Income in Perspective: 2 Bppl @ $3/day

I just saw a CNN headline that read: “Young workers scrimp to live on $15/wk.” Before reading further, what do you think: Is that stunning and shocking? Or shockingly typical?

The story turned out to be a piece about white-collar workers in China trying to live frugally, spending only 100 Yuan on travel and food during the workweek to conserve funds. Of course, the workers’ actual total expenses and income are higher, because that $15/week figure doesn’t include weekend expenses and other major costs like rent. Even so, the story is considered newsworthy here, and is probably a shock to a number of readers in the western world.

But the headline wouldn’t surprise readers who are familiar with the approximate distribution of income/GDP/wealth in the world.

To illustrate, here are two personal data points from 2006, when my wife and I traveled to Kenya and Zambia to visit friends:

  • Income: In Kenya, we were told that being a staff worker at a safari lodge is considered a good job. What does it pay? About $2 per day, for long hours and six-day weeks. This isn’t unusual; in about 30 countries, including Kenya, more than half of the population earns under $2 per day. An estimated two billion people – 30% of the world’s population – live on an income of less than $3 per day. And $3 per day is about what the attention-grabbing CNN headline implies, though the actual story behind that headline is much less bad.
  • Cost of living: But what happens when we consider, not just dollar-for-dollar comparisons, but purchasing power? Isn’t it less expensive to live in less-developed countries? Yes, it usually is, especially for shelter and services – there’s been some talk lately on the U.S. news about retiring in Mexico as a way for older people to save money in this economy – but the difference for the same quality goods is often less than one might think. In Lusaka, the capital of Zambia, we found there were only three grocery stores [*] having similar goods to what we would expect to find in a U.S.-style Safeway, although of course the Zambian stores were much smaller than U.S. stores (more the size of a medium Trader Joe’s) and offered far less selection diversity (something like a factor of 20 fewer varieties or brands). When we visited one of the stores, I picked up a few Western-style items, totaled the price and converted to U.S. dollars in my head, and found that those comparable products in Lusaka cost nearly the same as we would have paid for the same items in Seattle. Our local friend replied: “Right, nobody who lives here would ever think of buying a can of soda pop.” Certainly not when a can of Coke costs a day’s wage for many people, and doesn’t confer any significant nutritional benefit.

The gulf between the western- and world-median standards of living is, simply put, vast – and growing. The standard of living that’s normal for most of the planet’s population is well nigh unimaginable to many of us in the western world, and even for those of us who’ve been there, it’s one thing to see it and quite another to really understand what such a life would be like. I don’t claim to.


[*] They might well be the only such stores in the country, not just the capital.

4 thoughts on “Income in Perspective: 2 Bppl @ $3/day

  1. A can of soda might not be a good comparison. If you take the more “fundamental” products – bread, milk, fruits & vegetables – that sort of thing, then you’ll quickly notice that they are much cheaper, and not of any worse quality than in the West (in fact, for many agrarian countries, they are often better).

  2. This represents the very tip of the iceberg in terms of the vastly different way people experience their existence in the world. I suspect that if you were to get to know people from the area, you might find the differences run deeper; that they even have a radically different way of thinking than you or I — especially considering the highly systematized, scientific way we tend to approach everything.

    While Slumdog Millionaire was a fun film, I think the best way to try and understand our fellow beings is through reading, especially fiction. A primary function of good novels is to educate our moral sensibilities by allowing us to experience life as someone else. While we can never truly understand what life is like for another, I applaud the effort to at least recognize that the way we (rich westerners) live is not the only cultural idiom, nor is it necessarily ideal.

  3. Hi Herb,
    I understand your feelings. Forget about the difference between Wester world and the other countries in Asia and Africa. The problem with some countries like India is that, the gulf between the rich and the poor is vast and is increasing day-by-day. I recommend you watch the movie “Slumdog Millionaire (2008)”.


  4. Although I won’t claim there is no problem and everybody is as rich as they should be, I have to say it’s a bit unfair to take a Western product and expect it to pop up in the middle of nowhere, who knows how far from the nearest production facility, and expect it to not only be cheaper than in its home country, but to be substantially cheaper in order to match the local price scales.

    How expensive would Zambian local produce be if you’d want to buy it in a specialty store in, say, Denver?

    Stories like “oh my god they only make five bucks a DAY” always remind me of my extended stay in China, where it was trivial to have a full multi-course meal for 10 kuai, ie. 1 dollar and change (at the time).

    That said, there’s no doubt that most people in the West have no idea how filthy rich they really are.

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