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A Little Perspective
Pew Study: U.S. Middle Class Smaller But Richer Than Europe’s

The Pew Research Center recently released an ambitious study tracking the changing fortunes of the middle class in Western Europe and the United States from 1991 to 2010. Among the findings: the American middle class is smaller than Europe’s (and declining), but it nonetheless remains substantially richer than almost any other European country’s. More:

Compared with Western Europe, the U.S. middle class is smaller. Among the countries examined, the U.S. is the only country in which fewer than six-in-ten adults were in the middle class in 2010. Meanwhile, compared with many Western European countries, greater shares of Americans were either lower income (26%) or upper income (15%).  […]

Incomes of middle-class households in the U.S. are greater than the incomes of most Western European middle classes. Financially, the American middle class is ahead of the middle classes in the Western European nations in terms of disposable (after-tax) household income, with the exception of Luxembourg. Middle-income households in Luxembourg lived on $71,799 annually in 2010, at the median, followed by $60,884 in the U.S. The middle class in Italy lived on a median income of $35,608, the most modest means among the countries analyzed.

The results are worth exploring in full. While the Pew study does offer catnip to those concerned about income inequality, it also reveals how prosperous the United States remains by comparison with Europe. With the exception of Luxembourg, for instance, the U.S. tops every western EU country when it comes to disposable income for the middle and upper class:

The Pew study does not break down U.S. income data on a state-by-state basis, complicating any direct comparisons between American states and EU countries along its methodology. But a look at 2010 U.S. census data reveals the general trend: even the poorest U.S. states beat the poorest European countries when it comes to median household income, while only Luxembourg tops the richest states.

In 2010, for instance, the median household income in Mississippi (in 2011 inflation-adjusted dollars) was $37,838; the equivalent in Maryland was $70,976. By comparison, the average Italian household took home $35,608 that year, while a middle-income Norwegian household earned a median income of $56,960. Put another way: average households in states like Maryland, Connecticut, or Massachusetts are richer than those in Norway, Denmark, or the Netherlands, while residents of Mississippi or West Virginia are better off than the Spaniards and Italians.

For all the talk about rising inequality and a shrinking middle class, then, we Americans should count our blessings: when it comes to disposable income, you are still better off living in Mississippi than Italy.

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  • ——————————

    I always say that every American should travel internationally, at least a few times, especially to the 3rd – world.
    Most here have no idea how the rest of the world operates.

    So many clueless whiners….

    • D4x

      Yes, but Italy, and, imho, Indonesia, have much better food than Mississippi…

      • ——————————

        So does Beirut, and New Delhi….

      • Jim__L

        Ever had the food in a socialist country? East German food was still, my opinion, a form of psychological warfare the government waged on its people to keep them in despair.

        • D4x

          No, but your description does sound like Amherst College’ Valentine Hall food from early 1970’s…

          • f1b0nacc1

            Johns Hopkins dorms slightly later in the decade….I shudder just thinking of it!

            Turkey tetrachloride….

    • Jim__L

      Even traveling to Europe has a great deal of benefit to an American, in terms of seeing what the middle class elsewhere is like.

      I remember that Swedish and West German homes seemed very small and spare, compared to the American counterpart I grew up in. And don’t even get me started about the disaster that was Socialist East Germany.

      • Andrew Allison

        Speaking as somebody who grew up in the UK, it is my contention that American’s greatest contribution to quality of life is bathrooms in which one can swing a cat with enough water pressure to take a shower [grin]

        • Jim__L

          Oh, Lefties are trying to get rid of the water pressure. The toilets that don’t actually flush (or rather, that you have to flush multiple times) are another of their “contributions to society”.

          • Andrew Allison

            I share your sentiments regarding progressive (the epitome of double-speak) lunacy, but the truth is that toilets used to use a lot more water than necessary. As we both know, thanks to the lunatics running the Californian asylum, water is a real problem. But, pressure only affects the rate at which the tanks fill, not how much. A low-flow toilet that must regularly be flushed several times is either badly designed or is connected to a drain which is partially blocked (I’ve got three, and have almost never [I’ll spare you the details LOL] needed to flush twice).

          • Jim__L

            Well, the ones in California are “badly designed” then. The showers here are pretty wretched too, unless you fix them yourself.

          • ——————————

            Unless something has recently changed in the laws, water consumption laws for plumbing fixtures are national, not state-specific.

