The Cost of Being Poor: Costa Rica vs. the USA

Homeless boys lying on the streets in San Jose, Costa RicaHomeless boys sleeping on the streets on San Jose, Costa Rica

I was musing this morning about the way that in the USA and Canada, the poorest segments of our population pay the most for almost everything. It is very expensive to live as a poor person in the USA (and also Canada to a somewhat lesser extent given the government medical care). Barbara Ehrenreich’s Nickel and Dimed: On (Not) Getting By in America book detailed very well how difficult it is to live on a minimum wage or near-minimum wage in the USA and how much extra the poor ended up paying for basic services. And recent US studies show that low income earners actually pay some of the highest marginal tax rates on their income when all taxes (income and sales and payroll) are taken into account. But there’s even a retail side which you just take for granted until you see how things are done in another country. Safeway in Vancouver, for example, has convenience store prices unless you can buy sale items or ‘club packs’ and stock up. If you can only afford to buy a few things at a time, you pay the highest prices. Loblaws/Extra Foods I generally find better but they often have 1 at x, 3 for y prices where if you only buy 1 you are paying 30-40% more. Walgreens in the USA is famous for this same predatory pricing strategy as well as an even more insidious one where they actually sometimes have higher unit prices on larger sizes of some products for those who can’t do the math.

Kids playing around a waterfallLocal kids enjoying the simpler (and free) pleasures of life near Home Creek, Limon Province, Costa Rica

Retail prices in the USA are actually probably the cheapest in the world IF you’re shopping at Costco or the like. Here in Costa Rica, a 1.5 liter bottle of water varies from US$0.75 to US$1.25 – very little variation whether you’re buying it in a supermarket, a discount store, a tiny pulperia (small grocery store) or even a (non-tourist) restaurant or soda (lunch counter). Whereas back in Canada/US, getting a big bottle of water for a buck would be a miracle in the corner grocery store but I’d be offended if I went to Costco and bought a case of them at that same unit price. Water may be an off example somewhat since bottled water is a luxury item here more or less since the locals (and I) generally drink the tap water unlike in Mexico where everyone drinks bottled water and so it is cheap and plentiful (but where also corporate water interests may in fact be responsible for the fact that potable water has come to few parts of Mexico given that Mexicans are the world’s biggest per-capita drinkers of bottled water).

But take another example: toiletries. Gillete packages 2 packs of Mach 3 razor replacements. The unit price is still ridiculously pricey (about the same as the 8 pack in Canada though I’d say) but at least one doesn’t have to pony up $20 at a time to get a replacement razor. Almost all the disposable razors I’ve seen are sold in single packs. When I didn’t want a 3 pack of garlic at the fruteria, he opened it up for me and sold me one. Larger packages are generally cheaper but by a few percent not the double and triple we often pay for small sizes. Same model applies to pretty much anything whether the wholesaler supplies it like that or not. One blank CD-ROM for example is about 25 cents in almost any local papeleria or in an internet cafe.

Planter in an old bottleReally cheap chic

Even the local Ikea-like store, Aliss, which is chock-full of Asian imports which are all heavily taxed (import taxes are one of Costa Rica’s few reliable sources of tax revenue), seems to manage prices well below that found in North America. No doubt simply because they know their market wouldn’t bear higher prices and so seek out products for that. But they also must keep their margins low in order to maintain that where North American retailers generally when pricing subscribe to the “what can I get for it?” model (similar to the “how much money you got?” pricing model) rather than “what did I pay for it and what’s a fair price?”

Here in Central America packaging is also often minimized in order to keep prices down. You can buy a 1 liter plastic bag of bleach for example for pennies. If you want the convenience of a bottle, you pay more. Otherwise you empty the bleach into something else, saving you and the environment all that extra packaging.

