agree. Life is less focused on money in Europe and I enjoy my life with less money. The focus on money even destroy relations in America and partly in UK.

[@bxlbjorn]

I don't understand much about economics, but this was explained in very clear language. Thanks!

[@LCal23456]

A significant portion of US GDP is fueled by over bloated economic activity such as stock trading, venture capital over valued new technology investments, private equity squeezing as much money as possible from traditional businesses, cryptocurrencies, speculative property purchases, spending too much time commuting to work, overpriced food, tipping culture, sprawling suburbs, car-centered transportation culture, eating too much, over priced health care system, etc. I think Europeans have much better lifestyle than Americans, better food, better environment, generally healthier, etc in spite of the lagging GDP per capita.

[@JackKapral]

Happier? L M F A O

[@itsmethemario8846]

happier than average US citizen, read the whole sentence pls.

[@Atanukundu]

save your time - answer - GDP in terms of PPP

[@NickKret]

Great material, in these times of growing scepticism towards the EU, we need more such videos!

[@TheMrThe123]

Would you do an in depth video on “The future of European competitiveness” by Mario Draghi? I think it would be super interesting and very up to date video! Keep up the great work

[@mihailrangelov8343]

Jeez, seems like we, Europeans, will continue to convince ourselves that everything is totally fine even after the Draghi report. Putting aside the semantics of calculating economic prosperity, this attitude of "everything is fine" shown both by European citizens and politicians alike will inevitably lead Europe to complete irrelevancy on the world stage, which is already happening. The Draghi report is a much-needed wake-up call for Europe and it clearly shows why Europe is lagging so much behind the US.

[@mandisaw]

You could argue that Europeans' complacency is part of the issue. Americans tend to crave something "more", and will actively seek it out, making their way up Maslow's hierarchy. Europeans seem to wait for things to get better - or complain when they don't - but there's just not the same drive on a cultural level. (Not only talking about money here.)

[@Puschit1]

We should stop using the US as a measuring stick for everything. The US is running a very sick hyper capitalistic ponzi scheme like economic system where endless growth is all that matters. It's the US that needs everybody else to consume more, produce more and to create more debt. Europe is dragging behind in growth compared to the US and that's a good thing in my book because the system is about to burst like the housing market bubble in 2008. That's not to say everything is fine in Europe - a lot of things aren't. But the US is just worse in almost every aspect. I'd take a better work/life balance, half-way working healthcare and social security systems, free education, healthier food and generally a more modest life style over chasing but never living the american dream any day.

[@gambagamba6505]

These demental sparks for the urge of doing things is exactly what put us and the continent in major trouble. There was no reason to cut off Russian energy or for sanctions, neither to import countless immigrants from Syria or save planet earth from global warning. Europe was at its prime when it didnt do sh€t in Iraq. With GenZ and the internet culture of instant demand I accept for western politics to get even worse.

[@CaocaoX]

Europe and Japan didn’t capitalize the IT era

[@mvdp3784]

Another popular myth

[@schtreg9140]

IT services make up half a trillion of the US and EU economies. They are drop on the bucket. The EU missed out on a lot of that opportunity, but it's a complete myth that this somehow makes up for the imbalance in nominal GDP. It's really just exchange rates. At 2008 exchange rates EU GDP would be close to $27 trillion compared to the US $28 trillion GDP for 2024. Just like in 2008, the two economies would be roughly the same size and if we'd include the UK, the "EU+" economy would be quite a bit larger than the US.

[@M43782]

ASML (semiconductors)? Netherlands ARM microprocesor architecture? UK company SAP? Germany OVH (cloud computing)? France Infineon Technologies (semiconductors)? Germany Logitech? Switzerland

[@lexingtonofthefog1058]

@@M43782 Accenture is originally from U.S. .

[@M43782]

@@lexingtonofthefog1058 Spotify, Wise, OnlyFans (lol)

[@AxelQC]

This is why the Economist invented the Big Mac index.

[@Clery75019]

Which is flawed nonetheless as Big Mac prices haven't the same value depending on countries, just like would be a nutella index or a Heineken index. PPP is more relevant in this regard.

[@Elmex_1]

@@Clery75019 How doesn't it have same value ? It's an index to calculate how much you're paying for a food item. Some countries you're paying more for it than in others.

