Did you know that Mumbai has the lowest Cost of Living at the same time lowest wages when compared to the other 73 global Metro cities in the world?
Yes, thats what the 14th UBS Price and Earnings survey concedes. In fact, Both Delhi and Mumbai come at bottom of table.
Contents
Price Levels
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Oslo, Zurich and Copenhagen have the highest prices of the 73 cities comparison. Including rent (and energy), which accounts for roughly one quarter of the cost of living.
While Mumbai, Delhi, Manila, Kaula Lumpur and Cairo have the lowest prices of all the 73 cities.
As per the survey, the city rankings have changes since 2006 reviews. For Example, London which was 2nd most expensive place moved down 20 places due to Pound’s steep devaluation over last year.
Wage Earnings:
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In all of 73 international cities the employees in Copenhagen, Zurich, Geneva and New York had the highest gross earnings.
The undisputed champion in international wage comparison is Zurich. Net incomes are higher there than in any other city in the world. With its extremely high gross wages and comparatively low tax rates, Switzerland is a very employee-friendly country.
One the other hand, in line with price levels, lowest average wage earnings were found in the cities of Delhi and Mumbai, and in Jakarta, Indonesia, and Manila, the Philippines.
Domestic Purchasing Power
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This probably is the most important factor that should be seen while looking at overall cost of Living.
Purchasing Power can be determined by dividing the average annual salary by the total price of goods and services. This tells us how much purchasing power local wages have and
then compare which will reflect the rankings more accurately.
People in Zurich can buy the most goods after paying taxes and social security contributions, followed by Sydney, Luxembourg, Dublin and Miami.
Again, Mumbai comes in last 5 cities in these rankings. So even if prices are low, wage earning are low as well and when coupled with taxes the purchasing power of people in Mumbai is one of the lowest !
Jakarta, Nairobi, Manila, Mumbai, Mexico City and Delhi are the lowest 6 cities in Domestic Purchasing Power !
Work Time required to buy
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Now this a very interesting way to illustrate relative purchasing power of wages
Basically what these numbers signify is the time an individual has to work to buy a specific thing or highly uniform product that is available everywhere in the same quality.
An iPod nano: a day’s wages in Zurich and New York, around 20 days’ in Mumbai.
That does put things in perspective.
The iPod nano (with 8 GB of storage) is an ideal example of a globally uniform product. As the table shows, our comparison found significant variations.
An average wage-earner in Zurich and New York can buy a nano from an Apple store after nine hours of work. At the other end of the spectrum are workers in Mumbai, who need to work 20 nine-hour days – roughly the equivalent of a month’s salary – to purchase a nano.
The survey is an eye opener and pretty detailed at it.
Here is the complete report released by UBS Wealth Management Research Team.
(note: Click on the title if you are unable to see the report below)
Would love to know what readers think about this UBS Report
