Show Americans Americans' purchasing power still sill tops others' others Ily ny L L. Lesher Pres Ires Chamber of Commerce of the United States Slates still enjoy the highest standard of living in the world despite recent headlines indicating we have slipped to sixth place in per capita In In- come How can this be true Well It depends on exactly what is measured and how relevant that is to standard of living or for the sake of simplicity purchasing power The World Bank periodically publishes tables which rank countries by income per capita These tables are computed by taking the total output of the national economy of a country and dividing it by the population FOIl FOit MANY years we ranked first by this criterion But in the World Banks Bank's preliminary figures for 1975 our per capita puts us in sixth place behind Kuwait the United Arab Emirates Qatar Switzerland and Sweden The first three are oil sheikdoms with very small populations Undoubtedly these per capita income figures tell us something about the direction of change But they are a poor guide to relative standards of living because they take into account only Income and Ignore the local cost of living The Union Bank Dank of Switzerland Swit has been making much more painstaking comparisons since 1970 The banks bank's most recent study was released late last year For 41 major cities around the world it compares typical wage-salary wage rates rales for a representative range of occupations occupations occupations oc oc- oc- oc with local costs casts for a typical market basket of goods and services TIlE THE STUDY makes for some interesting browsing It shows for example that a food basket of 35 items typical of those used by the local consumer would cost in Tokyo highest and in Bogota lowest For the four US U.S. cities included in the survey Chicago Los Angeles New York San Francisco the food package ranges from in San Francisco to tl in New NewYork York The cost of a priced medium automobile including sales tax if any is highest in Istanbul Turkey and lowest in Madrid In terms of total outlays for goods and services Tokyo is the most malt expensive place in the world to live according to Union Bank In second place is Manama Bahrain followed by Oslo Stockholm Zurich Geneva Copenhagen Tel Aviv and New York Chicago is Los Angeles and San Francisco What about pay An automobile mechanic earns the most malt In Los Angeles and the least in Manila 1050 A primary school schoolteacher teacher earns the most in Geneva and the least In Manila 1042 A department manager or midlevel midlevel midlevel mid- mid level executive earns the most in San Francisco and the least in Buenos Aires Alres AS YOU CAN see sec both pay and living costs vary dram dram- from place to place If How ow do do you put it all together to tomake tomake tomake make meaningful comparisons comparisons comparisons com com- The best method is to compare the number of hours a atypical atypical atypical typical wage earner would have to work to purchase a specified package of goods and services Using this system you learn that a San Franciscan can p purchase with 22 hours of labor labora a food basket that would take a resident of Manila 1315 hours to earn A Chicagoan would work hours for an assortment of clothing that would cost a resident of Buenos Aires hours and a resident of Stockholm 48 hours In general pay in the US U.S. ranks at or near the top while our consumer prices tend to be roughly in the middle of the scale Because of this combination combination combination com com- to quote the Union Bank the United States is clearly in the lead of the purchasing purchasing purchasing pur pur- chasing power comparison |