I don't get purchasing power differences between other countries

[CaliforniaBJJ]

So, in America, working a few hours in a minimum wage job, that will allow you to buy more stuff in America than say a person in Europe who works the same hours in europe in the same job trying to purchase the same amount of things in europe.

However, that money that person made in europe, it would buy a lot more things in America than the money made by that American guy made in America.

What gives???

[Ocean Chief]

Things are cheaper in America?

[JBoInOntario]

I live in a border city, there are alot of things that are much cheaper in the US than here for the exact same product. Even when the dollar is near parity retailers blame things like economies of scale, wages, tariffs.
I'm almost convinced it's just because we are suckers and will pay more. The same book is often 40% more in Canada. I just think Americans demand better deals, that's why I like to shop there

[snake_vato]

prices are different brah

[Sohei]

Originally Posted by CaliforniaBJJ

So, in America, working a few hours in a minimum wage job, that will allow you to buy more stuff in America than say a person in Europe who works the same hours in europe in the same job trying to purchase the same amount of things in europe.

However, that money that person made in europe, it would buy a lot more things in America than the money made by that American guy made in America.

What gives???

Exchange rate. Also the countries economy.

In poorer countries things are dirt cheap compared to the US.

[CaliforniaBJJ]

Originally Posted by Sohei

Exchange rate. Also the countries economy.

In poorer countries things are dirt cheap compared to the US.

Yeah, but if they work some same job for same number of hours, they would buy less than American working the same number of hours.

America vs other countries is when the weird stuff I was talking about happens.

[Darwinist]

There are many reasons.

1. Exchange rate manipulations by central banks
2. Tariffs and quotas
3. Transportation costs(how expensive do you think Argentinian beef is in Argentine's ranch country?)

Purchasing Power Parity adjusted prices between countries actually give a better(in my opinion) view of the relative economic strengths of countries.

The wikipedia article on PPP is pretty damn good if you want to get into the specifics

PPP exchange rate (the "real exchange rate") fluctuations are mostly due to market exchange rate movements. Aside from this volatility, consistent deviations of the market and PPP exchange rates are observed, for example (market exchange rate) prices of non-traded goods and services are usually lower where incomes are lower. (A U.S. dollar exchanged and spent in India will buy more haircuts than a dollar spent in the United States). PPP takes into account this lower cost of living and adjusts for it as though all income was spent locally. In other words, PPP is the amount of a certain basket of basic goods which can be bought in the given country with the money it produces.

There can be marked differences between PPP and market exchange rates.[2] For example, the World Bank's World Development Indicators 2005 estimated that in 2003, one United States dollar was equivalent to about 1.8 Chinese yuan by purchasing power parity [3] — considerably different from the nominal exchange rate that put one dollar equal to 7.6 yuan. This discrepancy has large implications; for instance, GDP per capita in the People's Republic of China is about US$1,800 while on a PPP basis it is about US$7,204. This is frequently used to assert that China is the world's second-largest economy, but such a calculation would only be valid under the PPP theory. At the other extreme, Japan's nominal GDP per capita is around US$37,600, but its PPP figure is only US$30,615.

Purchasing power parity - Wikipedia, the free encyclopedia

[Sohei]

Originally Posted by CaliforniaBJJ

Yeah, but if they work some same job for same number of hours, they would buy less than American working the same number of hours.

Well exactly what country or countries are you referring to?

In poorer countries like Mexico and the Phillipines things are much cheaper but then again incomes are much lower as well.

In Norway things are more expensive because of the sales tax associated with them.

[AmericaOverAll]

Originally Posted by Sohei

Exchange rate. Also the countries economy.

In poorer countries things are dirt cheap compared to the US.

No, they arent. The US has just about the lowest food prices in the world for example.

One major reason shit is cheaper in the US is because we have a bigger market. The US is the biggest consumer market in the world. The more you buy the cheaper you get it.

[AmericaOverAll]

CARPE DIEM: As A Share of Income, U.S. Has Lowest Food Prices on the Planet; Europeans Spend Almost 2X As Much