Europeans Are Becoming Poorer

https://www.wsj.com/articles/europeans-poorer-inflation-economy-255eb629

by albertop • 3 years ago

68 125 3 years ago

Mat37772• 3 years ago

How poor will we get if you add the green transition to the Ukrainian war?

pl-94• 3 years ago

Hard to say as the green transition is poorly defined. However, lack of transition is much easier to define and to evaluate. According to a recent French government report [1], the cost of non action is significantly higher than transitioning to a net zero GHG economy by 2050.

[1] - Rapport Pisani-Mahfouz https://www.strategie.gouv.fr/publications/incidences-econom...

Mat37772• 3 years ago

Kind of absurd to promote a hardly defined thing

Garvi4• 3 years ago

The doubling of energy prices pretty much wiped out the heavy industry sector around here. I remember the German heavy industry Rhein area unions protesting this in Berlin without much media coverage a few months ago.

picadores• 3 years ago

Let them eat environmental fanatics

Garvi4• 3 years ago

The protesters were quite clear it wasn't about any misguided environmental policies, but political ones. We used to get a lot of cheap energy from Russia. Now that pipelines are getting blown up mysteriously, it's a different world.

And before someone accuses me of not badmouthing "the enemy" enough, know that even Ukraine is still importing billions worth of Russian gas and petrol products and thus financing the war against itself. Funny how that works.

astrange4• 3 years ago

That's because Germany exports its image of being rational and methodical so hard they accidentally believed in it and forgot they're all naturalistic-mystic Green Party hippies and shut their nuclear plants down.

Garvi4• 3 years ago

I agree in principle. But the shutdown of nuclear reactors and subsequent switch to lignite coal burning power plants didn't affect the economy as much as it did the environment. Coal power is not more expensive, it's dirtier.

hef198983• 3 years ago

Industry sectors are not being wiped out that fast so.

Garvi4• 3 years ago

What is that statement based on? In my country heavy industry has halved in the past 12 months. I know multiple engineers who are now getting into software development because of it.

LatteLazy• 3 years ago

https://archive.ph/nzdtv

comfypotato• 3 years ago

The graph uses 2008, 2019, and 2022 as indices.

This could just as easily be a graph exploring the effects of the pandemic. I doubt Germany’s last tick would be in that direction were it not for the pandemic, for example.

code-blooded7• 3 years ago

I moved from the US to Europe a year ago and I think articles like this don't capture quality of life in Europe well.

Just think about healthier food, walkable cities, great public transportation, safety, free education and healthcare. The way I see it, life in Europe is less stressful and more enjoyable than in the US.

Having less money translates into having a smaller house or a car, but in my opinion that doesn't make you any less happy. You just need enough to live comfortably, which especially in tech is not that hard, and then you can focus on whatever gives your life meaning.

hulitu• 3 years ago

Having less money translates into having a smaller house or a car,

It is more like no house and no car. Prices of cars increased with 50 % .

FirmwareBurner20• 3 years ago

Prices of cars increased with 50 %

So has real estate.

seren2• 3 years ago

As a European, I can still believe this is true (maybe this is some kind of coping mechanism), but at the same time, I got the impression, that overall healthcare, education, safety nets are getting worse as time goes by, so I don't know how long it will stay an advantage.

At some point, you need to have the mean to finance these services, so stagnating GDP is not that good.

remarkEon2• 3 years ago

I've spent about a month in Europe for the last three years on vacation and travel there for work semi-frequently. I've considered moving (wife says no, for now). I agree with you on the finance part. I'd need to accrue some significant coin to make this move make sense financially (plus finish becoming fluent). What I'd tell you is this "cope" isn't really cope. Americans just don't have many options for cities that have clean and reliable public transit, beautiful architecture, and safe streets. There's exceptions, obviously. But ... those exceptions are not, say, Vienna.

