Who's Really More Productive? Ranking the Top-20 US vs European States

While famed New York Times columnist and Nobel Prize-winning Keynesian Paul Krugman has written, “Europe is an economic success, and that success shows that social democracy works,” University of Michigan economics professor Mark Perry argues quite a different story.

Based on recent data from the Commerce Department’s Bureau of Economic Analysis (BEA), Perry has compared the per capita output of the 50 US states to European countries and found that as a group Europe — in terms of GDP adjusted for purchasing power parity (PPP) — has a $32,700 PPP GDP per capita, and could likely benefit from learning a little something from even humble Mississippi, the poorest US state, at $32,764. Perry also highlights how even mighty Germany falls at #47 according to his measures.

Here are the top 20 from Prof. Mark Perry’s Carpe Diem blog comparison:

Rank | State | 2010 GDP per Capita (PPP)
*    District of Columbia, $168,327
*    Luxembourg, $81,383
1    Alaska, $70,814
2    Delaware, $69,880
3    Wyoming, $68,162
4    Connecticut, $66,022
5    New York, $59,596
6    Massachusetts, $58,339
7    New Jersey, $55,715
8    Virginia, $53,113
9    Colorado, $52,205
*     Norway, $52,013
10  California, $51,905
11   North Dakota, $51,882
12   Minnesota, $51,238
13   Maryland, $51,224
14   Washington, $50,912
15   Illinois, $50,581
16   South Dakota, $49,741
17   Texas, $49,119
18   Nebraska, $48,708
19   Hawaii, $48,697
20   Oregon, $48,590

Only two European countries — Luxembourg and Norway (the latter of which is neither part of the EU, nor does it use the euro) — even make the top 20. In fact, the list would need to extend all the way down to #31, Georgia, and #32, Utah, to find the next European nation, Switzerland, wedged in between. This is despite being the famed private banking center and, again, the non-EU, non-euro using nation that it is.

Of course, GDP adjusted by PPP does not take into consideration certain quality of life issues such as living standards, vacation time, healthcare, and a host of other factors… however, it’s interesting to note that at least by some measures, the US continues to come out ahead. You can check out the complete top-50 list in a Carpe Diem blog post on how Europe could get an economic lesson from Mississippi.


Rocky Vega,
The Daily Reckoning