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Why Britain is poorer than any US state, other than Mississippi

22 August 2014

10:41 AM

22 August 2014

10:41 AM

Now and again, America puts its inequality on display to the world. We saw it after Hurricane Katrina and we have seen it again in the unrest in Ferguson, Missouri. A white police offer shoots dead a black man, after having stopped him for jaywalking. Britain’s police don’t have guns, so these scenes are unthinkable to us. But American-style inequality? We have plenty of that too, we’re just better at hiding it – as I say in my Telegraph column today.

I came across a striking fact while researching this piece: if Britain were to somehow leave the EU and join the US we’d be the 2nd-poorest state in the union. Poorer than Missouri. Poorer than the much-maligned Kansas and Alabama. Poorer than any state other than Mississippi, and if you take out the south east we’d be poorer than that too.

I’ve been asked (on Twitter) to link to my source, but I’m afraid there’s no study to point to. It’s original research. But it’s also a fairly straightforward calculation. You take the US figures for GDP per state (here), divide it by population (here) to come up with a GDP per capita figure. Then get the equivalent figure for Britain: I used the latest Treasury figures (here) which also chime with the OECD’s (here). A version of this has been done on Wikipedia, but with one flaw: when comparing the wealth of nations, you need to look at how far money goes. This means using a measure called Purchasing Power Parity (PPP). When this is done, the league table looks like the below. I’ve put some other countries in for comparison.


It’s not surprising that America’s best-paid 10 per cent are wealthier than top 10 per cent. That fits our general idea of America: a country where the richest do best while the poorest are left to hang. The figures just don’t support this. As the below chart shows, middle-earning Americans are better-off than Brits. Even lower-income Americans, those at the bottom 20 per cent, are better-off than their British counterparts. The only group actually worse-off are the bottom 5 per cent. Here are the figures:-


[Alt-Text]


In America poverty is more obvious due to White Flight, a phenomenon we just didn’t have. In the era of the motor car, the middle class (who tended to be white) worked out they could buy a lovely house in the safer suburbs and commute. The population of St Louis, where Ferguson is a neighbourhood, has halved since 1970. And back then, Ferguson was 99 per cent white. Now it’s 67 per cent black. Any Brit who has walked the streets of today’s Detroit will be stunned: this supposed city looks like a bombed-out ghost town. But 45 minutes up the I94 lies the gorgeous sprawl of Ann Arbor, and some of the loveliest spots on earth. America’s White Flight has created a visual spectacle with no equivalent in Europe. When urban trouble kicks off in America, this spectacle is there for all to see.

Britain has no space for white flight, we’re forced to live closer together. And we fool ourselves into thinking that proximity has brought cohesion. In fact, we have developed a new kind of segregation: keeping the poor cooped up in council estates, a stone’s throw from the posh parts – yet abandoning them in a welfare trap from which escape is pretty damn hard. Brits may be appalled at America’s gap in black-white life expectancy. But our Liverpool-SW1 life expectancy gap is just as big; we just don’t get upset about it. When you walk south over Westminster Bridge from the House of Commons, life expectancy drops five years.

No one beats up America better than Americans. They openly debate their inequality, conduct rigorous studies about it, argue about economics vs culture as causes. Their universities study it, with a calibre of analysis not found in Britain. Americans get so angry about educational inequality that they make films like Waiting for Superman (trailer below). And the debate is so fierce that the rest of the world looks on, and joins in lamenting America’s problems. A shame: we’d do better to get a little angrier at our own.

PS If anyone hasn’t seen Waiting for Superman, I can’t recommend it highly enough: it’s on iTunes.

 

PPS Time Magazine has run Screen Shot 2014-08-29 at 09.09.30a peculiar critique of the above with has a smug sub-headline (with “er, not quite” at the end) implying they spotted a massive flaw. And what is it? My table adjusts for spending power between countries, it says, but not within states! Dohh!

The idea that a dollar spent in New York goes equally as far as a dollar spent in Alabama is laughable, but the comparison he uses proceeds from that assumption.”

I’m not sure that the author has worked out that he’s accusing me of understating my case. To adjust for spending power within US states makes Alabama look richer and Britain’s position look even worse – as Time would have realised had the author “proceeded” a little more from his own assumption.

