Where is it better to live: in Germany – or perhaps in the USA? Anyone looking for an answer to this question only needs to look at the relevant economic data, such as gross domestic product (GDP) per capita. Or the average income of a private household. The GDP per capita in the United States, for example, is $76,400, almost 58 percent higher than in Germany.
One could also say: Every US citizen generates a good one and a half times as much economic output per year as their German counterpart. Even if you take into account that you can buy more for your money on this side of the Atlantic than on the other side, the lead is still 21 percent. The situation is similar with household income. The result is clear: Americans are significantly wealthier than Germans.
So far, so good – so wrong. The Berlin economist Jan Priewe comes to this conclusion in an as yet unpublished study that was supported by the Düsseldorf Institute for Macroeconomics and Business Cycle Research (IMK). South German newspaper available in advance.
Accordingly, the USA does in some cases significantly better than the Federal Republic when it comes to the classic economic indicators. But if you expand the pool to a total of 80 indicators from 15 subject areas, from wage levels to income distribution, life expectancy and housing situation to time sovereignty and gender equality, as Priewe did for 2022, the result turns into the opposite: suddenly it is Federal Republic is ahead in ten of the 15 areas.
If one also takes into account the degree of differences, one point for small, two for large and three for very large distances, the comparison is even more clearly in Germany’s favor at 23 points to 6. The lead is particularly large when it comes to the environment, health, safety, work-life balance and equality.
According to Priewe’s analysis, Americans earn an average of 5.3 percent more per year than their German colleagues. However, they also have to work significantly more, 1811 hours. Because of the extended vacation entitlement and the significantly higher number of part-time jobs, German employees only work 1,341 hours. Overall, the average hourly wage in this country is noticeably higher, but at the same time the low-wage sector is smaller.
On the other hand, US citizens consume a whopping 61 percent more than Germans. However, the purchasing behavior of American super-rich as well as the higher number of single and pensioner households as well as the lower capital income in Germany play an important role. In addition, in the USA, expenses such as the ubiquitous daycare fees or tolls for roads and bridges are also included in consumption. At the same time, inequality between people in the USA is significantly greater than here. A good 15 percent of the population are considered poor there, and just under eleven percent of the population here.
The Federal Republic is doing better in every respect when it comes to health. Although healthcare spending in the United States is significantly higher as a percentage of GDP, average life expectancy is lower. There are also fewer doctors and hospital beds per 100,000 inhabitants and more fatal accidents at work.
Americans perform similarly poorly in the areas of environment and safety. Greenhouse gas emissions per capita are around twice as high as in Germany, and the share of renewables in energy production is only half as high. The differences in security are even more dramatic. For every homicide and one prisoner per 100,000 inhabitants in Germany, there are an incredible eight in the USA. Internationally, the United States ranks 155th on this issue – next to Russia. Germany is in 43rd place.
According to the study, things are looking somewhat better on the US housing market: both the ownership rate and the living space per capita are higher than in Germany. In his study, however, Priewe points out that the population density in the United States is many times lower and the quality standards of buildings are often worse.
The USA’s lead in education and research is also less clear than it seems at first glance: spending on this area, at six percent of GDP, is higher than in Germany at 4.4 percent. However, comparability is impaired by the fact that dual vocational training, which is very important in this country, is excluded from the statistics.
The gross domestic product says little about the situation of the majority of the population
When it comes to equality, things are clearer. In the corresponding global rankings, Germany clearly ranks ahead of the USA, where, among other things, there is more violence against women, no paid maternity leave and larger salary differences between the sexes. In general, Americans also have significantly fewer social rights than Germans: protection against dismissal and tenants is weak, there is no parental leave, no child benefit and practically no short-time work, and the nationwide minimum wage is just $7.25. While state redistribution in Germany reduces income inequality after taxes and transfer payments by 42 percent, in the USA it is only 28 percent.
Overall, says Priewe, the result shows how little GDP, which is supposedly the most important economic welfare measure, says about the working and living conditions of broad sections of the population and how great the influence of welfare state institutions and inequality in income and wealth are.
The comparison should not hide the problems in the Federal Republic, after all, low wages and poverty are also widespread in this country. Collective bargaining coverage is declining and the high level of health care is threatened. There is also a lack of affordable housing and urgently needed public investments. Mothers in particular are often only able to take on part-time jobs because there is no other way to reconcile family and work. Nevertheless, the expert concluded, the comprehensive comparison shows: If Germany continues to develop in the direction of liberal US capitalism, it has a lot to lose.