This post is about purchasing power and value of Georgian and American currency. However, I do feel the need to quickly note that my pluralization of “lari” as “laris” is more poetic license than a reflection of my actual usage: even when speaking English, I usually pluralize “lari” as “lari”.
So I have this dollar bill on my desk that Tea gave me in Georgia to put in my wallet for good luck. I have resolved not to spend it while in the US, since this particular bill now has sentimental value, so I took it out of my wallet so I wouldn’t confuse it with the regular stream of dollar bills flowing into and out of my wallet and accidentally end up spending it. As I noticed it today, I reminded myself not to spend it and mentally compared its sentimental value with its purchasing power – or, as Marx might say, its exchange value.
Weirdly, I found myself comparing it to laris. What denomination of lari is most similar to a dollar bill? At first I thought it must be equivalent to a fifty tetri coin – half a lari. That made sense in terms of how often the things seem to go into and out of my pocket. But then I thought of it in terms of buying a drink when I’m out. When I go out in the US, if I want to buy the average 20 ounce soda, or a Snapple, I still expect it to cost about a dollar. When I buy a bottle of Nabeghlavi in Georgia, I expect it to cost a lari.
And of course this bottled beverage comparison is far from perfect. A vitamin water will easily run me two bucks, and in Georgia an iced tea will usually be a lari forty or a lari fifty. Prices go up and down depending on neighborhood or store. It may no longer be realistic for me to expect to get a Snapple for a dollar. But in terms of a very loose comparison, scaled to my consumption and spending habits, one dollar = one lari seems about right.
Same goes for food. If I expect to spend about ten or fifteen lari for a reasonable meal at a (Georgian) restaurant in Georgia, I expect to spend about ten or fifteen dollars for a reasonable meal at a restaurant in America. Again, there’s variation, but very loosely speaking when I would go out with friends and get kebabi and french fries and maybe a beer, I’d end up spending in the ten-fifteen lari range, 20 tops. When I go out with friends in NY and get a burger and fries and maybe a beer, I end up spending in the ten-fifteen dollar range, 20 tops.
Of course, one dollar = one lari is not the actual exchange rate. It’s usually somewhere around one dollar = 1.65 lari, and so in some sense food and beverages in Georgia are “cheaper” in that for a person with some fixed amount of currency who has total freedom to choose whether to be in the US or Georgia and can exchange currency at market rates, that amount of currency would go somewhat farther in Georgia when expressed in the price of food and drinks purchased for eating and drinking outside of the home.
And I can use this currency conversion, in some sense. If I tell myself that I can forego a Snapple now and buy 1.65 Nabeghlavis in Georgia, I can give myself some sense of the opportunity cost of my actions here in NYC. I can similarly say that one restaurant meal here only costs 1.65 restaurant meals in Georgia, and surely I would be willing to forego 1.65 restaurant meals there to enjoy one restaurant meal here, especially if I can get a bunch of friends together. That makes the expense of going out in New York not sting so much.
However, right after assessing the dollar bill on my desk at the rate of a single lari coin, capable of buying a bottle of Nabeghlavi, I remembered the conversion I established for myself before I came to Georgia, in order to try to ration out my paycheck. I had said that if I took home $2000 after taxes in a month in NY and 500 lari after taxes in Georgia, my conversion should be 1 lari = 4 dollars. In other words, expressed as a fraction of my paycheck, something that cost 1 lari in Georgia cost the same as something that cost $4 in the US.
That’s not a totally unreasonable conversion, given average salaries and taxes in both countries. However, that makes me realize how expensive that Nabeghlavi I always drink really was. It was one five-hundredth of my starting salary in Georgia. One two-hundredth of what many Georgian teachers make. Much more expensive, relative to the average salary in Georgia, than Perrier, the American yuppie sparkly water, which costs maybe $2 – one one-thousandth of a monthly paycheck, or less. I drank a bottle of Nabeghlavi a day.
It’s weird to think of myself as spending money lavishly in Georgia when I eat out, or drink mineral water.
What’s really strange, though, is the cognitive dissonance here – that something like a meal at a restaurant or a bottle of mineral water is *simultaneously* much cheaper and much more expensive in Georgia than in America. Americans have more discretionary income than Georgians, but things cost more, but Americans usually have more things, but Americans also have more debt and Georgians usually have more property.
And of course the relative costs of goods are vastly different – for instance, in Georgia, delivering a baby might cost 600 bottles of mineral water, but in the US it might cost 15,000 bottles of mineral water. Cell phone service costs me between five and ten bottles a month in Georgia but at least 15-25 in the US, and many people pay 50 bottles a month or more. On the other hand, a jar of peanut butter costs six bottles in Georgia but only three in the US, probably because peanut butter is actually imported to Georgia from the US.
The point is, it’s strange and interesting and totally nontrivial to compare the value of a dollar in America to the value of a lari in Georgia. And don’t even get me started on quality of life.