If Sweden and Germany Became US States, They Would be Among the Poorest States

[josephpalazzo]

https://mises.org/blog/if-sweden-and-germany-became-us-states-they-would-be-among-poorest-states

Since Sweden is held up as a sort of promised land by American socialists, let's compare it first. We find that, if it were to join the US as a state, Sweden would be poorer than all but 12 states, with a median income of $27,167.

Median residents in states like Colorado ($35,830), Massachusetts ($37,626), Virginia ($39,291), Washington ($36,343), and Utah ($36,036) have considerably higher incomes than Sweden.

With the exception of Luxembourg ($38,502), Norway ($35,528), and Switzerland ($35,083), all countries shown would fail to rank as high-income states were they to become part of the United States. In fact, most would fare worse than Mississippi, the poorest state.

For example, Mississippi has a higher median income ($23,017) than 18 countries measured here. The Czech Republic, Estonia, Greece, Hungary, Ireland, Italy, Japan, Korea, Poland, Portugal, Slovenia, Spain, and the United Kingdom all have median income levels below $23,000 and are thus below every single US state. Not surprisingly, the poorest OECD members (Chile, Mexico, and Turkey) have median incomes far below Mississippi.

Germany, Europe's economic powerhouse, has a median income ($25,528) level below all but 9 US states. Finland ranks with Germany in this regard ($25,730), and France's median income ($24,233) is lower than both Germany and Finland. Denmark fares better and has a median income ($27,304) below all but  13 US states.

On the other hand, were Australia ($29,875), Austria ($28,735), and Canada (28,288) to join the US, they would be regarded as "middle-income states" with incomes similar to the US median of $30,616.

We Should Adjust for Purchasing-Power Differences Among States

But, I'm really being too conservative with the US numbers here. I'm comparing OECD countries to US states based on a single nation-wide purchasing power number for the US. We've already accounted for cost of living at the national level (using PPP data), but the US is so much larger than all  other countries compared here, we really need to consider the regional cost of living in the United States. Were we to calculate real incomes based on the cost of living in each state, we'd find that real purchasing power is even higher in many of the lower-income states than we see above.

BTW, this study was done before the refugee crisis.

[Mike Cl]

https://mises.org/blog/if-sweden-and-germany-became-us-states-they-would-be-among-poorest-states




BTW, this study was done before the refugee crisis.

Does this study take into account what the state services Swedish and German taxes provide to the people?

[josephpalazzo]

Does this study take into account what the state services Swedish and German taxes provide to the people?

From the article:

These national-level comparisons take into account taxes, and include social benefits (e.g., "welfare" and state-subsidized health care) as income. Purchasing power is adjusted to take differences in the cost of living in different countries into account.

[aitm]

That's pretty..interesting.

[TomFoolery]

From the article:
These national-level comparisons take into account taxes, and include social benefits (e.g., "welfare" and state-subsidized health care) as income. Purchasing power is adjusted to take differences in the cost of living in different countries into account.

The social democratic era in Sweden ended years ago. They have lots of wealth inequality, and so do we. So I personally don't really hold Sweden up as the current model, but they do sort of serve as proof that it did at one time work.

Right, the average, healthy American may have more purchasing power than his or her Swedish counterpart. But what about the average, unhealthy American?

I'd rather take a pay cut in gross income and know that having cancer won't bankrupt me and my family for the next seven generations like a stain on Klingon honor than roll the dice to keep a few more disposable dollars in my pocket.

It does use median incomes which I will say probably evens out those outliers in the top 1% of earners that would skew an average. But does the study include people without incomes, or people on fixed incomes?

All I can say is that poverty is a multi-faceted thing and it has virtually an infinite number of metrics. So using gross income, we can say people in Sweden are on paper poorer than people in the United States. What I would think would be interesting would be to find out how many Swedish children have gone hungry. In America it's 1 in 5. How many people in Sweden fund medical treatment through crowdsourcing? I don't need to direct you to the gofundme website to know that in America, the number is shameful. For what many Americans consider to be the best country in the world, we could be doing a lot better.

[stromboli]

Average income versus disparity of income. If the highest earning person in a state is a billionaire and the lowest a McDonald's employee, average might work out that way. My take on it would be useful income- you can live on less if you live adequately.

I don't see Germans and Swedes on rafts attempting to come to the US or some other country, so that would indicate to me they are doing adequately well in their own view.

