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Western Europe Richer Than US After Adjusting for Hours, Inequality
Adjusting for hours worked and inequality, Western Europe's real income per hour exceeds the US, an analysis of OECD data shows.
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The idea that Americans are richer than Western Europeans holds up only if you ignore how much time people spend working and how income is shared. Once those factors are accounted for, Western Europe pulls ahead, according to an analysis by the People's Policy Project.
Most comparisons start with GDP per capita. By that measure, the US leads. The OECD data the analysis uses shows the US above Germany, France, Sweden, Denmark, and the Netherlands. But GDP per capita treats all time not spent working as worthless. Childhood, retirement, vacations, holidays – all assumed to produce zero value. A country where workers put in 80 hours a week to generate a given output looks as well-off as one that produces the same output in 40 hours.
Adjusting for hours worked changes the picture. The OECD also publishes GDP per hour worked. On that metric, Denmark and Germany beat the US. Sweden trails by only 3%. France by 7%. The only reason the US could look worse on this measure than on GDP per capita is that other countries work fewer hours. That can happen through lower employment rates or more time off per worker.