If Britain were a U.S. state, it would be the second-poorest

chewmylegoff

Presumably once the Scottish referendum is done we'll be hearing from the Alaskan Liberation Front about how much richer they would be if only they were an independent country.

paddyrg

SnooksNJ wrote: »

That's my point. It seems unfair to me that the US is being called out on it when it happens everywhere.

Seeing as all food (all material! Anything tangible!) is 'chemicals' - proteins, hydrocarbons, elements, compounds, etc then it's a meaningless axis.

However, if we're talking about food processing, adding synthetically derived and non-native ingredients, there are things allowed in the USA that are strictly illegal in the EU. Bovine growth hormones coming through in milk, corn syrup in breads, colourings that have been banned in the EU. If you use that axis, it's a world apart.

Anyway, back on track - GDP/capita is not comparable between the two countries. How about land value per square mile? Quite a different picture.

Interestingly, as by far the most populous 'state' and a massively concentrated cultural and financial capital, before long ours would become the key 'state' (much like California is now) for politicians. Shortly thereafter we'd have a 'British' president. If we all play along with this and get him elected, he can change the currency back to GBP, move congress to London Westminster and rename it parliament... basically we'd get one of the colonies back by stealth ;-)

michaels

I wonder if there were a referendum on joining a European superstate or the US which way the UK would vote?

The issue seems to be not that GDP in UK is low but that the cost of living is so high, this is largely driven by the disparity in housing costs (planning restrictions) and general prices largely driven by the fact that energy (petrol specifically) is much more highly taxed than in the US. Against this we get the NHS and benefits which may not be included in the comparison.

I wonder what the ranks for median and bottom decile would look like if these were used for comparison instead of mean?

zagubov

ringo_24601 wrote: »

The only similarity the USA and UK share is language. We are entirely different culturally, morally, ethically, educationally and a lot of other -allys.

We should not be comparing ourselves with them

Per capita GDP is meaningless really

Our education system is already aping their's.
Heaven help us if we get their health service too.

purch

ruggedtoast wrote: »

Once you have added on the mandatory 25% tip because your server is only being paid $1.17 an hour as a basic rate, I cant see that they are any cheaper than here.

The Minimum Cash Wage for Tipped employees is $ 2.13 p/h and has been for decades.

For Federal Income Tax purposes the minimum wage including tip credit is $ 5.15 p/h

Many States including California and Nevada don't allow Tip Credit for minimum wage purposes, and have rates of about $ 7 p/h

princeofpounds

Does anyone know what the PPP adjustment actually consists of?

I'd be interested to know how significant a component housing costs are as a part of it.

In my experience, there is a great deal wrong with the UK apart from housing.

Our food is reasonably competitive in price - meat is pricier than it used to be but not extreme - and of reasonable quality.

Consumer goods like TVs etc. used to be much more expensive here than, say, in the US; that gap has moderated.

Our tax burden is no longer low compared to Europe, it's fairly high now, but it is not amongst the worst either.

The NHS is functioning ok these days, on average. Could be better, could definitely be far worse.

I suppose transport costs have substantially crept up, maybe I should remember that.

Almost everyone I know, even down to fairly low-paid workers, can have a reasonable quality of life (food, health, heating, education and basic transport) with one major exception - cost of housing.

I'd be interested if anyone has views on that position, I'm just thinking around the topic.

Generali

princeofpounds wrote: »

Does anyone know what the PPP adjustment actually consists of?

I'd be interested to know how significant a component housing costs are as a part of it.

In my experience, there is a great deal wrong with the UK apart from housing.

Our food is reasonably competitive in price - meat is pricier than it used to be but not extreme - and of reasonable quality.

Consumer goods like TVs etc. used to be much more expensive here than, say, in the US; that gap has moderated.

Our tax burden is no longer low compared to Europe, it's fairly high now, but it is not amongst the worst either.

The NHS is functioning ok these days, on average. Could be better, could definitely be far worse.

I suppose transport costs have substantially crept up, maybe I should remember that.

Almost everyone I know, even down to fairly low-paid workers, can have a reasonable quality of life (food, health, heating, education and basic transport) with one major exception - cost of housing.

I'd be interested if anyone has views on that position, I'm just thinking around the topic.

Don't forget that taxes are closely correlated with Government spending in the long run. Taxes in the UK have quite a long way to rise or spending, relative to GDP at least, must fall.

I don't think there's a single PPP calculation. They range from the simple (e.g. Tye Economist's Big Mac index) to the highly complex models no doubt used by institutions like the IMF.

I find Gillette razor blades make a pretty good proxy for a PPP measure. They're small and light so there's an arbitrage opportunity if prices diverge too greatly between countries.

princeofpounds

I don't think there's a single PPP calculation. They range from the simple (e.g. Tye Economist's Big Mac index) to the highly complex models no doubt used by institutions like the IMF.

That I know, I'm wondering which was used so I could understand the methodology.

Don't forget that taxes are closely correlated with Government spending in the long run. Taxes in the UK have quite a long way to rise or spending, relative to GDP at least, must fall.

fair point.

the_flying_pig

i don't think that the ppp factor is crucial.

e.g. looking at countrywide average gdp per capita, US vs UK:

on a ppp basis it's 53k vs 37k.
on a nominal basis it's 53k vs 40k.

so not night & day.

i should think that the UK appearing so low is basically a product of [these precise figures are obviously totally indicative, being both made up & not measuring anything specific (e.g. what am i saying the UK's position would be if the following stuff didn't apply? i'm not even trying to guess) ]:

say around 15% of the difference is due to the PPP adjustment [which in part reflects lower taxes & so on & may well fail to reclect the fact that healthcare's largely free here];

say around another 15% is due to 'GDP calcaultion' type differences between the two countries like all US healthcare & much more of US education being private. this might be as high as say 20% at a stretch, e.g. if you take into account the fact that most informed guesses would put the USA's unofficial/'illegal', population [i.e. not showing up as 'capitas'] at double or more what the UK's is.

but most, say around two thirds of the difference, is entirely genuine, and does show that the US is a 'higher income' country in the sense that it has, per capita, more big, profitable companies [tho almost exactly teh same amt of oil per capita]. it's a lot more unequal, of course, and i'd be very interested to see how say median incomes compared, but GDP, yes.

Generali

princeofpounds wrote: »

That I know, I'm wondering which was used so I could understand the methodology.

Clicking through the OP's article and on to The Spectator, it looks like the OECD PPP numbers were used.

http://stats.oecd.org/Index.aspx?DataSetCode=SNA_Table4

This is the chapter that deals with Housing in the OECD PPP calculations:

http://www.oecd.org/std/prices-ppp/7-3012041ec009.pdf

A link to the entire document is on page 1 of the chapter, however this part might help:

The standard way of calculating bilateral PPPs for a basic heading is first to calculate a Laspeyres type PPP between each pair of participating countries, then to calculate a Paasche type PPP between each pair and finally to calculate a Fisher type PPP between each pair. The Fisher type PPP between two countries is the geometric mean of their Laspeyres type PPP and their Paasche type PPP. The Fisher type PPPs are not transitive. They are made transitive by the Èltetö-Köves-Szulc (EKS) procedure.

princeofpounds wrote: »

fair point.

Cheers, I thought so.