No, Britain Is Not Poorer Than Alabama

Britain just loves confirming the worst about itself. Our tabloids thrive on stories that portray the country as a teeming mass of greedy migrants and workshy idlers, run by a parliament of elites in alliance with a small uber-class of the 1%. The truth is rather more complex than that, of course, but no newspaper will go broke telling Brits that their country’s gone to the dogs.

Take Fraser Nelson’s bleak diagnosis in The Spectator of how Britain compares to the poorest states in the U.S., which has been picked up widely by media on both sides of the pond. If Britain were somehow to become the 51st state of America, Fraser suggests, it would rank near the bottom:

This may shock Americans who stick to an outmoded idea of the United Kingdom as a sceptred isle of pageantry and gentility (though any Yank who has ever visited an urban center outside of London on a Friday night will know that it isn’t all tea and hunting parties). But are our poorest areas really comparable to the worst of Mississippi or Alabama?

The statistics tell only part of the story, and it seems Nelson has rather skewed them to favor his conclusion. In pure GDP per capita, the UK ranks 21st in the world. That’s behind the U.S., at 6th, but ahead of countries such as Italy, Israel and Japan. When compared to U.S. states, it puts Britain in the lower half of the table, nestled between Tennessee and Missouri.

It’s only when you adjust the UK GDP per capita for living costs—that is, when you factor in that a dollar goes further in the U.S. than its equivalent in sterling does in the UK—that the Brits sink to the bottom of the state-by-state listings.

But here’s the thing: Nelson doesn’t appear to have attempted to factor in living costs within the U.S. The idea that a dollar spent in New York goes equally as far as a dollar spent in Alabama is laughable, but the comparison he uses proceeds from that assumption.

In fact, the U.S. Bureau of Labor Statistics finds sizable regional differences in the Consumer Price Index, with the South some 21 points below the Northeast. There’s no easy way to work that differential into Nelson’s back-of-an-envelope study, especially as the BLS doesn’t break down CPI by state. But isn’t it a little inaccurate to factor in the living costs of the UK and not the states used as a comparison?

It is also a little simplistic to equate poverty with GDP, which measures business and government spending as well as individual consumer behavior. Poverty is better reflected by rates of joblessness, education level and life expectancy. The UK’s unemployment rate is 6.6%, roughly comparable to New York (36th among the states). The UK has a 91% high school equivalent graduation rate, which would put it in the top 5 among states. And the UK’s life expectancy at birth is over 80; that would rank it among the top 10 states.

None of this is to say that Britain—an island of roughly the same square mileage as Michigan, but with a population almost twice the size of California—doesn’t have huge structural economic problems, or its own areas of persistent blight. But it shouldn’t take an oversimplified comparison to Mississippi to make residents see them.

Nelson does, however, get one thing absolutely right. If there’s one thing the Brits enjoy more than despairing at their own squalid state of affairs, it’s smugly noting that at least the Americans have it worse.