Tuesday, October 23, 2007

Money



During the past few weeks I've found myself discussing this topic with coworkers and friends alike. I suppose it all stems from the fact that I've scored a sweet short-term job in NYC this winter, and by sweet I mean it pays well.
I was playing around with the numbers, adding, multiplying, and dividing and couldn't help but notice: 1/4 of my monthly salary would cover rent, and the rest was mine to pay bills, to buy food, to put in the bank, or whatever. That's the way it should be. In fact, there's a general rule of thumb that says at max, 1/3 of your salary should go toward rent.
Try applying that formula to current Italian salaries and you'll fall off your chair. Let's say the average Italian makes something like 1,800 euro a month (I'm being rather generous here), 1/3 of that would be 594... there's no way in hell you can find an apartment, let alone a decent room to rent in Rome for that price! If you want to live in central Rome you'd have to fork out at least 1,000 euro- which leaves you with 800 to spend on bills and whatnot, and nothing to stash away in the bank. The equation is completely off balance for Roman standards. You'd have to earn 4,000 euro a month in order to be able to apply this rent formula. And from what I know, very few people have the luxury of making that kind of money.
Now let's think back to the days of the good ol' lira, this equation was actually applicable, or at least it was for me and most of the people I know. We actually earned enough to be able to pay rent and bills, and then save some money. Didn't we?
I had dinner with some friends and their friends visiting from Amsterdam and we ended up talking about Rome and the state of things. They were blown away by how pricey Rome was, and they were even more blow away when they discovered what the average Roman earned! Even in the center of Amsterdam, rent isn't nearly as outrageous as it is here YET they earn more than we do on average.
Something has gone terribly wrong here...

4 comments:

sognatrice said...

I wasn't around for the lira, but believe me, you'd have full support in your theory down this way--not a day goes by that I don't hear someone complain about the Euro (and it's not always me!).

Romerican said...

I never thought I'd be one of those euro-haters, but the more I think about, the more it seems clear to me that we got totally JACKED when the euro came around )=

Kataroma said...

It's good to be reminded that things weren't always so mucked up here. Since I've only been here 2 years it almost seems like the tiny salaries and huge rents (and living with your parents until 40) are the normal state of things. Good to remember that most Italians are as shocked as I am.

My boyfriend is Dutch - I'll have to tell him about the Amsterdam rents. He was under the impression that things were more expensive there - but he's probably a bit outdated. He's been here 17 years so he's a bit out of touch.

I just don't get how property prices can sustain themselves when salaries are so low and the economy is going down the drain...surely there has to be a levelling off at some point.

KC said...

I hate the Euro. I was in Italy for six months in 2001 and those were high times for anyone converting from dollars. But I remember the prices in general, and they were so much lower that I'm sure that Italians earning lira were doing much better too. Actually, that's what my husband always says, that before the Euro he had so much more money to spend. What a swindle the switch has turned out to be!

DH and I have considered moving to Rome a few times just because the work situation would be so much better there for the both of us. The fact that I can say that reveals just how horrid it is down here! Anyway, he's had offers, but none were ever for more than 1700 Euro a month. So far he's turned down every offer because we can't imagine his earning only a couple hundred more Euro a month but having to pay as much as a 1000 for rent!

This problem of there not being affordable housing for middle class and working class people is really shameful. It's not limited to the big cities, either. It's a serious social problem.