Among Top 10 in purchasing power
The most expensive cities in the world are Oslo, Zurich, Copenhagen, Geneva, Tokyo and New York, but Nicosia is not too far off, according to a purchasing power survey by Swiss banking giant UBS.
The Cypriot capital ranks halfway at 37th among the 73 cities surveyed, just a notch below Tel Aviv, Istanbul, Lisbon and Athens, but above a notch above Sydney, Doha, Ljubljana and Shanghai, according to the 38th edition of the UBS Prices and Earnings Report.
Once rents are also taken into account, life in New York, Oslo, Geneva and Tokyo is particularly expensive. The basket of goods costs least in Kuala Lumpur, Manila, Delhi and Mumbai.
The comparison is based on a standardized basket of 122 goods and services, plus information on salaries and working hours in 14 professions across 73 cities in the world.
Once again currency fluctuations are among the key factors which heavily influence relative prices between cities and countries in the short term. In 2006 London was the second most expensive city in the study, but the plunge in the pound brought it down almost 20 notches, and when the survey was conducted in March and April it was in midfield in Western Europe.
18 MINUTES FOR A BIG MAC
On their own, high prices or salaries say nothing about the wealth of a city or country. We only get a sense of purchasing power when salaries are compared to the level of prices. Relative purchasing power of salaries is very clear if we calculate how long you have to work in each city to be able to afford a standard product available in the same quality everywhere. The global average employee earns enough to buy a Big Mac in 37 minutes, a kilo of rice in 22 minutes and a kilo of bread in 25 minutes. In Nicosia, to pay for these items, one has to work 18, 10 and 12 minutes, respectively.
As regards where wages buy the most products and services, Cyprus is the tenth highest with hourly net, with an hourly pay rate of 95.3 units, where the benchmark New York is rated at 100. However, the report’s authors caution that “this simple analysis ignores one big factor, namely, the sometimes vast differences in the number of hours worked per year.” Perhaps, deducting the high civil service and union-controlled bank employees’ wages, the hourly wage rate in Nicosia would drop to the midpoint of the survey, as the other group of high-income professionals (accountants, lawyers, professionals) put in many more hours than those in government.
CHEFS, BANKS PAY BEST
The highest salaries were recorded in Switzerland, Denmark, and the US. Nicosia was 27th, sandwiched between Milan and Madrid, with a net hourly income of 13.10 dollars after taxes and social insurance contribution. Car mechanics earn USD 23,300 a year net (more than in Madrid), building labourers take home USD 19,400 (as much as in Amsterdam, Barcelona and Berlin) and skilled industrial workers USD 29,000 (nearly as in Brussels), while female factory workers are paid less at USD 14,800, the same as in Rome. Engineers in Cyprus earn an average USD 31,500 (near pay in Barcelona, Doha and Hong Kong), department heads USD 48,900 (less than in Copenhagen) and product managers take home USD 36,300 (less than Stockholm).
Primary school teachers in Cyprus earn USD 30,900, half of what they take home in Luxembourg and Zurich, but as much as in Vienna. Cooks are better off in Nicosia, earning USD 37,700 a year, as much as in Copenhagen, Dublin and Tokyo, but the best paid chefs are in Dubai with an average USD 53,600.
Personal assistants (PAs), that rare breed who run almost everything in the office, take home an average of just USD 19,000 in Nicosia, less than in Doha and Hong Kong, but more than in Madrid and Milan.
Last, but not least, the bank credit officer, with at least ten years’ experience, earns on average USD 37,300 in Nicosia, with union-negotiated wages and many other low-interest perks, slightly less pay than in Frankfurt bout seven times more than in Sofia and four times more than in Warsaw.
After a nine-hour working day, the average worker in Zurich and New York can buy an iPod Nano, but 15 hours in Nicosia. Employees in Mumbai are at the opposite end of the scale: assuming a nine-hour working day again, they have to work for 20 days to be able to afford an iPod, making it worth one month’s salary.
CLOTHING 20% LESS THAN NEW YORK
Interestingly, the average basket of 39 food items cost the most in Tokyo at USD 710, with a worldwide average of 385, about 21 dollars higher than in Nicosia.
Nowhere in the world is clothing cheaper than in Kuala Lumpur and Manila. A complete women’s outfit (a two-piece suit, jacket, skirt, pantyhose and a pair of fashionable shoes), costs a mere USD 120 on average. For only a little more – USD 205 on average – you can buy a complete men’s outfit (suit, blazer/jacket, shirt, jeans, socks, pair of shoes).
Customers in Tokyo, the most expensive shopping destination in the UBS study, pay over seven times that amount for a comparable mid-priced outfit. The global average price for the sample outfit is USD 500 for women and USD 680 for men, while in Nicosia the average is USD 590 and 860, respectively, 20% less than in New York. The only places where men pay less than women for their outfits are Cairo and Seoul.
For that business or vacation night out, might as well stay way from Nicosia, where the price of an evening meal (three-course menu with starter, main course and dessert, without drinks) including service, in a good restaurant is set at 47 dollars. This is just as much as in Amsterdam, Milan or Zurich, while the addition of wine that carries a mark-up of at least three or four times its retail value in Cyprus, could easily push the Nicosia dinner to among the ten most expensive in the world. Hotel stay in a 5-star establishment would set you back USD 260 a night for a double room en-suite, including breakfast for two and service, the same you would pay in Brussels.
