A vague statement. For the expense of staying in a private room and eating out for 2 days in Amsterdam, you can spend a week in Croatia.
This, and the popular news heading you see about Americans not having enough savings are all meaningless. I find the Big Mac index to quite useful. I'm working on a new web site that we try to list a similar a metric (affordability of traveling to each country, factored by the traveler return rate, etc). Comparing EU with countries like Sweden, the Netherlands, France, etc vs Croatia, Romania, Bulgaria, is orange vs apples.
Spending a week in a hotel in Croatia doesn't seem quite so cheap if your salary is paid in Croatia, which is why although the press release doesn't qualify "holiday" it does provide a country by country breakdown indicating that most Romanians and Croatians and very few Swedes feel priced out of an annual holiday. Agreed that your own index sounds like it would be useful data for other reasons.
So is it fair to say "the percentage of Europeans who can't afford a 1 week annual holiday is steadily dropping and most recently sits at a low of 28%?"
The starting point for this series is the global financial crisis and the drop seems to be driven mostly by Eastern European countries whose economies have been rapidly growing over that time period.
This news heading is bad because they include 16 years old teenagers in the statistics. A majority of them are living with their parents, attending high school, and obviously having no income. I'd be more likely to agree with the report if it only includes people who are working, or 24 years old and up.
> In 2013 the corresponding proportion was 39.5%.
It's actually a great improvement. Going from 39.5% down to 28% in a mere 6 years (despite the bad statistics counting 16+ years old).
It's worth noting that in many cultures, 16 year olds have modest incomes and 24 year olds are expected to have at least a nominal employment history.
Not that folks under 24 can necessarily afford to finance week-long holidays. But it's not entirely out of the question for young adults going in together on a beach house or something.
> and the popular news heading you see about Americans not having enough savings are all meaningless
What? How is it meaningless at all? Because other countries are cheaper?
Edit: To elaborate (since OP hasn't responded yet)... Implying that it means nothing to have no savings because other countries is IMO just wrong. Moving to another country (especially from the states) is difficult and incredibly expensive. It's the same argument for within the states. "Well why don't you just move to somewhere cheaper?"
Because moving is super expensive and if you have no money, and no savings, how are you going to move?
Just pack up all your shit and move to Mexico, right?
> if you have no money, and no savings, how are you going to move?
If you have no money, and no savings, you probably have nearly no stuff too. That means, if you can get a days work at minimum wage, you can afford the cheapest bus trip to almost anywhere on the same continent.
If you want less risk, and can get 3 days work at minimum wage, you can afford a return bus trip incase you can't find work at the destination.
People don't move because they don't want to lose friends and family, not because they can't afford to.
>If you have no money, and no savings, you probably have nearly no stuff too.
I wouldn't bet on that. I know plenty of people who have lots of stuff, high credit card debt, and very little or no savings. It doesn't make sense to save money for retirement when you have any unpaid credit card debt because you'll be losing money, rather than saving it.
Family and friends are a part of affordability. They can provide housing, food, childcare.
Also, how long do you expect it would take to find a job in a new place? You'd need to cover living expenses until your first paycheck, which is an extra 2 weeks after you've successfully found a job.
The kind of job that people new-in-town-with-no-money get typically pay cash.
Being a cleaner for example, garden work, etc. That sort of job you can knock on doors and get there and then, and be paid for 3-4 hours each time. You can probably earn enough to pay for food in the first week (while sleeping under a bridge), and food and a hostel the 2nd week. Proper housing is far harder to get, because it typically requires a big deposit and proof of employment.
Because Americans don't "save" their money in traditional savings accounts anymore. They shove it in investment accounts of varying types (less common) or retirement accounts (more common). When there's an emergency we tend to put it on credit and then use the time that buys to get money out of one of those other accounts and pay down the balance. Even many people who are living paycheck to paycheck are making some sort of 401k contribution which, while not a proper "savings" slush fund, can serve the same purpose of being able to cover an emergency expense if needed.
