The United States of America is a substantially wealthier society, on average, than is Sweden. Nevertheless, the poorest Americans and the poorest Swedes have essentially the same amount of money income — both get about 39 percent of America’s median income. Tim Worstall at TechCentralStation takes a gander at these numbers and concludes that even leftwingers should find nothing to admire about the Swedish model as opposed to the American — after all, the poor do the same in both places!
The trouble, as Max Sawicky points out, was right there in the text accompanying the chart (it’s in the new edition of The State of Working America) where Worstall found his data, “To the extent that these countries provide more social and economic support to their citizens than the United States, these numbers provide a somewhat incomplete comparison regarding the living standards of low-income people.” Obviously, however, the whole point of something like the Swedish welfare state is precisely that it provides more social services to its citizens. A more subtle and technical point would be that the chart compares incomes in terms of purchasing power parities (PPP) rather than market exchange rates. PPPs work by comparing what actual baskets of goods cost from place to place and thereby avoids distorting the picture with transient exchange rate fluctuations and captures the fact that consumer goods are generally cheaper in the USA than in Scandinavia. One downside of this method, however, is that “PPPs do not account for the cost of non-market social goods, such as education, health care, or child care, which are much cheaper for completely covered by public spending in many European countries relative to the United States.”
Now, as it happens, the United States is so different from Sweden in so many ways that I’m not sure this is an especially useful comparison. The United States isn’t going to become a small, highly urbanized country with an ethnically homogenous population and the Swedish economy has various non-replicable features, etc. Canada, by contrast, actually does resemble the United States in a lot of ways and its poor are substantially better off than are Americas poor, even while the American rich do better than the Canadian rich.
