Disposable income means income after taxes. It does not include any expenses, housing, health care, or otherwise.
from the OECD website:
> Income includes wages and salaries, mixed income (income from self-employment and unincorporated enterprises), income from pensions and other social benefits, and income from financial investments. It is less taxes on income, wealth, social security contributions paid by employees, the self-employed and the unemployed, interest on financial liabilities, and the change in net equity of households in pension funds.
The reason why the US has such high disposable income is because Americans have to pay for so much more out of pocket than other OECD countries do. Once you factor in health care, education and other social services that are cheap or free elsewhere, Americans are generally worse off than many OECD countries.
This isn't true. And while you're welcome to disagree with me, I've never seen anyone refer to it this way outside of this HN thread.
The Oxford dictionary states "income remaining after deduction of taxes and other mandatory charges, available to be spent or saved as one wishes."
Mandatory charges, to most people outside of this HN thread, are their bills and other common expenses. Mortgages, utilities, school and incomes taxes, etc are considered mandatory charges.
I'm not saying this to argue with you. Ya'll are welcome to interpret it how you like. But if you don't consider this perspective, you are going to misunderstand what other people intend to express when they use the term disposable income.
that may be what "mandatory charges" means to you, but it's not what it means in economic data.
mandatory charges are "mandatory" in the sense you are "mandated" by the gov to pay them; besides taxes these include social security contributions (some countries have more such "contributions"). The are no mandates (laws, regulations) that require you to pay for housing, food, education, etc.
I think the confusion is that _colloquially_ we refer to "disposable income" as meaning the money we can spend on things we want after we've covered all the essentials.
> It may include near-cash government transfers like food stamps, and it may be adjusted to include social transfers in-kind, such as the value of publicly provided health care and education.
Additionally from the OECD website:
> Household adjusted disposable income additionally reallocates "income" from government and Non-Profit Institutions Serving Households (NPISHs) to households to reflect social transfers in kind. These transfers reflect expenditures made by government or NPISHs on individual goods and services, such as health and education, on behalf of an individual household.
that still doesn't take into account the fact that US households must spend much more on healthcare and education than the expenditures made by EU governments on those same services.
Also housing is more expensive in the US (total cost, not per sqft), as is food; in fact, the cost of living in general in the US is more expensive than Europe or Japan, with the notable exception of cars and gas.
For example, I just searched cost of living in France vs USA and the first two sites I found gave similar figures of 30% more in the US. Not representative of all of Europe of course but an interesting data point.
Accrding to the wikipedia article you referenced, the OECD data is already adjusted for purchasing power parity (PPP), which is a cost of living adjustment. [0]
All the replies have me so confused, I have never heard an actual real life human being use the term disposable income to mean anything other than post-expense income.
So you have at least one other person who uses the word like that.
