– Mississippi has similar GDP per capita ($53061) than Germany ($54291) and the UK ($51075), so why are people in Mississippi so much poorer with a much lower living standard?

Question

I was surprised to learn that poor states like Mississippi have about the same gdp per capita as rich developed countries. How can this be true? Why is there such a different standard of living?

In: Economics

Answer 1

OP, the important term you use here is *per capita*. The US has the largest number of billionaires, by a large margin. And the largest number of millionaires by a **HUGE** margin. They’re in every state, including Mississippi and Arkansas. But all this wealth in America skews the *averages.*

Europe, particularly Northern Europe, has a very large number of citizens who live fairly well and would be considered mostly middle-class in the US, some even upper-middle class. But there are far fewer “rich” citizens than the US. The US has a significant middle class, a very large upper-middle class, a very large lower-middle class, and a significant “poor” population. Mississippi’s poverty is not at a per capita *Africa*-level, but significantly poorer than the poorest citizens in Germany.

All this is to say there is much more wealth in the US than Europe. This makes the average (per capita) higher, even though the wealth is not distributed as evenly as in Europe.