Forbes magazine has done the maths which Time couldn’t quite bring itself to. The author, Tim Worstall, says that if you do adjust for spending power within US states (which I didn’t) then Britain ends up below every single one of them – including Mississippi.

And for those interested, the most thorough critique comes from Chris Dillow, who has also Fisked my figures here. GDP per capita is one way of measuring wealth; it’s also the most widely-used way. I’d (again) like to say that, while its fun to trade figures, all of the above working was done for one sentence into a 1,250-word Daily Telegraph column not about Alabama or Mississippi but the British problems that I recommend Brits focus on rather than gawp at Ferguson.

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Show comments
  • Kev

    I realise this is a fairly old piece, but you’ve ignored things such as debts, cost of education, cost of healthcare, and public transport infrastructure that would probably even things out quite a bit in comparison to the USA if not put the UK back ahead. Yes, in certain areas the PPP in the USA goes a lot further, you just need to look at the price of fuel for that. At the same time, in that comparison, you need to consider alternatives to driving, how much driving is done in the USA and so forth. As far as I can tell you’ve vastly oversimplified the concept of wealth, especially concerning how much government spending impacts it.

    • Marc

      The cost of living is much less in the USA than in most parts of the UK, and that dramatically increases in the South of the US. Debts? Google, “UK adults will owe average of over £47,000 by 2020 as personal debt crisis looms”. Government spending (aka- welfare payments) is not factored into the the totals stated in national figures for income in the USA. Face it… You are on average poorer than the poorest Americans, in one of their poorest economies in decades. So sad, but so true. I can see why most of your fellow countrymen would want to leave the dismal UK if they could. The price of fuel? You really want to compare the UK to the USA for the cost of fuel?? hahaha Driving is much cheaper in the USA than the UK. Urban areas have plenty of public transportation, and that stretches out to most suburban areas these days. You have no idea. Stay ignorant, pal.

      • Kev

        Cheers for engaging me in discussion, I appreciate it.. As interesting as the UK personal debt crisis is, a quick google of american average debt lead to a figure of roughly $130,000/household – currently. And that was exactly my point Marc, that government spending (i.e. welfare payments) are not factored in. Neither are costs for healthcare insurance deducted from income in the USA. How much do I pay for healthcare in Scotland? £0. How much do I pay when I need an x-ray? £0. Prescriptions are free as well. Etc. Tuition fees for a university that’s ranked in the top 100 globally? £0. Cheers buddy. Granted, in England students will pay up to £27k, but that’s still cheaper than most comparable US institutions. These are all things that I feel should be considered when making these comparisons. What’s your children not being shot up at school worth to you?

        And again, yes exactly. Fuel is a lot cheaper in the USA than in the UK (hence PPP taking you a lot further). But you need to drive a lot FURTHER as well, because your country is so much bigger. So you’ll spend … idk, 25%? per gallon of gas, but you’ll drive three to four times further and end up effectively spending the same amount. Never mind that I think discouraging driving is a good thing while we’re all still using internal combustion engines. Also, in regards to driving, your roads and bridges are falling apart.

        Because you missed it the first time let me spell it out again. Gas cheap in USA. Expensive here. You drive more, means more gas. You HAVE TO drive more. Many people need a car to have a job. Driving is inefficient and not good. Busses better. Trains better still. Global warming is real (just for good measure).

        I’ll have to disagree with you on public transportation. Your train system practically non-existant. Busses run infrequently and unreliably. The major cities have decent to good public transport, yes, but that extends to what… 20 cities in 50 states?

        • Marc

          1. You pay much higher taxes than we do, esp. the poor. We don’t pay massive taxes on everything from gas to normal goods, including your VAT. You think your services are free? That’s hilarious. Your services are also extremely sub-par when it comes to any world-standard, if you can indeed get them while waiting in line or when a politician cuts you off at the knees. Some have even called your system worse than Communist China, but I won’t get into that right now. I guess you get what you pay for. I work with two English ladies who left the UK just recently and they insist that your standard of living in much less than here and it is nowhere close to being the same in costs. Much cheaper here for a much higher standard of living. In varies from State to State and urban area, but overall, this is factual. I’ll take their word for it, along with the original author to this piece.

