Illiterate and innumerate Americans earn as much as average British workers (and average workers in other G-7 nations)

See The United States vs. Europe, Part VI by Dan Mitchell.

"What’s the best public policy:

1. A small-sized welfare state such as Singapore?
2. A medium-sized welfare state such as the United States?
3. A large-sized welfare state such as those in Europe?

I prefer Option #1. Sadly, almost nobody in Washington is pushing for that choice.

The debate in D.C. is about whether the U.S. should expand the burden of government (per-child handouts, Medicare-for-all, green new deal, etc) and become more like Europe (option #3).

I’ve written a five-part series (here, here, here, here, and here) explaining why that’s a bad idea.

All of those columns cite data showing that the United States is richer than Europe and that the gap is growing. The should-be obvious takeaway is that it would be a mistake for the U.S. to copy the policies that have resulted in lower levels of prosperity.

Today’s column will be Part VI in this series and it’s motivated by two amazing charts from the U.K.-based Financial Times. As you can see, illiterate and innumerate Americans earn as much as average British workers.

 

The charts also show that Americans at all levels of literacy and numeracy out-earn their British counterparts.

And it’s not just that the United States is out-performing the United Kingdom.

Here’s the same data for the G-7 nations (the major countries of Europe plus Canada and Japan). All of those countries, even Germany, lag way behind the United States at every level of literacy and numeracy.

 

The numbers for Italy and Japan are especially shocking. Illiterate and innumerate Americans have higher wages than university-level workers in those two nations.

But the data for the other G-7 nations is also underwhelming. Americans with the lowest level of education earn more than average workers in England, France, and Canada. And they almost earn as much as average workers in Germany (based on what’s happening in Germany, I expect that nation’s numbers to deteriorate in the future).

Looking at all this data, I’ll ask a different version of the questions I presented at the start of today’s column: If the goal is higher wages for workers, especially workers with limited skills, is it better to have smaller government or bigger government?"