Retailers in the USA and Canada prey on the poor. They can’t stock up on goods. They can’t store goods. They can’t drive across town to the warehouse store (which charges an annual fee to allow you to shop there). The cheapest retailers aren’t even generally in their neighborhoods. Many US low income neighborhoods are completely bereft of retail except for the small corner grocery selling mostly goods (such as malt liquor and cigarettes) aimed at small scale frequent addictive consumption. The thing here in Costa Rica is that the small corner grocery isn’t a rip-off. It’s your neighbor. It’s not a division of Southland Corporation (the operator of 7-11). And they too have to buy and be able to afford items. Although in an ominous sign, I’ve seen my first chain corner stores this year in Costa Rica (AM/PM has started popping up) although it’s nothing like Mexico where in mid-sized and larger towns the chains have well begun the process of eliminating the corner store. The local corner store where I’m staying even extends credit to the locals or, if you’ve forgot your wallet, it’s okay to pay the next day when you come by next.

Try living without a car in rural Texas or Oklahoma and see how marginalized you are.

Local public transit is another example. It is cheap and plentiful and goes everywhere on a frequent schedule simply because a much greaterproportion of the population doesn’t own a car and therefore relies on the bus. Try living without a car in rural Texas or Oklahoma and see how marginalized you are.

Tourists come to Costa Rica and occasionally complain that it is expensive. And it can be. There is a tourist infrastructure for gringos which charges tourist prices. Prices aimed at tourists spending hundreds of dollars a day for a hotel for example so another $75 each on a tour doesn’t seem so crazy. But at the same time, I find it can be one of the cheapest countries to travel in if you know where to look for those cheaper hotels. Buses are excellent and very cheap (for example, I’m writing this during a 4 hour trip from the Pacific Coast to the capital San José and the ticket cost less than $5). They’re not as luxurious as Mexican Executivo buses by any means since there is just a single class instead of Mexico’s three class bus system. That’s because there is a segment of the tourism market aimed at both backpackers and locals Guatemala only has the former which means that if you go outside the Lonely Planet route there are no facilities at all.

Child eating a Cacao fruitLocal Bri Bri child eating a Cacao (the chocolate tree) near Puerto Viejo, Costa Rica. Photo by Maisie Crow

In Mexico, the 2nd class buses are of substantially lower quality than the usual regular long distance bus here but they are often only 20-30% cheaper (and 30-40% slower with many stops) than the executivo with it’s 3 across seats that recline almost into beds. There is enough of a middle class in Costa Rica (almost everyone really when middle class is defined in local terms) so that when Ticos (Costa Ricans) want to go to the beach for Semana Santa (Easter Week), there are basic facilities for them which are acceptable enough as well for a budget traveler from Canada or Europe (Americans, even college kids, may be another matter, they are notoriously picky as I recall from my days working for a US student travel agency where our main Europe tour operator didn’t include their most basic level of accommodations in their US brochures and prices since they couldn’t sell it and if they did they got nothing but grief when the Americans arrived and saw what they’d bought).

The impact of North American tourism is unfortunately at risk of changing this. As the best beachfronts are bought up by rich gringos who fall in love with this paradise, they are pushing out the locals. A gringo may buy a beachfront property, build their giant McMansion dream home and come a few times a year. Meanwhile the pool and the garden are sucking water and other resources from the local infrastructure and contributing little back. While a Tico run campground and cabanas project on the same beachfront would have provided many local people with some employment and many with access to their own beaches.

Local Bri Bri Grandma Faustina in her house, Puerto Viejo. Photo by Maisie Crow

The impact of North American values and retailers is also a risk. Walmart is expanding big time in Latin America; buying up local discounters and opening their own stores. No doubt what will happen eventually is what has happened in the USA. Suppliers will be squeezed to offer the best prices to Walmart in return for access to their large market share. Meanwhile local retailers will become less and less competitive and marginalized needing to raise prices even more just to maintain their presence at all as a convenience only.

