I was talking to some Germans today about the political and economic situation on both sides of the Atlantic, and one of the stylized facts that dominates such discussions is the idea that the German economy is doing much better than the US economy. Clearly, there's a sense in which that's true. But there's also the sense in which Germany is poorer than the United States:
That's because notwithstanding the lower unemployment rate over there, a lower share of the German population is actually working:
That in turn looks to be mostly driven by the fact that a much lower share of German women are in the labor force:
None of that is to deny the real strengths of the German economy—a great export position, a low level of unemployment, less inequality than we have in the United States—but it is a bit of context that I often see missing from this conversation. If over the next year the US actually converged on German economic conditions, I think people would actually be very cranky.