Edit: I suppose it isn't just the transit and the architecture and the safety that's the draw. Many in America, even if they're "conservative" (whatever that means today), are willing to pay more in taxes if it means free health care and a functioning bureaucracy.

motbus32• 3 years ago

As a non European, I can see some patterns that happen to my country 10-20y ago. There is a systematic de-funding of education and health care to prioritise the same private sectors. It is hard to explain in few words, but at least in my country we realised it too late.

murderfs• 3 years ago

Europe, with the exception of the countries directly bordering Russia and Greece (buying weapons to point at fellow NATO member Turkey), has spent decades underinvesting in national defense, arguably freeloading under American hegemony. Now that that's coming to an end, expect things to get worse.

stuaxo2• 3 years ago

In the UK, our healthsystem was the best on most metrics before the Tories came in and now it's behind on most.

Next will be Kier Starmer for Labour who main promises seem to be to keep the policies of the incumbents.

(Health used as an illustrative area but this applies across the board).

m000• 3 years ago

At some point, you need to have the mean to finance these services, so stagnating GDP is not that good.

Shouldn't a stagnating GDP translate to a stagnating quantity/quality of services? If things are getting worse while GDP stagnates, it appears that there is a gross mismanagement of the same amount of resources.

And I'd dare to say, that this mismanagement typically boils down to the privatization of (previously) predominantly publicly-operated sectors. A soon as the publicly-operated provider shuts down, profiteering starts.

veave2• 3 years ago

I've read this comment (or variations of it) so many times I am starting to wonder if it's a joke that I'm missing. Or simply propaganda.

I understand that you are in tech and are happy with your position, but consider the lives of millions who are unemployed, or those who can't afford to turn their AC on or fix their car when it breaks down. Not to mention how much prices have increased.

code-blooded7• 3 years ago

There are poor people anywhere in the world. I have friends who only make a little more than minimum wage here in Europe and of course they cannot afford many things like nice vacations or perhaps even the dryer at home (people just hang clothes anyway - not a big deal :) ), but they don't live on the street, can still see a doctor, have a car or use the excellent public transportation, and are okay overall.

The last city I lived in the US was Seattle and there were people doing drugs on the streets in middle of the city and cops just walked by. Many homeless people actually have a job. Healthcare is insanely expensive. Education costs are a joke.

I'm not saying everything is great in Europe. The original point I was trying to make is that comparing salaries/wealth alone completely misses the point. Quality of life is more complicated than that.

hcks• 3 years ago

Europeans have a strong ability to cope for their declining standards of life.

They’ll mention how about they have great cities/safety/etc but you’ll notice they never say which city/country exactly they’re talking about (as in let’s pretend all of Europe is Switzerland)

astrange4• 3 years ago

Just think about having to post this comment every time Americans ask why you don't have ice water, air conditioning or clothes dryers, and why you have half their purchasing power and are buried in cookie banners.

Btw, the main reason people think European food tastes better than US is because we enrich our flour with extra nutrients. You just don't like the taste of iron.

code-blooded7• 3 years ago

But I do have A/C and a clothes dryer. Again, things like that are easily affordable if you work in the tech or professional fields in Europe.

raverbashing• 3 years ago

Dryer - check (it's the slow type but I'll get back to it in a minute)

Fridge - regular sized ones (that is, full height) are not uncommon

AC - not a problem in the hotter places and it is getting better in the not so hot places (also if you're booking an Airbnb definitely check this)

"oh but the dryer doesn't do anything" it absolutely does, for most of them select the 'Iron' or 'Cupboard' level of dryness instead of the time. It does take a long time, so just throw it in the night and have a day/night or peak electricity contract. Unless you're overloading it or think someone would go out in 5C/40F weather with humid clothes

roydivision• 3 years ago

(European, working in IT). Agree for the most part. However getting used to it is an other matter. My money used to go much further, pay rises are rarer, the cost of living is going up. One feels like one is running to stand still sometimes.

edem• 3 years ago

Where you live (which country)?

code-blooded7• 3 years ago

Poland. I travelled around Europe and chose Poland for a mix of personal and quality of life reasons. Whenever I mention Europe I speak about what I observed in majority of places I visited in Europe though.

prasoonds• 3 years ago

I assume you're a tech worker - that places you in the top 5-10% of the population, wealth and income wise. Most of the 'other half' isn't doing so well - living in shared apartments well into their late 30s, never being able to afford a home, no kids, no travel except for a handful of cheap spots and staying in hostels, eating out perhaps a handful of times a month, many small quality of life things that add up (old crappy phones/laptops, no dish washer/dryer, buying cheap quality food in supermarkets because that's all you can afford etc.) and suddenly, life isn't so rosy.

