How much does it cost to live in Bogotá?

How much does it cost to live in Bogotá? With some back-of-a-beermat calculations on the cost of living and drastic wage inequality, our columnist ponders inequality and shows his left-of-centre leanings.

How much does it cost to live in Bogotá? Of course the question depends on who you are, and the notoriously fickle field of statistics, which I failed at uni years ago. Notwithstanding that (and perhaps finally to banish the ghost of my university failure), I present my armchair-expert findings distilled from various websites and my own random survey in the local corner shop.

So let’s start with some assumptions. You are a single person, living in a shared three-bedroom flat close to the city centre, having the occasional meal out with beers and some lunches in a local café, go to the movies every fortnight, the gym from time to time, buy a pair of jeans and new shoes every six months, drink a cappuccino every day, use local transport and a few taxis. You often cook at home, and have several beers and two bottles of wine a month. You work full time and earn the average wage.

So here’s the bad news: in Bogotá, you can’t. According to my calculations based on data from the website www.numbeo.com, the above scenario will cost you USD$779 a month here. Numbeo collects user-provided cost data from cities around the world, which may not be the most scientifically rigorous methodology, but they are a good benchmark.

There are about 2.2 million Colombians who live on the minimum wage of COP$737,717 (about USD$250) and your average salary will net you about COP$1.2 million (about USD$400). It may be a slightly misleading figure since we live in a country with very high wage differences, but even so, it means that to achieve even this modest lifestyle you will have to earn nearly twice the average wage. Even more if you want holidays, pets, a car or a family as well as the above list. And forget about saving for your own place. The chart below shows where your money might go, and compares it to London and Washington DC.

How much does it cost to live in Bogotá? OK, some of you might suggest cutting back on the drinks, meals out, gym, cinema and internet. But why? When we talk about ‘cost of living’, surely we mean ‘having a life’.

These stats give insights into some of the social aspects of Bogotá, such as why adults still live with mum and dad, why so many Colombians want to move overseas, why Bogotá has so much crime and why the teachers (who earn just under the average salary) have just been on strike.

It also explains the wave of guilt that some people feel when they spend more than the minimum wage on their monthly grocery bill.

There are other sources that support this, like the international Local Purchasing Power (LPP) Index. This looks at the cost of living and local wages and takes New York as the benchmark at 100. Bogotá’s LPP Index is 37, which puts it pretty low down – in the bottom third with New Delhi, Bangkok and Lima.

In practical terms, that means the average rolo salary can afford to buy just over a third of typical goods and services than the average salary in New York City.

Is this because Bogotá is the capital? Are there other places in Colombia where the living is easy? Of course, in rural areas people can grow food and be more self-sufficient. However, they face other problems like broken schools and a lack of health posts. Other large cities are definitely cheaper than the capital. But here’s the rub: outside Bogotá salaries are also lower. Crunching data from the Expatistan website gives us the table below.

Smaller cities like Pereira, Popayán and Bucaramanga give similar results, which explains why, for all its hardships, Bogotá still attracts many people: more work opportunities and higher salaries, though there may be other compelling quality-of-life reasons to live in Colombia’s smaller cities.

Of course the sources for these stats are from websites that use data collected from people sending it in, so there will be a bias. Other stats are more carefully compiled, such as the Gini Coefficient that measures the equality of wealth in a nation. A Gini of 0 means that everyone has exactly the same wealth and a Gini of 1 means that one dictator owns everything in the whole country.

Not surprisingly, countries with the lowest Gini are former socialist countries like Slovenia and the Czech Republic, and parts of Scandinavia, with GCs of around 0.25. The least equal countries are in sub-Saharan Africa and Latin America with scores of 0.5 and above.

Also not surprising is that Gini Coefficients are political papas calientes since they indicate just how much of a country’s wealth is being hogged by the rich few. In this sense Colombia fares badly with a GC of around 0.5, putting it in the bottom 20 basket-case countries along with places like Sierra Leone, Central African Republic and Honduras.

And if we look at the UN’s ‘Rich to Poor 10%’ salary ratio, Colombia does even worse. The latest figures (2013) suggest that the highest salaries are on average 60 times more than the lowest salaries. So some people earn more in one month than what the majority scrape together in five years.

Of course the end result of this is not just poverty but conflict. Denied a living wage, it is hardly surprising some of the population turn to guns either to commit crime or for political ends (and sometimes both). During my various encounters with guerrillas over the years, the first question in their interrogation manual was: “Do you know how much a farm worker gets paid?”

It is also about working conditions. Staff at private schools and colleges are often laid off a month before Christmas only to wait nervously until the following year to see if their contracts will be renewed. This also means the college can avoid paying the Christmas bonus. More worrying is that everyone sees this as ‘normal’.

Suppressing the proletariat seems ingrained. Even my liberal-minded neighbours transform into petty dictators at the annual residents’ meeting when some small benefit is proposed for the guy who cleans the building. The men round the table puff their chests out, talk down the motion, and compete to be the mano dura. The same happens each year on a national scale when Colombia’s politicians vote on the minimum wage rise and walk a tightrope between the workers and the bosses, eventually screwing the workers.

