Re: Indian cities cheapest, lowest earning - Report
- From: imemind@xxxxxxxxxxx
- Date: 11 Aug 2006 04:01:56 -0700
bobber wrote:
"Eerybody can effort to have those goods and services"
Thats exactly my objective also. But keeping price of services
extremely low destroys the incomes of poor unskilled population.
They suffer most when cost of living increases. low cost structures
allows them to live comfortably if not luxuriously. Even where base
line earnings are high, large section of people can barely live
comfortably. So it is a relative thing.
Your
dad was able to raise a family on Rs 100/PM because the maid charged 3
Rs/month, lived in a shack, ate just two rotis every meal, and could
barely afford milk for her kids. Same for the street cleaner, same for
the guy who worked in the neighborhood shop, same for the woman who
cooked at the neighborhood restaurant,
Actually free-lance maids and workers made more than average salaried
person. Because every family member generated income and they worked
for several hoseholds and employers. Even street hawkers made decent
money. Simply being awashed in consumerism does not generate quality of
life. Everybody lived by Simple living and high thinking - leftists
exploit it as poverty
far far worse for the 300
million landless laborers who got only food and no cash at all. It
does'nt has to be this way.
Solutions leftists offer guarantee that many will not have even food
and shelter. Because, as cost of living escalates, no amount of minimum
wage will be sufficient to buy basic necessities and it traps the
society in vicious cycle. In the west, constant escalation of minimum
wage has not kept up or eradicated poverty and homelessness and it
takes world's biggest welfare and charity setup to help keep everybody
wel-fed. To assume that minimum wages will take care of problem is to
live in fool's paradise. It creates a vicious cycle of escalating cost
structure until labor no longer remains competitive internationally and
loses out to automation or china.
By not having a realistic minimum wage law,
or not implementing the minimum wage law wipes out the income of the
lowest rung of the economy, and in a poor economy the base of the
pyramid is very very wide.
It can never be realistic or enough. Wouldn't it be nice if famhands or
housemaids made at lest one lakh/mo so they can keep up with highly
paid IT professionals? They too need to buy all that good stuff
advertised on tv and sold in nextdoor malls. But if farmhand or other
kind of basic services begin to cost in lakhs of rupee at minimum, rest
assured that everybody will have to fork out thousands of rupee for
each tomato and each potato - and forget being able to afford that TV
or dinner at nice restaurant, even minimum wage of several lakhs of
rupees will not be sufficient to provide minimum necessities.
For masses struggling to catch up with ever-expanding consumerist
lifestyle, it sounds very enticing to have higher wages and leftist
scoundrels seek to trap people in such vicious cycle to create captive
constituency that looks up to them for their wel-being.
One fact must always be kept in mind, the
poor are consumers also, they will keep you employed if you will treat
them kindly. If these poor at the base of the pyramid were given living
wages, they would have gone out and spent the money, generating demand,
which would have generated production, which would have generated
employment ---> leading to more demand. This is classical Keynesian
economics and it pulled out first US and later Weimar Germany from the
hole in early 20th century.
Liberal Keynesian economics has been discredited and discarded like
marxism. It has bankrupted usa socially, morally and spiritually and
landed their government, corporations and people on debt and welfare
that forces usa to wage agressive trade and wars to plunder and pillage
the world.
It could easily have pulled India into a
middle income economy ($4000-6000 per capita) by late 20th century if
only Nehru had adopted its basic tenets in entirety.
Per-capita is another one of loony leftist virus. It merely captures
expansion of commercialization, consumerism and escalation in cost
structure. If you can search google and find my older post on this
subject explosing the whole hoax
PC Mahalonobis,
his planner, throught mechanically like a mathematician, equating labor
with material in creating his input/output models. The problem was
that while price of labor was entirely under the control of the rulers
given India's massive population, the material price was determined at
international commodities exchange. The net result was that while labor
rates stagnated, material price kept pace with inflation and
international demand and supply. In a nation like India, or China for
that matter, the natural demand-supply laws are not going to help labor
because of the population size, so economics has to be suspended for
labor. Follow the current debate about increase in minimum wages in US
these days, demand supply is not in favor of labor, but politicians
know that people at the bottom of the heap are having problem feeding
their families, so they want to raise wages even though there is
surplus labor at current wage rate in the economy. This is how it has
to be. The increased wages will raise prices a little bit not that much
if its an open competitive economy and labor will spend the money,
creating demand.
Yes. Give them million dollar and that should expand the demand million
fold. And why stop at million if it is that good?