walkable cities, great public transportation, safety

These are great upsides for sure, no arguments

healthier food

As I said, only if you can afford it. I would guess about 70-80% of the population can't - they shop at discount grocery stores and get cheap foods, usually of terrible quality

free education and healthcare

Healthcare is a sham. Pray that you don't need anything 'complex' ever. The GPs will talk to you for 2 minutes max, tell you something generic (go rest, green tea, ibuprofen) and tell you to be on your way. Getting appointments at specialists usually takes weeks on average and can often take months. It's very good if you have a costly treatment for a chronic disease, however.

Education is severely underfunded and getting your kids into a good kindergarten is a massive undertaking, especially in a large city. You have to start usually an year in advance. Higher education, while free, is likewise underfunded (look at any university rankings for research output)

The collapsing population means that the pension liabilities of countries are growing quickly and pretty much everyone who's working age today should expect their pension to only cover 25-50% of their living costs. But, no one's saving anything and people don't seem to realize this fact.

Yes the quality of life is decent - for now. The trajectory of many things that make it so however appears to be going downhill. The worst part though that that most europeans have their head in the sand about it and as a result, no one's pushing for any changes.

I love living here but for all the things I said before, I don't think I'll stay.

FirmwareBurner20• 3 years ago

I assume you're a tech worker - that places you in the top 5-10% of the population, wealth and income wise.

No, it doesn't. I live in Austria and as a tech worker you're not in the 5-10% income. As a tech worker you earn as much as the unionized tram-driver, ~2500 Euros net/month.

Also, INCOME != WEALTH. It takes time and a big income to build wealth and we don't have that, and most wealth here is inherited cross-generation via zero-inheritance taxes. There's people making minim wages spending all day smoking weed and walking dogs, who's families own entire apartment blocks and several houses, yet you'll pay way more taxes than them and be financially less well off.

If you move here for work, the high taxes, low wages means you won't build any wealth (legally).

I agree with your other points. All the great social services in Europe are underfunded relative to their usage.

FirmwareBurner20• 3 years ago

I moved from the US to Europe a year ago and I think articles like this don't capture quality of life in Europe well.

Europe isn't a country. Where exactly in Europe did you move?

code-blooded7• 3 years ago

Poland. I travelled around Europe and stayed for 1+ month in several places last year before ending up in Poland. Since I have recent first-hand experience with multiple countries I say "Europe" when it applies to what I observed in majority of the countries I visited.

r00fus3• 3 years ago

The entire concept of "wealth" in the US is perverted - there's general ignorance or disdain for socially-owned wealth, instead of it's wealth extracted from the ground or populace or biomass and converted into personal wealth (then aggregated into a metric like GNP).

As someone who had a chance a decade or so ago to emigrate to the EU from the US, I regret not doing so every time I hear of a school shooting or visit the EU and see how much actual health/enjoyment for normal people I see over there that's not visible here.

mmmmmbop• 3 years ago

What stops you from moving to the EU now?

shaburn• 3 years ago

You trade a higher average on the lower end for upside for the majority.

seren2• 3 years ago

In an environment with rising energy prices it is hard to compete with a net oil exporter.

However, it means that Europe should invest more in nuclear and renewables to stay relevant. But the war in Ukraine is not helping I guess.

But the 2008 vs 2023 comparison is really sobering.

gumballindie• 3 years ago

Hm dubious article. Fails to mention that while west europeans are indeed getting poorer east europeans are getting richer. Confused folks might say that east europe is becoming richer thanks to eu funding and i will remind them that that comes at the heavy price of having sold entire industries to said benefactors - whom often underpay despite colossal profits, essentially making development more … challenging. Nonetheless decades of hard work seems to pay off for the “cheap labour”.