There’s one more gripe I’ll share with you. Which is that the main complaint people seem to have about Costa Rica is the quality of the roads. Don’t get me wrong, I’m no fan of being jarred back and forth while driving on potholed gravel for hours at a time. Or getting out of the bus and walking because the bus has to lighten the load to make it across a river crossing where the bridge is out. The 45 km (30 mile) trip from Dominical to Quepos took a rather ridiculous 2+ hours. But keep in mind that even with a water shortage here in Manuel Antonio (from overdevelopment) and water being trucked in, the water has remained potable and safe to drink from the tap. Even with a developing world budget, the Caja (Costa Rican social security system) provides medical care to anyone else who wishes to participate in the program by contributing a small portion of their earnings (a entire family can be covered for about $16/month at the minimum earning level). Can the Americans say the same? Concrete aplenty they’ve got (both at home and no doubt now being built by Halliburton all over Iraq).

Sixaola HousingBanana plantation worker housing near Sixoala, Limon Province, Costa Rica

Meanwhile a series of natural disasters here (floods and landslides primarily but no single incident big enough to have attracted much attention from the international media) have decimated the budget of the country so that much of the road repair budget has gone simply to just making minimum repairs in the damaged areas.

Don’t get me wrong, I’m by no means trying to glorify the situation of the poor here in Costa Rica or be an apologist for the problems in this country. There remain some very marginalized groups such as the indigenous Bri Bri on the Caribbean coast. The large number of alcohol and drug addicted who seem to be falling through the cracks and creating a large crime problem. No doubt because the safety net here is primarily focused on one’s family and extended family so if you alienate them, well, you’re out of luck. The first photo above shows there’s a problem with homelessness, even among children. Driving through the banana plantations near the Panamanian border and seeing how the worker’s lived (not so much the state of their houses but the complete and utter lack of any other opportunity for those that live in the area) was also poignant. But for a country with very limited resources, I think the country does pretty well.

Check out this amazing photo gallery of the local Bri Bri from the Caribbean of Costa Rica. If you want to assist in the helping of the lives of the Bri Bri, you can do so by visiting The Bridge which is a local grass roots organization dedicated to helping the indigenous people of Costa Rica. They are currently in need of some extra funds to help with school books and such. And if you’re planning to visit, they always appreciate gifts of school supplies and other items.

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Discussion »

  • #1Patricia

    As to the comment about walmart. Pali, Mas x Menos, and Hypermas are walmart run businesses in Costa Rica. They are one of the very few grocery store chains in the country and Hypermas is, by far, the largest store I encountered while I lived there. Also, as to the beach and seeing los Ticos and the Americans, I remember camping with my family. We would take a walk down the coast and look at all the rich Americans living in either huge homes, or staying in grand hotels. Of which they would fly to and from other places by helicopter and hang out on there yachts. Meanwhile, los Ticos played in the water or on banana boats and camped in tents nearby. The drinking water depends on where you are. When staying in a hotel or eating at a business, the drinking water is generally okay. However, when it comes to people’s homes, and some small restaurants, tanks are used to hold the water. The tanks are not as clean and some Americans do experience some stomach issues. Costa Rica does do very well. They have some subsidized housing for the poor, but the government just cannot help everyone. One of the biggest problems Costa Rica faces is that of illegal immigration, which does take a toll on their economy. With Nicaragua being as poor as it is, and Costa Rica doing so well and being so close, Costa Rica has to deal with a lot of illegal immigration.

  • #2Lala72

    You actually racked your brain to come up with this “woe is me” nonsense?

    “U.S. retailers prey on the poor.” What??? Are you an idiot? Or, have you simply never had a business course in all your life??? The LAST thing any retailer wants is to be stuck with “the poor” as its sole customer base.

    No one’s preying on anyone. Poor people are…well…”poor.” That’s why they can’t afford things. Get it?

    What a pretentious, ignorant article.

  • #3Alexa Sanovia

    I was very touched by what I was ready and I thank you for writing this artical.