          2. The fees for (some) college/university courses here are too much, but still, we have many more people (esp. minorities) enrolled in these institutions. If you can’t afford it, you shouldn’t go. I can see why higher education might be a bit cheaper in the UK. Afterall, you are worse off than our poorest States, so how could people afford it? We also have many more options than you do for higher education, including community colleges and various trade institutions. We both know your crime figures are a joke and are not to be trusted. How many police scandals have you had, when police we caught fixing the numbers on your own crime? All too many. What’s it worth to not have your child stabbed or assaulted on knife-island? How many no-go zones with full Sharia-Law? How many times will police ignore you because you don’t fit into their politically-correct version of enforcement? Don’t you have a stabbing once every 30 seconds or so? Assaults are much more common in the UK, than here. Too bad your own police won’t tell the truth. Sad. Most of our violent crime is in the isolated areas of the most urban areas of the country. Less than 4% of our counties have crime at your levels. Your crime is pretty much everywhere, and getting worse. That’s the major difference. The vast majority of America is untouched by serious crime. Too bad you can’t say the same.

          3. The average commuter drives about 15 miles (or less) to work, each way. That is nothing. We can afford it, and public transportation is much more expensive for the State, at large. If you bothered to look at the stats for poor households, you would know they have one or more cars. How can poor people afford that, according to your ignorant screeds on the matter? That is not the same for poor people in the UK. They can only depend on a public transport, since that’s the way it is. Do your people still freeze to death in your mild winters since they can’t afford heating oil? I bet they do. I’ll take freedom over your fascism. The only reason people in Europe take public-transport is because your State makes owning a vehicle so expensive, including all the taxes. That is the only way they can get people to take public transit, while it costs the State BILLIONS in waste. They FORCE you to do it. You really think there is no pollution in public-transport? You better get educated quick, since you haven’t a clue in the matter at hand here. Cars are more fuel-efficient than trains, and cars are also more “green” than your polluting trains. Your trains are a major setback for the environment. EVERY major urban and suburban area has a vast network of trains, buses, taxis and other means. Nobody here even cares about public transportation because owning a car is pretty easy and inexpensive. There is no such thing as man-made global warming, so that is a non-starter right there. Please check out the stats on the pollution for the greater area of London. It’s just about as bad as China. That’s pathetic. Your dirty diesels are a crime against humanity. I can see why even a company like VW had to lie and install cheater software on their crappy cars to sell them in a country where standards actually exist. Like you, they will pay a massive price for their crimes, lies and deceit.

          4. Where are our roads and bridges falling apart? Absolute nonsense and lies. Sure, some areas are in need of maintenance, and that work is being done as we speak. Our maintenance is no worse than anywhere else in Eurostan. All you are reading are the same lies, from the same idiots who want to funnel more taxpayer Dollars to their corrupt Union pals in the construction business. Get a clue. We’ll keep on carrying on, as your whole country shuts down due to half an inch of snow. Beyond pathetic.

          5. Trains are a joke. We don’t need TRAINS, because we have the greatest AIRPORT system of the world. TRAINS are a massive waste of taxpayers monies, since NOBODY takes them here. They constantly lose money and only a corrupt government can keep pouring wasted tax-monies down this black hole. They always operate at half their capacity or less, so it makes ZERO sense to build more. This country is much too big to even consider what a waste that would be. We couldn’t care less about them. That is why our airport networks makes yours look inferior.

          6. Wrapping this all up, you’re still the poorest of the poor — At least when it comes to OUR standards. Learn to live with it. The funny thing is, you’re being compared to the States with massive minority populations, yet the UK is still (mostly) lily white. Sad, sad, sad. Good luck with your Muslims and your coming collapse. At least you know now who owns half your capital and probably half your country by now.

