Why is the US economy pulling ahead of Europe?

The US is trouncing comparable rich-world countries economically, enjoying higher growth and productivity. What is it doing so right?

Image of dollar bill beside building flying US flag
There’s been 73% productivity growth for US workers since 1990
(Image credit: Getty Images | Javier Ghersi)

In 2024 the average US worker will have generated about $171,000 in economic output, compared with $120,000 in the euro area (on purchasing-parity terms), $118,000 in the UK and $96,000 in Japan. That’s a big gap that’s been getting much bigger in recent decades. Since 1990, labour productivity has risen by 70% in the US, compared with 46% in the UK, 29% in the EU and 25% in Japan. A frequent objection is that US productivity is overstated since US workers get much less holiday time than their peers abroad. But even on a per-hour basis, the gap remains sizeable – there’s been 73% productivity growth for US workers since 1990 versus 55% in the UK, 39% in the euro area and 55% in Japan. And since the financial crisis of 2008-2009, US productivity has grown by 30%, more than three times the rate in the eurozone and the UK.

What’s an average worker’s output in the US?

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.