Monday, April 18, 2005

The reverse millionnaires

One of my former colleagues used to live as a "$60,000 millionnaire" -- he drove a $35,000 car, took expensive trips, wore semi-pricey clothes and had definite champagne tastes on an undersized (for a lawyer) budget because we worked in a small insurance defense firm that paid sh-t for wages.

In Norway, however, the inverse is true: people are paid decently well, the per capita GDP is high and the Norwegians consider themselves among the wealthiest people in the world. Except for one thing: they cannot afford to buy anything. Remember, the average person living around the $20,000 poverty line in the US has a car, house, color TV, microwave, operational fridge and is not starving. The average Scandinavian's PURCHASING POWER is actually less than an American who is part of the working poor, as Bruce Bawer notes in the interesting article linked in the title hereto:

Alternatively, the [Swedish research company, Timbro] study found, if the E.U. was treated as a single American state, it would rank fifth from the bottom, topping only Arkansas, Montana, West Virginia and Mississippi. . .

Contrasting "the American dream" with "the European daydream," Mr. [Johan] Norberg [Swedish economist] described the difference: "Economic growth in the last 25 years has been 3 percent per annum in the U.S., compared to 2.2 percent in the E.U. That means that the American economy has almost doubled, whereas the E.U. economy has grown by slightly more than half. The purchasing power in the U.S. is $36,100 per capita, and in the E.U. $26,000 - and the gap is constantly widening."

But it gets worse for the Scandinavians:

. . . another study, this one from KPMG, the international accounting and consulting firm [small snip] indicated that when disposable income was adjusted for cost of living, Scandinavians were the poorest people in Western Europe. Danes had the lowest adjusted income, Norwegians the second lowest, Swedes the third. Spain and Portugal, with two of Europe's least regulated economies, led the list.

Norway's purchasing power = about $18,350 per capita. US average: more than $32K. The US working poor, who receive earned income tax credits, do not pay income taxes and may be eligible for other subsidies, may be better off that Norway's average person on the street.

HT: Stoli-man

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