          • Kev

            1. Yes the UK has higher taxes. I’d argue they spend it better though. The NHS provides an excellent service, comparable to every world standard. The US does indeed have world leading facilities, but is extremely limited with who can access them. What use is having the best medical facilities in the world when people have to ruin themselves financially to access them? Anecdotally I’ve never had to wait longer than I’d think reasonable (got an x-ray within 15 minutes of arriving at the hospital). You’re again bringing me back to the issue that I don’t think standard of living is measured all that well, and doesn’t take fixed costs into account as much as it should, but lets move on – we’re clearly not making progress in that area.
            2. I’m not sure what you think minorities have to do with tuition fees… or why their enrolment needs to be brought up? You should have more minorities in university, proportional to having a greater number of them.
            3. Crime figures. I don’t actually know about them in detail, I haven’t heard anything at all about children being stabbed or assaulted. I’m sure you could think of at least five school shootings off the top of your head though. I’m not sure what constitutes a county in the US, size wise or location wise, but considering how huge the US is, I’m going to assume that those numbers are where population is fairly densely populated, and likely encompasses more than 4% of the population. I’d rather have more assaults and fewer deaths, I feel like that’s the better deal. I can only laugh at “the vast majority of America is untouched by serious crime” and “how many times will police scandals have you had”. Your police commits the crimes. Commits murders, police brutality and then gets away scot free. You think Sharia-Law is bad? At least we can get the actual police to help out, who do you call when an officer is killing another black man?
            4. Americans spent an average of 42 hours stuck in traffic a year. Some major cities in excess of 80 hours AVERAGE, that’s pretty huge man. Why would I want to use a car, spend my money on car insurance, contribute to global warming, contribute to traffic etc. when I can take public? How many of your veterans are homeless? Do they have a car too? Making cars expensive is a good thing, it cancels out the negative externalities of consumption. I just got to the part where you’re an anthropogenic climate change denier, that sounds like someone doesn’t understand basic science, and doesn’t listen to people that are smarter than him. Of course there is pollution in public transport. Just a lot less than in cars. A car will be more fuel efficient than a bus, of course. Say 7 litres per 100km for the car as opposed to 19 litres per 100km for the bus. But a bus will transport more than three times the people so it works out. I don’t know where you get the nonsensical idea from that trains are more polluting than cars. Trains depend on electricity, and not even a coal plant is less efficient than an internal combustion engine of a car. I’m well aware that the air pollution levels of London are in shambles…. what’s your point?
            5. Have a look at this, I can’t be bothered rehashing that. https://www.youtube.com/watch?v=Wpzvaqypav8
            6. The entire country doesn’t shut down when there’s an inch of snow, but it’s economic nonsense to invest in snow clearing machines and infrastructure if it only snows once every three years in London (notably not the entire country).
            7. Clearly you have no idea what a decent train system looks like. Trains are the way forward my friend, and again, flying everywhere taxes the ecosystem incredibly… let’s try and preserve at least some of the ice caps, eh? Trains are great and a much more pleasant way to travel… but you wouldn’t know that, I can’t blame you for that.
            8. I don’t particularly care all that much how poor you think people here are, I’m not from the UK 😀 Again you’re bringing up minorities… I get the feeling that you’re actually an incredibly racist and unpleasant person, though the latter part of that wasn’t really all that difficult to tell.. I’m happy with my life here, really couldn’t have asked for much more.

            • Marc

              1. Really? Money spent better? So money spent on a Communist healthcare system is better than what?http://www.telegraph.co.uk/health/healthnews/10141476/NHS-is-worse-than-communist-China-say-doctors.html?fb Your fantasies? North Korea? Cuba? Haiti? You’re funny. Not sure what you consider to be “excellent,” but others EXTREMELY disagree with your ACTUAL care. Getting an X-Ray and getting actual care are two different things. I’m pretty sure your case is not the norm, as your inferior system is world renown for its shabby service, long wait times and horrendous outcomes. http://www.independent.co.uk/life-style/health-and-families/health-news/nhs-uk-now-has-one-of-the-worst-healthcare-systems-in-the-developed-world-according-to-oecd-report-a6721401.html
              Over 90% of Americans have private insurance and access to healthcare facilities, with the best results of care of the world. Another huge chunk of the rest CAN afford it, but choose not to get it. That is their problem, but a hospital is still required by law to care for you (regardless of insurance), if you enter their doors. If you are truly poor, you have access to Medicare and Medicaid. Maybe you’ve heard of those? Knowing your ignorance on all of these matters, you probably haven’t.

              2.Okay, forget the minorities. We have MORE people enrolled in college than you do, no matter what race of people they are. So much for your “free” college. Obviously all of those “freebies” haven’t helped your country, as you’ve gone from a “world power” and have slumped into poverty. You can have your “free”. Again, you get what you pay for. I’m pretty sure all of these places operating on “free” are at the same standard we had 50 years ago. Quite sad.

