Tale of 45 Cities

Moral: the U.S. is cheap

The news may first delight, then bewilder inflation-weary Americans, whose stack of unpaid bills grows every time the mailman calls. According to a study by the Union Bank of Switzerland, citizens in big U.S. cities are substantially better off in terms of what they can actually buy with their wages and salaries than people with similar jobs in metropolises in other countries.

The Zurich-based bank rated 45 cities around the world in terms of their inhabitants' purchasing power, measured by the amount of goods and services that can be bought with their incomes. This was calculated by taking the average pay in a group of twelve common occupations --among them teaching, office work and construction--and comparing it with the cost of a "basket" of standard household expenses. These included rent, food, clothing and public transportation, as well as the cost of a wide range of services such as getting a haircut or having a suit cleaned. Chicago, San Francisco and Los Angeles topped the buying-power list. New York, the only other U.S. city included in the survey, placed sixth, behind Amsterdam and Zurich.

The most painless places to live are those where the rise in prices has been more than matched by the rise in incomes. It takes a Chicagoan just 75 1/4 hours to earn enough to buy the survey's basket of goods and services. For the same items, a Londoner must work twice as long. Prices for a great many things are simply lower in the U.S. than they are elsewhere. For instance, a cartful of 39 supermarket items that costs $135 in Los Angeles and $172 in New York sells for $225 in Zurich and an appalling $292 in Tokyo. A color TV that is priced at $600 in the U.S. sells for twice that in Zurich and three times as much in Tel Aviv.

At the same time, while inflation has squeezed Americans' pocketbooks hard--"real" incomes rose by only 2.2% last year, or less than half the 1978 increase--the Union Bank report finds that pay levels in the U.S. are still high. A construction worker in New York, for example, averages $20,800 a year, almost twice as much as he would get in London and three times what he would earn in Paris. A teacher in Chicago with ten years of experience receives about $20,100 a year; this is below the $31,400 his counterpart in Zurich makes, but well above the $12,200 a London schoolmarm or master gets. A chef at a good restaurant in San Francisco makes more than three times the $8,700 that a cook in a similar place in London would earn.

Manila, Lisbon, Istanbul, Mexico City and Bogota boast the cheapest prices, while Jeddah (Saudi Arabia), Abu Dhabi and Manama (Bahrain) are the most expensive. Incomes are also swept away rapidly in Tokyo, Oslo, Geneva and Copenhagen. The 2.2 lbs. of medium-quality rump steak that would cost $7 in the U.S. fetches $24 in Zurich and $41 in Tokyo. In Jeddah a smoker must pay $4.99 for a pack of Marlboro cigarettes.

American executives who are dispatched to posts in expensive foreign cities tend to be cushioned against price shock: major U.S. corporations give people in high-cost areas adjustment bonuses that range from 10% to 40% of the employee's salary. It is the traveler who is most keenly aware of how purchasing power can be ravaged in the really pricey metropolises. Unless faraway places like Manila or Bogota are indelibly etched in their vacation calendars this summer, most Americans might discover U.S. cities to be downright travel bargains.

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