Hopefully that title invoked the O Jays’ song “For the Love of Money,” and not just stress. I’m not here to stress you out. I’m just here to talk about the value of money (did that invoke stress?). Warning: many numbers follow.
The exchange rate at the time of this writing is $1 USD = 2,912 COP. During my year here in Colombia, that second number has fluctuated between 2,828-3,181; generally when I’m mentally converting I just divide or multiply by 3,000.
In Spanish, thousand is mil (pronounced like the word meal); it’s custom for Peace Corps Volunteers to talk about money by mixing English and anglicized Spanish (pronouncing mil like the beginning of million). Examples: Exchange rate is about three mil to one USD. The big peanut butter jar is twenty mil. Exceptions, of course, are when something costs under 1mil. Bananas at the tienda (store) across the street from my house are 300 pesos; I would never say they’re point three mil or three tenths of a mil. They cost three hundred pesos.
Something to keep in mind is that perspective is very important when talking about how “cheap” or “expensive” things are, because these terms mean different things to different people. You see that even in the United States, right? Since I can’t find resources that clearly provide matching statistics (ex: annual median per-capita income) for the United States and Colombia, I’m going to refer to this Pew Research report. This report took income statistics for all countries worldwide, turned them all into USD, and shows how the wealth is distributed both globally and within those countries. On a global scale, one must only make $10.01-$20 daily to qualify as “middle income.” In the US, that would mean a salary of $5,200. Obviously in the US, $5,200 is not middle class. According to this data, only 5% of people in the United States are below the global middle class. By comparison, in Colombia 65% of people are.
Let’s talk about cars. Imagine your basic basic sedan, selling for $12,000 USD. That car can get you places. It can get you places far more quickly and safely than a bus or a motorcycle, and it is available on demand. The time you save in that car affords you hours to do other things that can advance your life forward – maybe go to a job interview or attend a networking event. To have the privileges that this car offers, though, you need to be privileged enough to buy it.
Things like cars are priced at the same price in Colombia as they are in the US. By that, I mean that this $12,000 USD costs $36million COP, which is 2.4+ times as much as 65% of people earn in a year.
Or for an all-too-real-to-me example, almonds. I really, really love raw unsalted almonds. If I could eat all the almonds I wanted in a year, I’d probably eat nearly 25 pounds of almonds. That would cost me $150 USD. That would be 3+% of the annual salary of someone under the global middle class (we Peace Corps Volunteers sit right at the “middle”). I certainly can’t spend 3% of my salary on almonds, as much as I’d love to, and I only have one mouth to feed.
I hope this helped you think a bit about the value of money. I am obviously sharing these ideas in the context of US vs. Colombia, but they can also be applied globally…and in looking at economic disparity in the United States.