[@Clery75019]

@@Elmex_1 To begin with, we don't eat beef in India.

[@MC-hx6xn]

@@Clery75019 The Big Mac index uses the Maharaja Mac. Your overall point is well taken: the index “was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible.” 😂 (The Economist, online, 2024.7.30, retrieved 2024.10.20)

[@Dangur2]

The difference between nominal and PPP GDP for non-western countries is even bigger, sometimes up to several times. I suggest you to review the countries with biggest differences between nominal and PPP GDP.

[@starstencahl8985]

I can tell you people here in Europe are NOT getting happier. I’ve never heard so many people talking about fear and worry about the future so much, financially and safety-wise. It’s the number one everyday topic now

[@fietsenOveral4650]

It's sad to compare Europe to the US (or China) becuase Europe is one of the few places where well being and sustainability are serious concerns. In the US, the entire system has become entirely oriented around (short term) private profits, which have little correlation to actual well being of the average person. Parts of the US are slowly bringing back child labor and accelerating investment in heavily damaging industries. Businesses are able to offload basically of their negative externalities on the public and get massive subsidies, with no hope of balancing things out. The gloves are totally off and the political system is doing the bidding of the the business world in almost all respects.

[@dodododatdatdat]

Dont forget reproductive rights

[@q1337]

"Well being and sustainability" im in an EU nation that imports a ton of foreign workers (nothing against them, they just saw an opportunity) but the fact that they stuff 15 of them in an apartment, pay them the absolute minimum wage and get them to work all day long makes local workforce not able to compete the slightest. This has a dual effect of locals literally being undesirable for almost all entry level jobs and the "legal economic slavery" since absolutely no local can live on the wages being paid by the hiring business. The only reason this is working is because of the huge influx and interest of migrants to come to the EU and the EU practically forcing nations to accept them, which lead to this situation where politicians gain favor from the EU for doing this while their private sector friends get even richer at the cost of the locals and not to mention migrants that 80% don't speak the local language and most don't even speak english. Like I said, hard to blame the workers but when my taxi driver does't speak english or the local language and doesn't know the streets or the local road regulations then there is simply no other explanation other than private sector greed

[@learningisfun2108]

@@q1337. I live in Canada. Migrants (some on temporary work visas, some permanent) will do the work that almost no young Canadians will NOT do: farm work, manual labour, taking care of elderly…. They help our economy and, generally, are well accepted. I’d like to think that the average Canadian sees the (overall) benefits to immigration.

[@q1337]

@@learningisfun2108 I understand what you're trying to convey, Like I mentioned in my previous comment, I don't blame the migrants themselves for any of this. The main issue is the fact that they get treated differently in favor of the business' that hire them. If they were paid the proper minimum required by locals to live then there wouldn't be an issue, the sectors where workforce is thin would be saturated without much damage. The issue is greed, Why would you hire me as a taxi driver when I demand (literally need to live) a certain minimum wage and rights when you can hire someone who comes from half way across the planet, barely speaks English, basically doesn't know his rights, doesn't ask for a raise, doesn't take sick days, works unreasonable amount of time daily and lives in a cheap apartment with 15 people that you as the business provide. There is 0 reason from the perspective of a business to hire me, a local, for such a job. now you would say these are all entry level basic so to say jobs, when "good" jobs require work experience and if you happen to be in a field where migrant hires are almost 90% good luck getting any job for that experience. That is the problem. Whichever sector has migrant hires rising directly inversely correlates to local hires decreasing and probably permanently. You would say the government would do something but ofc not, in the eyes of the EU our leaders are generous and migrant loving but anyone who actually lives here will tell you otherwise. Sorry for the long comment but this is what I want to end with, They say there are no workers but they offer such low wages that you couldn't afford to feed yourself for a month let alone secure housing accommodation. The entire situation is in the hands of our government who should be working for the best interests of the people but I'd be lying if I said there is even 1% of truth in that. Edit: I also want to add that as a result of all of this, student job availability is falling, because of course, why would anyone want to pay a local a fair wage. It may not seem that big of a deal but when people who are joining the workforce are met with either very very high qualification requirements or unrealistically low wages there is something wrong with the system.

