UBS Prices and earnings 2012: Highest net wages in Zurich, Geneva and Luxembourg
- Oslo, Tokyo and Zurich are the most expensive cities in the world
- Highest purchasing power in Zurich, Sydney and Luxembourg
- Food costs five times as much in Tokyo as in Mumbai
- Paris, Lyon and Copenhagen have the shortest working hours
The latest edition of the "Prices and Earnings" study from UBS examines wage purchasing power in 72 cities around the globe. With this, the 15th edition of the publication, UBS also unveils a new version of the "Prices and Earnings" iPhone application.
To ensure the global comparability of the study, the data collected for each country in local currency was converted into a single, common currency. The euro and the US dollar have depreciated considerably against various currencies since 2009, leading to major discrepancies with the prices and earnings levels calculated by UBS in some cases.
The most expensive cities in the world
Oslo, Tokyo and Zurich are the most expensive cities in the world, according to the prices for a standardized basket of 122 goods and services. When rents are added to the mix, New York, Hong Kong and Dubai jump up in the list. By contrast, the cost of living is lowest in the Indian cities of Delhi and Mumbai.
The highest wages are paid in North America and Western Europe
The highest gross wages are earned by workers in Zurich, Geneva and Copenhagen. After deduction of taxes and social security contributions, however, Luxembourg overtakes Copenhagen due to the higher level of deductions in the Danish capital. Delhi and Mumbai bring up the rear of the earnings rankings, where workers receive only around six percent of the average Zurich wage.
Nine minutes for a Big Mac in Tokyo
Salaries go farthest in Zurich, where the net hourly wage buys the most goods and services from our standardized basket in international comparison.
How much a wage is actually worth is best described by comparing purchasing power in relation to goods that are as homogenous as possible around the globe. Thus, in Tokyo it takes nine minutes of work to earn enough to buy a Big Mac, while in Nairobi it takes 81 minutes. Workers in Zurich can buy an iPhone after 22 hours work; in Manila, by contrast, it takes around 20 times longer.
Shortest working hours in Paris, Lyon and Copenhagen
People work the most in Asia, Africa, the Middle East and South America, at over 2,000 hours per year. The shortest working hours and highest number of days of paid vacation are enjoyed by workers in Western Europe. In South America, the picture is mixed: in Mexico City, workers receive the lowest number of paid days off out of all the cities surveyed, with an average of six days vacation a year, while their colleagues in São Paulo and Rio Janeiro enjoy considerably more, with an annual vacation entitlement of 30 days on average.
Overview of regions
Prices for our standardized basket of goods and services are lowest and wages compared with the global average are highest in North America. In terms of purchasing power, all US cities rank higher than Toronto and Montreal; this can be explained above all by the fact that net hourly wages are 20 percent lower on average in these Canadian cities.
Even though prices in the US are higher than the global average, prices for electronic and household goods are very attractive in North American cities, with Miami and Los Angeles boasting the best deals in international comparison.
Asia and Pacific
Nowhere is the discrepancy between prices and wages within an individual region larger than in Asia. For example, food costs five times as much in Tokyo than it does in Mumbai, while wages in Tokyo are twelve times higher than in Delhi.
There is no Asian city at the top of the domestic purchasing power rankings when measured in terms of net hourly wages. The Australian city of Sydney has the second-highest domestic purchasing power in international comparison.
Price levels in Sydney and Auckland have risen sharply versus 2009, due not least to the appreciation of these countries' currencies against the euro and the US dollar. To offset this, however, wage levels in both cities have also increased.
Not only prices for goods and services but also wages are lower in Eastern Europe than in Western Europe. Prices in Eastern Europe are 36 percent lower on average than in Western Europe. This discrepancy in prices is more than offset by the fact that workers in Western Europe are paid at least three and a half times more than their Eastern European neighbors, however.
A comparison with 2009 shows that the euro has depreciated relatively strongly against other Western and Eastern European currencies, with the exception of the Romanian leu. This depreciation of the euro is also evident when comparing prices in Western Europe: apart from Luxembourg, all Western European cities that use the euro as a currency of payment have a lower price level than cities outside the European monetary union.
Zurich and Geneva have among the highest price levels, yet workers there also receive the highest wages. Compared with the similarly expensive cities of Oslo and Tokyo, however, the purchasing power of Zurich and Geneva is around 30 percent higher.
Andreas Höfert, Chief Economist UBS
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Loris Centola, Co-Head CIO WM Research
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Daniel Kalt, Chief Economist UBS Switzerland
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Hartmut Issel – Head CIO WM Research Apac
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Gerit Heinz – Head Research Germany
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Roberto Scholtes Ruiz – Head CIO WM Spain
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Adolfo Acebras – Analyst Mexico
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