Americans definitely keep emergency cash in savings accounts or at the worst, money market accounts. I doubt "Americans" as a generalized entity even have investment accounts, outside of whatever tax advantaged account employer offers.
By and large, "Americans" probably just don't have sufficient cash flow to create a decent emergency fund, and/or they lack the discipline.
I would hope that higher earners and higher educated are trying to keep at least 6 months of highly liquid assets available, i.e. cash in savings accounts or money market funds.
I too like the Big Mac index as a relative measure of cost of living the way that most people actually live their lives. I'd be very interested to see your new website once it is ready! Happy to provide some thoughts too if you're still hashing stuff out for it.
The other index should be called a Bankrupcy Index. Which would be a measure of a likelihood you'd go bankrupt or indebted forever, per country. Potentially extended with Credit Index - how likely is an average person to get a loan the size of local house, car or medical bill.
Because it's entirely fraudulent. The headlines keep claiming that around 40% of Americans can't afford a surprise $400-$500 bill. The actual number is around 12% according to the Fed survey that the headlines are intentionally misleading about. It keeps getting pointed out that the claim is false, however the propaganda value is too sweet so it keeps getting abused.
So which one of these is supporting your point and which one is not? I'm guessing the Cato Institute (formerly the Koch Research Foundation) is the one pushing the propaganda.
The Big Mac index is completely unrelated to savings in a country. You may not understand what these are telling people but that only makes them meaningless to you.
Oh but it is. BigMacParity index can tell you if you can afford the holiday in your country but not in another. I bet most people in EU can actually afford a semi decent holidays in the country they earn in. Obviously not all.
This is essentially a decent measure of "can you take x time of a break, spend a bit and not go bankrupt".
Except if you're Danish, students are always excluded when counting who's poor or not. Technically students are poor (mostly), but it's viewed a temporary, and therefore they're not included.
In America, only college students that live off campus and do not live with relatives are counted in the official poverty rate. I can't really see why they should be excluded, since they are living in poverty that is just often propped up by debt.
But, the census bureau also calculates an additional poverty rate that excludes college students.
It should probably only include people mid-twenties to mid-fifties or so, which should hopefully avoid most intentionally underemployed people. I care about breadwinners, not dependents.
I can see that going either way, depending on how the question is posed. Fewer 16-year olds may be able to afford a vacation paid from their own income, compared to the population mean.
But sponsored through parents/relatives, more 16-year olds than the population mean may be able to take a vacation, given your vacation at 16 years old is likely to be cheap, relative to an older person's vacation.
1. When I was 16 I couldn't afford a slurpee at 7-11
2. I had to stay in the UK (London) for weeks a few times (looking for work) and you can stay in a hostel for around 20 pounds a night, get a boris bike/bus or walk for like 5 a day and shitty food for less than 10 a day. Not exactly a 'fun vacation' but it's also one of the most expensive cities in the world.
3. What an arbitrary unit to measure wealth in. That's like asking how many pairs of jeans can you afford - well, are they from the thrift store or are they from the Armani Exchange?
Well, I'd say anybody that can't find a fun vacation staying at a hostel in Europe and walking around the middle of pretty much any city must surely have no imagination and/or also hate life in general.
I don't take 'vacations' per se. When I travel I like to go with a goal, let it be snowboard for a week or surf for the weekend in a nice spot, or just stay at a 5 star hotel drinking gin and tonic by the pool.
Any kind of city 'vacation' for me is hell. Hate it. Did many before, still hate them. Go see the Mona Lisa or some natural lake? bleh. Boring. Rather be at home drinking gin and tonic in my sofa doing nothing all day.
(to be fair, I lived in many countries, moved house and cities (and countries) pretty much every year. I've seen most of Europe has to offer (and didn't like it) and now nothing is better than just living near the sea. Spending some quality time with local friends and go surf or to the gym.
