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Monday, December 19, 2016

Measuring poverty: currency devaluation or poor using smoke signals?

A friend posted this in my fb wall and I quickly commented that it is lousy analysis to suggest or say that "Poverty in the Philippines" today is worse than the 1930s. 

A devalued or depreciated peso, yen, won, dong, ringgit, rupiah, dollar, etc. is NOT a strong indicator of poverty worsening today than decades ago.

Take access to information. Even the super rich in the 1930s did not have a computer, no internet, no fb, etc. The poor now have smart phones, can do fb, enjoy youtube, etc. 

Or access to modern transportation, even the super rich in the 30s did not or could not ride commercial airplanes, no comfortable aircon buses. The PH Airlines (PAL), Asia's first airline, was created only in 1941. Now even the poor can ride budget airlines (Cebu Pac, Air Asia, etc.) and travel in comfort with aircon vans and buses.

Or take life expectancy. In the 1930s, even the super rich Filipinos would be lucky to live up to 65 yrs old, now even the poor can expect to live up to 70, 80, 90 yrs.

That claim of "minimum wage was P4/day" in the 1930s, what % of the workers were receiving that much? I bet the majority of workers would be getting P1/day or less during that time.

The poor now have access to more information, more modern education, healthcare, etc. than even the super rich could enjoy in the 30s or 40s or 50s.

A devalued peso, devalued ringgit, devalued rupiah, devalued won, devalued yen, devalued dollar (HK, Taiwan, Ca, US, etc.) is NOT indicator of more poverty.

Better indicators that "poverty is worse today than the 1930s" would be:

1. Average life expectancy is falling, from 70 to 60 to 50 yrs old.
2. Poor riding more carabaos and horses instead of more motorcycles or e-bikes or 2nd-hand cars.
3. Poor going back to using typewriters because they can't afford computers and tablets.
4. Poor using smoke signal or doves flying long distance to send messages and letters because they can't afford smart phones with yahoo or gmail or fb accounts.

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