I would suggest that europeans try and work together in some sort of union of cooperation and mutual respect. If there was such a union then certainly the whole continent might fare better. Just a thought.

hef198983• 3 years ago

Yeah, and most of the article, which is allmover the place, focuses on the period right after Covid (bad for Europe as an export heavy region) and the war in Ukraine (it changes things if a war happens right next door). Inflation is a serious problem everywhere, and yes the tendency of rich European countries to favor austerity didn't change. Greece is fucked since 2008, in order to save investment banks, nothimg new here.

In short, the article uses some nice ancdotes, throws in special cases, puts some statistics and numbers (without additional explanation of how those numbers are calculated) on top of all of that only to justify the narrative behind the headline. So, all the mortal sins (in my view) of numbers heavy journalism in one place.

Not that everything is rosey over here, but Europe is far from poor. And for some reason, we didn't have a recession yet neither. The article is well in line so with a lot of others pushing the narrative of neo-liberalism being the only saviour of a Europe on the brink of collaps (only a slight exageration).

ClumsyPilot• 3 years ago

having sold entire industries to said benefactors - whom often underpay despite colossal profits

And pay no taxes.

throwawaycol• 3 years ago

Does it have anything to do with lack of colonies?

UhUhUhUh• 3 years ago

Well, some Europeans are getting richer. Move along.

lucasRW4• 3 years ago

Western European are funding the eastern countries (tens of billions per year), plus, are accommodating hundreds of thousands of migrants per year. You'd have to be a full to think that at some point this does not translate into a serious dent into your economic health.

FirmwareBurner20• 3 years ago

Western European are funding the eastern countries

No they aren't. Western European countries are getting access to the eastern european consumer market to sell their products, and to the cheep Eastern European resources, products and labor to prop up their shortages for industry, labor and social services at the expanse of their own, through the EU common market. It's why Eastern Europe now pays the same or more for food and energy than Germany when it used to be significantly cheaper.

There's no free lunch here. You're making it sound like westerners are directly putting their money in our pockets. I checked my pockets and I don't have any western money in them. Your comment sound like your average fake Brexit propaganda.

lucasRW4• 3 years ago

It is true that the West can use the East's cheaper resources: but the benefits made there go into the pockets of those who own those businesses.

However, the funding of the East is spread across the complete taxpayer via EU contributions, which is in effect, a tax.

t8sr3• 3 years ago

Most new GDP growth since the 90s has and will continue to come from capturing new industries, like large scale web tech, genetic technology, space flight and modern investment finance.

For all of these industries, you need a critical mass of specialists and capital, and so they can only be captured by very large companies. (Although SMBs can survive in some parts of the value chain, which is where Switzerland seems to live.)

Americans (and the PRC) are very good at creating large new companies. Europe not so much - we have the money and universities, but also a lot of German Angst and a complicated internal market, not to mention heavy regulation.

Being around startups, I’m also pretty surprised how unsophisticated many EU investors are - good ideas get severely underfunded, while everyone piles into random ML and crypto scams, only to loose all their money.

Over time, this adds up to missing growth compared to the Americans. And we're so used to being rich that we can't conceive of what the continent will look like once the money is gone, so long-term economic outlook doesn't get much attention from the electorate.

polotics• 3 years ago

You seem to be under the impression that companies are things that exist inside of countries. I put it to you that, except for mafia led places where the rule of law doesn't exist (cough, Russia... but not only) companies are quite separate entities.

t8sr3• 3 years ago

This isn't Cyberpunk 2077. The US reaps huge benefits from having companies like Google, Facebook and Microsoft subject to their laws and regulatory oversight, and owned by their capital. This is why lobbying is such a profitable business.

pas5• 3 years ago

Countries doesn't have to be on the cutting-bleeding edge of innovation, what they need is to have sane tax laws to keep some of the economic surplus at home.

That said, yes, the startup scene in the EU is ridiculous, both investors and startups are subpar. There's too much nepotism and cronyism, entrenched interests, and other barriers to adoption for most products and services, and there's absolutely not enough capital for doing proper R&D, marketing and building a sustainable revenue stream.

t8sr3• 3 years ago

I don't agree. If Europe stops having pharma companies, then whoever does have them can dictate prices. If we don't have chip foundries, then we depend on the US and China for telecommunications, and need to live with their standards and their roadmaps. If we don't have investors, then all our new companies end up owned by Americans and relegated to a back office.