The effect will be that of transfer from capital
owners' surplus to workers' pockets.Reading too much Marx.
imemind@xxxxxxxxxxx wrote:
bobber wrote:
Its pretty well known already. The price of services in India is dirt
cheap. Purchasing power of Indian rupee in domestic market is among the
highest in the world.
Those who harp on dollar value of our wages do great deal of disservice
to those very poor who need the low cost structure of the economy in
order to maintain comfortable living standard. It is not how much one
can earn but how much that money can buy is the true test of a healthy
economy. My dad made rs100/month and yet we were able to live like
middle-class in sixites. Wage levels define the cost we charge to each
other for our services to each other - it creates the cost structure of
an economy - we have to keep it low enough so that everybody can effort
to have those goods and services. Remember, escalation in cost of
living increases for everybody but earnings do not go up uniformly for
everybody - it punishes the poor the most. I donot understand why
Indian leftist intellectuals are trying to promote wage and
cost-of-living parity with dollar-based economies of the west by
constant comparision of Indian wages in dollar terms? Are they
patronized by west to remove cost advatantage that Indian economy
enjoys in global economy?
Mobius wrote:
Revealing report, actually. Check the bottom ends of all the charts in the
following link. (I was not able to append them to the text quoted
below)
http://www.ubs.com/1/ShowMedia/media_overview/media_global/mediareleases?contentId=103132&name=PuL_2006_en.pdf
Zurich / Basel, August 9, 2006, 08:00 AM
2006 UBS Study "Prices and Earnings"
A global comparison of purchasing power in 71 cities around the world.
Four European cities and Tokyo most expensive - highest wages in
Scandinavia, Switzerland and the US
a.. Oslo, London, Copenhagen, Zurich and Tokyo are the world's most
expensive cities.
b.. With the highest net wages, Zurich and Geneva, followed by
Dublin, Los Angeles and Luxembourg, lead the pack in purchasing power.
c.. People in Asia work the longest hours - almost 50 days more per
year than Western Europeans.
d.. Asian workers at least partially compensate for low purchasing
power through longer working hours.
Oslo, London, Copenhagen, Zurich and Tokyo are the world's most
expensive cities in relation to a standardized basket of 122 goods and
services. The UBS study "Prices and Earnings" shows that life is
particularly expensive in London and New York if the cost of housing is
included. The basket of goods and services costs the least in Kuala Lumpur,
Mumbai, Delhi and Buenos Aires.
New York and Chicago drop back
Shifts in rankings are mostly the result of changes in foreign
exchange rates. Compared to the 2003 edition of the UBS study"Prices and
Earnings", New York and Chicago have dropped in the rankings, mostly due to
the weaker dollar. Shanghai and Beijing, meanwhile, remain comparatively
inexpensive despite an economic boom, because the national currency, the
renminbi, has so far resisted pressures to appreciate.
Highest wages in Scandinavia, Switzerland and the US
In the cities of Western Europe and North America, workers in 14
representative professions earn a gross hourly wage averaging USD 18; in the
Eastern European and Asian cities examined, the figure was only USD 4 to 5.
The highest wages are paid in Copenhagen, Oslo, Zurich, Geneva, New York and
London. In a comparison of net wages, the Scandinavian and German cities
lose ground due to their high tax rates and social security payments. The
shooting star in the international comparison of wages is English-speaking
Europe, with Dublin and London new in the top ten.
35 minutes of work for a Big Mac
Wages only become meaningful in relation to prices, i.e., what can be
bought with the money earned. A globally available product like a Big Mac
can make the relationship between wages and prices much clearer. On a global
average, 35 minutes of work buys a Big Mac. But the disparities are huge: In
Nairobi, one and a half hours' work is needed to buy the burger with the
average net hourly wage there. In the US cities of Los Angeles, New York,
Chicago and Miami, a maximum of 13 minutes' labor is needed. Although the
comprehensive comparison of purchasing power and gross wages puts them at
the top of the table, higher production costs mean that workers in Swiss and
Scandinavian cities need 15 to 20 minutes for their Big Macs. After buying
the study's basic basket of goods and services, earners in Zurich, Geneva,
Dublin, Los Angeles and Luxembourg retain the highest portion of their net
wages for discretionary spending like vacations, luxury items or savings.
Seoul has the highest, Paris the lowest working hours
Asian employees can at least partially compensate for low hourly wages
through longer hours spent at work. With a mean annual working time of 2088
hours, people work longest in the Asian cities. Based on a 42-hour work
week, Asian workers labor about 50 days a year more than their peers in
Paris, where a working year is just 1480 hours, or Berlin, where a years'
work equals 1610 hours.
