Obsession with numbers

I’ve always been somewhat addicted to math as it relates to freelance writing. I love using numbers to prove a point, especially when it can be used to educate people away from the tired old “omgz t3h content millz r EVIL” mentality. Perhaps it’s due to my enjoyment of the show Numb3rs, currently enjoying its 5th (or is it 6th?) season, or perhaps it’s just a perverse addiction to being right. Probably the latter.

Definitely the latter upon further reflection.

If you paid attention to my recent Content Writing Experiment, you saw me delve into the raw numbers as presented by the US Department of Labor. You also saw me touch on the concept of livable wage, which is a flawed concept that does not apply to a global pool of freelancers living in countries around the world where living expenses, taxes and other amenities vary drastically.

The obsession with numbers led me to take a closer look at what livable wages really are, and what living expenses are compared to median wages across the world. I’m going to use only two examples for this particular post: Italy and the United States.

The United States

In 2009 the median wage for an American citizen was just over 18 USD per hour. That’s around 35k a year. For a 40 hour a week job.

The median living expenses for an American citizen are around 2k USD per month, or 24k USD per year.

I’m not even going to go into the whole addiction to credit thing that has almost every American out there believing that if they don’t make 60k a year or more they are “poor”. I’m simply presenting the raw numbers. The average US citizen makes 35k a year against living expenses of 24k a year. This does not take into account ANYTHING above and beyond the BASIC living expenses…rent/mortgage, utilities, insurance, groceries, vehicle, taxes, etc.

What that means is that the average US citizen should be able to walk away with around 11k USD per year above and beyond living expenses, or around 30% of their total income for the year.

Italy

The median wage for an Italian citizen is 25k Euro a year. Given the current exchange rate 0f 1.4, that’s around 34k USD per year. Roughly the same as the average US citizen.

Here’s where the discrepancies start.

The average work week in Italy is 20-25 hours a week. Half of what the typical American works. In other words, Italians work half as many hours for the same amount of money.

The median cost of living in Italy is 700 Euro a month, or 950 USD per month. Let’s round that up to 1k a month, just for the sake of argument. That’s a total of 8400 Euro a year of living expenses, or rounded up to 9k, just for the sake of argument. That means the average Italian is left with 16k Euro a year above and beyond living expenses, or around 65% of their income.

So, Italians work half as many hours for the same amount of wages, and have half the cost of living expenses. And as everyone knows, Italy is one of the best European countries to live in. Their amenities are the same as every other developed country on the planet, and they have an extremely high tax rate. They have exceptional food, exceptional wine, and exceptional living conditions. There aren’t trailer parks scattered across the landscape, there’s no welfare system, and they aren’t suffering from an economic recession at the same level as the American people.

The raw numbers

Looking at those basic statistics, the average American is left with 30% of their income after living expenses to use for paying taxes, loans, and any and all amenities above and beyond basic living expenses. Meanwhile, the average Italian not only worked half the hours for the same amount of pay, but they are left with double the amount of expendable income used for the payment of taxes, amenities, and expenses above and beyond basic necessities for life.

Someone other than me, over in this thread, pointed out the statistics shown over at NationMaster’s website. Using the math (I haven’t delved into it much yet, but I will later on!) presented, Italy is only 12% behind the US in terms of total productivity of money per year as an entire country. What that means is the average Italian citizen is working roughly 76% more effeciently than the average US citizen in terms of hours per year worked.

In other words, for every hour worked, an Italian is 76% more efficient in terms of income. They are making 76% more money than the average American citizen. For the average American to achieve the same ratio of hours work against total living expenses, they would need a 76% pay raise.

Come again?

You heard me. 76%. And keep in mind that Italy is not the highest income bracket country in the EU.

Now, while these numbers are by no means conclusive (I’m not even delving into the average amount of money per year most US citizens spend on excess compared to those in Italy or other parts of the world, nor am I going to compare the average amount of debt, or the addiction to credit cards and the credit system that only exists in the US), nor have I looked at some of the poorer (or richer) countries in the European Union, it points out a fairly stark difference in livable wages between two “highly” developed countries.

When most people think of Italians they think of luxurious buildings, ancient history, villas, wines, cuisine, Mediterranean resorts, and some of the most amazing scenery in the world. And they are correct. And ironically enough the average Italian can work 20 hours a week, make the same amount of money as a 40-hour-per-week US citizen, and walk away with 60% of their paycheck in hand after the basic costs of living compared to the 30% that the average US citizen has in hand.

Livable wages are a myth. It is a term used by individuals who do not understand global concepts, global agendas, and global relations. Going hand in hand with livable wages are standardized wages. There is no such thing as an “industry standard”. Why? Because the same industries exist in both Italy and the United States, yet the costs of living in both countries is drastically different, meaning that the wages for employees can potentially be that much different.

Look at a person living in Seattle. They are required to make X per year to cover their living expenses. Compare that to a person living in Santa Fe. Now compare that to a person living in Mexico City. Rome. Athens. Sydney. London. Aruba. Any international city you choose to plug in.

See the pattern?

At the end of the day where you choose to live in the world can dramatically change your ability to access your hard-earned money. If you choose to live in a country where the cost of living eats up 70% (or more) of your income before you even get to paying taxes and amenities…well, let’s just say I don’t envy the people who are forced to work 40, 50, 60 or more hours a week just to make ends meet.

The next time someone brings up the great rate debate, educate yourself before you enter the discussion. It helps to be able to prove your point and show that you understand what it means to be globally aware and globally educated.

T.W. Anderson is the founder of Complete Writing Solutions, and is a freelance writer specializing in travel writing, website content, interior design and home improvement, green-related topics, as well as anything else potential clients need him to be.

Posted in Freelance Writing 101 Tagged with: , , , , , , ,
2 comments on “Obsession with numbers
  1. T.W. Anderson,

    Perhaps we should all move to Italy!

    Working 20-25hrs and still being able to save such a high portion of one’s income – way to go.

    Your comments are right on the money. Levels of average income and living expense will vary in different parts of the world. So too, as you point out, does the number of hours which the average person would need to work in a particular week in order to cover basic essential living costs – even within the same occupation group or profession.

    Given this, there is no one singular figure which every person around the world needs to make in order to afford a basic lifestyle.

    I recently spent some time teaching English in South Korea, where I found that I was able to save around 40% of my income whilst still enjoying a reasonable standard of living, and was able to return home to Australia having built up a fair amount of savings. But results are completely different for those in exactly the same occupation in neighboring countries. In Japan, teachers earn a higher wage, but from what I am told, living costs are very high and many teachers struggle to save anything at all. In China, on the other hand, teachers earn what I think is a reasonable wage by Chinese standards, but converts to fairly negligible amounts once the teacher in question returns home to any developed country.

  2. Yep, Andrew. It also depends on the wages of the country. For example, wages in Bulgaria very low, but they are new to the EU and have not switched to the Euro yet. The “average” here is around 1500-2000k leva a month, or 1-1.4ishk USD per month, or 12-15k USD per year. But that is offset by the fact that families live together, almost no one rents (everyone has family property that is shared by whomever needs it.), and the cost of living is amazingly low. My wife was reading an article awhile back (forget where) in which it showed that despite the low wages, the cost of living was such that Bulgarians have typically 40% more disposable income than the average American.

    Just depends on where you live.

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