Best Bang for Buck

Here’s an interesting benchmark on the purchasing power of a country’s currency -the amount of hours you need to work to buy a Big Mac. The survey conducted by Swiss bank UBS amongst 70 countries showed that it only takes 10 minutes of work in Tokyo to buy a Big Mac. The global average is 35 minutes. In Kenya, it takes 1.5 hours. “Wages only become meaningful in relation to prices -that is, what can be bought with the money earned.” Makes sense.

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16 Responses

  1. It’s not hard to believe that Tokyo is top on the list. They have after all, one of the highest per capita income in the world. But on the downside, the most expensive country to live in.

    Did you know that it’s cheaper to go on a vacation to the US of A than in Japan?

  2. That is why it is always true that “Time is gold”.

    If the survey includes the travel time getting the goods (as variable), then Philippines would be on top. Imagine the traffic in Metro Manila.

    It is faster to have a lunch in HK than going to Makati from Cavite or Caloocan.

  3. Sngl – yes you’re right. It’s cheaper for someone in Tokyo to fly to Manila and golf on the weekend than to take the train to Yokohoma and do the same thing. And to thing that Manila is some 4.5 hrs way by jet, it’s mind boggling. I guess the stat underscores the importance of the relationship between wage rates and prices.

    I recall during my vacation to RP last year the NIKE basketball shoes I bought for my nephews cost something like P3,000 a pair in Bacolod and for someone making P10,000 a mo, that’s a third of his salary. That’s saying someone in Canada making $3,000/mo would fork out $1,000 for a NIKE. huh.
    And to add insult to injury, we would probably be paying less than
    P3000($64) for the same shoes here. Silly indeed. The world is unfair.

  4. Myepinoy – since I don’t eat rice that much, I take my lunch rather quick! Yes, travel time in MMla is a total nightmare. I heard business folks in Makati have to check in a hotel in QCity if they plan to meet with a client in the area the following morning. Execs are given 2 cars so they can avoid the color code hassle and have access to a private car 7 days a week. MRT rail is great but if the planners don’t do something about expanding MMLA’s land area and at the same time controlling population, it’s going to be a disaster in the next 10 years.

  5. someone emailed this to me before. and hoenstly, i found it quite interesting 🙂

  6. This won’t probably apply in MLA because everyone eats chicken rice and not Big Mac 🙂

  7. Japanese earn more. That’s why most of them come to the Philippines to splurge their money here. Mostly on women. They even go to the extent of buying houses for their girlfriends and their girlfriends’ families. That easy for them, no? While many Filipinos take forever to buy their own houses.

  8. The world is unfair. The prices of goods and services in Japan is high but then wages are commensurate to make them affordable. I think this is key to an economy, that cost of living is made reasonable and inflation is checked. Even if salaries are low, it won’t matter if costs of goods and services are indexed it it.

    I’m not sure if globalization “lifts the boat for all” as it claims to do. I used to be sold on it but now I am wary. Forking out P3000 for a NIKE? P3,000 should be what you pay for an apartment and not a pair of rubber shoes. And really, why do people need to wear NIKE? It’s because of of global marketing – that’s what Pinoys see the NBA idols wear on games being broadcast on TV. I remember my dad wearing RP made ELPO rubber shoes in the old days.

    There used to be local made CONVERSE and imported CONVERSE in the old days. That’s just fine. But now, CONVERSE is only made in one place, perhaps China and everybody seems to be buying it at the same price no matter where you live in the world. Glocablization sure gives jobs and makes corporations richer but who gets dinged? Consumers in poor countries.

  9. i remember my mother-in-law saying something like, “kahit di na sana tumaas ang sweldo, wag na lang tumaas ang bilihin.” sounds ok, but wont happen.

  10. That’s the reason why the fake goods market is thriving here in Manila — “counterfeit chic” as they call it.

  11. Bing – As long as prices of goods are commensurate with salary, quality of life of people with not deteriorate. When the country doesn’t get a grip on inflation, the result is skyrocketing prices. Unfortunately, there’s only so much companies can increase people’s salaries, otherwise they themselves will go banrkrupt.

  12. Senor – you bet and it happens all over the world I guess. No one really knows what’s genuine anymore!

  13. Big Macs are very expensive here in Cambodia. First, you have to buy a plane ticket to go to Bangkok. Then, get a taxi to go to the mall. 😉

  14. LOL !

  15. i agree, benchmarking based on hours work is more indicative of the purchasing power of a currency. minsan kasi we tend to convert into peso kaya namamahalan tayo. pero if we think based on how much time we need to work before we can buy something, then we realize its not expensive after all. imagine the price of a large dominos pizza in the philippines is same as the minimum daily wage. in other words it takes 8 hrs of work to before one can afford a pizza. in developed countries, probably will only take 30 minutes to 1 hour work.

  16. agree with you. It’s such a drag to think that one has to work all day just to be able to buy pizza – medium or large?! Someone tells me that the cost Starbucks coffee in Pinas can buy you a kilo of pork!

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