Seriously, hostels are the most fun way to visit any first-world country (if you're young, at least). Meet new people every day, with an obvious instant common topic to talk about. Super easy to schedule ad hoc adventures with your fellow hostellers.
As compared to a hotel, which will generally be just like every other hotel in the entire world, and you might as well have just gone to a hotel in your home city. Or the usual tourist traps, where you'll compete with a giant mob of people too busy checking off items on their checklists to chat or adventure.
The only way a non-hostel vacation makes any sense is if your #1 goal is to post selfies to make yourself look rich and successful.
>As compared to a hotel, which will generally be just like every other hotel in the entire world, and you might as well have just gone to a hotel in your home city.
What? If I'm trying to see the Louvre, a hotel in Paris is hardly interchangeable with one in, say, Chicago.
>The only way a non-hostel vacation makes any sense is if your #1 goal is to post selfies to make yourself look rich and successful
Or really any goal that isn't "hang out with strangers and sleep in uncomfortable beds".
You seem unreasonably certain that what you want is the only thing any sensible person could possibly want, which is utter nonsense.
I agree that hostels are fun for the reasons you said, but I've also gotten bed-bugs, I have shared a bunk with a dude who snored so loud he put ear plugs in his own ears.
I have been in a hostel with two scary ass dudes from a favela or something, luckily I wasn't the young, female solo-traveller they kept hitting on - literally: "kissy kissy?"
There are a million reasons to NOT stay at a hostel.
I like privacy, cleanliness, comfort, and I often need to be left alone to recharge after a long day. It makes sense for me to not use a hostel and I don't use any sort of social media.
Or conversely, "Nearly 72% of Europeans can afford a week long away vacation, up from only 60% six years ago."
In the US I suspect it's more like "[some percentage] of Americans can't afford to miss a week of work."
I intentionally avoided the 40% stat tempting because of the assorted '$400 unexpected expense' stories because as Bloomberg and others note it's partially due to sloppy reading of statistics. https://www.bloomberg.com/opinion/articles/2019-06-04/the-40...
> could not afford a one-week annual holiday away from home
You get in Europe around one month of paid vacation time. What people can't afford is to travel. The title of the article misses that point, but, it's clear in the article itself.
I'm surprised that Italy, 44%, is in such a bad position. Worse than Poland (35%).
I can't express how much the association between "not travelling" and poverty angers me. (Greta, help me here.)
Some people choose to live in a stressless small town, work less, commute by bike, pick up their kids from daycare earlier and have a great time gardening at home. If your surrounding already feels like holidays, why the heck would you get your ass stuck in traffic or a narrow cylinder?
Oh right, talking about the horror of being stuck in an airplane for 15 minutes makes a better story when returning to work.
But the study did not ask how many traveled for holiday. It studied how many could afford to do so, regardless if they actually traveled or wanted to travel.
So 28% of Europeans either (a) have little disposable income although they work hard, or (b) do not buy into consumerism and minimize working time. (a) is a problem we should fix, (b) is a very healthy lifestyle, both for oneself and the planet.
We are giving no indication how large is (a) and (b), but the tone of the article wants us to believe there is problem.
Why not look at more important stuff like: do you have decent living conditions, enough space, fresh air to breathe, good teeth, respectful working condition? Oh right, fixing air quality in Paris is more challenging than sending people away for a week.
Since it's "people", not "employees", it may well be about travel and time off for some. For self-employeed sub-contractors (i.e. the "gig economy"), time off means time not paid.
While studies like this are valuable, it's important to always consider context around data; highly recommend this article that explains why we should be skeptical [1].
In this case, the data is given to Eurostat by EU member states, who presumably collect income data for the purpose of taxation. This can create an inherent issue, as nobody would overstate their income, but many people would understate their income.
As a result, the percentage of Europeans who can't afford a 1 week annual holiday is likely lower. "By how much" is hard to tell, but it would be interesting to see if there's any anonymous income data collected for non-taxation purposes, from which we may get more accurate answers.
