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  #1  
Old Posted Apr 18, 2012, 8:41 PM
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Why is the U.S. wealthier than Europe? Give credit to its cities. (Report)

Why is the U.S. wealthier than Europe? Give credit to its cities.


04/17/2012

By Brad Plumer

Read More: http://www.washingtonpost.com/blogs/...OfOT_blog.html

Quote:
.....

The United States, it turns out, actually derives more economic benefit from its cities than any other country on the planet. Roughly 83 percent of America’s GDP came from its “large cities,” defined as cities with a population of 150,000 or more. By contrast, China got 78 percent of its GDP from large cities and Western Europe got a surprisingly small 65 percent of its GDP from its large urban areas.

- The report’s authors argue that the city gap between the United States and Europe account for about three-quarters of the difference in per capita GDP between the two. In other words, the United States appears to be wealthier than Europe because it has a greater share of its population living in large, productive cities. All told, some 80 percent of Americans live in large cities, versus just 58 percent of Western Europeans. Why the difference? The McKinsey report explains language barriers in Europe have made migration from rural to urban areas somewhat slower on that continent. Also, various E.U. programs have “transferred funds from richer metropolitan regions in its member states to poor rural ones.” Government spending in Europe has helped limit urban migration.

- That’s noteworthy in light of the fact that various commentators have often complained that the U.S. Congress has a rural bias (in part because of the way the Senate is structured). David Leonhardt, for instance, has argued that, in the United States, “suburbs and rural areas receive vastly more per-person federal largesse than cities.” There’s some debate over Leonhardt’s numbers, but either way, the McKinsey report suggests that Western Europe has a much larger anti-city bias in its policies — and is somewhat poorer as a result.

- In 2025, the report predicts, about 600 cities around the globe will account for 60 percent of the world’s GDP. And one in seven of those will be located in the United States, with New York and Los Angeles number one and number six, respectively. (China, meanwhile, will be catching up fast.) “The United States has a broader base of large cities than any other region,” the report concludes, “and that explains their greater economic clout.”

....



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  #2  
Old Posted Apr 18, 2012, 8:52 PM
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What a nice little ego stroke for Americans.

The U.S. is "wealthier" because it has the richest people on earth in Hollywood, Manhattan, Cambridge, Washington, and the Silicon Valley. The big bucks are made largely in the U.S.A. That's all there is to it. However, if you remove that top 3% of overachievers, the U.S. looks a lot more impoverished compared to other developed nations.

Also, when will people get comparing one nation to a geographical region of many nations that have varying laws and cultures is not apples to apples?
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  #3  
Old Posted Apr 18, 2012, 9:19 PM
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Originally Posted by ue View Post
What a nice little ego stroke for Americans.

The U.S. is "wealthier" because it has the richest people on earth in Hollywood, Manhattan, Cambridge, Washington, and the Silicon Valley. The big bucks are made largely in the U.S.A. That's all there is to it. However, if you remove that top 3% of overachievers, the U.S. looks a lot more impoverished compared to other developed nations.

Also, when will people get comparing one nation to a geographical region of many nations that have varying laws and cultures is not apples to apples?
this place is the land of milk and honey if you're loaded but you're SOL if you're in the middle class.
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Old Posted Apr 18, 2012, 10:00 PM
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All I can say to this is: No shit. As I've been going on about for a long time, the United States is so polarized that parts of it are essentially 2nd or 3rd world while other parts are like 1/2th world. This polaration is noticiable when comparing cities to rural areas, but even more shockingly exists within cities where you can go from some of the richest places on earth to some of the poorest places in the United States in a matter of blocks.

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Also, when will people get comparing one nation to a geographical region of many nations that have varying laws and cultures is not apples to apples?
When will people stop comparing the third largest country on earth to nations that are a fraction of its size that have almost nothing in common with it from a demographic perspective?
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  #5  
Old Posted Apr 18, 2012, 10:10 PM
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^ Country vs country or country vs continent/geopolitical region? Hmmm.
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  #6  
Old Posted Apr 18, 2012, 11:06 PM
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The fundamental flaw this report makes is US cities = metro areas, European cities = city limits. It's the same "Seattle is bigger than Rome" bullshit I've been railing against.

The report states that 80% of Americans live in "large cities" (vs 58% of Western Europeans) and that the US has 259 "large cities" (vs WE just 186).
It states that New York is the world's second largest city (more like 11th) and will remain so until after 2025 and that LA will rise from 6th largest city in the world to 4th.

http://www.mckinsey.com/Insights/MGI...global_economy
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  #7  
Old Posted Apr 18, 2012, 11:09 PM
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inefficiency adds to gdp. it's good for the economy to drive two hours to your workplace. it just isn't any fun.
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  #8  
Old Posted Apr 18, 2012, 11:22 PM
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Okay, I'm really getting sick of this stupid urban population contest. Who really gives a damn at the end of the day? It's just numbers.
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  #9  
Old Posted Apr 18, 2012, 11:28 PM
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Quite a poor article comparing continents, or parts of, with a nation and with the diffination flaws Shiro points out well..


Personally I like that regardless of where you go in my Kingdom the options and conditions are the same - recreation, education, PT etc - and sure that comes at a price, but then again so does centralized cities..