[@learningisfun2108]

@@q1337 Thanks for your reply. I don’t entirely disagree with your arguments. We should be electing governments that have the people’s interests at heart, not just business. Tough balance to strike. Secondly, you can’t blame immigrants for their hard work and hussle to build a better life for themselves and their family. They sacrifice s more than we can imagine. My grandfather was an immigrant and I am benefiting greatly from his hard work and hussle. He helped build this country. My kids haven’t worked a physically labour intensive job their whole lives (I did but just as a teenager/young adult until I graduated university, so, not much). Like me, my kids have no idea how tough immigrants have it. I don’t believe immigrants get favourable treatment; they are willing to sacrifice more (as witnessed by their willingness to move countries, cultures, languages, suffer racism and discrimination, …) by taking a smaller pay; and living much more humble lives with fewer creatures comforts. Like my grandfather did. How can I be against them when I directly benefit from my grandfather being in that exact same position?

[@KilgoreTroutAsf]

Thats not the income of the average European/American. That number would be the median income. What you are ahowing instead is the average of all the incomes, which is a pretty useless metric considering 1% of Americans make 50% of the money.

[@MatthewWillis-g9m]

Median income Americans make more anyways

[@seanthe100]

Median income PPP is higher in the US actually higher than all countries in the world including the nordics

[@nikhilkay1]

US is still higher in median income than western europe. I visit Europe, China, India and live in US. I feel there is entrepreneurial spirit in all countries except Europe.

[@meibing4912]

If you think 1% of Americans make 50% of the money you have brain washed so hard its difficult to imagine any recovery.

[@spoenk7448]

​@@nikhilkay1then you're visiting the wrong places in Europe. There is plenty of entrepreneurship throughout the EU.

[@darkkitchenrecords2625]

remove the top 1% in UE and US then compare... whooole other picture see also how the things improved for the lowest 10%... a stark contrast where UE will shine brighter.

[@MatthewWillis-g9m]

Simply not true on average Americans make more you guys get more vacations and better work environments though

[@darkkitchenrecords2625]

@@MatthewWillis-g9m Not really. America is fierce towards low income and a single visit to the hospital can bankrupt you. It sucks that you have to use your day-offs for open heart surgery. It's simply better to be lower income in EU than in the US, that is a fact.

[@firstwavenegativity6379]

Lol, if we removed the most productive people, the productivity gap wouldn’t look as bad. Stop coping, people like you are why we’re falling behind the Americans

[@Carewolf]

The UE are the United Emirates. Dont mix those into the discussion.

[@darkkitchenrecords2625]

@@Carewolf right, I should say EU but I went with the french acronym (union européenne) my bad. However, it's always UAE as an acronym for United Arab Emirate

[@Paul-eb4jp]

I live in Spain now and I can honestly say it's only the weather that's better, I miss UK nightlife so much, people there go out and socialise much more than here and Scandinavia where I've also lived.

[@emilianoantoniopanciera4979]

The only big difference is due to the big Tec company, they raise the GDP divide alone

[@7Hellzz]

I am european and also 20% less productive than an american.

[@sociolocomtsac]

The crazy part is, we do it with 20% lower IQ.

[@robvelor]

Like any good vassal should

[@dudebroguymate]

@@robvelor you got that backwards

[@robvelor]

@@dudebroguymate Might as well freeload off the empire now that you are not stealing other people's wealth. Keep tradition going.

[@persiathiest1963]

50% lazier and less ambitious than an active American

[@TitouFromMars]

Another parameter is inequality. California must have a higher GDP per capita than most European countries, but I'm not sure that's any consolation to the countless homeless people to be found on the streets of LA.

[@KolyaBennett]

California and the western world need to return back to free-market capitalism. Only then we can begin lowering poverty as we once did.

[@CactusGirl-x7f]

Almost all states in the USA have higher gdp then European countries. The UK per capita without London is poorer then Mississippi

[@collin9085]

I've seen lots of homeless people in Europe. For instance, Germany has a 0.37% homeless rate vs the 0.2% in USA.

[@CactusGirl-x7f]

@@collin9085 they really have homeless people. But the UK is the worst among them all

[@Aschraffff]

Funny example you gave. I get 1 hair cut per month, and never had one where I live (Switzerland). I get my haircuts while travelling (all over Europe, Morocco, Asia...)

