About the dollar cost of living, crime, etcetera

[steveinbsas]

This thread doesn't make sense without the original post.

 

[darmanad]

If I look at just the last three years with estimating inflation at 20% in 2008, 20% in 2009, and 25% in 2010 the cumulative inflation over that 3 year period would be around 80% in Pesos. At the beginning of 2008 the Peso was about 3.10 to the dollar, today its about 4.00 to the dollar or a depreciation of about 30%, so the dollar based inflation over the last three years is about 50% Fifty percent is still pretty significant increase in only three years. I agree this can't go on forever but we'll have to wait to see how long this lasts.
A friend of mine complained that he went out to dinner last week in B.A. 2 small lomos, 2 salads, and half a bottle of wine for $400 pesos, very pricey. I don't know of any country that has sustained this kind of inflation that didn't suffer significant economic problems in the end.

The dollar was 3.05 in Oct 2008. It had remained fairly constant in the year prior thereto. http://finance.yahoo.com/q/bc?s=USDARS=X&t=5y&l=on&z=m&q=l&c= So while the exchange rate didn't keep pace with inflation in the past TWO years, it has made up for more than 50% of inflation in the past 2 years. I think it will start to keep closer to actual inflation going forward.

I am being completely serious - where the hell are people getting the money to shop? Is it "who the hell knows what will happen tomorrow so lets spend all our money today?" that is happening?

Because I don't have kids, earn a salary in dollars and still wince every time I go out these days. Everything seems expensive to me. I took a cab from Canitas to Recoleta and it was 30 pesos. The price of clothes is astronomical. Lunch for two in a cheap place is 80 pesos. My health insurance is almost 900 a month.

Seriously, where are people getting the money? Local salaries can't be keeping up with inflation. So how are people doing it? Putting it all on credit cards?

In times of rampant inflation it makes no sense to bank pesos (bank interest doesn't keep pace with inflation here). When I discovered that my condo assn has no more than 1 month's reserve I started to object until a fellow owner brought me to my senses. So, yes, people are spending all their incomes or buying hard currencies on the expectation those currencies will hold their value against inflation... which will happen soon.

"Expensive" is a relative term. I don't mean to be crass, but $20 for a lunch for two is not expensive compared to what it would cost in any other cosmopolitan metropolis in the world.
900 pesos per month for health insurance may be dirt cheap depending on your age and policy coverages. I pay the equivalent of over 2000 pesos per month and have a US$5,000 self-retention per annum (but I am over 65).
How are people getting all that money? Not everyone is enjoying the high life. The great majority of residents are struggling to maintain a decent life style. And with the structure of some bank credit cards (low interest rates compared to inflation) I would guess mid-income consumers are indeed maxing out on available credit.

I totally agree.
Every weekend I see people walking around with huge branded shopping bags, like Tommy Hilfiger.
Taxi fare was just increased over night and we paid almost double to go from Centro to Palermo ( it was 20+ on Friday night and almost 40 on Saturday).
The decent dinner costs each of us 80-100 pesos.

I'm curious about local salaries. How much would be average and how much is high, let's say for starting salary for a graduate? mid-career?

The people with branded shopping bags may be Brasilians. According to Goldman, Sachs, the real is the most overvalued currency in the world now which explains in part why BA is swamped with Brasilians.
Taxi fares have not doubled recently. They have increased 26% despite your anectdotal evidence to the contrary.
US$ 20-25 (80-100 pesos) is not a lot for a dinner in a decent restaurant in just about any major city in the world. Moreover, $25 pp is on the high side of the restaurant spectrum (ala La Cabrera with wine). My wife and I just had a great meal in one of my favorite spots in Barrio Norte (Bar Norte): a full dish of veggies, a potato tortilla, and a plate of matambre de cerdo al vedeo large enough for two, 1/2 bottle of wine and soda...the tab was 96 pesos and we took home half the veggies and tortilla. That same meal in Rio would easily cost twice as much in even a modest restaurant.

Local salaries? Hard to know what you mean by the way you frame the question, but a bus driver told me he earns about 2500 pesos per month. Cops with some years on the job earn somewhat more. One told me he earned 3500/mo. I doubt school teachers earn more than that. Taxi drivers can earn more ...if they work 6 or 7 days a week, 10-12 hours which is not uncommon.

Citigirl Im with you 100% on this incredulity thing...I stopped by a shopping last week (a Thursday) to get a balloon for my son´s birthday and to say it was packed was no exaggeration. I waited in a line of 10 ladies to go the bathroom, nearly all with shopping bags. Thats mid month, mid week full on shopping in the middle fo the day - when I´m usually working and never see this reality. Last week one of our Project Coordinators (shes 23) who earns 3600 per month (before tax) told me she bought her 15yr old brother a netbook for his birthday...I was surprised that someone at an income level many would consider low to average would spend so much on a regular birthday...heck Im getting old -crack open the champagne and foie gras and let the good times roll....we can always flee the country in 2 years and leave the debts behind!

