How global cities rank after the financial crisis
London, once one of the world’s most expensive cities, now ranks in the middle of the pack of European cities in terms of the cost of living. The sharp drop in the value of British pound largely is to blame for the decline of London’s ranking from the second priciest city three years ago to No. 22, according to a study of comparative purchasing power by UBS of 73 cities around the globe.
New York, Oslo and Geneva now have the highest living expenses in the world. Excluding rent and energy, Oslo, Zurich and Copenhagen have the highest prices. Offsetting those costs, these cities also rank as having some of the highest gross wages in the world. Zurich, the headquarters of UBS, tops the scale in terms of gross wages, but also enjoys relatively low tax rates.
Currency devaluations meant prices slipped the most in Mexico City, Moscow and Seoul over the past three years. Eastern European cities in the European Union are 35 percent cheaper to live in than Western European ones.
Western European workers make more than three times what Eastern European workers make in pay. Sofia, Bulgaria and Bucharest, Romania, which joined the European Union in early 2007, have wages comparable to Columbia and Thailand, the report notes.
Cities with the lowest wages include Delhi and Mumbai, along with Jakarta and Manila. These calculations were based on comparisons of wages in 14 different professions.
COST OF GOODS
Tokyo pays the highest price for a basket of 39 food items at US$710, while Zurich is second at US$660. Food prices in Switzerland are 45 percent higher than the rest of Western Europe. Mumbai, on average, pays only one-fifth the cost of Tokyo for food.
On average, UBS estimates it takes employees in cities around the world 37 minutes to earn enough to pay for a Big Mac, 25 minutes for a kilo of bread and 22 minutes for a kilo of rice. A Tokyo worker takes 12 minutes; a worker in Nairobi takes 2.5 hours to earn enough for a Big Mac.
It takes a worker in Zurich or New York one day of work to buy an iPod Nano with eight gigabytes of storage. At the other extreme, it would take a worker in Mumbai 20 nine-hour days, or nearly a month’s salary, to purchase the same Apple music player.
London charges the most for train tickets of any city in the world. Passengers can expect to pay US$89.10 a month, double the rates charged in other Western European cities. German cities are second. UK travel on trains, buses and subways cost 3.4 times the world average while German travel is 2.5 times more expensive.
*** – Geneva, New York, London and Oslo have the most costly three-star, or mid-range hotels at around US$240-$250 a night.
* – $73 was the average bill for a three-course meal, excluding drinks but including tip, in the 73 cities surveyed. Tokyo had the most expensive restaurants at an average bill of $US87, followed by Oslo, Dubai and Barcelona, with bills around $60.
Asian and Middle Eastern cities work the longest hours. Cairo works the most, at 2,373 hours a year, followed by Seoul at 2,312 and Hong Kong with 2,295 hours. European cities worked the least with Western European employees averaging 1,745 hours a year and Eastern Europe with 1,830 hours.
Lyon and Paris spend the least time at work, followed by Madrid, Copenhagen and Nicosia. Switzerland and Greece work more than other Western Europeans. North Americans work 1,890 hours while Africa works 2,087 hours.
As you might expect, Rio de Janeiro tops the list of paid vacation with 30 days off, along with the perhaps unexpected Lima, Peru. Those South American cities are followed closely by the Baltic cities of Tallinn and Vilnius, Berlin and Sao Paolo, each with 28 days off.
For comparison, North American employees average 10 days of paid vacation; Mumbai workers average 16 days off, while Western Europe has the most paid vacation with 25 days off on average.
The UBS 2009 edition of “Prices and Earnings: A Comparison of Purchasing Power Around the Globe” estimates living costs using 154 measures. This year’s survey is the Swiss bank’s 14th since 1971. The report is calculated using a basket of products and services used by a Western European family of three. Regional preferences are weighted to account for the fact that no universally acceptable basket of goods and services exists. Pork and alcohol are not consumed in Islamic countries, but are replaced by comparable local substitutes, the researchers said.
(click to enlarge cities in survey)
(Source: UBS Wealth Management, Images: UBS and Reuters)