[@nicolaspadula9791]

As someone who lived in Switzerland but got my haircuts in France, I think this is because haircuts in Switzerland are so expensive that you can get one for cheaper EVEN with travel costs. I live in the UK now, and sometimes the roundtrip plane ticket to Geneva costs less than the haircuts next to my old apartment.

[@cyronixed]

You can get haircut for 25 chf or 30 chf, if you try to save 10 bucks on haircuts you are really a cheap person

[@Aschraffff]

@@cyronixed I got my latest haircut in Morocco for 2.5fr, and it was much better than the stuff here. No need for appointment, waiting, very friendly guy...

[@joknul1]

Mooie video! Greetings from a fellow Fleming!

[@ThanasisZantrimas0310]

In the past, an economist said that governments should not use GDP as a metric of success and to project the prosperity of people in economic terms.

[@richardminhle]

Poverty is the key to happiness. That explains it.

[@MaximilianFischer497]

Amidst economic uncertainty, financial resilience is crucial. However, my pressing issue is optimizing my idle $240,000 reserve, which has been stagnant for far too long. Despite my long-term perspective, inflation is eroding my savings and daily market losses are eating into my portfolio's value. I urgently need a strategic solution to revitalize my investments and safeguard my wealth.

[@MarshalWagner457]

If you need advice, consider speaking with a financial advisor. Don't get me wrong, you can do it on your own, but financial advisors have a lot more knowledge and expertise in this area.

[@TicheDebb0]

That's right. Advisors have information and paths that are not disclosed to the public.. I profited £560k in 2022 under the tutelage of my Fiduciary-counselor. Am I selling? Absolutely not.. I am going to sit back and observe how this all plays out.

[@RowanBryson]

That's impressive! I could really use the expertise of this manager for my dwindling portfolio. Who’s the professional guiding you?

[@TicheDebb0]

There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with “Sonya Lee Mitchell” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.

[@henryallard245]

She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.

[@jeffmorris5802]

Anecdotally, Americans are very sensitive to the economy, and are prone to complaining about small changes. Americans expect to buy a house, expect to become wealthy in their lives, and expect to be able to afford a couple children. They're optimists who are very willing to be self-critical. Europeans are the opposite. Europeans don't react much to their economy, and complaining is more of a pastime for them. Europeans don't expect to buy a house, become wealthy, or have a couple kids. They're pessimists who don't actually enjoy genuine criticism, and are pleasantly surprised when things aren't as bad as they thought. This leads to a disconnect. Americans are technically thriving in many ways, but small issues lead to deep dissatisfaction. Europeans are technically floundering and failing in many ways, but the small things in life lead to satisfaction. It's a difference in culture, mindset, and expectations.

[@personalbranddata]

Pure bullshit, not even going to engage with this comment any further.

[@markdowding5737]

Hi Dr. Scashfoort, with Europe's aging population and the increasing strain older people put on the welfare state what is your opinion of a possible privatization of public pensions? Besides getting rid of a system some consider pyramidal, it could also directly inject many billions of investment into Europe's economy which could translate into higher levels of productivity

[@laurencefraser]

If any part of your plan involves 'remove money earmarked for a specific use for the public and give it to private interests' the result is almost universally 'the money goes 'poof' and the public does not get the benefit it was earmarked to provide'.... sometimes with a smokescreen or illusion hiding that fact for a few years first. How that happens varies, but that is the result.

[@mihaicraciun8678]

Stuff needed for human survival + private sector = misery

[@antoniolima1068]

how about ... NO... we pick what parts of our society we want to apply capitalist/investors/debtors logic, we are majority socialists, we do not apply financial interests logic to every facet of our lives... when control over global markets end let see those "financiers" and their wannabes get ahead in life.

[@tealkerberus748]

When you put a commercial profit motive into a system that people need in order to stay alive, you get the US health insurance industry where companies will refuse to pay for services that are unambiguously covered by their policy because if they delay long enough, the policy-holder will die, and that is more profitable than paying out on the policy. If you want a bunch of corporate investors to get rich by making elderly people starve to death, then privatising pensions would be a very effective way to make that happen.

[@markdowding5737]

@@tealkerberus748 The US is an extreme example of how to do things. But you have countries that adopt a semi-private pension system, like Australia, who seem to get the best of both worlds.

