What Happens When Americans Realize How Miserable We Are?
Life is about more than GDP
The title of today’s post is a riff on a recent headline in the Wall Street Journal: “What happens when Europeans find out how poor they are?” The Journal’s management evidently liked that article, which revolved around the assertion that European economies are lagging far behind the U.S. A few days ago they published a video enlarging on the claim.
As I explained the other day, however, perceptions of European decline are largely based on a statistical misunderstanding. European incomes relative to American incomes have not declined, because GDP growth as conventionally measured doesn’t mean what many people think it means. For the extremely wonkish, I’ve posted a little mathematical model to explain what’s going on in the data.
But let me not stop there, and pose a challenge in the opposite direction: What will happen when Americans realize how miserable we are? Not in all respects, of course. But my guess is that relatively few Americans realize how much we are falling behind other nations on basic aspects of a civilized life, like health and safety.
Take the issue of life expectancy, which surely matters as much as GDP. After all, one important contributor to the quality of life is not being dead. Judging from reader reactions to earlier posts, many generally well-informed Americans are still startled to learn how badly U.S. life expectancy has lagged behind other advanced nations:
This life expectancy gap will surely grow in the years ahead, thanks to the Trump administration’s attacks on both health coverage and modern medicine, including but not limited to the widening assault on vaccines.
The US lag in preventing deaths gets even more startling when one begins to delve into the details. I myself only learned recently that the United States, which used to lead the world in traffic safety, now has much more dangerous roads than other wealthy nations. I included Portugal in the chart at the top of this post because of personal history: I worked in Lisbon for three months in 1976, and driving there back then was terrifying. Now Portugal has much safer roads than we do.
Or consider infant mortality, where the United States not only does much worse than other rich nations but now does worse than some much poorer countries:
Then there’s deaths by violence. Donald Trump and right-wingers in general often portray European cities as dangerous places, overrun by criminal immigrants. The reality is that while U.S. crime has plunged from its peak around 1990 — you wouldn’t know it listening to the right, but New York City in particular is incredibly safe by historical standards — murder rates are still far higher in the U.S. than in Europe:
Mortality is a useful point of comparison because it’s easily quantifiable. So, to a lesser extent, is work-life balance. As I noted in Sunday’s primer, the Germans and the French are roughly as productive per hour as Americans. They have lower GDP per capita than we do because they have more leisure time. Most German employees, for example, receive 25-28 days of paid leave every year. The average US private-sector worker receives only 10 days of paid vacation and 6 paid holidays annually.
And the US is, of course, the only advanced nation that doesn’t guarantee healthcare to all its citizens.
Other problems with the US way of life — like our lack of walkable cities, access to public transportation, and feasibility of living without a car — are harder to summarize with simple numbers. But they are real failings.
I don’t mean to suggest that everything is worse in the U.S. We do, in fact, have substantially higher GDP per capita than European nations, and this is reflected in our material standard of living. For example, we live in bigger houses, which is nothing to sneer at, and drive bigger cars. And as people who have lived on both sides of the Atlantic can attest, “getting stuff done” — everything from finding a place to live to finding a plumber on a weekend — is often much easier in America.
But there are many ways in which America’s quality of life is much worse than one would expect given the nation’s wealth. And we should always remember that economic growth is supposed to be the foundation of a better life. A nation that has high GDP per capita but whose citizens live worse than their counterparts in other countries is not a success story.
And many Americans would, I believe, be angry if they realized how much worse our lives are in many ways than those of our counterparts abroad.
Why are American lives so often nastier, more brutish, and shorter than those of citizens of other advanced nations? That’s a complicated story, but much of it comes down to the fact that US politics has for decades been dominated by a party that is fiercely opposed to any concept of shared responsibility, of caring for our fellow citizens, and that foments a deep level of distrust that makes it ever harder to operate as a society.
As a result, we don’t guarantee healthcare. We underfund public services. We promote private consumption — including driving — while neglecting the provision of public goods. We don’t assure basic health and safety, including for children, which in the long run will make us poorer. It’s not an accident that America began to fall behind other rich countries in many ways around 1980, that is, around the time the election of Ronald Reagan marked a sharp rightward turn in U.S. politics and policy.
You shouldn’t read this post as an exercise in America-bashing. As a nation, we have many strengths and virtues. But we also have weaknesses and failings. And American triumphalism, which often involves bashing Europe, gets in the way of recognizing what we get wrong.
MUSICAL CODA
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A major weakness in simple GDP comparisons between the United States and Europe is that GDP can reward costliness rather than efficiency. This is especially clear in healthcare and higher education. The United States spends far more on healthcare than European countries, and that spending is recorded as economic activity. Insurance administration, hospital billing, private-sector profits, high drug prices, legal and compliance costs, and complex reimbursement systems all add to measured GDP. Yet these additional expenditures do not necessarily produce better health outcomes. In many comparisons, the United States spends more while achieving similar or worse outcomes than European countries.
This means that a higher U.S. GDP may partly reflect a more expensive and inefficient system, not necessarily a higher standard of living. By contrast, European countries often provide healthcare through public or heavily regulated systems that deliver comparable or better outcomes at lower cost. Those services are still counted in GDP, but because they are delivered more cheaply, they contribute less to measured economic output. In this sense, lower GDP can sometimes reflect efficiency rather than poverty.
The same issue applies to universities. In the United States, high tuition, student loans, private administration, and institutional overhead all generate measurable economic activity. In much of Europe, public universities charge low or no tuition, and the cost is absorbed through the public sector. The education still has value, but because it is less monetized and less expensive to the individual, it may contribute less to GDP than the more costly American model.
This creates a broader problem: GDP measures the market value of production, not the quality of life produced by that activity. If one country spends twice as much to obtain the same medical treatment or educational outcome, its GDP will look higher, but its citizens are not necessarily better off. In fact, they may be worse off if the extra spending comes through higher insurance premiums, medical debt, student loans, or reduced disposable income.
Therefore, Europe’s lower GDP per capita should not automatically be interpreted as economic failure or lower living standards. Part of the gap may reflect fewer hours worked, more leisure time, lower inequality, and the public provision of services that are less expensive but socially valuable. The American economy may appear larger partly because more basic social needs are routed through high-cost private markets. That raises measured GDP, but it does not always raise welfare.
I live in New England and have about 30 days of paid leave (PLUS sick leave) per year. I also have a 35-hour work week. This is what can happen if you're unionized, even in the U.S.!