“Gerald, you foreigners have hearts that are too big,” says a friend when we discuss this. “This is Colombia, you need to be firm. If you give workers an inch they will take a mile.” But a few beers later he is bragging on his tax-avoidance scheme, then later moaning about economic stagnation, and finally asks his beer bottle: “Why can’t we be more like Germany?”

You don’t have to be a genius to figure out that raising the lower salaries in Colombia would solve many of its problems. If a large chunk of the population live below the breadline, who buys products and services? And wouldn’t paying a decent wage cost less than creating social services to prop up the poor?

How often are we told that people grow coca only because they can’t make any other living? Surely it is cheaper to raise people’s wages than shoot at them from expensive helicopters when they go rogue and become cocaine cowboys.

Of course there are counter-arguments: that forcing up wages will break businesses and cause job losses. But often that’s not true. In fact, companies that voluntarily raise wages often get higher productivity, less absenteeism and a lower turnover of staff. All of this saves money.

Will Colombia connect the dots? There is some improvement: year on year the Gini is slowly – very slowly – going down. Wealth distribution is on the political agenda. But some die-hard political families will fight to the bitter end to keep playing Oligarchs and Peasants. How much does it cost to live in Bogotá? There is still some way to go.

Our top tips for cutting costs

Feeling the pinch? Here are some practical tips to cut costs in Bogotá.

Give up wine: Because of high import duty, a good bottle of Chilean wine costs around COP$55,000 (nearly USD$15), which is 30% more than the same product in Europe. So ditch the Casillero del Diablo (hard, I know) for a tot of tetrapack rum or a bottle of Poker. Alternatively, watch out for discounts and discount stores like Ara and D1.

Drink around the universities: Students like drinking and are usually strapped for cash so the cheapest bars – and often the most lively – are around the university zones of the city such as the Candelaria, Chapinero and Calle 45.

Buy a bicycle: The cheapest and quickest way round Bogotá is by bicycle. Keep an eye out for second hand bikes online or at bike repair shops, which often sell old bikes. To lock it up, you’ll find some chain and a padlock from the hardware store. Alternatively, you’ll be surprised at how much of the city you see by walking – or how many adventures you might have on public transport.

Dump the gym membership: Now that you have a bike, you will keep fit just moving around the city. Also look out for free fitness classes in the Parque Nacional.

No more Mac attacks: A Big Mac Combo costs $18,000 (USD$6) in Bogotá, OK that’s still cheaper than New York ($USD8) but for the same cash you can get three corrientazos. In fact, at $6,000-$15,000 (USD$2-5) corrientazos are a great value way to fill up. Most small restaurants will have a board outside announcing the day’s fare. You will normally get a soup, a meat-and-two-carb main course on the menu del día/set menu, including a small pudding, and a glass of fresh made, albeit watery, juice.

Learn Spanish for free: Instead of buying classes, check the internet for language exchange sites (ie www.mylanguageexchange.com) where you can meet locals learning your language. Everyone wins. Also, keep an eye out for language exchange nights where you can mix making new friends with language learning.

Learn salsa: You’ll dance more and therefore drink less in clubs. Works out cheaper, though watch out for the mark up on spirits.

Eat local food: Colombia’s bad roads mean high transport costs, so the cheapest food is that grown close to the capital, or just down the hill. Nearly all fresh vegetables are grown locally but many fruits (apples, pears, plums, kiwis) come from Chile and cost accordingly. Colombia’s tropical fruit (pineapple, papaya, bananas, passion fruit) are cheaper. Don’t forget the lesser-known Colombian fruits like zapote, níspero, lulo and guanábana.

Buy secondhand: Bogotá is crammed with secondhand shops and markets, from furniture and electro domestics, to clothes and antiques. Small high-value stuff – cameras, computers, musical instruments, electric tools – can be found. Websites such as www.mercadolibre.com.co have listings of stuff for re-sale. There are fascinating Sunday flea-markets on the Séptima, south of Avenida 26.

Move to a lower estrato: Colombia’s estrato system zones neighbourhoods by wealth with estrato 6 being filthy rich and estrato 1 being the opposite. Officially, services such as electricity, gas and water cost more in higher estrato zones and, unofficially, everything else does too. A good compromise is estrato 4.

Rent a room rather than a flat: There are many furnished rooms to rent, often with all services and internet included, which can be less costly than renting a flat. Close to colleges you can find cheap cupos universitarios – student digs with small single rooms and shared bathrooms and cooking areas.

Avoid the chains: Whether its supermarkets (avoid Carulla if you want to save cash) or homeware, there are bargains aplenty if you stay away from the big names. Colombian supermarkets aren’t cheap, so check out Mercado Paloquemao (Calle 19 with Carrera 22) where thrifty rolos go to do their weekly shop.

Check out one of the San Andresitos or San Victoriano, piled high with everything from perfume to cuddly toys and ferreterías (hardware stores) for odds and ends around the home.

Free activities: From free concerts in the parks to free entry to museums on Sundays and talks at the Biblioteca Luis Ángel Arango, there’s a surprising amount on offer that won’t cost you a peso.

By Gerald Barr