Being the place where the modern world is designed means you get a say in how it runs. If we give that up, it'll be the yanks' world - we'll just live in it.

rob742• 3 years ago

Many of the examples given in the article are complete rubbish:

The French are eating less foie gras and drinking less red wine.

foie gras involves torturing animals, and drinking less alcohol is healthier, so good for them!

Across Germany, meat and milk consumption has fallen to the lowest level in three decades

yes, more people are eating less meat - good for them and for the environment!

TooGoodToGo, a company founded in Denmark in 2015 that sells leftover food from retailers and restaurants, has 76 million registered users across Europe

using food at or past its sell-by date instead of throwing it away? Now we can't have that, can we?

At this point, I was waiting for a line about how so many of these poor, poor Europeans are now forced to use bicycles or public transportation, which must surely be because they can't afford a car or the gas prices. But luckily it didn't come (except for the poor woman who has to "share a car with her partner’s father").

lucasRW4• 3 years ago

So according to your "analysis", not going on holydays anymore, or to the restaurant, or having smaller houses, is not the sign of being less wealthy... "because it is good for the planet". Green-leftism summarized righ here !! :D

rob742• 3 years ago

No, I just wanted to suggest that some of the things mentioned in the article may also have other reasons than simply not being able to afford them. I am not in any way in dire straits financially, but I also look at the "reduced price" (due to sell-by date or for other reasons) shelf in the supermarket - not because I can't afford anything else, but in order to have more money for other stuff. And I also try to go more by foot, bicycle or public transportation than using the car - partly because of increased fuel prices, but partly also because it's healthier, better for the environment and I generally arrive at the destination less stressed out than if I take the car. Reality is more complex than the simplistic spin articles like this one try to put on it!

As for "having smaller houses", that's not as much because people are earning less, but because housing prices have exploded recently - that's a real problem that the article completely fails to mention, because it doesn't fit into its narrative (it also happens in the US).

Zealotux• 3 years ago

I assumed the article was playing on clichés to make a point; as a French, I spoke with my mother yesterday about how people buy lesser-quality food and sometimes skip meals more often.

She's volunteering at a food and clothes bank and noticed the increase in demand; even from the working class, the struggle is real. And, pardon me for the directness, but your patronising tone really isn't helping workers get on the side of what you see as "good".

thefz• 3 years ago

TooGoodToGo, a company founded in Denmark in 2015 that sells leftover food from retailers and restaurants, has 76 million registered users across Europe

I am a registered user and never used the service. I just forget.

r00fus3• 3 years ago

The real rub is that neoliberalism exists in Europe too. Just it hasn't completely captured or replaced existing systems... yet.

The struggle is real for non-wealthy everywhere as more and more is owned by fewer and fewer people. To paraphrase William Gibson: "the future is here, just unevenly distributed".

allarm2• 3 years ago

It’s not for you to decide what is good for the others.

WA2• 3 years ago

Don't believe any article that uses AVERAGES instead of the MEAN when it comes to wages, because average wages are worthless to consider and are more easily skewed by extreme outliers.

Since Jeff Bezos moved to our village, we're all multi-millionaires on average.

FirmwareBurner20• 3 years ago

Since Jeff Bezos moved to our village, we're all multi-millionaires on average.

Funny anecdote, but realistically how many ultra-wealthy like Bezos live in neighborhoods poor enough to significantly, distorrt the localc market? I think you'll find the ultra wealthy generally live in similar locations, seme as the poor, same as the middle class, and that goes in every country, from the US to France.

defrost2• 3 years ago

FWiW there's at least one person on the planet with a personal wealth > $10 billion that still lives on their multi generational station surrounded by native title lands populated by first nations people with no income or assets (other than an embedded 'nation' their family has held for at least 10K years.

MattPalmer1086• 3 years ago

Did you mean to say "instead of the MEDIAN?"

WA2• 3 years ago

Yes, my bad. I meant the median.

BillyTheKing• 3 years ago

There's a significant issue in that innovation isn't always at the forefront in Europe. The primary focus seems to be maintaining the status quo, particularly safeguarding pensions. Tbh this lack of innovative thinking is quickly becoming a pretty severe problem.

