Monday, April 18, 2011

The price of lunch and a haircut...

I had a little bit of extra time this afternoon amidst my many meetings here so I figured I’d take a minute and enjoy some of the local fare and get a much needed haircut. The food here is always absolutely amazing but as I’m so often invited to eat with people in their homes I don’t frequent the eateries around town very often. I stopped in at one of my favorite places to go get some shwarma which as always didn’t disappoint. I had a fantastic lunch and even though it was a bit pricier than I expected, was well worth it. I spent about 7JD which equates to about $10 which I don’t make a habit of spending but on rare occasion I figure it’s not bad to treat myself. Getting the same kind of meal in the states would cost me about the same price so it was great. When it comes to food here restaurants are not terribly expensive when compared to cooking for yourself but eating isn’t cheap in Jordan. The price of eating out reflects the price of food in general which is significantly higher than in the States. I had a great lunch though so I walked up the street looking for a place I knew of where I could get a decent haircut. I walked in and was greeted by the same barber who had cut my hair a few times last year and was surprised to have him remember me (though I don’t think he has many blond Americans come sit in his chair so perhaps I shouldn’t be as surprised). I sat back and enjoyed a full service haircut and shave which rivaled if not surpassed some of the posh high end salons I had been to in the States. As he finished up I started thinking how much cash I had with me to make sure I could pay for the service but was surprised when he told me how much I owed him. I ended up paying 3JD (about $4.20) for one of the better haircuts I have ever had. I thought about things as I was walking away and started to do some quick mental math. If any of you have gotten a decent haircut in the States you’ll know that it’ll cost you at least $10-$15 and I honestly doubt you’d get near the quality of service that I had received. I would say this is normal when travelling internationally as cost of services reflect the lower cost of living in the area but then I thought about my lunch tab. The cost of food, rent, clothes, or any commodity is incredibly expensive in comparison to prices back home, but the cost of services is nowhere close! I was curious if this disparity was consistent when considering more professional types of services so I asked my friend who is an attorney here in Jordan. This friend studied law in France at a very reputable law school and has been practicing for over seven years but is still making what is considered a below average income in relation to average reported income in Jordan. I suppose it makes sense that a nation that imports 90% of its consumer goods will have very limited purchasing power but this is quite a problem. Add to this the fact that the currency is pegged to the US dollar and it further complicates the issue. A weak dollar doesn’t impact purchasing power to the average American as significantly as consumables (especially food) are produced there in country so though there is some impact it is not felt as readily. Jordanians face much more dire conditions as they rely on the strength of their currency to dictate purchasing power for consumer goods. I’m sure I will get into a more in depth discussion of this situation and possible solutions in a future blog. This is by no means an in depth economic analysis of the situation but it’s interesting to note the real-world experience that points toward an important economic situation. In the states my barber can take the wage he earned to go buy lunch and have a little left over, but here my barber has to work three times as hard to eat.

1 comment:

  1. The Becker-Posner Blog has a few good articles on food / commodities prices and the effects of these on the poor in third world countries.

    http://bit.ly/gInkhc
    http://bit.ly/hEBDpJ

    It's interesting, being in a services business it starts to become really tempting to utilize the service price arbitrage, sourcing human capital resources abroad. Certainly, it will behoove policy makers in first world countries to bear in mind the impact of their decisions on the U.S. dollar and commodity prices generally as rising prices are going to have a significant impact on events abroad and may eventually come back to haunt us in the form of needed intervention on our part in political spheres within countries where unrest is fomented.

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