Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Quality of Life, US is lagging

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The minimum wage in the United States is $7.25 per hour which is now, not even in top 10.

A single barometer is quite incorrect like per capita income. You have to look at in the context of Gini-cofficient or equality in distribution of wealth.

The Organization for Economic Co-Operation and Development developed a list of each country’s minimum wages. The ten countries with the highest minimum wages per hour (in USD) are:

  1. Luxembourg ($13.78)
  2. Australia ($12.14)
  3. France ($11.66)
  4. New Zealand ($11.20)
  5. Germany ($10.87)
  6. Netherlands ($10.44)
  7. Belgium ($10.38)
  8. United Kingdom ($10.34)
  9. Ireland ($9.62)
  10. Canada ($9.52)

You have to factor in a few other criteria to judge the quality of life.

1) Can you buy a house and take holidays: Median House Price divided by Median salary. If the country has ratio of 20 that means buy a house will take 50 years of savings if you save 40-50% of your after tax earning vs a ratio of 5 that makes a difference in your quality of life. This ratio has been going up since the 1980s due to interest rates and urbanisation.

Even this ratio of Median House Price to Median Salary is not completely right. The average house in Europe is half the size of house in Australia or Canada for the same price.

2) Free and quality public schooling

3) Free and quality public healthcare

4) Work culture: Nobody works outside 9-5 Monday to Friday in New Zealand. Some Australian self employed people prefer working on a Saturday. There are 25 annual leave and holidays in Australia and New Zealand compared to 10 in the US, also people work longer hours in the US on a working day. Norway, New Zealand, Netherlands and Germany are experimenting with 4 day work week.

US has been dropping on all criteria in the OECD average for over two decades. The one exception is the listed US companies which have excelled despite lowering quality of life standard relative to the OECD average.

Written by amitdipsite

March 27, 2021 at 1:21 pm

Posted in Uncategorized

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