I was visiting a med island recently with both Americans and Europeans, it was evident how wide the income gap was becoming. The American members of our group, working in comparable positions and industries, had significantly more spare cash than their European counter parts.

I honestly hope that Europe addresses this lack of innovation and economic decline instead of just propping failing industries. Although it's important to recognize that the issue is not just bureaucratic. It's more deeply rooted in mindset and creativity — which is arguably much harder to overcome..

Unfortunately, creating an environment that encourages innovation, startups, and tech adoption isn't particularly straight-forward (especially if you're behind). It requires a cultural shift, coupled with decent policies and investment in top-level education

pas5• 3 years ago

There's a lot of innovative thinking, for example making healthier cities by getting rid of ugly roads and replacing them with bike lanes and public transit alternatives.

What's missing is investment to increase productivity of costly public services. Sure there are billions of funds spent every year on "economic activity encouragement", but as you mention it just ends up propping up failing businesses.

Basically the healthy nice cities are still in a big ugly messy transitory phase. Trains as still fucking expensive and slow, so people fly and drive a lot. (Integrated ride sharing and overnight train service would be nice, etc.) And of course there's the issue of housing.

FirmwareBurner20• 3 years ago

The primary focus seems to be maintaining the status quo, particularly safeguarding pensions.

Pretty much yeah, but is it a surprise that people vote to keep their cushy standards of living from the past?

Sure, none of those voters cares that the economic landscape has changed since the boomer times when Europeans companies ruled thew world and brought in the most profits and tax revenue, which allowed easy funding of the generous welfare system we enjoy, except that now we're not producing the same amount of money to still afford this lifestyle, so something will have to give, since the current trajectory seems to be ever increasing taxes on labor to fund welfare, while economic prosperity and competitiveness declines.

nunez• 3 years ago

NAME REDACTED, a 31-year-old anesthesiologist living in Manchester, England, earns about £51,000 ($67,000) per year for a 48-hour workweek. Inflation, which has been about 10% or higher in the U.K. for nearly a year, is devouring his monthly budget, he says.

That's insane. AFAIK, Anesthesiologists in the US make $400k/year MINIMUM.

(I redacted their name to prevent them from backlinking to this site.)

FirmwareBurner20• 3 years ago

And people on HN say that the wage disparity between EU and US is overblown.

pas5• 3 years ago

Brexit is working as intended, yeey! More NHS funding ... oh what, wait, what... oh dear, the xenophobe conservative clowns were lying? Oh no! Never would have crossed my mind!

nvm0n13• 3 years ago

Given one of the primary justifications for not leaving the EU was to retain access to unlimited cheap labor for the NHS, it isn't easy to blame low medical worker wages on Brexit. If you want medical staff to make more money, removing their primary source of competition is a quick way to do that.

In practice of course Brexit has done no such thing as the immigration rules in the UK are still optimized for mass immigration, as the Conservatives are so much not xenophobic that they prefer to enrage their own voter base than restrict immigration by even small amounts.

As for healthcare spending, the massive jump in NHS spending during the pandemic more than consumed the former EU contributions. The EU funds did indeed go to the NHS and then a lot more on top. If the UK was still paying in, then inflation would be even worse.

tim3332• 3 years ago

Brief googling gives Average base salary £100,082

the guy in 51k probably just started in the job.

shtam• 3 years ago

Only consultants will earn that, and only after they've been a consultant for several years (i.e. they've been working as a hospital doctor in total for somewhere between 12-20 years)

https://www.bmj.com/careers/article/the-complete-guide-to-nh...

The doctor quoted will likely be ST3 band, which means they've completed a 5 or 6 year medical degree, and then been a full-time "junior doctor" working in a hospital for 5 further years.

Doctors in the NHS are horrifically underpaid, and especially post-brexit there's a growing exodus to higher-paid countries (Australia, New Zealand, USA...).

tim3332• 3 years ago

They are becoming poorer

Seems dubious and based of a drop of 3% or so in real incomes between 2019 and 2022 caused by covid and the Ukraine war raising energy prices. Those are mostly over now - covid and the energy prices - and Europe will recover.

Europeans Are Becoming Poorer

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