Question: Compare the evolution of productivity between USA y UE during the ’80 and ’90.

Trends Factors explaining the different trends racism

The productivity between United States and Europe during the ’80 and ’90 are different due to several reasons. On a big scale, they both have different social models. For example, Americans and Europeans think differently about poverty, inequality, redistribution of income from the rich to the poor, social protection, and welfare. Americans believe that the poor should take care of themselves and on the other hand, Europeans believe that the government is primarily responsible to help out the poor from their poverty. Europeans consider themselves less happy when inequality increases even as many other individual and social indicators that determine a person’s happiness remain constant. Americans do not consider themselves to be less happy as inequality increases, and neither are the American poor as upset by inequality as the European rich are. Europeans freely and willingly choose to have a larger welfare state, with all associated costs in terms of taxation and regulation, because they dislike inequality. In Europe, the regulations on taxes are very strict so people contribute to paying them. As in the US, they are much easier and not much stricter on the regulation so people are much easier to find a way for not paying taxes. In my opinion, taxes are also related to racism. Since the majority/minority society exists in the US and Europe, the majority of people thinks that the minority is eating up the economy and thus they think the amounts of taxes they are paying are not fair. Europe spends twice as much as the United States on social programs (roughly 20 percent versus 10 percent), and total government spend in Europe is close to 50 percent of GDP, whereas in the United States, government consumes about 30 percent of GDP. The gap between the output per capita in Europe and in the United States existed since their concept on working is different. From the 1950s to the 1970s Europeans were working harder than Americans and were just as productive. From the mid-1970s to the mid-1990s Europeans began to work less and less, but their rapid hourly productivity growth allowed them to keep pace with hard-working Americans. In the United States these were years of concern about slow productivity growth. For the last ten years, however, not only have Americans been working harder than Europeans, their productivity has been growing faster. At the same time, Europeans chose to have longer vacations, early retirements, and short work weeks. On contrary, Americans declare themselves happy to work more for more pay if they have the opportunity. So, in sum, Europeans want to work even less and Americans are happy to work as much as they do. However, if the Europeans work less and less and retire early, that will raise the taxes that pay for the expansive welfare state which leads to becoming poorer country relative to harder working societies. In conclusion, while all this was happening, technology was developing at this time as well and it was the core key for developing. The US utilized this technology well developing and improving the communication level which they then turn into services. However, Europe could not utilize this technology well which turned into a slower growth of output per capita.