Politics and Economics
Swiss banking giant, UBS, describes itself as "the world's largest wealth manager, a top tier investment banking and securities firm, and a key global asset manager." In early August, the "wealth manager" released the results of its comparative survey of the cost of living.
The results they released don't offer much analysis about the causes of the differences, but they do describe the data in understandable ways. (That's a model for your students to follow.) My favorite is the comparison of how long an average worker in a wide variety of countries has to toil in order to buy a Big Mac. Here's what UBS says on its web site:
35 minutes of work for a Big Mac
"Wages only become meaningful in relation to prices, i.e., what can be bought with the money earned. A globally available product like a Big Mac can make the relationship between wages and prices much clearer. On a global average, 35 minutes of work buys a Big Mac. But the disparities are huge: In Nairobi, one and a half hours’ work is needed to buy the burger with the average net hourly wage there. In the US cities of Los Angeles, New York, Chicago and Miami, a maximum of 13 minutes' labor is needed. Although the comprehensive comparison of purchasing power and gross wages puts them at the top of the table, higher production costs mean that workers in Swiss and Scandinavian cities need 15 to 20 minutes for their Big Macs."
MoneyWeb, a South African online newsletter, like most other news media, reprinted with little editing, the content of the UBS press release:
Jo’burg a cheap place to live
"A worker in Johannesburg will earn up to 63% less than a similar employee in New York City and around 60% less than the same person in London. However a comparable worker in India will earn more than 90% less than someone in New York.
"These astonishing figures are the results of UBS’s 2006 Prices and Earnings survey. The survey was conducted in 71 cities around the world, with only Johannesburg and Nairobi featured from Africa. All results were converted to a single currency (the US dollar) at rates on a given day to make direct comparisons possible.
"Johannesburg isn’t expensive by any means, but neither is it cheap and falls into what UBS terms a 'median city'.
"It’s more expensive to buy electronic goods in Jo’burg (28% costlier than New York, but a good deal cheaper than London). Very few cities offer cheaper appliances than New York but Dubai is the cheapest.
"Workers (at the average wage of 14 different professions) in Jo’burg will need to work for half an hour to buy a Big Mac, while Parisians would need 21 minutes and New Yorkers 13 minutes. Employees in Mexico City would need to work for almost an hour and a half..."
Most of the world's media parroted the UBS press release (which was issued in four languages), probably because the report itself was written in German. The whole report is available, including the list of how many minutes of work is required to earn enough to buy a Big Mac in 71 cities. That list also reveals, more prosaically, how long it takes to earn enough to buy a kilogram of bread and a kilo of rice.
It's not of great importance for our purposes that the report is in German. I can read the data, and my German is so poor that when I was in Germany and trying to speak the language, people kept asking me to speak English so they could better understand me.
My point here is that there is a wealth of economic data available from UBS, the World Bank, The UN, the IMF, Global Insight, and the CIA World Fact Book (which, by the way, got a new web address in late July).
You can set your students to work making hypotheses about correlations between economic conditions and political systems AND finding out if their hypothetical correlations actually exist. I would ask them to work with a partner and to present their hypotheses, their research results (with carefully credited sources), and their conclusions to the class. It's also a chance to reinforce the lesson that correlations are not causations. That makes it a great "two-fer" (i.e. a two for one deal).
posted by Ken Wedding @ 10:20 AM
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