GDP PPP per capita minus the top 10%

[Jacobtm]

When ranking countries by GDP PPP per capita, the United States is frequently right at the top. However, the United States also ranks higher than most rich countries for inequality. So if we're just ranking high in GDP PPP per capita because we have a ton of fabulously rich people, the statistic is meaningless.

But has anyone compiled GDP PPP per capita taking off something like the top 5-10% of earners? I feel like this would be a more useful statistic to really assess wealth.

[opebo]

But has anyone compiled GDP PPP per capita taking off something like the top 5-10% of earners? I feel like this would be a more useful statistic to really assess wealth.

This does sound interesting Jacibtm.  Though 'earners' is a bit of a strange term to apply to the privileged.  I can tell you that the worknig class didn't seem any better off in america than in thailand.

[Torie]

If you look at median rather than mean  per capita income, that should largely solve your "problem" because the  median will not be affected by a long right tail of the bell curve encompassing the mega earners (which mega earners have in general all of a sudden have  seen their incomes crash).

[Jacobtm]

But has anyone compiled GDP PPP per capita taking off something like the top 5-10% of earners? I feel like this would be a more useful statistic to really assess wealth.

This does sound interesting Jacibtm.  Though 'earners' is a bit of a strange term to apply to the privileged.  I can tell you that the worknig class didn't seem any better off in america than in thailand.

I realize that you and I may talk about the same people and economic activities and use very different terms, so you would call the priveleged "owners," and say that their wealth isn't earned but stolen from the workers. However, while you may see someone who owns a small business or works in a mid-level management position as an "owner" or "exploiter", and thus take that persons' well being to only exist at the expense of the "owned", I don't think you should discount the well being of one based on their position on the economic ladder.

So while you say the "working class" in the U.S. and Thailand are about equal, if you're excluding some 1/3 of the American public from being labelled "workers" because they're slightly higher up the scale of ownership, I think it's important to consider those people in judging the economic well being of any country, and the effectiveness of any economic system.

Of course, if the "owners" are only 10% of a population  and 90% of the population is just toiling to pay their bills and eat, then that system is rotten.

[opebo]

Of course, if the "owners" are only 10% of a population  and 90% of the population is just toiling to pay their bills and eat, then that system is rotten.

Yeah I think its more like 90/10 than 2/3-1/3.

[Tender Branson]

You should also take into account that the average American worker works about 25% longer each year than the standard European worker to achieve the "higher" GDP. (1800 annual working hours vs. 1400/1500 in the EU)

For example a German employee works 1350 hours each year for a GDP/capita of 30.000€, an American works 1800 hours for 35.000€.

Adjusted for this, the German worker produces 22€ the hour, the American just 19.5€ ...

http://stats.oecd.org/wbos/Index.aspx?DataSetCode=ANHRS

[opebo]

Correct.  Productivity or per hour GDP and thus standard of living is much lower in the US than in Western Europe.

[Gustaf]

Correct.  Productivity or per hour GDP and thus standard of living is much lower in the US than in Western Europe.

No, that is incorrect. Productivity in Western Europe and the United States is roughly similar, but American prioritize money over leisure time (and to some extent freedom over equality).

American GDP per capita is more like 47 000 USD with most Western European countries ranging from 30 000 to 40 000.

[Franzl]

Correct.  Productivity or per hour GDP and thus standard of living is much lower in the US than in Western Europe.

So standard of living is much lower because of the fact the hourly productivity is only ca. 10% lower.....but despite the fact that prices are almost certainly 10% or more lower?

[Gustaf]

Anyway, according to Wikipedia, the median income in the United States is 48 000 USD, so pretty much the same as average GDP.

The UK is at 39 000. Switzerland is at 55 000. Internal differences within American states are considerable.

But Opebo tends to ignore facts that falsifies his prejudices.

[Franzl]

Anyway, according to Wikipedia, the median income in the United States is 48 000 USD, so pretty much the same as average GDP.

The UK is at 39 000. Switzerland is at 55 000. Internal differences within American states are considerable.

But Opebo tends to ignore facts that falsifies his prejudices.

And further underlining that point should be the exchange rate in recent years. Having a weak dollar doesn't change the U.S. numbers....but artificially makes European numbers seem higher because their Euros buy a greater amount of dollars....even though the GDP or median income haven't nearly risen at that level.

[Jacobtm]

Of course, if the "owners" are only 10% of a population  and 90% of the population is just toiling to pay their bills and eat, then that system is rotten.

Yeah I think its more like 90/10 than 2/3-1/3.

While you may view 10% as owners, and then think the 90% of "workers" are inherently exploited, I don't think the owner/worker dichotomy you subscribe to really matters. I know plenty of rich people, in the top 10% wealthiest in the US, who are miserable in their wealth. I know others who purposefully left high income jobs for lower paying ones because they wanted more personal time. And I know people who are much further down the scale, in the bottom half, who are perfectly happy.

To me, if the system permits people making a reasonable salary to live a happy life, then that's perfect. Economis is really all about utility, not wealth, and if you can use your income to arrange your life in a way that makes you happy, that's all that an economic system can really be asked to do. Surveys comparing wealth to happiness find that after around $40/50k a year, happiness doesn't really increase with wealth, so as long as one can bassically afford to live a comfortable life, they're as happy as money can get them.