[@davianoinglesias5030]

The exorbitant prices of medical care, education and food definitely contribute towards the higher GDP

[@MrMezmerized]

And the US has (criminally) high interest rates. Bad for people, good for corporate profits which show up as positive economic numbers.

[@robertmartin6800]

We do spend vast amounts of money on our healthcare and education. It’s mostly public spending, so normal Americans have no control over it, but it’s still obscene.

[@ruvanefriebus-cv6td]

Happier?

[@teglayani6748]

"You'll Own Nothing and You'll Be Happy" WEF quote

[@persiathiest1963]

They use "dumb" and "happy" interchangeably in Europe

[@jaredkronk4614]

Well if no one is getting rich their is less income inequality and that is how people measure abstract concepts like happiness in statistical quantities. Do countries with extremely high rates of depression due to being sub arctic and a natural lack of sunlight exposure factor in? Nope, but income equality does.

[@HUEHUEUHEPony]

Yes we live in walkable places

[@boldisordorin9010]

As a european i can say i am very happy where i am despite being a broke student. Even if i am not rich the infrastructure and the public services of the city i am in are very good

[@DoritoBot9000]

GDP is much higher but so is the cost of living. This video addresses just the US, but the same applies to Canada where basic needs such as housing, food, and transportation are absurdly expensive, eating up the 90k salary that I though would allow me to live comfortably over there.

[@h4446j]

I think something often overlooked in the comparison between the US and Europe is the scale of responsibilities the average person has in each region. The average American has college debt which he should pay and should have some money set aside for a medical emergency. The average European doesn't worry about these things

[@MyYoyas]

Happier? Happier? Please, don't joke, we are in full decadency

[@_Nibloke_]

But who is getting richer if the US GSP is skyrocketing? Working American or holdings/banks/...? On paper the Irish are doing wonderful. The average Luxembourgers are pissing in golden toilets. Most of UK growth last year was because of gold tranfers. And so on...

[@VonKirda]

15E for your haircut is definitely over the top

[@justskip4595]

I asked a barber here in Finland what it would cost to just shave my hair to 1mm and it would have been 20€, said that other haircuts would be 20€ too. This was 15 years ago. I bought 20€ hair clipper and I have been shaving my head with that since then. During the cold months (About half a year here) I just let my hair grow, till it gets warm again and I just start shaving my head. I wonder how much I have saved during that time by doing that. Not actually saved too though, money mostly went for food instead.

[@Yutani_Crayven]

You have to think about it from the perspective of what a living wage is in each respective country (hourly wage). A haircut is a simple thing, but you have to account for the barber's time, and then for additional costs like hair conditioners, electricity, water, rent, equipment, and so on. That skyrockets the price pretty quickly, without there being any sort of rip-off at all. I've been cutting my own hair for many years now, too, but I understand why a haircut costs as much as it does.

[@moover123]

😂😂😂 so cheap

[@paulskiye6930]

15 euro is considered cheap in Randstad. It's about 25 euros near Amsterdam.

[@rafaszmuda669]

Thank you very much for this video it make me realize layer to this situation that I genuinely never considered before.

[@castellasants]

Muchísimas gracias por los subtítulos, ahora puedo enviarle estos videos a mis amigos ❤

[@cr4yv3n]

I'd like to be "unhappy" but rich. I can wipe my tears with 100 EUR bills

[@dr.youssefelazouzi2736]

"you will have nothing and you will be happy."

[@denisdufresne5338]

Isn't quality of life better measured by the local purchasing power index than GPD per capita?

[@laurencefraser]

Also much more difficult to get data that is both accurate and usefully comparable.

[@chickenfishhybrid44]

He's talks about ppp

[@denisdufresne5338]

@@chickenfishhybrid44 Yes you are right. I wrote my comment too early, it is my mistake.

[@cynthiabauer5763]

per capita statistics are strange when comparing USA and Europe because the USA has a very different demographic profile, where one demography is similar to Europe but other demographies are significantly different skewering the average.