There's no doubt cities are great for the economy, but so are rural areas with low land value where factories and manufactoring plants can be build - if we build that in Danish cities there would be no way the prices could compete with foreign competition, so we need the cheap rural areas just as much as we need the cities here.. and quite honestly despite the difference in US urbanity and land value I have a feeling it works the same way overthere..
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  #10  
Old Posted Apr 18, 2012, 11:48 PM
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America also keeps the spice flowing. It's the US that keeps global shipping lanes and trade open and safe. Period.
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  #11  
Old Posted Apr 19, 2012, 12:51 AM
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Quote:
Originally Posted by SHiRO View Post
The fundamental flaw this report makes is US cities = metro areas, European cities = city limits. It's the same "Seattle is bigger than Rome" bullshit I've been railing against.

The report states that 80% of Americans live in "large cities" (vs 58% of Western Europeans) and that the US has 259 "large cities" (vs WE just 186).
It states that New York is the world's second largest city (more like 11th) and will remain so until after 2025 and that LA will rise from 6th largest city in the world to 4th.


http://www.mckinsey.com/Insights/MGI...global_economy
I could not find how they measured the European Cities. What page did they state it on? Also the NYC as second largest was referring to GDP I believe.
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  #12  
Old Posted Apr 19, 2012, 1:12 AM
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I could not find how they measured the European Cities.
Me neither. This report is severly lacking. But it's clear that they're not comparing like for like as Western Europe has way more 150,000+ cities (metro) than just 186. Proof lies in that number. They do state that the 259 US cities of 150,000+ are MSA.

Quote:
Also the NYC as second largest was referring to GDP I believe.
"2nd largest city in the world in 2025 will remain New York...4th largest city in 2025 will be Los Angeles"

They're not talking about GDP...
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  #13  
Old Posted Apr 19, 2012, 3:28 AM
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Okay, if the report is bogus, then what alternative explanation do you have for GDP disparities? It's not just because of a few ultra-wealthy people; medians and per-capita incomes are also higher here.

So if the city premise is wrong, what's the right answer?
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  #14  
Old Posted Apr 19, 2012, 3:30 AM
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americans move more. they move house more often, and over greater distances, and they move more in daily life due to sprawly cities and long commutes.

moving costs money and adds to gdp.
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  #15  
Old Posted Apr 19, 2012, 3:42 AM
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"All told, some 80 percent of Americans live in large cities, versus just 58 percent of Western Europeans. "

They must be counting nearly all metropolitan areas as "large cities" in the United States. If we go by a percentile scale where the 100th percentile is living in Manhattan and the the 0 percentile is living in the wilderness in Alaska then the 20th percentile would be living in a place like Springfield, Illinois. Most people would not consider Springfield, IL a "large city".
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  #16  
Old Posted Apr 19, 2012, 4:13 AM
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As far as i know, the European Union has a slightly higher GDP than the United States.

EDIT: Oh wait, nevermind.

Last edited by JDRCRASH; Apr 19, 2012 at 4:24 AM.
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Old Posted Apr 19, 2012, 4:22 AM
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I have to agree with Shiro about the whole CSA/MSA thing---its not really apples to apples is it? More like apples and oranges.

Would be nice if the world had a uniform system for comparative purposes.
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  #18  
Old Posted Apr 19, 2012, 4:26 AM
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Quote:
Originally Posted by SHiRO View Post
The fundamental flaw this report makes is US cities = metro areas, European cities = city limits. It's the same "Seattle is bigger than Rome" bullshit I've been railing against.

The report states that 80% of Americans live in "large cities" (vs 58% of Western Europeans) and that the US has 259 "large cities" (vs WE just 186).
It states that New York is the world's second largest city (more like 11th) and will remain so until after 2025 and that LA will rise from 6th largest city in the world to 4th.

http://www.mckinsey.com/Insights/MGI...global_economy
that makes sense to me. if you live in a fairly rural part within the city limits of a suburb of chicago, you live in an urban area.
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  #19  
Old Posted Apr 19, 2012, 11:56 AM
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No Shiro this report use metropolitan or urban area for European city.
The two largest city named are London and Paris, not London and Berlin if city limits were used.
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  #20  
Old Posted Apr 19, 2012, 1:12 PM
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Quote:
Originally Posted by Minato Ku View Post
No Shiro this report use metropolitan or urban area for European city.
The two largest city named are London and Paris, not London and Berlin if city limits were used.
Obviously they made a change there, but not for other cities. Western Europe has ~300 >150,000 metro areas (do you want me to list them? ) and not just 186.

France alone has over 50 and this is by the INSEE method of 40% commuters. If we were to truely compare apples to apples and apply US Census methods (25%/15%) we'de end up with even more (maybe 500?, see how much GDP is generated in European "cities" then...)

http://fr.wikipedia.org/wiki/Aire_ur...aires_urbaines



EDIT-

This is my quick estimate of Western European metro areas >150,000:

Germany 80
UK 70
Italy 50
France 50
Spain 50
Netherlands 28
Belgium 12
Switzerland 9
Finland 7
Portugal 7
Greece 6
Austria 5
Norway 5
Sweden 5
Denmark 4
Ireland 2
Iceland 1
Luxemburg 0
Total: 391

Last edited by SHiRO; Apr 19, 2012 at 2:00 PM.
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