Standards of Living in Asia

GERARD SWOPE, who was President of the General Electric Compan y from 1922 to 1940, and again from 1942 to the end of 1944, is one of the most beloved elder statesmen in American industry. In 1938 we published in the Atlantic his authoritative findings about the cost of living in Europe, and in June, 1940, his second analysis. “The Cost of Living in South America"; in 1950 he visited one country in the Near East and seven in the Far East, and here is his revealing comparison of their cost of living with ours.

by GERARD SWOPE

IN the year 1937 in the course of visits to European countries, and again early in 1940 in visits to several South American countries, I made some comparisons of standards of living which were published in the Atlantic Monthly. The articles aroused much interest and discussion, and thousands of reprints were made. This year I visited one Near Eastern and seven Far Eastern countries, not only to compare their standards of living with ours — a subject which has always been of absorbing interest to me — but also to see at first hand the various groups in countries bordering on the Pacific Ocean, and associated with the American Institute of Pacific Relations, of which I have been the chairman since December, 1949. In Table 1 I have compared the cost in workers’ time in the United States of some of the commodities discussed in my earlier articles with their cost in the United States in 1950.

TABLE 1

Number of minutes’ work required to buy certain commodities in the United States.

5 food Items 1937 1940 1950
1 qt. milk 1 doz. eggs 1 lb. bread 1 lb. butter 1 lb. meat 102 (1 hr. 12 min.) 135 (2 hrs. 13 min.) 110 (1 hr. 50 min.)
1 (30-watt incandeseent lump 12 13 0 2
1 k.w.h. electricity 3.6 4.5 1 7.5
1 copy of a newspaper 3.5 5 1.5

It will be seen that the various items all take less of the workers’ time to procure; that is not because there have been reductions in price in all items, but that workers’ wages have gone up.

The basis taken was the low-income group, the common or unskilled worker, using the day or hourly rate in the national’s money unit of value and how much that unit of value would purchase in the community where the worker lives. Wage rates or cost of living in different countries cannot be compared by reference to exchange rates of the money unit. In some countries exchange is limited and restricted; in others there is a great difference between the official rate of exchange and the actual rate. In one country (Indonesia) the unit of money had been literally cut in half: all bills of five gilders and over were cut in half, the left-hand half used in stores or at the bank for one half the number of gilders printed on the note, the other half turned in to the government, with the understanding that the bearer would receive a forty-year 3 per cent bond for one half the amount printed on the note, it would be entirely misleading to compare wage rates of these countries on a money basis, because of the difference in purchasing power or real value.

Before leaving the United States from New York in January, 1950, I took the generally admitted w age rate of common labor and the retail prices in corner stores of four articles of food — milk, eggs, bread, and butter — and four other items in general use — a 60-watt incandescent lamp, a kilowatthour of electric energy, a gallon of gasoline, and a newspaper.

Food of course varies in the different countries, especially because of the difference in latitude from the North Temperate Zone of the United States to below the equator in Indonesia, and varies too in character, kind, and quantity; but all of the items in Table 2 are used to some extent in all the countries I visited: therefore the same four articles of food have been taken — one quart of milk, one dozen eggs, and one pound each of bread and butter.

TABLE 2

Number of minutes’ work required to buy four food items.

1 qt. milk 1 doz. eggs 1 lb. bread l lb. butter
Israel 24 87 21.5 32.7
Pakistan 600 720 210 1380
India 168 204 40 444
Ceylon 90 450 45 450
Malaya 150 345 37.5 300
Indonesia 480 1260 168 360
Philippines 96 231 40 270
Japan 120 270 45 720
United States 10 37.4 6.7 34.3

The length of time an unskilled worker in the United Stales must work to procure one quart of milk, as shown in Table 2, is ten minutes; in Israel twenty-four minutes, over twice as long; in Pakistan six hundred minutes, or sixty times as long.

A glance at Table 3 will show that to procure the stated quantity of all four food items, a worker in the United States must work one hour and twentyeight minutes, while in Israel he must work two hours and forty-five minutes, or twice as long. In Pakistan he must work forty-eight hours and thirty minutes, or over thirty times as long.

TABLE 3

Total time required to buy all four food items.

Israel 2 brs. 45 min
Pakistan 48 hrs. 30 min
India 14 hrs. 16 min
Ceylon 17 hrs. 15 min
Malaya 13 hrs. 52 min
I ndonesia 37 hrs. 48 min.
Philippines 10 hrs. 40 min
Japan 19 hrs. 15 min
United States 1 hr. 28.4 min

It will be noted that Tabic 2 shows great variety in some items between even neighboring countries. It follows that the longer a man must work for these four food items, the lower his standard of living; therefore the highest standard of living is in the United States. In second place, notwithstanding all its difficulties and large monthly immigration, is Israel; and in third place the Philippines. Far down on the list are Indonesia and Pakistan. While Japan is low because of the war, it is rapidly improving.

Also reflecting the standard of living are the it tans in Table 4: one 60-watt incandescent lamp, one kilowatt-hour of electricity, and one gallon of gasoline. The three countries, the United States, Israel, and the Philippines, also show the least amount of work to procure these items. The countries with the lowest standard of living, Indonesia and Pakistan, also take the longest working time to procure these items.

TABLE 4

Number of minutes’ work required to buy three commodities.

1 60-watt incandescent lamp 1 k.w.h.electricity 1 U.S. gal. gasoline
Israel 17 7 45
Pakistan 1020 120 780
India 174 28 288
Ceylon 180 12 285
Malaya 105 33 285
I ndonesia 360 4S0
Philippines 10 20 105
Japan 105 8 120
United States 6.2 1.75 12

The last item is the daily newspaper, the cost of which is shown in Table 5. It is also a reflection of the standard of living and the literacy of the country, with the United States, Israel, and Japan in the first group and Indonesia and Pakistan last. This also indicates not only the literacy or education of the people, but the fundamental basis for democracy.

TABLE 5

Number of minutes’ work required to buy one newspaper.

Israel 4
Pakistan 60
India 8.4
Ceylon 1.5
Malaya 20
I ndonesia 60
Philippines 10
Japan 4
United States 1.5

The total kilowatt-hour use of electricity per capita per year is a reflect ion of the degree of industrial development in a country and of the use of electricity in the home for lighting and household appliances. In the U.S. the kilowatt-hour use per capita per year is 2000, in Israel and Japan 400, in the Philippines 23, in Indonesia 5.2, and in India 1. I have no reliable figures for Pakistan, Ceylon, or Malaya, but the figures are very low, probably less than 1.

The use of gasoline and petroleum products tells approximately the same story. The annual consumption in gallons per capita in the U.S. is 600, in India 6, in Indonesia 8, in the Philippines 24, and in Japan 9. From this study and comparison of the standards of living in these countries and the use of electrical energy and of petroleum products, two conclusions may be drawn: —

1. That the central impetus in the Near and Middle East in improving education and standards of living is and will be Israel.

2. All the rest of Asia (exclusive of U.S.S.R.), Indonesia, and the Philippines will look to Japan for progress and development of education and standards of living.