The data is collected with questionnaires; I checked one of them and it had literally the question "Could you afford a week’s annual holiday away from home? Yes/No"
I'm not sure not being able to afford a holiday away from home is such a bad thing- a staycation is much easier on the environment, not to mention the wallet. One does not need to travel away from one's home to relax and recharge, and requires no burning of fuel on trains or airplanes.
What does afford mean in this context? Does it mean people self-report that they can't afford to go on holiday or does it mean they did not go last time or is it a function of disposable income?
Without knowing the methodology this statistic isn't really that useful at all.
The American reward credit card "game" has made it really easy to travel at near zero cost. Since 2012 I've applied for, on average, about 5-10 new cards/year that come with extremely generous hotel, airline point, and travel cash rewards. I've taken international first/business class many times for free and stayed in very nice hotels that can average $500/night+. I seriously can't remember the last time I paid for a flight or hotel unless it was a very good deal.
The US is different in a lot of ways, but the insane generosity of rewards credit cards over the past 8 years or so (post recession) is something to behold. I can't imagine it will last forever, but grateful I've caught it as a young adult.
A household must first have the disposable income to utilize those types of cards in order to get the rewards, which makes your plan a complete non-starter for millions of Americans. Not to mention the required level of organization and financial savvy required to not let that type of credit card wheeling and dealing bite you in the ass.
As another credit card churner, there are a couple of notes I can add:
1. Always pay your card in full on time.
2. Signup bonuses are the only aspect of churning that is worth it to most people. If you can manage to spend $3000 on a credit card in 3 months, you can get signup bonuses that are definitely worth your time. $4000 or $5000 levels in 3 months exist as well and are better. Typical signup bonuses can be worth $500 at the $3000 level, representing a 16% discount on everything you buy.
3. You can pay your federal taxes on a credit card for a 2% surcharge, and most state taxes as well for a similar charge. This is best done as estimated quarterly taxes. Minimize your withholding at work to maximize the value of this. You can pay your utility bills ahead of time for free as well.
4. If you don't go for airline miles, the other option is cash back rewards.
5. An easy way to keep track of the cards: every time you apply for a card, take screenshots of the date and bonus criteria from the signup website. Save this in a google drive folder with the date in YYYY-MM-DD as the start of the folder name. Now you can easily track cards by date, and cancel them as needed.
Well now I hope I've made a few people a bit more savvy.
The point is the bonus points for spending x in 3 months not the points for the spend. 60k bonus points for the first 4,000$ spent is definitely worth..most points are 1.5 cents or so.
This is about churning, not regular rewards. Sign up for a new card, pay taxes on it among other things to meet the spending requirement for the signup bonus, get “free” $$$ for things you have to spend anyway.
Except you don't get “free” $$$ for things you have to spend anyway...
You get points you can use for vacation or travel.
If you NEED to vacation or travel, it IS simply a smart transaction. But if you weren't spending money on travel before than it can still result in increased expenditure even if managed perfectly.
Yes, this is a well designed system that letting the "poors pay for riches". All the customers pay for the system, and only high incomes can easily use the benefit.
> All the customers pay for the system, and only high incomes can easily use the benefit.
All the customers who don't pay their credit card bill in full every month, yes. Do that (i.e., don't spend money you don't have) and you too can benefit.
Honestly I think there are lot of people making enough money but just spend it all and not save for a rainy day. Just how many high end trucks and SUV you see people driving. Or expensive phones. Or eating out at expensive places.
Only to a certain extent. It's largely outweighed by the amount of benefit your credit score is receiving by eventually having multiple aged accounts. What the OP is describing is essentially a way for people to trade points from their credit score (provided people are at a level of disposable income to start playing this game) for straight up cash or loyalty points.
> Doesn't opening that many accounts every year hurt your credit score?
Yes.
However, you'll still be in the 80th+ percentile of credit scores. Additionally, the number of applications you've made contribute only around 10% to your credit score.