[Baruch]

Any study that mentions "socialism" or "capitalism" is politically tarnished ... and therefore suspected of bias.

I would have to live in Sweden for awhile and compare ... but that isn't going to happen.  This seems to be an attack piece against Bernie Sanders supposed "communism under the bed and in the closet ... oh my!".

[josephpalazzo]

I don't see Germans and Swedes on rafts attempting to come to the US or some other country, so that would indicate to me they are doing adequately well in their own view.

Perhaps not now, but wait until the refugee crisis blows the EU to pieces, maybe you will see those nimbus boats en masse. :93:

[stromboli]

apples and oranges, JP. any outside force that changes the equation doesn't validate it.

[josephpalazzo]

apples and oranges, JP. any outside force that changes the equation doesn't validate it.

Do you have a crystal ball that says the EU survives this crisis?

[stromboli]

Do you have a crystal ball that says the EU survives this crisis?

No I do not have a crystal ball. But I don't see anything in the article where the refugee crisis is factored in, so that is a different issue than the one addressed. If you want to factor in the refugee crisis, you should have said so initially.

[josephpalazzo]

No I do not have a crystal ball. But I don't see anything in the article where the refugee crisis is factored in, so that is a different issue than the one addressed. If you want to factor in the refugee crisis, you should have said so initially.

Well as I indicated in the OP, the study was done before the refugee crisis. As it stands now, IF Sweden and Germany were US States, they would be among the poorest States. When this refugee crisis unfolds, I can only see the economies of these countries go down, and therefore many of them will most likely end up lower than Mississippi. So your claim that "I don't see Germans and Swedes on rafts attempting to come to the US or some other country" is a little premature, wouldn't you think?

[stromboli]

"I don't see" in the present tense is not a prediction. You are extrapolating, not me. The future is a different issue. You may certainly be right.

Note: I'm the guy that did the refugee thread. I have never said that I was in support of it. You are talking in this thread about a comparison between Germany and Sweden and the U.S.. If you want to project into the future, you may well be right. I also have never declared that I agree with socialism or am a follower of Bernie Sanders. I have used those countries comparatively on various issues, but first of all Germany is not socialist and secondly, I agree that a socialist government would not fare well under a refugee crisis. 

[Baruch]

"I don't see" in the present tense is not a prediction. You are extrapolating, not me. The future is a different issue. You may certainly be right.

Note: I'm the guy that did the refugee thread. I have never said that I was in support of it. You are talking in this thread about a comparison between Germany and Sweden and the U.S.. If you want to project into the future, you may well be right. I also have never declared that I agree with socialism or am a follower of Bernie Sanders. I have used those countries comparatively on various issues, but first of all Germany is not socialist and secondly, I agree that a socialist government would not fare well under a refugee crisis.

The problem is that  "socialist" like many political labels, only means what people choose momentarily for it to mean.  Germany is simply German .. neither capitalist nor socialist ... it is a mix of E Germany and W Germany ... if that means anything.  But even W Germany allows unions and apprenticeships  .... they actually take Labor seriously.  They also haven't sent all their factories to China.  It is hard to say who is more socialist therefor ... the US which hates Labor or the US which sends all factories to China to be run by the Chinese Communist Party.  Or Germany which has pretty good social support or Germany which is pretty conservative in other respects.

[stromboli]

The problem is that  "socialist" like many political labels, only means what people choose momentarily for it to mean.  Germany is simply German .. neither capitalist nor socialist ... it is a mix of E Germany and W Germany ... if that means anything.  But even W Germany allows unions and apprenticeships  .... they actually take Labor seriously.  They also haven't sent all their factories to China.  It is hard to say who is more socialist therefor ... the US which hates Labor or the US which sends all factories to China to be run by the Chinese Communist Party.  Or Germany which has pretty good social support or Germany which is pretty conservative in other respects.

I never thought of Sweden as socialist until it was mentioned a few years ago, in the context of the Islamic influx. The problem with the continual "defining" by political pundits is that it amounts to so much finger pointing- Social Security is socialism because its not privatized, and so on. The current state of the Republicans wanting to do away with that and other things like killing the Affordable Care Act is that they have nothing to replace it with. I'm not strictly speaking either a capitalist or socialist- I simply think that what works, works- labels or otherwise. If the Republicans have something better, bring it. But so far they don't.