Functionally Illiterate US Workers Earn About the Same as Average Brits

A Financial Times analysis making the rounds has a stat that trader Twitter cannot stop chewing on: US workers who are functionally illiterate now earn roughly the same per hour as the average British worker. The comparison, built on OECD data by John Burn-Murdoch, is less a slam on Brits than a data point on how wide the transatlantic wage gap has become.

The numbers behind the headline

The same proportion of US workers who score stunningly low on literacy earn an average of almost $30 per hour, and two-thirds of them are in work. Their British counterparts make the equivalent of $20 and fewer than half are employed.

According to the analysis by journalist John Burn-Murdoch, based on OECD data, US workers who are functionally illiterate now earn roughly the same amount as the average British worker.

Why the gap keeps widening

Young people in Britain are some of the most well-educated in the rich world, but economic stagnation means that breeds not growth but frustration. In other words, the UK is producing skills its economy is not paying for.

This is illustrative of a broader blindspot in policymaking. Education policy is key to economic growth as a country moves from low to high income, but after a certain point the opposite force becomes stronger: the economy drives educational outcomes.

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The market read

For traders, the story is really about US wage strength and UK consumer weakness. Higher hourly pay across the American labor stack, even at the bottom, feeds directly into consumer spending, services inflation, and the Fed’s reaction function.

On the other side, sluggish UK wages keep the pressure on domestic-facing British names and the pound. It also helps explain why so much UK-listed capital keeps drifting toward US listings.

The counter-argument

The problem with the number is that it is from the OECD and measures income relative to a country’s median rather than absolute poverty. In other words, the statistic tells us where people stand compared with others in their own country, not about material deprivation as such. Cost of living, healthcare, and taxes still matter when you translate the hourly figure into a standard of living.

Options market and stocks to watch

Watch for continued divergence trades between US and UK-exposed names:

• WMT: Watch for how US low-end wage strength shows up in same-store sales and grocery mix.
• MCD: Low-literacy, high-turnover labor pool sits at the heart of the P&L; wage floor moves are worth tracking.
• MA and V: Cross-border spending trends between US and UK consumers show up in payment volumes.
• FXB: The pound remains the cleanest expression of UK wage and growth weakness.

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