Mission accomplished. We’re just like Europe, at least in terms of Gross Domestic Product per person (emphasis mine):
For quite some time, the US and the leading EU countries have been fairly comparable in terms of output per hour worked. The US has had higher output per person for two reasons: a relatively high employment/population ratio and very high average hours worked per person. The first of these is important because it raises the possibility that EU countries performing well on productivity measures are benefiting from the “Thatcher effect” . If low-skilled workers are excluded from employment, for example by restrictive macro policy, as in Thatcher’s case, or by labor market sclerosis, as claimed by critics of European institutions, then productivity measures are artificially boosted.
This issue is now moot. As a result of the crisis, the US employment/population ratio has dropped sharply, to the point where the US is now little different from the EU. The difference in GDP per person between the US and leading European countries is driven primarily by differences in average hours worked by employed people.
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Comments
The article is self refutung …
In the first paragraph he says
"If low-skilled workers are excluded from employment, for example by restrictive macro policy, as in Thatcher’s case, or by labor market sclerosis, as claimed by critics of European institutions, then productivity measures are artificially boosted."
Nothing he says is the second paragraph refutes it … he just ignores that and say the issue is moot.
Er, no. Possibly could have been more clearly written, but WAJ's point is quite valid. We have a false, artificially established unemployment number. If the true number were openly acknowledged we'd be on par with the EU. As it is "our betters" claim we are not. They – as usual – are dead wrong
This may be true, and is a valid concern. But when boom times return, I believe we have much more pent up productivity and capitol that will take us well beyond Europe in the next few years. Still, we need lower taxes and a more fair environment (not skewed towards public sector work) to get things back where we really belong.