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Sunday
Sep182011

Cost of Living

   A month or so ago there was a report on NBC’s Nightly News about the rising cost of living in the United States. In spite of the anemic recovery and stubbornly high unemployment figures, consumer prices were steadily rising, exacerbating a difficult situation for millions of Americans who were already struggling to make ends meet.

   The report went on to list the average price of the following items:

A dozen eggs    $1.68

A pound of chicken    $1.30

A pound of beef    $3.62

A gallon of milk    $3.62

A pound of coffee    $5.24

 

   My first reaction was, “A gallon of milk? A pound of beef? Who the hell buys that much?” My second reaction was, “Good god, that’s cheap!”

   Obviously, I’ve been living too long in Japan where meat is sold by the gram (100g = 3.53oz), milk by the liter (0.26gal), and where the sticker shock of groceries would send the average American pensioner to an early grave. (Even a multi-millionaire relative of mine who was posted to Tôkyô several years ago complained of the prices. Now that’s expensive!)

   Curious to know how local prices compared, I went to the neighborhood supermarket and came up with the following:

 

Six eggs    ¥158

100g of chicken    ¥98

100g of beef    ¥480

1 liter of milk    ¥198

7 oz of Lions coffee    ¥998 ~

 

   In American units and dollars these would come to (drum roll, please):

 

A dozen eggs    $4.10, or 2.5 times more expensive

A pound of chicken    $5.79, or 4.5 times more expensive

A pound of beef    $28.30, or 7.82 times more expensive

A gallon of milk    $9.73, or 2.69 times more expensive

A pound of Lions coffee $29.63, or 5.65 times more expensive

 

   With prices these high, consumption habits are naturally going to be different. Instead of buying a gallon of milk, a Japanese housewife will buy just one liter and make it last. (No chugging milk straight out of the bottle here.) She’ll also prepare meals with far more vegetables and seafood, which tend to be much more affordable, than her American counterpart. In Japan, for instance, hamburger patties are often made with a mixture of ground pork and beef, known as aibiki (合い挽き), which is cheaper and many would argue tastier than pure beef. (I agree.)

   The Japanese housewife will, generally speaking, fix a larger percentage of her family’s meals herself rather than rely on store-bought items, such as pre-cooked deli goods and frozen foods. Cooking from scratch not only lowers costs considerably, but is more healthful, as well. More meals will be eaten at home, too, meaning that, all things considered, the Japanese family probably spends a lot less on food than would seem possible given the prices of groceries. (I’ve tried to find stats on the Engel’s Co-efficient[1] by country to see how Japan compares to the U.S. and other countries, but have so far been unsuccessful.)

 


[1] Engel’s Law states that as income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. In Japan, the Engel’s co-efficient, which is taught in junior high school home economics classes, describes the percent of income spent on food.

 

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Reader Comments (6)

I've found a number of sources which claim that the average America spends less than 10% of his disposable income (income remaining after deduction of taxes and other mandatory charges, available to be spent or saved as one wishes) on food. According to one study, "the percentage of disposable income spent by Americans on food has dropped over the decades. In 1929, it was 23.4 percent. Since 2000, the share of such income spent on food has run between 9.4 and 9.9 percent."

While the Statistics Bureau of Japan reports that some 23% of income is spent on food, another study by National Geographic showed that spending on food as a percent of gross income in 2010 was 9.69% in Japan, compared to 4.66% in the U.S.

September 18, 2011 | Registered CommenterAonghas Crowe

Good post.

American women have to learn to cook. I am talking about an average American housewife. I cannot understand how my neighbor who is a housewife and has 4 kids doesn't cook. It is a disaster in my opinion. Eating frozen pizza or Subway sandwiches every day? If I were her husband, she will no longer be my wife. Sorry, neighbor!

Sandy

September 18, 2011 | Unregistered CommenterSandy

I meant "...she would no longer..."

Sandy

September 19, 2011 | Unregistered CommenterSandy

Having spent the last 12 years in Australia with 1.5 years of those somewhere in the middle in Fukuoka, I'm always shocked at how cheap prices are in Japan and how good the quality is.

Australia, for such a large country with a lot of space/soil ready for agriculture always delivers grossly overpriced and average greens and fruits...
Just as I am shocked at Japans prices, I'm often dumbfounded by Australia's ... for example Bananas. I saw them for $14 a kilo (US$15-ish) this May or June.... Why can I get them in Japan for 95yen a kilo (about $1.15...?)..
http://www.imageupload.org/?d=FF5790731

It seems they've dropped now to just AU$2.31 per banana, so a bunch of 5 may cost about AU$11.55 (over US$12.50)
http://www.homeshop.com.au/website/product/dept_landing.jsp?FOLDER%3C%3Efolder_id=2534374302037962&bmUID=1316372129086&bmLocale=2673

September 19, 2011 | Unregistered CommenterKayne

Sandy, thanks for sharing your thoughts.

I agree with you completely. One of my mini crusades has been to get people back into the kitchen and cook their own meals again. It kills me that in the States people have these huge, beautifully designed kitchens and yet the knives don't cut.

Last summer, while visiting family I pointed out that of the three kitchens I'd been in that week not a single one had a butcher's knife that could slice through meat. "Obviously, no one's cooking." They protested, "We DO too cook!" Their idea of cooking, I observed, was picking something up from the Whole Foods deli and plopping it on the barbecue.

There was an excellent article on this in the Economist in 1997 ("That Other National Expansion", December 18, 1997) that left such a strong impression on me that I can still quote stats from it.

"Oddly, the official figures suggest that Americans are eating less fat than in the early 1980s. But these figures are based on what people SAY they eat. As Americans forget how to cook, they probably know less about what they are swallowing than they once did. Roughly half a family’s food budget now goes on food eaten out; and 45% of dinners eaten at home include not a single home-made item."

Almost HALF of the meals eaten at home do NOT include a SINGLE home-made item. What are these people thinking?

September 19, 2011 | Registered CommenterAonghas Crowe

Kayne, thanks for the comment.

What I've discovered going back to the States every few years is that prices here (Japan) have steadily fallen while those in the States have gone up (at the same time that incomes for many have fallen). Fifteen years ago, I used to think that America was cheaper. Five years later, it depended on the item I was shopping for. Some things were cheaper in Japan, others more reasonably priced in the U.S.

Today, it seems that many things are more expensive in the U.S. Food, however, isn't one of them, unless you're eating out. You can have an excellent lunch here (made from scratch by chefs who know their stuff) for as little as ¥500 or as much as ¥900. (A four-course French meal (at lunchtime, mind you) might cost about ¥2,500 ~ ¥5,000.) In the States, however, a comparable meal would set you back $20-30, plus tip. I say "comparable", but there really is no comparison when it comes to taste. Americans sacrificed taste for price and convenience decades ago.

September 19, 2011 | Registered CommenterAonghas Crowe

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