Who has the highest standard of living in the EU? Do Germans earn more than the French or Swedes? With this comparison calculator you can find out how well you personally compare with your salary in the EU.
The economic mood in Germany is somewhat depressed a few days before the European elections, and the economy is not really getting going. But compared to other European countries, Germans are still doing particularly well. This is clearly shown by an analysis by the German Economic Institute (IW). The interactive graphic also shows how income is distributed in the EU countries – and where you stand with your income.
As a comparison, the IW experts arrive at an average EU net salary of 1,529 euros. In Germany it is 1,942 euros. In order to be able to compare household salaries at all, the IW weighted the salaries according to the needs of the individual income earners and also took into account the different prices in the EU. Strictly speaking, all figures are “purchasing power adjusted euros”.
Germany ranks 6th in the income comparison
The country with the highest income is Luxembourg – by far at 2,750 euros. Austria (2,126 euros), the Netherlands (2,116 euros), Belgium (2,003 euros) and Denmark (1,952 euros) also have incomes with higher purchasing power than Germany, which ranks sixth in this comparison. In contrast, the average incomes in Greece, Slovakia, Hungary, Romania and Bulgaria are well below 1,000 euros.
In Bulgaria, the average income is 802 euros, just a little more than half the EU average. However, the Eastern European countries have recently been able to catch up significantly. “Incomes in Europe have become more similar as a result,” explains IW economist Judith Niehues. In the Czech Republic, for example, the average salary is now 1,300 euros, and Slovenia is even above the EU average at 1,572 euros.
Where you personally stand with your salary
In the graphic below you can see where you stand in this European comparison based on your personal income. A few assumptions are made, which are explained below. All you have to do is enter your income and the number of household members over 14 and under. You can select a different comparison country at the top right.
This is how economists arrive at their figures
For the comparison, the average salary in each country is used, not an average, but the so-called median. This means that there are just as many people with a higher salary as with a lower salary than the median. The calculation is based on the net salary, which means that taxes and social security contributions have already been deducted. And all types of income are taken into account, including pensions, interest and rental income.
The IW researchers then convert the respective family salary as if each member were a single earner. The economic researchers take into account that a real single person has higher costs than members of a family who share the apartment and everything else. This is called “needs-weighted income”. Finally, the German Economic Institute takes into account that you don’t get the same amount for one euro everywhere in the EU. For example, prices in Germany are higher than in most other EU countries.
Not all euros are the same – differences in purchasing power
This then leads to an income “adjusted for purchasing power” that is then comparable across the EU. In Germany, this is the aforementioned 1,942 euros. Because prices in Germany are higher than the EU average, the German average salary corresponds to the actual euro amount of 2,097 euros in German prices.
You can imagine it like this: If you were to spend your entire salary, but instead of shopping in Germany, you distributed your purchases equally across all EU countries, you would only need 1,942 euros for the same purchases (plus rent and so on). The fact that identical products are priced differently applies not only to countries with different currencies, but also within the euro area.
Incomes in Germany are more evenly distributed than in the EU
The authors of the study, Judith Niehues and Maximilian Stockhausen from the German Economic Institute, also looked at how income is distributed within each country. Income is most evenly distributed in Slovakia, Slovenia and the Czech Republic. Income is particularly unevenly distributed in Bulgaria, Lithuania and Latvia.
You can see the distribution of income in the graph above if you select a comparison country other than “European Union”. In this respect, Germany is doing slightly better than the average of all EU countries.
Important for the assessment: The comparison only refers to income. The IW experts did not take wealth in the EU states into account in their calculations. In addition, there are also differences between the regions within the respective countries, both in income and purchasing power. For example, you get more for your money in the Cuxhaven district than in Stuttgart.
Source: Stern