  • #4shirley denning

    I have to say that 45% of costa ricans have money, more than my retirement each month..you look around and the only houses that are being built are hugh homes and even middle class homes that are very expensive..people are buying them and they are the ticos…I am an american and have lived here for 11 years now and see the people around me…i live in a middle to poor nieghborhood. the poor people are very happy even tho they do not have money or half the time food..most of the people work, walk, go to school and are a happy lot..they are religiously church going people..they are happy with what they have whether it be a lot or nothing..they like to laugh, eat, drink, and dance..they live for today not tomorrow…

  • #5sHOTTA

    I think it is wrong to go into another mans country and pass judgement. Yes USA has a better standard of living. USA earned the rite to live the way they live so does Costa Rica or any country.

    In time we will progress not only as nationals but as a society that always move forward.

    -sHOTTA

  • #6Daniel

    To DL. Do you have something against Nicas. Why do you have to insult. Theres a lot of Expat Americans (more that 7000) living in Nicaragua, you dont see me criticizing you. A stop your predudism agains us, and learn some manners and respect because you dont have any compassion for why we live in Costa Rica. Learn our history first, and then talk. On day though, you will be the one immigrating to Nicaragua because of an economic breakdown in your country or because you could’nt make it with you salary pension.

    FROM A 100 and 10% Nicaraguan!!!

  • #7Fanci Pantalones

    Thank you Daniel. I am so sick and tired of people just shooting off their mouths about Nicaraguans, before even researching the history of when most Costa Ricans immigrated to Nicaragua for better jobs. Many people have the habit of blaming the Nica’s for everything before looking at the problems within Costa Rica.

  • #8wimora

    ja ja, los ticos ya ni siquiera necesitamos defendernos, de las burradas que nos inventan.

    Lo que no recuerdo es cuando fuimos a buscar trabajo a Nicaragua

  • #9Jay Man

    For all you who think Costa Rica isn’t a 3rd world country… My Wife is a Tica who lived in a two bedroom home, with the back yard converted into two more rooms. Wood palates for flooring, and random sheets of ply wood for a roof. More than 12 people lived in that home.

    Not all of Costa Rica is warm and sunny either… She lived in the mountains, were temperatures reach as low as 60 degrees (F) in winter months.

    I’m not trying to paint a “Woe is Me” picture ” Lala72… The fact is, there are a lot of extremely low income families in Costa Rica, but I would take living in their culture any day of the week over our materialistic ideals…

    “DL”… There isn’t one bit of truth to his comment…

    Moderator’s note: Post edited to remove personal insults

  • #10Dwyane

    Well interesting column-Since I live here in the Us and am Disabled and I guess you might say on the poor side versis when I was able to work was rich-I like it here and the prices here as with every were go up and down snd \I’m not starving and do get a good steak once a week plus god health care.
    I’ve hit a pot hole or two on the roads but \i’d say there in good shapee overall.
    Nope No Crying here and I hope not for the rest of you folks as well.
    Be Coolllllllllllll
    DB

  • #11erick

    que tal si comparamos las sociedades,nosotros los ticos ,tratamos de educar a nuestros hijos no se las damos a babysister,los llevamos a la iglesia todos los sabados y domingos,no los llevamos a chuckechesse.pagamos lo que tenemos y no vivimos teniendo todo lo que no hemos pagado siendo exclavos de uncle sam ,tenemos una cultura diganme cual es el nombre de la suya,miramos a la gente a los ojos al caminar por la calle,no bajamos la mirada,no miramos colores en las escuelas solo amiguitos de salon,no le tememos a nuestros policias pues todos somos iguales,no vemos a viejitos de 80 aun manejando para pagar impuestos,no tenemos que comprar hasta una acetaminofen en el cvs despues de pagar la visita al doctor,tratamos a los extranjeros con respeto y dignidad no preguntamos si son americanos o no pues siempre son bienvenidos,deberian de usar todos sus millones de dolares para educar a su sociedad y aprender un poquito de nuestra pobre pero educada costa rica,oh y si no me equivoco el que escribio el articulo es tan educado que nisiquiera habla este idioma y cientos de nosotros hablamos mas de tres.