That sounds very strange to me, I am Canadian too, I have several friends who take 1-2 week holidays who make way less than the median software engineer.
Do all of your friends have kids and expensive mortgages, or what?
When I was growing up, until I was about 16, my parents never, ever went on vacations (their only vacation in their life had been going on honeymoon, 1 week to a city 300Km away... and staying in a room in their relative's house).
Now, after working all their life, they can afford some middle range vacations every year.
This is what people that take responsibility for their life do, I guess, so I can't see any problem with 28% of people not being able to afford something that is basically a luxury.
No it's not interesting. You are not "entitled" to travel for holidays, even in a society with a good social security net that ensures the basic needs of its citizens are met.
we, as humans, define needs. air is most essential. water is second. food less so, but not having it will still kill. then there is housing, which isn't strictly necessary. healthcare, which will expand your expected lifespan. and this is where things start to differ: europe thinks healthcare is a need, in usa that's very much up for discussion. now in europe whether you have a need for travel is also up for discussion. here in nl there are foundations which sponsor the holidays of poor families, for instance.
Instead of waffling about 16 year olds, did anybody notice that the underlying data source was provided, and is a dashboard that can be modified?
The URL is absurdly long, so I won't post it here but it is right there in the 2nd paragraph.
If I change the "Household Type" filter to only show "Households with Dependent Children", the EU-28 rate is 31.2% in 2017, with the lowest in Norway at 7.3%. The 2018 numbers are estimates.
There is a lot of information missing in this post. For instance, what is a 1-week vacation? Something about those numbers tells me it's using the average cost of a vacation in Europe, rather than a cost proportional to the income of a person in that country. Would help a lot if there was more to this article.
I recall reading about people in Italy who would pretend to go on vacation - closing up their houses - because they didn't actually have the cash to do so but were too embarrassed to admit it:
Yeah, parent's argument is one of the most interesting I've seen in a while: "I don't know any poor people, and no, I don't live in a bubble, so poverty doesn't exist!"
I believe it's noticed in Asia as well or at the very least Thailand. For example there's much less European tourists travelling to places like Phuket [0] and Pattaya [1] lately. Of course the strong Thai Baht (or the weak Euro) also plays a role in this.
I’m from Europe and would similarly call bs. Literally everyone I know can afford a one week vacation. And that includes a couple on social services one friend who’s on long term sick leave and a homeless friend.... but I live in a bubble on the far right hand of the chart; Denmark, not in Romania or Greece, so my personal experience isn’t that telling. That said I do think they are artificially pushing the numbers higher by including 16 year olds. For jobless teens it’s obvious they “couldn’t afford” vacation, but again every teen I know travels with their parents paying. I think 10% being unable to travel in Denmark is extremely overshooting it. It’s more likely less than 2% in the extreme scenario. As I said I know unemployed and homeless people who still have enough to travel.
Most of Europe has seen zero net economic growth for about 12 years. Simultaneously household debt has skyrocketed across most of developed Europe over the last two decades.
Many of the major economies in Europe have net contracted over the last 12 years, even as their populations have expanded (Britain and France for example). That's a recipe for falling per capita living standards (especially while populations are aging, so you have fewer workers and higher social welfare system costs).
When you adjust for inflation, the majority of countries in Europe have seen their economies contract since 2007-2008.
Here is what it looks like per capita from 2007-2017 (and many of the large economies in Europe are again teetering on recession, including Germany):
If you look at Britain, their economy is about where it was in 2004 on GDP, while having added 10% more population
For France, they're about where they were in 2003 on GDP. They've added 6% or 7% to their population in that time.
Germany has seen zero net economic growth since 2007-2008.
Italy has seen zero net economic growth since 2004.
Spain has seen zero net economic growth since 2006.
Russia has seen zero net economic growth since 2008 roughly.
The Netherlands has seen zero net economic growth since 2007. Their economy was $913b for 2018, it was $936b in 2008 for comparison. That's prior to an inflation adjustment (a conservative inflation adjustment is that their economy is ~20% smaller versus 2008).
