price comparisons - question
 

In quite a few threads here people write things like "it all averages out" when you compare Canadian wages/prices to UK wages/prices. I am truly confused. The price of real estate in major cities, price of gasoline/petrol, new car and major appliance prices - all are about double in the U.K. Most (not all) food is more expensive there. Having briefly - and admittedly not very thoroughly -done salary comparisons, it seems to me that the average U.K. wage is approx. 30 - 40% higher than in Canada. How on earth can it then"all average out"? I find life in Canada incomparably cheaper than in the U.K. You can buy a decent car without breaking the bank, you can buy a very decent house (except in certain parts of B.C.) on an average salary and my wife and I eat out two or three times a week - something we could *never* do in the U.K. She earns about 50K and as a free-lance musician (albeith a fairly well established one), I earn about $35K. The kids are grown and not a major drain on our finances. Perhaps my view of this is skewed but whenever I visit the U.K (London and Reading) I'm aghast at the prices and then read with astonishment on this board that when salaries are compared it all equals out. Does it really?

GTR

Re: price comparisons - question
 

I have to agree with you there - we went from UK to Germany - found that cheaper to live than England - then here, cheaper still! I'm sure it's true in some areas (that things average out), but overall, I'd say no - it IS considerably less expensive to live here. We had good incomes in the UK and still found it a struggle to make ends meet. Not anymore. I think the 'disposable income' portion is probably greater here, AND it goes further :)

Re: price comparisons - question
 

Well we have done the detailed comparions and projected our Canadian costs (not there yet, still in UK but seems to be 20 to 30% more-for-money in Canada than here, howver you compare. Mind you, we're not planning the monster 5 bedroom house, eating out each night, buying two $50k trucks and having 2 Hawaiian/Caribbean vacations a year.

Canada def offers better bang for buck in our view. :) but also it's not just about the money for us.

Rich.

Re: price comparisons - question
 

A combined salary of CDN85K sounds fairly impressive to me.....obviously I'm no expert, but a UK salary of around £36K (taking an exchange of 2.3:1) would be way above average.

The average wage here is supposedly around £24k pa, but not too many people seem to come even close to earning that, so I don't know where the (Government) figures come from.

I think the bottom line is......enjoy what you have, and the next time you are having a little :beer: , think how lucky you are!! ;)

All the best

Scouse

Re: price comparisons - question
 

Exchange rates are not a good way of determining costs and living standards. A more accurate method is "Purchasing Power Parity" http://fx.sauder.ubc.ca/PPP.html or a more simplistic approach is by determining how long do you have to work to buy something like a gallon of gas, a house, a car or Big Mac.

Re: price comparisons - question
 

I think you will find that when we speak about things being the same - it is relativity we are talking about.

For example:

House in UK - £300,000 = House in Canada - $300,000
Salary in UK - £35,000 = Salary in Canada - $35,000
Petrol in UK - 89p per litre = Petrol in Canada - 89c per litre
Car in UK - £15,000 = Car in Canada - $15,000

Generally it works out the same, just forget about currency exchange rates or which currency symbol you use. I find with almost everything it is the same figure in $'s as it is in £'s.

*edited to say* Obviously when you go on holiday to UK you will see everything is more expensive when you do the exchange calculations, but that isn't what we are talking about.

Re: price comparisons - question
 

I understand what you're saying - but I wasn't talking 'numbers' or exchange rates - just how things seem to be for us financially, and they are markedly better :)

Re: price comparisons - question
 

I think the bit where it falls down is the salary comparison part. My wife and I both earn $35K which would be a total of $70K. There is no way that it is equal to UKP70K. With $70K and no kids we manage a reasonably high rent (Toronto) and everyday stuff like phone, cable and food and have enough spare for entertainment and some savings etc. but we can't afford a car and no way we could get a mortgage to buy a house that costs $300K. While the house prices in the UK are equally insane as they are here (can't find a decent house in my area under $450K) I am fairly sure that if we had an income of UKP70K outside London area then we could at least afford a car. Obviously it depends where you are. I'm fairly sure you could take $70K outside the Toronto commuting GTA and get a house and car, but of course you'd have to also find a job to pay you some money as well. It's not as bad as the exchange rate but I think it's a little less than just switching the dollar and pound signs.

