Fraser Nelson, over at the Spectator, has a little post about how the UK, Britain (the native home for both of us), is actually poorer than all but one of the US States. Tucking in right behind Alabama and just above Mississippi. Despite the fact that he once fired me [...]
The author takes PPP (Purchase Power Parity) per capita of the UK as a whole versus individual U.S. states. So what does it mean that Mississippi on average has a higher PPP than the UK? Two things:
The UK gets dragged down by it’s poorer regions; and
The U.S. has enough ultra-rich people to drag its PPP up despite a large swathe of its population being poor.
Another way to look at it is, if wealth distribution was fair in the U.S., even people in Mississippi would be better off than the average Brit.
That’s the problem with averages vs medians. It completely overlooks wealth gap.
Here is an example. Moderna CEO made something like $500 million last year. If Moderna had 1000 employees, that would mean the company’s average employee pay is $500,000. And that’s before even adding their pay to this average.
The PPP adjustment is going to inflate the values in low cost of living states/nations; cost of living correlates pretty well with average income (i.e. don’t travel to Switzerland unless you like spending money), which means all those eastern European countries and southern states with lower average incomes are going to get a leg up on central/western Europe.
I did, and it’s a vast argument to make based on two data points. That the bottom 10% of the U.S. and Finland have the same PPP says nothing about the wealth of the rest of the population, just that the rock bottom of both countries is more or less the same. Not to mention, socialized services probably means Finland and Sweden’s bottom 10% probably has higher life expectancy than the U.S.'s bottom 10%.
The author takes PPP (Purchase Power Parity) per capita of the UK as a whole versus individual U.S. states. So what does it mean that Mississippi on average has a higher PPP than the UK? Two things:
Another way to look at it is, if wealth distribution was fair in the U.S., even people in Mississippi would be better off than the average Brit.
That’s the problem with averages vs medians. It completely overlooks wealth gap.
Here is an example. Moderna CEO made something like $500 million last year. If Moderna had 1000 employees, that would mean the company’s average employee pay is $500,000. And that’s before even adding their pay to this average.
Exactly. The median wealth of me, my partner and Bill gates is basically zero. The average wealth in billions of dollars.
Yep, there is a good reason the median average is usually used when looking at incomes.
It’s like Bernie always says: it’s the wealthiest nation in the history of the world. So why is basically everybody poor?
There’s even an entire book related to this topic, Progress and Poverty
The PPP adjustment is going to inflate the values in low cost of living states/nations; cost of living correlates pretty well with average income (i.e. don’t travel to Switzerland unless you like spending money), which means all those eastern European countries and southern states with lower average incomes are going to get a leg up on central/western Europe.
We’re approaching BadEconomics territory
Thank you for making this make sense.
You should read the last paragraph of the article.
I did, and it’s a vast argument to make based on two data points. That the bottom 10% of the U.S. and Finland have the same PPP says nothing about the wealth of the rest of the population, just that the rock bottom of both countries is more or less the same. Not to mention, socialized services probably means Finland and Sweden’s bottom 10% probably has higher life expectancy than the U.S.'s bottom 10%.
A homeless person in Finland has free access to medical treatment that could render a moderately wealthy American homeless.
Studying isn’t just free - the state pays you for it.
What you can purchase is, despite popular belief, not a good indicator of life quality.
Ultra rich people — like the royal family?
Yes, like that! The British royals often have around $30 million at their disposal. It’s completely fucked, nobody needs that much money.
Good thing you don’t have anything like that in the US.
One billion is a thousand million, in case anyone forgot.
The difference between a million and a billion is approximately a billion