– 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

There are two groups of 10 people, each group has a total income of 1 million dollars. Yay!!!

In one group, each person gets $100,000. Not bad! They are all feeling fairly good.

In the other group, one person gets $820,000. The other 9 each get $20,000. If you look at that group, they look pretty poor overall.

But on paper? They both have the same overall income!

That’s super simplified of course, but that’s the reason. In Germany wealth is more evenly distributed. They get lots of social benefits, universal health care, better worker conditions, etc.