            You can’t do much to change toilet consumption unless you buy older higher- flow used toilets that have been restored, or buy black market toilets from Canada or Mexico, which have higher flows. But you can buy after-market shower heads at home depot, or a plumbing store that have high water flow. And for faucets you can simply remove the water restricter that is inside the end of the faucet. Just unscrew the end of the faucet and remove the flat piece of metal that has the small hole in the center and you will have good water flow.

          • Jim__L

            Renter here, and not by choice.

  • f1b0nacc1

    It would be very interesting to break this down by metro areas, and proximity thereto. Maryland, for instance, probably has its numbers grossly inflated by the DC suburbs, and depressed somewhat by most of Baltimore. Similarly, I would love to see what the difference is between Milan and Palermo…

    • Angel Martin

      One issue with statistics from countries like Italy and Greece is the large amount of tax evasion and unrecorded black economy.

      Some of the wealthiest people in the EU live in the north Athens suburbs and in Milan.

      • f1b0nacc1

        An excellent point, and this goes right to the heart of the problems with making comparisons like this.

  • Boritz

    Besides the income disparity, Europe makes simple things like acquiring a driver’s license the equivalent in time, money and complexity of fighting off a gand jury indictment.

  • Fat_Man

    The comparison of the US with Luxembourg is absurd. Luxembourg has a population of less than 600,000. It would be about the 95th largest metropolitan statistical area in the US. Comparing tinny areas like Luxembourg with huge ones like the US makes the likely hood of statistical aberrations soar.

    • Andrew Allison

      But it does make one think about where the money to provide Luxembourger’s extraordinary incomes.

      • Jim__L

        It cuts deals with major corporations to give them a very low marginal tax rate, which to an area the size of the 95th metro of the US, is a huge amount of money.

        • Andrew Allison

          I know [grin]

  • Andrew Allison

    As are all to many Pew studies.

  • CaliforniaStark

    Would suggest the study should have compared after tax income, since many Europeans pay much higher taxes than Americans pay, even when both federal and state taxes are taken into consideration. Also, the services and benefits that Europeans receive free or at little cost should be taken into account, and compared to what Americans pay for the equivalent services.

    My experience in Europe is that Americans live a more affluent lifestyle than Europeans, taking into account larger residences, better mobility and a wider array of consumer products. Americans often get a “cramped” feeling in Europe; and a lot of things Americans are accustomed to are much more expensive in Europe

  • Jacksonian_Libertarian

    What a bogus study, it should have gone back to 1980 or even further. In 1980, Europe and America’s per capita incomes were roughly equal after 35 years of American financed rebuilding in Europe. Then, Reagan cut taxes and spending, reducing the burden of the Government Monopoly on the economy. And American growth accelerated, and compounding growth (the most powerful force in the Universe) boosted American per capita income 30% over that of Europeans.

  • Jeff77450

    Should also take into consideration the fact that the U.S. has done the heavy-lifting of the defense of Europe for the past 72 years. Good grief, the money that U.S. troops and their families have spent in Europe, most especially Germany, might be in the hundreds of billions, adjusted for inflation. Not to mention billions more contracting for supplies & services. Probably not a major factor now but likely was up until say, the mid-sixties, when the framework for Europe’s cradle-to-grave-nanny-states was being built.

    Also everything else that the U.S. contributes, e.g. the world-wide air traffic control system, GPS, weather and communications satellites, the internet, a disproportionate amount of the world’s R&D. I’m sure that we could think of others. For the pacific-rim countries the Pacific Tsunami Warning System.

  • Maddog

    Chicken Little shrieks about the shrinking middle class

    http://www.maddogslair.com/blog/chicken-little-shrieks-about-the-shrinking-middle-class

    Well, this is technically correct, but fails spectacularly to note that America’s middle class is shrinking up, invading the upper class. And the American lower class is also shrinking upwards! This is not happening in Europe.

    “The Pew study does not break down U.S. income data on a state-by-state basis, complicating any direct comparisons between American states and EU countries along its methodology. But a look at 2010 U.S. census data reveals the general trend: even the poorest U.S. states beat the poorest European countries when it comes to median household income, while only Luxembourg tops the richest states.”

    Well, they didn’t be I have that data on a PPP basis, click through for much more.

    The data is bad for Europe with only a single exception.

    Mark Sherman

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