IT ONLY TAKES nine minutes for a worker in Tokyo (Japan) to earn enough to buy a Big Mac but a wage earner in Manila will have to toil eight times longer or 73 minutes to be able to afford the same item, according to a UBS study.
“The quality and nature of many goods varies widely from one place to the next. This is compounded by regional influences that affect the characteristics and availability of individual products,” UBS’ Prices and Earnings 2012 report, published last Sept. 14, states.
“One commodity is especially well-suited for the purposes of international comparison by virtue of the fact that it is pretty much the same wherever you buy it around the globe: the Big Mac.”
The study found that among the 72 cities surveyed, it takes an average of 28 minutes to earn enough money for a Big Mac, nine minutes less than in 2009.
“A rise in global average wages can be observed compared with 2009. This has had a consistently positive impact on purchasing power for certain goods,” it states.
Prices and Earnings is an annual UBS report that compares the purchasing power of individuals with a standardized basket of 122 goods and services. For the 2012 edition, 72 cities were surveyed from the end of April to the end of May.
“High absolute prices or low wage levels have only a limited bearing on the prosperity of a city’s population,” the study states. “It is only by comparing the two figures that we can establish how many goods and services can be purchased with a given level of income.”
Workers in Copenhagen were found to have the highest purchasing power in terms of gross hourly wages, followed by those in Zurich, Geneva and Los Angeles. Those with the least purchasing power were in Jakarta, Manila, Kiev and Nairobi.
Looking at purchasing power in terms of net hourly wages, Zurich led the pack, followed by Sydney, Luxembourg and Geneva. In the bottom were Jakarta, Manila, Nairobi and Kiev.
Looking at wage levels, meanwhile, Zurich, Geneva, Copenhagen and Oslo (Norway) took the top four spots, while Delhi, Jakarta, Manila and Mumbai comprised the bottom four.
With regard to price levels, meanwhile, Oslo, Zurich, Tokyo and Geneva were identified as the most expensive cities, while Delhi, Mumbai, Bucharest and Manila were the least expensive.
In last year’s Prices and Earnings report, Manila was in the bottom five for three indices: purchasing power, wages and prices. –KATHLEEN A. MARTIN, Reporter, Businessworld
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