The UBS Prices and Earnings poll found that worldwide, Oslo, London, Copenhagen, Zurich and Tokyo are the priciest cities, according to a news release. With the highest net wages, Zurich and Geneva, followed by Dublin, Los Angeles and Luxembourg, lead other cities in purchasing power.
Among US cities, UBS said a dollar earned in Los Angeles, after deducting taxes and social security contributions, is worth more than in Chicago, New York, Miami, Toronto and Montreal. Because of their much higher wages, workers in North American cities have far more left over for vacations, luxury items or savings than their counterparts in Latin America. On the other hand, the average purchasing power in Central and South America is just a third of the level in North American cities.
The most sizable hikes compared to the previous version of the Prices and Earnings poll, were recorded by Sao Paulo, Rio de Janeiro and Santiago de Chile. However, economic growth and currency appreciation have reduced both the price and the wage gaps in relation to the North American cities. Prices have risen more steeply than wages, so that the North-South divide in the distribution of purchasing power remains.
According to UBS, in the comparison of purchasing power, the Swiss cities of Zurich and Geneva remain at the top. Public sector wages largely support this result, since, in contrast to many emerging countries where teachers and bus drivers earn far less than comparable professions in the private sector, these jobs are comparatively well paid in Switzerland (and in Scandinavia). In terms of prices, too, the Swiss cities rank highest. Food prices in particular confirm the country’s image as a high-priced zone – only Tokyo is marginally pricier. Price differences between Geneva and Zurich are narrower for tradable goods than for services, which are some ten percent cheaper in Geneva.
Asian employees can at least partially compensate for low hourly wages through longer hours spent at work. With a mean annual working time of 2,088 hours, people work longest in the Asian cities. Based on a 42-hour work week, Asian workers labor about 50 days a year more than their peers in Paris, where a working year is just 1,480 hours, or Berlin, where a years’ work equals 1,610 hours.
UBS said that in no other region is the price spread between the most expensive and the cheapest city greater than in Asia. While Tokyo lands in fifth place among the world’s most expensive cities, the region is also home to the cities at the other end of scale, including Delhi, Mumbai and Kuala Lumpur. Singapore and Taipei. The two Pacific Rim cities Sydney and Auckland, occupy the midfield in the comparison of prices and wages.
The UBS studies “Prices and Earnings” can be downloaded under the following link: www.ubs.com/research .