Why does the US, a society with low union membership rates have much higher median salaries both before and after taxes and government benefits than in Europe where there are lots of powerful unions?

https://data.oecd.org/hha/household-disposable-income.htm

Medians don’t tell the whole story. Incomes for high wage earners in the US have increased disproportionately compared to European countries, while wages for middle and low income groups stagnated in comparison.

The value of benefits isn’t takin into account. Health care is a huge driver of inequality in the US. Tens of millions of you get minimal health care, and even many on health care plans only qualify for a fraction of the treatments Europeans take for granted. Education is another example. Overall the US system is fine, but the funding model is appallingly uneven with the majority of public funds ending up going to schools in wealthy areas. The national funding and provision models in Europe are far more egalitarian and, as with health care, much more efficient.

Even so, there’s still a legitimate gap in the US favour here. That can’t be denied. Arguably what Europeans get in return is peace of mind and a society that has their back. They know that whatever happens to them, they will get decent health care, their kids will get a decent education, and they’re more likely to get fair treatment from their employer.

> They know that whatever happens to them, they will get decent health care, their kids will get a decent education, and they’re more likely to get fair treatment from their employer.

And as a former manager once told me, 'one needs the constant fear of homelessness to keep workers in line'. That is the real engine of innovation /s

I don’t see how that can work. People in fear are going to be more risk averse, surely, and innovation is always risky.

I mean clearly the US is still a very innovative economy, it’s not like everyone is constantly in fear of starvation any second. But still, I don’t see how fear promotes innovation. There are many economic and societal factors in the US that promote risk taking and innovation, but fear of hunger in oppressed workers isn’t one of them.

It doesn't, I was being sarcastic.

I think you're confusing medians and averages. A median figure is not skewed by high earners at the top.

Second, the OECD adjusts for differences in government transfers like healthcare and education.

> A median figure is not skewed by high earners at the top.

That’s exactly my point. For “not skewed by” read “reveal the fact that”. Neither averages nor medians tell you much about the shape of the distribution, but the shape does matter.

Also you’re missing my point about education and health care completely. Yes the OECD accounts for their value overall, but that value is very unevenly distributed in the US. Much more so than in Europe. I also made a point about quality as against just spending.

Are you subtracting wages lost to both employer AND employee contributions to health insurance, co-pays and the like? That's the only way it's a fair comparison. Hell, even if we do earn more after accounting for that, living in a society with universal healthcare is worth something all it's own.

Yes. From my link -

"Information is also presented including social transfers in kind, such as health or education provided for free or at reduced prices by governments and not-for-profit organisations."

Bull.. ahem.. shit. If you want a fair comparison, compare the incomes of union workers vs non-union workers within the same country or COL area doing similar jobs. If unions would bring wages down, corporations would be all over that and will sign you up on the first day. Use your head, damn it.

We’re better at preserving the threat of new entrants. Truckers routinely start their own businesses here. That’s tougher in most of Europe, where labor laws making hiring and firing strikingly expensive.

> That’s tougher in most of Europe, where labor laws making hiring and firing strikingly expensive.

That is true. Personally and anecdotally I find that to be a good thing. I feel much more comfortable with 35h work week, 35 days of paid vacation making €60k without living in the fear of getting fired the next day.

Even if I could get more money in the US, I highly doubt that my standard of living would increase enough to justify the uncertainty that would come with this move. And I think that difference is even more extreme with jobs that don’t require years of education beforehand.

They’re frankly two perfectly good equilibria that do different things well. It’s part of what makes us good allies.

Healthcare costs in the USA eat those gains.

The OECD numbers adjust for both healthcare and education.

Americans are still making 25% more than Western European counterparts.

Do they? I could have sworn they just accounted for taxes. Do you have a citation? Do they also count employer contributions to healthcare premiums?

Not exactly something unions will solve, and not enough to destroy those gains on average.