CHAOSTOCOSMOS

Wednesday, 24 May 2006

Gazpacho soup for the soul

Borrowing and locally adapting (Gazpacho worked, because it was harder to explain Potaje Canario) from OneManBandwidth's post originally entitled, "Wonton Soup For The Soul: Live the Chinese Dream?", I wanted to comment on the following:

"The United States has, according to Hertz, one of the lowest levels of inter-generational financial mobility in the "first world,", behind most of Europe. Britain is one of the only industrialized countries that may be as bad, or worse, than the U.S.."

Yes, as someone hoping to inherit some of the British "family wealth", I would tend to agree that the situation in Britain is worse. Much worse.

Many UK prices are still, roughly, the same number of pounds there as they are in dollars in the US. With an exchange rate today of 1.867501 (Source: Yahoo), that means stuff is 1.867501 times more expensive in the UK. You might as well say double. It becomes difficult to see how anyone, other than those who won / inherited / made money years ago, can both live and save for the future.

The dollar / pound exchange should have worked out nicely in my favour, however, when I went to the US in 1980, when the exchange rate was 2.42 $/£ and, thus, everything was 2.4 times cheaper, except that there were far more than 2.4 times more things to chose from so I managed to blow all my spending money in my first three days in New York.

Americans would most notice it, when they got to the gas (petrol) pump.

PetrolPrices.com will give you the latest prices, which, as of Tuesday, the price of Unleaded was, on average, 96.3p per litre (Min: 89.9p Max: 106.9p).

BP told the BBC that it would soon top £1 a liter in April.

To be able to make a proper comparison, we need to multiply the figure by 0.038 to arrive at £3.6594 per US gallon. Converting that at 1.867501 $/£ gives us an absolutely scary equivalent price of about $6.83 per US gallon.

Kudos to John Cletheroe for the formula.

According the US Government's figures, the price of Regular Grade (which, I think, is usually a bit more expensive than unleaded, but it was all I could find), Dollars per gallon, including all taxes, as of Monday, 5/22/2006, even in the most expensive state, California, was only $3.255. Heap of a difference, huh?

Whilst I am not going to attempt to compare more apples and oranges, I do know just from prices I have seen around and about that houses in the US seem, in comparison to British equivalents, dirt cheap. Laughingly so in some areas.

So that just brings us to the question of salaries.

IF rates of pay were sufficiently higher in the UK to compensate for pretty much double the costs, well, all things would be equal, wouldn't they?

Don't even dream.

Again, it is difficult to find perfectly like examples to compare, but let's just take this vacancy for a Graduate Operations Manager in Cheshire in the UK. The job is advertised with a starting salary of £21,000 (which converted at 1.867501 gives us an equivalent of $39,217.) This would pay a little more in London.

(I did check several jobs to make sure this was not a particularly low offer and, since I was earning £21,000 in the UK back in 1992, just before I left and with a lowlier title, I have to come to the conclusion that British salaries have slipped and the situation is worse now than it was then. Prices haven't stayed down to keep pace.)

Even in the lowest paid state in the US, Florida, the Median Salary for a General / Operations Manager is quoted at $59,930. That's more than $20,000 a year extra, on top of prices that are roughly half of what your UK counterpart is paying.

The standard of living, even when I last visited the US in 1980, appeared to be WAY above that available in the UK, because "average people" had access to far more choice of goods, services, conveniences ... and had more income.

The old argument, of course, was that you had to foot your own medical bills and pay for medical insurance in the US. Sadly, that one no longer works, because if you want decent treatment, you have to pay for it over this side of the pond too now.

Dare I say it, but Americans have become spoiled.

If Americans can't manage, with so much more disposable income than people in other countries have, then it can only be the fault of bad management.

And rampant consumerism where people have been trained / brainwashed into believing that they NEED all sorts of things that they merely WANT, only because they are available in stores. If they weren't available, OK, you wouldn't have the convenience, but you'd also have money that you could pass on to your kids.

Nevertheless, I am not saying we Brits are any better. My own New York shopping spree proved that, didn't it? :) But there are other social factors.

I doubt attitudes will have changed drastically in the "average Brit in the street". Not even Bush and Sundance being in each other's pockets can change that. In fact they have made it worse. When I last lived in the UK, despite professing a general dislike of their loud, colonial cousins, folks in the UK were green with envy. They wanted every last new fangled gadget they heard was available in the US. Back in those "dark ages", we'd always reckon it would take two years before said item would appear in British shops. We'd drool.

It was bad enough then that this desire would override the basic fact that the British are a nation of poorpers, by comparison, without the necessary resources to back up their dreams.

What happens now we have the internet and 24 hour international shopping, is that the lead time has been reduced to two weeks, because they don't have to wait for something to arrive in the shops any more, they can just pay the shipping and have it whizzed across the Atlantic, stretching the old plastic another 5,000 miles with it.

Bigger eyes and smaller pockets does not make for a happy situation.

So to get back to the Gazpacho/Potaje aspect.

When I first came to the Canary Islands, it did not matter that the best salary available was (and still is) about £400 a month (£4,800 per annum, converting to $8,964.) On the one hand, this was a deliberate personal decision to give up materialistic longings and be cured of my shopaholism addiction. It was a transition from "Riches to Rags", mostly, by choice to find "richness" in other ways. And, funnily enough, it is amazing what you can live without.

Fourteen years ago, the shops here had little more choice than some Russian state stores you may have seen on TV. So much has changed. They even put  labels in English on goods often now - which causes my head to flip because I am expecting Spanish - and we have almost every product you can find in the UK, Germany, the rest of Europe - and even Oreo Cookies thrown in - available.

Prices were then, also laughingly cheap. The Euro changed that. In some things they still are, like cigarettes for 10 Euros (£6.82 / $12.73) per carton of 200 - which have only just gone up from 7 Euros (£4.77 / $8.90), as opposed to British prices that are almost 10 times those rates.

But housing has been flying through the roof lately. And food is only still cheap if you buy local fresh produce or steal out of the fields!

Our gas (petrol) is heavily subsidized, because the Canary Islands are remote. The current price of unleaded is between 80.7 cents (55 pence) and 84.5 cents (57 pence) per liter, depending on grade. Again, applying the formula above, even the lower of the two works out to $3.90 per US gallon. Still ahead of US prices.

Compared to the UK, living is still relatively cheap here, but that gap is narrowing.

Compared to the US, there is not much in it financially, so I predict that the US will not remain behind Europe much longer, but Europe offers other cultural benefits.

Then, I've always had this thought that looking east would be the next step - in terms of a culture and thinking that was not of the typical western consumerism. But with China's fast growing economy, how long will that remain? Is the wisdom of the ancient civilisation strong enough to resist all the decadent temptations?

It's a very tough call, because, on the one hand, why shouldn't all human beings, whether they live in the US, the UK, Spain, China or, for that matter, Africa, all have access to the same food, products, conveniences, hopes, dreams ...

Reality is that they don't.

The bigger reality is the harm all the WANTING is doing to our society.

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