Advantages of the Purchasing Power Index

  1. The Purchasing Power Index is transparent and easily understood. The PPI methodology provides easily understood data. Anyone who has ever worked and saved for something understands the concept of “How long do I have to work to be able to afford something”.
  2. The PPI methodology is a transparent methodology as a whole process. In addition, each step in the methodology is transparent. Both the methodology and the results are easily understood.
  3. The PPI factors in effects of inflation, and effects of changes of wage and/or prices
  4. The PPI allows inclusion of the benefit of wage additions such as subsidies, benefits, bonuses and any other additions to income by deducting the cost of any items these additions supply from the total income needed by the worker
  5. Care must be taken not to presume that a specific wage/benefit addition item takes the place of income needed for other essential items. Employers, not employees, decide upon wage addition items. The items may or may not supply life essentials to workers and their families.

  6. The PPI allows for geographical specificity, while providing a clear methodology for comparison between geographic locations. The PPI methodology allows for specificity in each geographic "focus area" while providing data that establishes a basis of comparison between one geographic location and another. Because costs differ from area to area, the wages required to meet those costs will also differ. The PPI provides a clear methodology for comparison.
  7. A comparison of the cost of self-sufficiency in rural, suburban and urban regions within a country is also possible. These different locations can be as varied as comparisons between urban and suburban locations within a state, between different cities in a country or between different countries, such as on different sides of a border.

  8. The Purchasing Power Index provides the data to track the effect on workers' purchasing power of jobs being moved from one area to another or from one group of workers to a new group in another country.
  9. The PPI allows for specificity and comparison over time.
  10. Future studies can provide data in the same form: minutes of purchasing power required (minPP.) The minPP reveal the progress or decline of workers in their struggle to meet basic needs.

  11. The PPI is inclusive of foods and other items particular to any group within any local population, because it is based on actual pricing/shopping
  12. The PPI allows for the cost of community or cultural demands in a worker's life to which s/he is required to contribute. The PPI methodology allows for the items chosen for pricing to be culturally sensitive. By doing actual pricing, the PPI pricing lists can be inclusive of foods and other items particular to any group within any local population.
  13. The PPI is based on affordability, not what is chosen for purchase. It states what is possible in terms of the purchasing power accruing as the result of a normal workweek.
  14. The PPI removes the question of judgment of values involved in decisions as to how one spends one’s money. . It totally avoids the distracting discussions about whether or not persons make prudent use of their financial resources. It removes the whole question of judgment of values normally involved in decisions as to how one spends one's money. The PPI states what is possible in terms of the purchasing power accruing as the result of a normal workweek.& At different wage levels, what changes are the "prices in purchasing power minutes" or the "cost in work minutes" according to the various wage levels. Questions as to whether a person is spending money in a manner which another person might consider "frivolous" longer part of the discussion. The emphasis is on what is affordable, not what is chosen for purchase.
  15. The PPI allows comparison of the effects of wages paid by different employers whose workers do the same work.
  16. The PPI changes the context of the expression "minimum wage". There are questions that then can be asked:
  17. Minimum in terms of what context?
  18. Is a minimum wage the minimum amount that a person needs to survive?
  19.  Is it the minimum established by the local governing power as the least amount
  20. that the employer is obliged to pay the employee?

  21. The PPI methodology provides precise calculations accepted by corporations, non-governmental organizations (NGOs,) faith-based investors and other members of the socially responsible investing community. The spectrum of groups that have commissioned the prior studies undertaken by CREA testify to its acceptance and relevance. The response of numerous public groups that have read public reports of the past studies has been overwhelmingly positive.