[@Carthodon]

I think the reason why you see so many Americans complain in your comment section has less to do with the reality of income and more to do that the people watching are generally going to be on the left, and in the US the left basically see Europe as an ideal that they want the US to adopt. Europe does not really have politics that are similar like this, some political parties would prefer to be more aligned with one country or another in some way, but once Communism faded away there aren't parties which act like they would rather be born in a different country. As a result, for these people ANY difference must mean the US is worse. The second reason is because of the politics of our country, where there is a level of divisiveness driving an obsession over politics that is more extreme than in Europe, politics has less to do with which policy you agree with and more with which tribe you belong to, and if someone wants your vote they have to tell you that you're a victim of some other group. For the left, these perpetrators are invariably business and the rich which as the story goes are making them poor. It's how we have a political campaign where the candidate avoids critical interviews, debates, and it is unclear what she intends to do on anything because what matters is the group she appeals to. Having lived in the Netherlands for a few years, I think the average American really takes a lot of things for granted in the US because there are a number of things which are clearly worse in Europe. Economically the US is pretty clearly better off, but what Europe decided to do is sacrifice economics for supporting a more relaxed lifestyle. If two economies had the same hourly wage but one economy had people working longer hours, I can see a lot more people in that economy complaining about not being able to relax as much even though from an economic perspective there is no real disadvantage. This relaxation is why I think there's a pretty big difference in outcomes like happiness and life expectancy.

[@williamthomas7332]

Hi really enjoy all the vids, very thought provoking. Please can you do a video on GDP V’s GNP. Has there been any ideological “political” reasons for no longer using GNP?

[@falsificationism]

Europeans are like your friend who had a big enough nest egg to retire early.

[@rutessian]

and constantly asks the government: "please don't screw me over!" and the government does that anyway.

[@falsificationism]

@@rutessian lol all we want is to chill in our retirement communities and get haircuts and go out to dinner at 3pm! Let us consume our nontradable goods in peace!

[@persiathiest1963]

False

[@falsificationism]

@@persiathiest1963 Oops I meant China

[@faitero]

I like to live in Europe, life and work balance is perfect. 👌🏼 doesn’t matter we poorer like Americans

[@tealkerberus748]

A lower count of billionaires in Europe doesn't mean the average person is poorer. Also a poor European doesn't have to worry about how to pay for things like insulin if they need it, which makes them better off than many Americans anyway.

[@benficaM8888]

idk. but even that PPP graph, we're still behind, even though it's not as dramatic as the nominal graph

[@MoneyMacro]

Yes behind. But, not falling behind more. Was my point. At least, not yet.

[@Puschit1]

@@MoneyMacro A single medical bill can negate the surplus american income of several years, though. That's won't happen in most european systems with proper healthcare.

[@NicolasSchnyder-c2u]

It would be great to make the distinction between Europe and the European Union. Clearly this video talks about the EU. This distinction matters, in particular when you are from a non-EU European country like me.

[@FlegmaPro]

I live in Ireland with my wife and my toddler. My wife is on sick leave for the last 3 years and I am the only one working. When we both worked we bought an apartment and eventually a house. We are renting out an apartment and we have no problems going through the month. Life is extremely easy at the moment and I have never struggled in Ireland for money. I have been all over the world and can afford most things I want. we both have an used car with a combined worth of 12000e. They get us wherever we want. Our toddler has her mother constantly at home and I took 9 weeks of half paid parent's leave by social welfare. I still have 50 days off annual leave left as I carried it so much from my previous year. Life in Ireland is so easy, I only wish we had more sunny days

[@novalinnhe]

Glad things have been going well for you sir! Always good to hear a positive story amongst all the negative :)

[@sykaax]

GNP it is really bad idea, a lot times worse than GDP. Why? Well because Europe is poor of resources, we have nothing compare to USA or other countries in world. Africans, Latin Americans e t c . We do not have a lot oil, metals. we are very poor in resources compare to others. AND WE NEED MONEY DOLLARS FOR BUY THAT. For that reason if we poor in GDP metrics it is means we cant buy resources, without recources we cant produce goods, and without goods our service fake prices economy worth nothing. SO YEAH we need cancel sosialist ideas and try to implement more USA way of thinking and way of economy.

[@MrOndra31]

Good point

[@gambagamba6505]

Or maybe import Russian energy again and sanction problematic US tech companies instead changing our way of life and achievements since 1000 of years ? China is socialist and is overtaking the US in every aspect. This Atlantic mindset of yours is now eating itself since the end of the coldwar, so we have to go even more righwing?