An analysis of the historical data produced by the UBS Study of Prices
and Earnings, shows that Europeans have reduced their working hours in the
last 30 years in favor of more leisure time. Americans and Asians, on the
other hand, have a higher regard for earned income, it seems. Wage levels
and leisure time determine prosperity - but more leisure time leads to
greater prosperity only when wages reach an adequate level.
The Americas: New York the most expensive, highest purchasing power in
Los Angeles
A dollar earned in Los Angeles, after deducting taxes and social
security contributions, is worth more than in Chicago, New York, Miami,
Toronto and Montreal. Although the highest wages are paid in New York, it
also has the highest cost of living anywhere in the Americas. Thanks to
their much higher wages, after buying the basic basket of goods and
services, workers in North American cities have far more left over for
vacations, luxury items or savings than their counterparts in Latin America.
The average purchasing power in Central and South America is just a third of
the level in the North American cities.
The biggest upward jumps compared to the previous issue of "Prices and
Earnings" were recorded by São Paulo, Rio de Janeiro and Santiago de Chile.
Economic growth and currency appreciation have reduced both the price and
the wage gaps in relation to the North American cities. However, prices have
risen more steeply than wages, so that the North-South divide in the
distribution of purchasing power remains.
Asia Pacific: Large price and wage gaps
In no other region is the price spread between the most expensive and
the cheapest city greater than in Asia. While Tokyo lands in fifth place
among the world's most expensive cities, the region is also home to the
cities at the other end of scale, including Delhi, Mumbai and Kuala Lumpur.
Singapore and Taipei, as well as the two Pacific Rim cities Sydney and
Auckland, occupy the midfield in the comparison of prices and wages.. The
highest wages in Asia are paid in Tokyo, although the Japanese capital has
fallen seven places since UBS's last survey in 2003. The reasons for this
are the devaluation of the yen against the euro and a deflationary price
cycle that only ended recently. The highest level of purchasing power in
Asia is enjoyed by workers in Tokyo, Taipei and Seoul. Sydney and Auckland
have even made it into the top ten worldwide.
Europe: The internal market and the euro drive price convergence
Narrowing price differences for comparable goods and services are an
important indicator of market integration. Based on historical price data,
the newest UBS study of Prices and Earnings notes significant price
convergence within the EU internal market. The creation of a common market
and the launch of the euro as a common currency have contributed to reducing
price differences. The mean relative price spread among the cities of the
EU-15 in the survey has dropped by around a third since 1985. Having said
that, the harmonization of price levels is not a linear process. Rather, it
is subject to frequent bumps in the road to price parity. Market integration
is furthest advanced in the Eurozone. The recent addition of ten new member
states has again widened the spread of prices within the European Union.
Switzerland: No changes in high level of purchasing power
In the comparison of purchasing power, the Swiss cities of Zurich and
Geneva remain at the top. Public sector wages largely support this result,
since, in contrast to many emerging countries where teachers and bus drivers
earn far less than comparable professions in the private sector, these jobs
are comparatively well paid in Switzerland (and in Scandinavia). In terms of
prices, too, the Swiss cities are at the fore. Food prices in particular
confirm the country's image as a high-priced zone - only Tokyo is marginally
pricier. Price differences between Geneva and Zurich are narrower for
tradable goods than for services, which are some ten percent cheaper in
Geneva.
The UBS studies "Prices and Earnings" can be downloaded under the
following link: www.ubs.com/research.
Contact
The Americas
Andreas Hoefert,
Head Global Economic Research,
UBS Wealth Management Research
Tel. +1-212-713 3326
Asia Pacific
Yonghao Pu,
Head Wealth Management Research Asia Pacific,
UBS Wealth Management Research
Tel. +852-2971 8693
Europe and Switzerland
Simone Hofer,
Editor-in-Chief of "Prices and Earnings",
UBS Wealth Management Research
Tel. +41-44-234 4873
Daniel Kalt,
Head Economic & Swiss Research, UBS Wealth Management Research
Tel. +41-44-234 2560
Background
The "Prices and Earnings" survey, issued by UBS every three years,
presents a global overview of the prices of goods and services, wages, wage
deductions and working hours, and the resulting purchasing power in 71
cities on all continents. Information is based on a survey comprising more
than 35,000 individual data points. Based on historical data, the survey's
analytical section examines long-term trends in price convergence in Europe
and differing values attached to earned income versus leisure time, among
other topics.
Top Download media release
a.. Media Release including tables
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- References:
- Indian cities cheapest, lowest earning - Report
- From: Mobius
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- From: bobber
- Re: Indian cities cheapest, lowest earning - Report
- From: imemind
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