Study: Prosperity in Germany and the US – GDP comparison is misleading

The gross domestic product of the USA is 57% higher than that of Germany. Does this automatically mean that the American population is better off than the German population? The situation is not that simple, as shown by a study conducted by economist Jan Priewe with the support of the IMK of the Hans Böckler Foundation, which has now been published. The aim of the study was to record the social, economic, and environmental conditions for the majority of society, paying particular attention to the economically disadvantaged section of the population. To this end, the median values of a total of 80 different indicators were used to obtain a meaningful picture and to compare the situation for the populations of both countries.

The results showed that Germans are better off in ten of the 15 areas examined. Germany is ahead in the comparison, particularly in the areas of the environment, work-life balance, health, safety, and equality, due to factors such as a smaller gender pay gap, paid maternity leave, and less gender-based violence. In the US, on the other hand, there were significantly higher values for household income and consumption, as well as slight advantages in terms of housing conditions and the education and research sector. At the same time, however, poverty is more widespread there. These results can be attributed, among other things, to the fact that although US citizens may have a longer annual working time and therefore a higher household income, the average hourly wage in Germany is higher and the low-wage sector is significantly smaller here. These points also highlight the relevance of trade unions and collective bargaining agreements. Overall, the study illustrates how little gross domestic product alone says about the prosperity of a population. Instead, the author paints a complex picture of an overall situation influenced by various factors, in which the German population is in many ways better off than the US population.

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If you are particularly interested in the public affairs sector, we would like to recommend our CHECKPOINT Political Consulting event on May 16. There you can meet political consultancies such as 365 Sherpas, ADVERB, Hill & Knowlton, Fink & Fuchs, FleishmanHillard, and Johannsen + Kretschmer in person.

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