ELI5: For the same amount of effort and work, why is a teacher in the US or europe able to purchase so much more (local and foreign) products compared to a teacher in third world country?
Chad for example – Teachers get roughly 250 – 330 USD a month.
In the USA it’s 5800 USD.
This is because mainly they rely on agriculture as their main source of their countries output.
Same applies to birthrates – in chad it’s incredibly high (as with most developing countries) which dilutes workforce. Loads going for the same jobs. Include in that lack of education and skills. It’s just a vicious cycle
So, basically, when you make more money because the cost of living is higher, you end up also living with more debt. Debt, becomes a staple of almost every single household. If the question is about “being able to purchase more” then that is your answer. The largest population percentage growth is in low income families, and that’s around the world. It is a continuing trend. If developing nations had companies that were willing to throw every family $30000 of credit based on a high interest rate, those teachers would buy much more too.
Here the answer is very straight forward, a US teacher is getting paid by much wealthier taxpayer than Kenian teacher. The same goes for pretty much all apples to apples jobs, a brick laid down in US is much the same than one laid down in Kenia, but the one in US costs more simply because the country is richer.
But while many parts of the economy are circular like that, it doesn’t mean the entire economy is like that. An engineer in US is able to create much more value than one in Kenia because of better education, better tools, better access to markets and finances etc. There are many parts of the economy that do in fact produce much more value in one country than in another for the same amount of labor.
Each place has its own economy that mostly doesn’t interact with the economies of far away places.
The salary of a teacher in a place depends on how hard it is to become a teacher, how many people want to be teachers, how many teachers are needed, and how much people are willing to pay to hire a teacher. All of those things can vary from place to place.
Similarly, the price of things depends on how much they cost to make (including the salary of the people involved and transportation costs), and how many people are willing to pay how much for that thing.
Buying power also depends on other variables like taxation.
There’s no good reason to expect the buying power from a particular salary in a particular place to be equal to any particular number from another place, unless it’s very easy for, say, teachers to move between those two places in search of a better life as a teacher.
Comments
US teachers make closer to third world country teachers compared to Europe and Canada.
Because minimum wage is much higher in developed countries
Because they’re a third world country? They have a worse economy. That’s it.
Poor economies in general.
Chad for example – Teachers get roughly 250 – 330 USD a month.
In the USA it’s 5800 USD.
This is because mainly they rely on agriculture as their main source of their countries output.
Same applies to birthrates – in chad it’s incredibly high (as with most developing countries) which dilutes workforce. Loads going for the same jobs. Include in that lack of education and skills. It’s just a vicious cycle
So, basically, when you make more money because the cost of living is higher, you end up also living with more debt. Debt, becomes a staple of almost every single household. If the question is about “being able to purchase more” then that is your answer. The largest population percentage growth is in low income families, and that’s around the world. It is a continuing trend. If developing nations had companies that were willing to throw every family $30000 of credit based on a high interest rate, those teachers would buy much more too.
Here the answer is very straight forward, a US teacher is getting paid by much wealthier taxpayer than Kenian teacher. The same goes for pretty much all apples to apples jobs, a brick laid down in US is much the same than one laid down in Kenia, but the one in US costs more simply because the country is richer.
But while many parts of the economy are circular like that, it doesn’t mean the entire economy is like that. An engineer in US is able to create much more value than one in Kenia because of better education, better tools, better access to markets and finances etc. There are many parts of the economy that do in fact produce much more value in one country than in another for the same amount of labor.
Each place has its own economy that mostly doesn’t interact with the economies of far away places.
The salary of a teacher in a place depends on how hard it is to become a teacher, how many people want to be teachers, how many teachers are needed, and how much people are willing to pay to hire a teacher. All of those things can vary from place to place.
Similarly, the price of things depends on how much they cost to make (including the salary of the people involved and transportation costs), and how many people are willing to pay how much for that thing.
Buying power also depends on other variables like taxation.
There’s no good reason to expect the buying power from a particular salary in a particular place to be equal to any particular number from another place, unless it’s very easy for, say, teachers to move between those two places in search of a better life as a teacher.