Drew

Re: price comparisons - question
 

Let me verify before I go any further: you "cannot" afford a car making 70k CAD??? WHAT???? 70K after taxes gives you about 50k cash per annum, of which "surviving" expenses as I calculated them (east of Toronto, $1250 rent, two kids) averaged 3k per month or 36k per year which leaves 14k for miscelleanous stuff PER YEAR out of your combined salaries. A decent car will cost roughly 20k and it will last at least 10 years with minor maintenance cost (if it's Japaneese, of course :D ), even figuring cost of insurance and gas - please don't tell me that out of 140k for 10 years of spare money you cannot afford a 20k car which will last at least that long....

Re: price comparisons - question
 

I trust your judgement on expenses being equal when dropping the currency symbol, but are you sure you got your salaries right? Are you saying £35,000 is as common as CAD$35,000 in Canada? This would mean that people in UK make roughly 2.37 more than in Canada which nowhere agrees with the statistical economic data nor common sense (Canada being so much behind the "developed world"?)

To back up my words, one decent economic figure which often translates nicely into salaries people actually receive is Purchasing Power Parity which according to 2005 CIA Factbook equals ~$27k USD in UK, while it's around ~29k USD in Canada...

Re: price comparisons - question
 

I bought a beautiful three bedroom house with all the bells and whistles in Oakville (in 2003) for 269K. A *very* decent used car can be had for 10K. But those are minor quibbles. The major point is that while 35K is pretty close to an average Canadian salary, this sum is way above average for the U.K. As I said before: I simply do not see where it all averages out. One could argue that culturally the U.K. has much more to offer and unemployment there is lower - but the standard of living is undesputably higher in Canada overall.

GTR

Re: price comparisons - question
 

Whilst Tiaribbon is correcty on the comparisons and I am not even there I have read a lot about the statistics of earnings and have found that differential between average household incomes is about a quarter overall and seems to be getting closer as time goes by. Average household income in Canada is around $83,000 (£36,000) and in the UK it is £27,500. A major cost factor in the last few years has been housing and a reportedly tripling of the cost of a home in the UK. In Canada the house we were looking at 15 months ago has gone up by $50,000 which is reflected in the housing boom which is still underway whilst the property boom has stalled in the UK. I wonder if the costs will become much closer?

Saying that the environment that the average salary will buy is somewhat different from Canada to the UK due in part to the huge amount of old and social housing that was and is being constructed in the UK. But I have seen brochures of many new developments in Canada recently where the space allocated (plot) seems to be getting ever smaller which I am sure is a reflection of get rich quick on the part of the builders who are seeing the benefits of a housing boom.

Perhaps then the financial benefits are not what they appear to be.

But from a personal perspective (us) it makes sense. Also the buying power of the average graduate is greater in Canada than the UK - perhaps this is the worry about the brain drain to the south and quality people command more...?

As far as average wages are concerned I read that a houshold salary will at least buy you a 3-4 bed detached new home or a smart condo. In areas in the south of the UK a graduate will be lucky to afford a one bed flat in a not very nice area.

In short comparitives are not what they seem to be but where is? You pay your money - you take your choice but do your research first.

But if you have a job in the UK it is quite different to no job in Canada. We are faced with a major change in our business life coming towards us so we have a real incentive to make a new start. If I was settled in a job with a nice pension and plenty of prospects within a company I would give it serious thought. Depends on personal circumstances and what you want out of life and where you want to 'try' and live.

PS. One thing you might have to ask is this. You...the parent may think you have won small fortune when converting your hard earned money but what about your children. If they are starting with nothing like we did you are on a level playing ground. Then you need to say where do you think your children will have the greatest chance of not working themselves into the ground in a difficult economy with a poor 'lifestyle'. My vote is with Canada - not Europe. But only time will tell

Re: price comparisons - question
 

It could be that the smaller lot size is a typical Yuppie requirement for 2 working parents. Part of the low maintenance lifestyle along with outsourcing the housecleaning and bringing up the kids.

Re: price comparisons - question
 

I have found the same.
Coming from the UK, Canada seems very cheap, but it's only in proportion to wages. You earn less over here.

Re: price comparisons - question
 

But just mulling it over I would hope that IF my children could end up earning $40-$50,000 as graduates a car for $15,000 is a lot less of a years salary than £15,000 from a UK salary at £25,000. Here's wishful thinking perhaps.