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Quite often, in conversations with people from other countries, we start comparing salary levels. Although gross income can vary significantly, purchasing power, most likely, will remain approximately at the same level, which is especially evident in the real estate market.
Is the grass really ‘greener’ on the other side?
Thanks to social media , I talked to many specialists in my field who , and gathered data on salaries (data was also taken from ) and calculated the parity (PPP) salary in other cities in relation to the salary in my hometown – St. Petersburg (PPP data was taken from ).
How can we compare countries by cost of living today?
The constant rise in prices for goods and services globally, which is associated with , does not allow a person today, planning to move to another country, to gain an understanding of the cost of living and the cost of services in a foreign country.
The chart shows the median interest rates worldwide over the last 200 years, which until 1980 were at a balanced and reasonable level: about 4-6%:
The reduction in interest rates and the decoupling of the dollar from the gold standard in 1971 – , which became a phenomenon of the 21st century.
The same phenomenon at Deutsche Bank.
As a result of these events, in countries are established:
1. mismatched central bank interest rates
2. heterogeneous inflation
3. varying real estate prices
4. unequal price levels
5. different cost of living
How can we compare ‘Cost of Living’ across different countries today?
To assess life in another country, we can use the concept of — Purchasing Power Parity (PPP)
About purchasing power parity (PPP)
Purchasing Power Parity the ratio of two or more monetary units, currencies of different countries, established based on their purchasing power concerning a specific set of goods and services
Learn more:
What is PPP using the example of a Big Mac price?
Big Mac Price: p1
Berlin-$4.70 / New York-$5.70 / Saint Petersburg-$2.10
Big Mac PPP (Purchasing Power Parity) to Saint Petersburg: p2=p1/2.10
Berlin-2.2 / New York-2.70 / Saint Petersburg-1
Monthly Salary = after taxes: p3
Berlin-$2085 / New York-$3900 / Saint Petersburg-$1150
PPP based on the Big Mac - monthly salary in the city
relative to the salary in Saint Petersburg: p4=p3/p2
Berlin - $940 / New York - $1470 / Saint Petersburg - $1150
This logic can also be applied to other goods: from 'jeans and eggs' to the cost of Toyota cars and utilities.
To do this, on the website Numbeo.com thousands of people fill in data on the prices of goods and services in their city (only data for the last 18 months are used, after which these 'prices' are mathematically averaged). Additionally, volunteers manually collect data from established open sources and these prices of goods and services are supplemented by city twice a year..
An example of several (out of a total of 50) expense categories in Saint Petersburg (the number of people who filled in data for Saint Petersburg over the last 18 months is 524):
The article takes PPP for 50 different expense categories. Data on relative ratios are as follows:
Local_Purchasing_Power_Index = (Average_Disposable_Income(This_City) /
(BasketConsumerPlusRent(This_City)) / (Average_Disposable_Income(New_York) /
BasketConsumerPlusRent(New_York)) BasketConsumerPlusRent(City) =
sum_of (Price_in_the_city * (cost_of_living_factor + rent_factor))
An example comparing the cost of living in Munich (Germany) and Saint Petersburg (Russia)
Comparison of the cost of living in Rostov-on-Don and San Francisco (USA)
In my small subjective study — I believe that the PPP cost of living index is adopted for average expenses in this city for a family of four. (open data from ). The article discusses the situation where a person living in city N invests and spends earned money, in this same city N..
Why BIM (engineers and coordinators)
BIM engineer (1-2 years of experience) — this is an entry-level position in a construction organization (previously a BIM engineer was called a 'Designer', now it is called a BIM engineer). A BIM manager (4-6 years of experience) is a person with experience who should be able to program a bit, but not more.
The share of properties under construction using BIM will soon constitute80% of all properties under construction. about 3% of Russia's GDP (up to 12% globally). BIM engineers and coordinators are former design engineers in construction. Judging by (with about 2000 participants) — the number of specialists in this position in Russia at the moment is between 10,000 and 20,000. The salary ratio in each country — BIM Engineer / BIM Coordinator / BIM Manager: 100% / 125% / 150%. Soon, all engineers working in planning will, in one way or another, work with BIM technologies, and all engineers can apply the BIM prefix to their position..
Conclusions:
1. The total annual salary (which is usually discussed in the West) varies significantly depending on the country, while the net monthly salary, when converted to purchasing power, is practically the same.
For example, The total annual salary of Kyiv vs San Francisco has nearly an 8 times difference., while The net monthly salary will differ only by more, and the package often contains.
2. The lower your annual income, the more m² you can buy in your city for 10 years.
With the money earned (assuming half of the salary is saved over 10 years) in cash (without using a mortgage), one could buy 46 m² of real estate in Kyiv and 31 m² in San Francisco.
The countries considered in the calculations are approximately equal in terms of safety, quality of education, and healthcare services. Each of these aspects has its advantages and disadvantages in each of these countries. These aspects
are difficult to analyze , unlike prices for goods and services.At the moment,
to be in the top 10% of the highest-paid people in the world, one needs to have an annual income of $14,500.
.
$15,800 per year (the net monthly salary is $1,150 or 71,000 rubles). Based on parity, if they offer you $47,000 gross per year in Boston or Dublin, expect that it is roughly equivalent to a salary of 71,000 rubles. net per month in Saint Petersburg. Although this is
a subjective opinion, I believe it can be relevant.I welcome your feedback.
My original article on LinkedIn (in English).
Will you find more salaries in another country? Not really… Engineering Salaries Worldwide.
Artem Boiko
with an accuracy of ± 10%. Link to the table (Google Spreadsheet)
BIM Salaries vs PPP
Where the data came from
The salary discussion was held (thank you to those who participated) in the group "BIM Russian expats" on LinkedIn —
Annual gross salary:
Tax rate:
Price per m² for purchase:
Purchasing power parity (PPP) to St. Petersburg:
Source: habr.com
