Food 65% more expensive in New Caledonia
A report released yesterday shows just how much a life such as this will cost you – above and beyond life in France, for example. The most expensive of France’s territories, prices here are, on average, 34% higher than in France. The second most expensive French territory is French Polynesia (Tahiti), at 26% higher. The cheapest French overseas territory is Reunion Island, with a price difference of just 6% higher.
Let’s take a look at the price comparisons from the report:
Price comparisons: New Caledonia vs. France
|Cost in New Caledonia|
|Restaurants and hotels||
|Alcoholic beverages and tobacco||
|Housing, water, electricity||
|Clothing and shoes||
|Furniture and appliances||
|Other products and services||
I’ve mentioned the exorbitant prices before, but it is something else to see it confirmed in black and white. The high cost of living has been in the press recently and last year, 20,000 people in New Caledonia took to the streets over it.
A local shop-owner explained to me that everything is taxed at at 45% (meaning business owners are paying 45% on imported goods to the government), which accounts for the high prices (but how do we explain high rents, high communication costs, etc.?). He explained that it is next to impossible to pass on savings to customers with such a high overhead. Another person explained that as there is so little competition here (there is a monopoly on mobile and phone communications, for example), the consumer has no choice and is at the will and the whim of the provider.
But my question is how those on low incomes manage (including not only the working, but students and the elderly).
I read today that only 3% of the local majority population (Kanaks) complete higher education and 38% of young Kanaks are unemployed. Very few of them have much of an opportunity to manage, preside over or run a business or work in “knowledge worker” or decision-making positions. Those who are working appear to be doing so in low-paid, low-skilled jobs.
So how much does one earn in a low-paid, low-skilled job in New Caledonia? The minimum wage here is 888 CFP an hour, or 150,000 CFP a month (169 hours) – which works out to €1,257 per month (USD 1,639). (This assumes that the low-paid wage earner is being paid at least minimum wage.)
The net minimum wage in France (four 35-hour work weeks) is €1,426 – €169 more than in New Caledonia. Yet low wage earners in New Caledonia are paying 65% more for food (which is said to make up 18% of a household budget) than their French counterparts. How?
Clearly they are making do with less.
Another article today highlighted that there are potential gender issues when it comes to high cost of living. High prices affect women differently from men suggests the Union of French and Pacific Women (UFFO), which is trying to sensitize the public to the fact that women who live in tribes far from the city centre are deprived employment opportunities and education. Thus, a high cost of living hits them harder and potentially puts them at much greater risk for poverty than men. This being said, nearly one in five (17%) live below the poverty line here.
All of this gives one pause.
What are the answers?
- Take a closer look at importation taxes?
- Encourage competition?
- Encourage (higher) education for all?
- Create incentives for upskilling?
- Create better jobs?
Answers in the comments section, please! I’m curious to hear what you think.