These type of anectdotes don't have a lot of import when it comes to ascertaining the cost of living on dollars, the original topic of this thread, except to underscore how difficult life may be for locals earning pesos. I don't know how sophisticated the job of Project Coordinator is, but I would find it kind of hard to live on US$ 900/mo before taxes. Your Project Coordinator obviously loves her brother. Her largesse is more a sign of that affection than it is a commentary on the demographics of BA shopping patterns.

 

[allcraz]

I am being completely serious - where the hell are people getting the money to shop? Is it "who the hell knows what will happen tomorrow so lets spend all our money today?" that is happening?

Because I don't have kids, earn a salary in dollars and still wince every time I go out these days. Everything seems expensive to me. I took a cab from Canitas to Recoleta and it was 30 pesos. The price of clothes is astronomical. Lunch for two in a cheap place is 80 pesos. My health insurance is almost 900 a month.

Seriously, where are people getting the money? Local salaries can't be keeping up with inflation. So how are people doing it? Putting it all on credit cards?

Citygirl, I have VERY often said the exact same thing. But what others say is true. Lots of these that you see are foreigners living it up on vacation, and another big point, perhaps someone already said it, is simply that these average-earning citizens you are referring to simply don't save. They spend it all. Every month. They don't make the money to save toward anything they might dream of being able to buy (a home, a bigger home, dream vacation, etc...) so it goes to what they want right now. Although I do know a few who are saving for cars.

Concerning health insurance, it's either mostly paid for by their employer or they're just using the national system and not a prepaga. AND I would say that they don't take near as many taxis or eat out for lunch. Argentines are very well known for wanting to look like they earn more than they do, so they will be much more willing to spend that money on clothes and then take a bus and buy a few empanadas for lunch.

 

[syngirl]

Citigirl Im with you 100% on this incredulity thing...I stopped by a shopping last week (a Thursday) to get a balloon for my son´s birthday and to say it was packed was no exaggeration. I waited in a line of 10 ladies to go the bathroom, nearly all with shopping bags. Thats mid month, mid week full on shopping in the middle fo the day - when I´m usually working and never see this reality.

Thursdays -- many banks have Women's day for their credit cards so that they get 20% or more off at a shopping

Last Sunday was mother's day -- I'm sure a lot of people were taking advantage.



However has anyone else seen the latest ad put out by Garbarino -- father son and daughter go into the store -- the guy sells them a new camera or LCD to the Dad (I can't remember which), an iPad to their 8-10 year old son, and a Netbook to the daughter of about the same age. And they all walk out of the store with huge smiles on their faces -- Hey!!! We're so happy, we just spent about us$4000, there's no way my wife will be angry that I just charged up $16,000 pesos in items at Garbarino....

 

[syngirl]

Oh, concerning taxis... when I arrived in 2005 it was .70 centavos on the meter when you got first got in the cab -- now what is it? $5.80? What is that? An 800% increase?

Yes cabs were cheap, but neither inflation nor NAFTA has gone up by 800% in 5 years.

 

[gouchobob]

Something new on banking in Argentina, seems to be a step in the right direction.

http://www.bloomberg.com/news/2010-...tina-by-offering-customers-free-accounts.html

 

[steveinbsas]

Inflation and increasing costs are certainly important issues, but I think the most disturbing point in this article refers to crime in Argentina, especially this:

From Live and Invest Overseas -

"Kidnappings, assault and battery, and other violent crimes continue. In my experience there's rarely more than one degree of separation between any Argentine and violent crime. That is, every Argentine I know has been a recent victim of violent crime or has a close friend or family member who was.

I think this is a tremendous exaggeration. It certainly isn't true where I live now (where violent crime in the nearby cities of 75K and 350K is almost non-existent). Does the use of the tern "any Argentine" in the first sentence mean the author is referring to the entire population of over 40 million people?

If every Argentine the author knows has indeed "been a recent victim of violent crime or has a close friend or family member who was" I wonder why he would continue to spend any time here. If I had read this article prior to coming to BA for the first time I'm sure I would have canceled my trip.

 

[SaraSara]

Once at a party I asked those who had been held up or robbed to hold up their hands. All twenty people there did. Then I asked those who had been robbed twice to hold up their hands, and about half the people did. All those people lived in la Recoleta.

Since moving to BA five years ago, my spare tire was stolen twice, and my daughter's bag was lifted at a sidewalk cafe. And before you say - "she should have been more careful", she was reading the menu board with her back against her chair, and the thieves swiped the bag hanging from that chair. Those thieves are real pros, so one noticed anything. This was in Las Cañitas.

 

[gouchobob]

Inflation and increasing costs are certainly important issues, but I think the most disturbing point in this article refers to crime in Argentina, especially this:




I think this is a tremendous exaggeration. It certainly isn't true where I live now (where violent crime in the nearby cities of 75K and 350K is almost non-existent). Does the use of the tern "any Argentine" in the first sentence mean the author is referring to the entire population of over 40 million people?

If I had read this article prior to coming to BA for the first time I'm sure I would have canceled my trip.

While the article may exaggerate (who really knows) most of the people I know have been victims, some more than once. Crime is certainly a growing problem. Is it any worse in Argentina than other countries in Latin America, probably not. Do people need to be alert and on their guard, absolutely.