The Poor’s Purchasing Power

by Katrina Byrant

Reports about purchasing power have been circulating (like this one that looks at what $100 buys you in each USA state, or this one looking at US housing costs). Richard Faber, one of Purnaa’s owners, recently crunched some numbers comparing the purchasing power of Nepal’s minimum wage to the USA’s.

For example, the average cost of boneless chicken breasts in the USA is $3.42/lb. A person working a minimum wage job ($7.25/hr) would have to work just 31 minutes to buy that pound of chicken. In Nepal, the cost of a pound of chicken breasts is about $2.25/lb. However, the minimum wage is just $0.53/hr. So a person working a minimum wage job in Nepal would have to work 4 hours and 14 minutes for that same pound of chicken.

If the purchasing power of minimum wage earners was the same in the US as in Nepal, US buyers would pay $30.78/lb of chicken!

Below is a table that I put together to show how much items would cost in the US, if purchasing power were equal to that of minimum wage earners in Nepal. This should give you a “feel” for how expensive items are for the people in Nepal.

For those of you that like equations and want to know how the prices were determined, its very simple: Price = (Price in Nepal / Nepal Hourly Minimum Wage) x USA Federal Hourly Minimum Wage.All prices are in US dollars.

It was really enlightening for me to make this table. No wonder most of our neighbors live in a single room with family, walk to work, don’t use toilet paper, and consider milk tea a special treat!

(This was excerpted, with permission, from Richard’s personal blog.)