The Illusion of European Prosperity

By John Gustavsson

Thursday, July 16, 2026

 

For Europeans who have long endured jabs from Americans about their relatively lower salaries and standards of living, the recently released Global Wealth Report by the Swiss bank UBS made for delightful reading: According to the report, Americans are not only not wealthier, but indeed significantly poorer than people living in even southern European countries like Italy and Spain. Predictably, the report was picked up by left-wing American commentators, who used it to take shots at the state of wealth in America. In reality, these numbers do more to highlight America’s strengths than its weaknesses.

 

Among the 58 countries ranked, America ranks second on average net wealth (assets minus debts) per person but drops to a humbling 28th spot for median net wealth. To the left, and to many a gleeful European, this is proof that while America may have a lot of money, it is all concentrated in the top, among the likes of Elon Musk and Donald Trump. For ordinary people, their reasoning goes, Europe’s system is clearly better.

 

As a European, I can only wish it were so. Unfortunately, the left’s interpretation has some serious flaws.

 

First, let’s talk about the demographic elephant in the room: While America has an aging population, it is not aging as fast as Europe’s. The average American is 39 years old. The average German, Italian, and Spaniard are all between four and ten years older. This “age gap” equals several additional years to accumulate assets. If America was a European country, it would be the youngest second only to Albania. On a related note, American families are still on average larger than European ones, and for all their blessings, children have a way of reducing their parents’ net worth.

 

Second, there’s debt — and Americans have a lot of it. Since liabilities are deducted from assets when calculating wealth, this effectively reduces the wealth of average Americans. This is, in part, due to medical and student debt, two issues that are either non-existent or barely register in the vast majority of OECD countries. While debt forgiveness would be both a logistical and morally hazardous nightmare for reasons other commentators have already outlined, conservatives stateside must take the issue of reducing both educational and medical costs seriously.

 

And there are two additional factors at play that are related to debt: Americans are, as evidenced by a multitude of behavioral studies, less risk-averse than their European counterparts. This translates into a greater appetite for consumer debt, which Europeans are less keen on.

 

The other factor is that the United States economy, contrary to popular belief, has fared extremely well since the financial crisis compared to the rest of the West. It may seem paradoxical that net wealth could fall as the economy booms, but rising wages and stable employment induce consumers into taking on more debt, as they — and their creditors — are more confident in the future of their cash flows.

 

Not a single country in the western and southern EU has outperformed the U.S. in real wage growth since 2008. To reiterate, this is wage growth and does not account for the much-maligned capital incomes of billionaires from the booming stock market. Ordinary people have, even with inflation deducted, seen their salaries rise faster than anywhere in the western and southern EU, and just about anywhere else in the OECD.

 

For comparison, in Australia, which comes in as a very strong third in the UBS median wealth ranking, real wages are lower today than they were in 2012. This is also true for Japan, the Netherlands, and Italy, which all outrank the U.S. on median net wealth. In fact, in Australia and Japan, real wages are actually still dropping. Under these circumstances, it is no wonder that consumers prefer squirreling away whatever they can over taking on debt.

 

It is true, however, that America has a high degree of both income and wealth inequality, and that inequality has grown since the financial crisis. What Europeans and left-wing Americans fail to understand, though, is that this is directly tied to America faring so much better for ordinary people.

 

Unlike the EU, America has a booming tech sector that accounts for a great deal of the stronger American recovery from the financial crisis, and the subsequent higher growth. This boom did not just turn Elon Musk into a trillionaire but also made high-earners and even millionaires out of perfectly ordinary Americans willing to educate themselves and work hard. The increased spending and investment of these people subsequently enriched not only their families, but the economy as a whole.

 

It is not just true of the tech sector. America’s inequality allows American doctors to earn 2.5 times their British colleagues, and that’s before taxes. Fewer than one in five British doctors still work full-time today, as marginal tax rates make it not worthwhile. This has resulted in deadly waiting times, and the number of Brits choosing to pay for private health care — on top of paying for the universal system through taxes — has almost doubled in just two years. Britain’s obsession with fairness has successfully reduced income inequality to levels lower than the Soviet Union’s, but at the expense of not just its tech sector, but also its flagship welfare state achievement, the National Health Service. And the rest of Europe is not far behind.

 

The recent focus on Europe’s lack of air conditioning has unfortunately served to distract from stronger contraindicators, such as the aforementioned flight from public health-care systems, that dispel the idea of Europe as a utopia for the ordinary man. Our homes do not simply lack air conditioning, but they also lack space: The average home in the EU is just over half as big as the median in the U.S. Even in Luxembourg and Belgium, which rank No. 1 and No. 2 respectively on median net wealth, average dwellings are 25 percent smaller than the American median.

 

None of this is to say that America does not have real economic issues. American net wealth has dropped since 2020, and real wage growth has also been very much tepid since then. But if America wants to get its groove back, it should not look longingly across the Atlantic Ocean but rather understand that it already possesses the recipe for success. The greatest threat to another late 2010s real earnings boom is not wealth concentration, but technophobic opposition to data centers and European-style preemptive regulation of the AI sector.

 

Properly read, the UBS Global Wealth Report neither indicts America nor flatters Europe. The gap between America’s average and median wealth rankings tells us more about demographics, debt habits, and growth than about who is truly better off. Imperfect though it may be, the low-tax, free-market system that has characterized America has allowed it to channel talent into high-productivity sectors, and it is the reason America today offers a better life for ordinary people. To get out of its funk, Americans should embrace and expand upon this proven concept, not chase illusory European prosperity.