Salary Equivalent

Discussion in 'Economics' started by Bob Guercio, Aug 8, 2010.

  1. Hi All,

    I'm new on this forum and I'm here to ask questions since I know very little about economics.

    That said, I've often wondered exactly what it means when they say that somebody in an underdeveloped country makes $1.25 per day. As I understand it, they make a salary in their own currency and the conversion rate of that currency is to dollars or $1.25 in the above case. But isn't it important to know what the buying power of their salary is in their economy rather than what the conversion is to dollars? Perhaps $1.25 converted to their currency puts a minimum amount of food on the table and some rudimentary shelter over their heads.

    Nobody in the United States would ever work for $1.25 per day since that would only buy a cup of coffee. Begging or living off the land would be far more productive.

    Thank you,

    Bob Guercio
  2. By the same token, should we have a different minium wage for different cities?
  3. You should really travel to some of these countries to see how people who make 1.25 per day live. When I was in the philippines, I talked to some homeless children who were beggers. They said they average about 15 pesos per day (about 30 cents) and that they only eat once per day. Somedays they said they get "lucky" and someone will give them 50 pesos (which is about 1 dollar) Since I dont like giving money out (because of syndicates that these children might be working for) I bought 4 of them some food. It cost 90 pesos(2 dollars) for 4 big plates of food. They couldnt finish the food because it was more than they were used to eatting. I also treated them to soda which was another 90 pesos(for 3 sodas) which they also couldnt finish. Most of those people that make that little money are squatters and just living on the street. The adults usually have their own business selling candies or cigarettes, or even giving rides on their bicycles.

    The salaried people who have actual "jobs" that get paid that little are usually domestic helpers, so they live with the employer and the employer pays for the food.

    Squatters also do not pay rent and homeless people generally are not asked to move from where they live that often, unless the property owner wants them to move. Squatters in the 3rd world build up little cities all over and usually near the water. Its a big contrast for someone like us fromt he US to see people live like that eatting 1 meal per day and having to bath in the same water people shit in. You really can not appreciate how good your life is until you go to the other side of the tracks and see how 60% of the rest of the world lives.
  4. Yes peil, but this "other 60%" (and it's larger than 60%) are non caucasian populations. Even the poorest of caucasian nations don't live like that. You have it so good because you live amongst a far more developed group.

  5. Gosh! I really don't know where to begin at this website.

    I only want to know if my logic is correct and if it is correct, why isn't the money that these people make expressed to us in a way we can understand. Perhaps $1.25 converted to their currency gives them the buying power of $75.00 per week! This I can understand and relate to.

    Bob Guercio