  • #12josue

    to dl. you need to go and spend some serious time in san jose. appearently judging by your very much ignorant comment, you think that you have to spend hours trying to find pictures of children sleeping in the street. that is so common here at home that we don’t even have to take pictures of it. you americans do because it’s so “impressing.” how about you go live in leon xiii and see what happens to people like you over there. no, seriously, next time you go to san jose please do me a favor and spend your time in leon XIII or perhaps la Carpio up in pavas. I’m from Pavas, and i know what im talking about.

  • #13tina

    i know what poor is i was once so poor hhat we did not have food for days only water i have four childer and three grand i teach them how hard life is with no food and a place to sleep

  • #14Andy

    Josue, I totally agree with you. Leon 13 is no joke, nor is that area of Pavas you reference. There are many slums in Costa Rica, and while one can’t ignore the ritzy tourist attractions and resorts, these areas need to be cleaned up and as Jay Man says, there are several steps that need to be taken to get Costa Rica to a first or second world country level.

  • #15JimmyL

    Your article was interesting. I made it about halfway through before I gave up….on your grammar!

  • #16SAM

    I agree with what was said above. For the person insulted on Nicaraguan illegal immigration I didn’t see any type of prejudice in this article. The issue does exist and unfortunately there are some nicaraguans who come to commit crimes. This does not exclude Costa Ricans and other immigrants from other countries. Illegal immigration doesn’t limit itself to nicaraguans. there is a neighborhood in downtown san jose which is dominated by Dominicans and you simply just don’t walk in there.
    Safety is an issue but with a little street smarts I haven’t had any issues ever. Never been mugged or hurt by anyone.
    The bus system is good and will get you anywhere you want to go for cheap. Unfortunately traffic can be a hassle but not unbearable. Life moves slower so you are not as stressed out as living in New York and getting stuck in traffic during rush hour when you still have a million more things to do.
    DRINKING TAP WATER IS GOOD EVERYWHERE. Someone mentioned above that not in people’s homes or restaurants. Only very marginalized neighborhoods might have that problem but no one goes there unless you live there. I have drank tap water from almost everywhere i’ve been in Costa Rica and never had a problem. And most natural drinks are made with tap water unlike in Mexico where you won’t find natural drinks at all for the same reason.
    There is a super large middle class and there definitely is an upper class in Costa Rica terms. The homelessness in Costa Rica is pretty much defined to those who gave in to binging or drugs and never got help. Costa Rica is the #1 country in latin america to invest money in welfare programs. Those who want to stay homeless do it because they want to.
    The streets… pretty much no excuse. Nicaragua is a lot poorer and they have awesome streets almost anywhere in the country. Their infrastructure is also better. Not to mention Guatemala’s infrastructure who surpasses any other country in Central America. (Panama doesn’t consider itself from Central America).
    And this I saved for last cuz it really pissed me off…. to those that say that large chains doesn’t prey on the poor of course they do. And if you ever taken a business class at all or economics for that matter THERE WOULDN’T BE CAPITALISM IF THERE WASN’T A POOR LOWER CLASS! The system is made to make sure that there is little opportunity for the poor to escalate their socio-economic status. Not impossible but very difficult. The large chains cut out any small and medium business reduce competivity and then set the prices. A large chain brand in particular is not a monopoly but as a larger picture all the large chains together are a monopoly. This is how the system works in any type of field. Why do you think every country compares their currency to the dollar or do you think that by mere coincidence the dollar is just the standard point of comparison. Eventually we will see other markets emerge like China and they will set the prices for everything we know, cut out anyone selling rice as their main agriculture export product and who gets screwed???? The poor and the rich get richer…. otherwise we wouldn’t have capitalism!!!!!!!!!!

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