Sunday, June 17, 2007

Pack Your Moneybags

The good people behind the Global Rich List want to be the travel agents for your next guilt trip.

It's an elegantly simple concept - they ask you how much money you make in a year, and then place you on a little continuum that shows your relative place on the global money train. The overall idea is for people in the Western world to understand how well off they are in comparison to the world's desperately poor, and hopefully to "help redress the balance," by making a donation to a worthy cause. GRL themselves seem to be partial to CARE International, which they link to from their website.

But, as with a lot of things that have been deliberately simplified, this particular concept has been perhaps over-simplified. For instance. The rankings don't do anything to take into account the relative cost of living from one place to another - the value of a set market basket from one place to another that economists use when determining the relative values of currency - for instance, a United States Dollar, spent in the People's Republic of China, buys considerably more than that same Dollar would here in the United States. So while there are a number of people throughout the world that are forced to subsist on $1.00 a day, it's a pretty safe bet that one would have to spend significant more than that to match their standard of living here in the United States.

By the same token, however, they rely on that same disparity to generate donations, by pointing out how much good can be done in foreign countries for only a small amount of money. For instance, they state that $8.00 will by 15 organic apples in the industrialized West, but 25 productive fruit trees in Honduras.

Another tidbit is that their methodology of creating the rankings doesn't allow for the numbers to match up. They are using a pretty smooth curve to plot the relative levels of income of the world's population, and that curve doesn't even begin to match up with the numbers that people commonly cite when they speak of such things. For instance, it's commonly said that there are 1.3 billion (out of an estimated world population of about 6 billion people) living at $1.00 a day or less. But the curve places that number much lower, plotting that only 600 million people have a $1.10 or less in income every day.

It doesn't take much to realize that Americans are remarkably adept at seeing themselves as impoverished, even while they live lifestyles that are the envy of most if the developing world. And I suspect that we'd better off, if we had a better idea of how we stacked up against people other than the residents of the neighborhood McMansion (or real mansion, for that matter). The Global Rich List is a start, but I suspect that it's going to take something a little more concrete, and a little more accurate.

1 comment:

ben said...

Too true... my mother is considered destitute because she's being put on long term disability which should still bring her in $40K/year :)

Eventually globalization will catch up to the poor and they'll price themselves out of existence. China is no longer all that cheap - especially the cities which boast some of the highest real estate prices this side of Medina.