Cost of Living Rising

In addition to yesterday's post regarding the cost of living in Korea, today the Korea Times published an anonymous op-ed simply titled "Korea-US Price Gap." The article, lacking decent sources as usual, is copied below. Again, I plead with you, Korea Times, quit with the flash-based Website so I can just link you.

The major problem mentioned in the article states that, though prices in Korea are 95% of what they are in the US, the per capita income is only $18,000, "less than half of Americans' average income." Real estate aside, the Korean people don't live as Americans live, thus making the comparison of costs-of-living somewhat misleading.

In Moscow, a city which is becoming known for ridiculously overpriced everything, the average salary for a police officer or school teacher is bafflingly low (exactly what the salaries are, I can't recall), yet these people aren't starving to death. They're living like Russians, not Americans. And Koreans are going to live like Koreans, not Americans.

Luxury, often associated with American and other Western goods, trends, and fashions, is expensive everywhere, even here.

From the Korea Times:
...
South Korea is on the threshold of being on par with the United States and other advanced countries in terms of consumer prices. This means that Koreans' purchasing power is growing weaker than that of their American counterparts in the wake of steep price hikes over the past several years.

The nation's consumer prices reached 95 percent of those of the U.S. last December. In other words, South Koreans pay $95 to buy a product here that is sold for $100 in America. This betrays a general belief that consumers can get products, especially manufactured goods, at much lower prices in Korea than in the U.S. Regrettably, that is not the case. South Korea is no longer a cheap country to live in.

The price gap between the two countries has rapidly narrowed since 2001 when Korea's price level was estimated at 63 percent of the U.S. average, the National Statistical Office (NSO) reported Sunday citing data from the Organization for Economic Cooperation and Development (OECD). The comparable figure stood at 68 in 2002, 70 in 2003, 84 in 2004 and 86 in 2005.

Considering that South Koreans' per capita income is currently about $18,000 which is less than the half of Americans' average income, the narrowing price gap is bad news. What's worrisome is that Korea might soon catch up with U.S. prices if the trend continues.
...
However, the main culprit of the price hike is skyrocketing home prices amid rampant property speculation. It is not surprising that Seoul has emerged as the third most expensive city in the world when it comes to housing for salaried workers. A recent survey by a multinational real estate agency revealed that Seoul recorded the average housing price of 18.35 million won per pyong (3.3 square meters) of floor space, following Moscow with 20.04 million won and Paris with 30.61 million won. In fact, Seoulites live in a place whose living cost is much higher than Tokyo and New York. ...