UBS Prices and Earnings 2012 It is probably no surprise that people in Asia work longer hours than their European counterparts or that they are paid far less. This and other interesting comparisons are goods and services are documented by UBS in its Prices and Earnings 2012 Survey, a comparative look at the cost of living around the world. The survey, which is updated every three years, compares a basket of goods in 72 cities, based on European consumer habits.
In the 2012 survey, some modifications have been made to weighting in the basket of goods, while only the iPod Nano has been removed from the basket and replaces the iPhone. “The individual data items were collected from companies deemed to be representative and the occupational profiles were delimited as far as possible in terms of family status, work experience and education.� Oslo, Zurich and Tokyo form the top three most expensive cities in the world, with Tokyo being 50% more expensive than most cities in Asia. Bangkok continues to remain in the lower half and competitive across the board.
Despite the increase in its minimum wage earlier this year, Bangkok can still boast having one of the lowest wage levels, coming in 63rd of the 72 cities surveyed. This represents a comparison of the “effective hourly wages for 15 professions, weighted according to distribution, net after deductions of taxes and social security contributions.” Looking at the international distribution of wages, UBS notes that all regions show “a considerable growth in gross hourly wages on average compared with 2009.” The survey reports the average hourly wage rate in Asia is US$9. Total taxes and social security as a percentage of gross wages list Bangkok at 6%, Kuala Lumpur at 18% and Shanghai at 17%. In terms of net wages, Bangkok is listed at US$4.40 per hour, Kuala Lumpur at US$5.50 and Shanghai at US$5.40. Looking at wages by occupation, the survey lists Department Managers in Bangkok earning an average net income of US$26,400 per year, working 49 hours per week. Lower wages and longer work hours than most of their counterparts in Asia seem to be the theme that comes across the survey. This holds true for female factory workers, construction workers and skilled industrial workers.
While Bangkok is a city with a low wage and tax rate, the survey also shows that Thai workers enjoy less vacation days off than their counterparts in Asia. At 7 days per year, only Mexico City comes in lower with 6 vacation days per year. Kuala Lumpur workers enjoy 15 days of vacation, on average, and in Shanghai 9 days. Reflecting Thailand’s vibrant consumer market, people in Bangkok spend an average of US$2,178 per year on goods and services. This compares to US$1,634 spent in Manila or US$2,050 in Kuala Lumpur. “In western Europe the entire basket of goods and services costs an average of 3,335 US dollars…” The survey states that “Average food costs have increased by around 11% since 2009 when measured in US dollars. In some countries, price increases of nearly 50% were observed.” The monthly expenditure in Bangkok for a basket of goods containing 39 food items weighted according to European consumption habits is listed at US$422. The medium cost of a furnished 4-room apartment in Bangkok is listed by UBS as US$1,460, compared to US$2,720 in Jakarta or US$9,660 in Hong Kong. The cost of an expensive, similarly sized and furnished apartment in Bangkok is US$2,250 and US$880 at the lower end. Looking at the cost of services, UBS analyzed a basket of 27 services, which also included such items as access to broadband internet and a variety of leisure activities. “Our global prices and earnings comparison shows that where earnings are higher, services are also higher....in Oceania, North America and Western Europe, the basket of services is most expensive in these regions at an average of 720 US dollars.” In Bangkok, the same services will cost US$440. A complete review of UBS Prices and Earnings 2012 shows Thailand is still a cost effective location to do business in. Taken together with the country’s geographic position at the crossroads of ASEAN, its world class infrastructure and hard-working people, it seems Thailand is the choice to make.