Things are not going well here in America. That is obvious to pretty much everyone who lives here. And yet, our democratic, free market heritage is not yet entirely squandered. That is perhaps most easily seen through the eyes of others, like Britain’s Telegraph, which documents how much better off we Americans are compared with UK residents:
Pay in Britain has long lagged behind the United States, with the average worker earning £17,000 less per year.
The average salary was just over £52,000 in the US last year, according to the US Bureau of Labor Statistics. But the UK equivalent was £35,000, according to the Office for National Statistics (ONS).
Many more statistics follow. The Telegraph is astonished that Chipotle store managers may earn a six-figure income:
Three years ago, US burrito chain Chipotle advertised that new hires could quickly make a $100,000 (£80,000) salary. The viral tweet became a sensation.
Fast-food workers in the UK make £18,000 a year on average, according to job search engine Glassdoor. How could their American counterparts be eyeing up a six-figure salary?
The case became a stand-in for all that was wrong in the country’s economy, from productivity to inactivity to the tax burden.
Those are all factors. The article includes a graphic that shows how much more money Americans make than their British counterparts, in 25 different occupations, ranging from bartenders to barbers. You may or may not consider it good news that American lawyers out-earn their British counterparts by the widest margin.
Recent trends have favored the Americans:
Real wages – the value of pay cheques after accounting for inflation – flatlined in the UK for years. After growing by an average of 33pc a decade between 1970 and 2007, stagnation set in after the financial crisis.
The recession in the US was shallower, and it recovered from it faster. This is borne out at the economy-wide level. Real US GDP grew by 2.5pc in 2023, compared to just 0.1pc for the UK – the country’s worst performance since 2009, and one capped off in the closing months by a slip into recession.
But why is America more prosperous? It isn’t an artifact of exchange rates or benefits packages, as analyses of Purchasing Power Parity show:
OECD data shows that in real terms 2022 dollars PPP, US employees made $78,000 a year to the UK’s $54,500 – some 43pc less. This means UK workers are considerably worse off than their US counterparts, all things considered.
So what is the bottom line?
The US’s low tax, low regulation environment has maintained its lead in this domain for more than a century.
The Democrats are doing their best to change that, but our free market heritage is not extinct. Not yet, anyway.