              3. You have stats on police officers committing crime here? You hear a few stories in your BS media, and you know the whole country? haha It’s a small fraction of less than 1%. You really have no idea, do you? Your blather is hilarious, but still a lie. Would you like me to post facts, figures and articles of your police fudging the numbers of your real crime rates? http://www.telegraph.co.uk/news/uknews/crime/10557155/Lord-Stevens-admits-police-have-been-fiddling-crime-figures-for-years.html
              Just say the word and we’ll go through them. http://www.telegraph.co.uk/news/uknews/crime/11236805/A-million-crimes-reported-by-public-left-out-of-police-figures.html
              British Police Order Citizens: “Surrender Your Knives!” Really? Surrender your knives? I can see why you wouldn’t be able to handle guns. http://www.telegraph.co.uk/news/uknews/crime/11236967/How-police-forces-delete-and-downgrade-crimes-reported-by-the-public.html
              If you did have them, I’m sure you’d already be an Islamic State, caused by surrender. http://www.americas1stfreedom.org/articles/2015/7/21/how-britain-cooks-the-books/

              4. First off, everybody in every region of the globe sits in traffic. It’s called driving with other humans on the road. You should try it sometime. Some places are indeed worse than others. So? How much time do you spend stop to stop on a train? PLENTY! It’s also called FREEDOM of motion to go where you want to go. Choice is a wonderful thing, but your brand of eco-fascists want none of that, right?
              Your OPINION on “gloBULL-Warming” is a sad and pathetic joke. There is no global warming as all the REAL science has already proven. How many excuses must you make for your lies? How many billions & trillions have you already wasted on this lie? How many scandals must you ignore to actually believe those lies you stated? You still falling for that crap? Really? That’s just brainless drivel. There is absolutely ZERO global warming and ZERO proof man is causing any of it. What’s your claim now? 0.1 degree is going to kill us all, and you can’t even prove that? At least we have the freedom to choose what we want to do in regards to transportation. Trains are MASSIVE polluters, as compared to cars. TRAINS are MASSIVE wastes of taxpayer money, since FEW use them. Since you warmists do believe that CO2 is causing the Earth to warm, why do you love trains? They emit TONS of Co2 into the air and heat the Earth! You are a hypocrite! What’s my point about your pollution? http://time.com/122283/china-pollution-london-beijing-nitrogen-dioxide-no2/ Do you really have to ask? Apparently your critical-thinking skills are sub-par, at best. http://www.telegraph.co.uk/news/uknews/1465041/Cars-are-more-fuel-efficient-than-trains-claims-study.html

              6. It’s also economical-nonsense to invest in transportation methods that few use or want to use. I already told you that we have invested in the world’s biggest and most comprehensive airport networks. Over 85.000 flights a day. That is what works for a country this big. Your puny country is not even half as big as my State. What’s your point really? Oh wait, you don’t have one.

              7. Trains are not the way forward. They are perhaps the way forward for a high-density population, but not for anything else. Other than that, they are a waste of space, money, resources and fresh air. Maybe you “greens” can pitch in and help pay for VW’s fraud and swindle. If you’re so good at methods of “clean” transportation (including trains), why is this your reality? http://www.bloomberg.com/news/articles/2014-05-27/london-s-dirty-secret-pollutes-like-beijing-airpocalyse
              If you really want to know a way forward, maybe you can explain why 180 of your previous “glo-BULL warming” catastrophe predictions have never come about or were even close. You have ZERO credibility. Keep crying wolf though. Nobody is listening.

              8. I don’t need to think about it, since we all already know it. The stats have already been proven, as this author stated. Why must I repeat myself? Inhale it all in and just deal with your dismal existence. I couldn’t care less about what you think I am or what I feel in my heart. I am not a racist, but just throwing out actual facts. Yes, some minorities tend to do worse than a native population, or compared to the majority in any given area. There are many reasons why this can happen, but that is reality. There are also many minorities in America that (on average) do better than “whites” in America. That is what I am comparing it to. What is your excuse when the UK is basically still a vast majority white, as compared to the USA? What will you look like when our minority numbers are nearly the same? Ask yourself that question and then realize how poor you really are. We’ve already done the dance and can see where we are. You are not even close and have already fallen on your faces.

          • Kev

            Also… “poorest of the poor — At least when it comes to OUR standards” just confirms the stereotype how ignorant you are of the world and your shortsightedness

    • Truthsayer

      Actually cost of education in the US is widely overstated. Community colleges offer a good education and they are very cheap.

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