Belgium has seen zero net economic growth since 2007.
Denmark and Finland have seen zero net economic growth since 2007-2008. Denmark's GDP in 2007 was $319b ($353b in 2008), in 2018 it was $350b.
Finland's economy was $255b in 2007 ($283b in 2008). It was $275b in 2018. A conservative inflation adjustment over those ten years would produce a meaningful contraction. Even worse, their economy was $141b in 1990, so they've seen almost no growth for nearly three decades. $141b adjusted from Jan 1991, is ~$268b today, per the Fed.
Poland has seen zero net economic growth since 2008. Their GDP was $533b in 2008, it was $586b in 2018. Even a very small inflation adjustment across ten years means they've seen zero real growth (or worse, a real net contraction).
Portugal has seen zero net economic growth since 2007-2008.
Greece has been set back to where they were in the mid 1990s, so they've lost 25-30 years.
This list keeps going. It consists of most of the large economies in Europe, with only a few exceptions (Sweden has done OK after an inflation adjustment, somewhere close to break-even; the Baltic states have done well). Countries like Slovakia, Czech, Bulgaria, Hungary, Belarus, Slovenia, Croatia, et al. have seen zero growth since 2007-2008 roughly.
That chart mostly reflects that the dollar gained a lot of strength over that time span since it converts to dollar at every years exchange rate, if you go back to 2000 you'd see that all of them gained huge amounts since dollar weakened a lot from 2000-2007.
Let's say that you are on social benefits. Let's say that this gives you 7 euros a day of budget (for most of Europe it's 2 or 3 times that or more). What prevents you from flying/hitch hiking somewhere (you can easily find Ryanair 3 to 10 euros promotion flights), and couch-surfing there? Bonus points: pick a place where life is less expensive than where you live, for actually saving money while traveling.
I kinda agree with you for Western Europe and if you have a really good social network. But that's not the whole Europe.
Let's take the big problem-country in their chart (Romania). Unemployment/social benefits = 100€/month (and you only receive that in the first year after you got unemployed, after that is less); also, you can be required to do social work if you want to keep the benefits (so no vacation for you!)
Minimum salary = 250€/month.
Median salary = around 250€/month (46% of employees are paid at minimum salary and some take less than the minimum as they are not fully employed).
Average salary = 600€/month (because around 10% of employees are in IT)
Average pension = 230€/month
"Normal" cost of living for a person is usually more than 200€/month.
If you're on a minimum salary you probably don't have any savings and you don't know many people outside the country. And you need to know someone quite well so you can couch-surf at their house. Also, people over 50 don't usually know English and the nearby countries speak completely different languages. Usually older people visit their (Western Europe) relatives with all the expenses paid by their relatives, so you can't say it's a real vacation that you can afford.
You cannot just sleep outside in general by law in most of the EU. Loitering is a thing. Not to mention weather is often not exactly accommodating, so you would need gear to do that, and while not especially expensive, it is not free either, nor that comfortable.
Quite a few people do take to tent hikes or biking trips which are cheap - excluding time and effort.
Unfortunately not much of a defense against bubbles. It depends more on how you are choosing the sample rather than how representative it is on 2 dimensions.
I personally know people over a wide range of wealth and income brackets across several continents, including unemployed; but I don't know anyone who is involuntarily poor, because none of my hobbies or social circles would bring me into contact with a person who was struggling to get by.
I'm too, and I've lived at my current place for 8 months and already I know somebody who cannot. At my old place in a gentrified location, I knew quite a few.
This, and the popular news heading you see about Americans not having enough savings are all meaningless. I find the Big Mac index to quite useful. I'm working on a new web site that we try to list a similar a metric (affordability of traveling to each country, factored by the traveler return rate, etc). Comparing EU with countries like Sweden, the Netherlands, France, etc vs Croatia, Romania, Bulgaria, is orange vs apples.