FAQ Living Wage

 

What is the WageIndicator approach?

The WageIndicator motto is to 'share and compare information about wages and living conditions’. WageIndicator maintains several databases with information about wages. The development of WageIndicator wage database began in 2000. The database has been shaped in interaction with web visitors who consult the data and respond to surveys. The wage data is used to develop the Salary Check tool, providing precise and updated salary information for different occupations. The quality of Salary Check increases with the growing popularity of the WageIndicator websites and the number of filled surveys. The Minimum Wages database was introduced in 2011 as a response to the worldwide lack of knowledge concerning minimum wages and the need to comply with these wages. Data on national and World Bank poverty lines was collected and since 2015 published on the WageIndicator websites, indicating bottom income lines. Since 2014 WageIndicator publishes the estimates of Living Wage as indicators of incomes that allow decent living standards to workers and their families. WageIndicator continuously improves the quantity and quality of wage indicators and shares the results online. The Questions & Answers below intend to contribute to the transparency of this approach.

Why does WageIndicator present Wages in Context?

For many countries Wages in Context provides a range of income figures, including the national poverty line, World Bank poverty line, the national statutory Minimum Wage, the estimated Living Wages and actual wages in low-, medium-, and high-skilled occupations. In this way Wages in Context enables assessing the income situation of working individuals and their families. It may be assumed that such updated and reliable income information will support stakeholders and policy makers in their aim to guarantee - at least - minimum income levels allowing workers and their families to lead decent lives.

What is a National Poverty Line?

A National Poverty Line is the minimum income level on which an individual is deemed able to survive. These National Poverty Lines are set by the government at stake. National definitions of poverty and their practical implementation vary widely across countries. In some countries the National Poverty Line is calculated based on actual prices and figures are revised regularly. In other countries the figure attached to the poverty line is irregularly updated. The poverty line is usually set for an individual. Only few countries define a poverty level for a family. Richer countries deploy more generous living standards to define poverty than poorer countries. Some countries do not define a National Poverty Line at all. Therefore, national indications of poverty lines are not directly comparable across countries. To assess whether a National Poverty Line indicates an adequate income, WageIndicator compares to a Living Wage based on real prices of goods collected through the WageIndicator Cost of Living survey.

What is the World Bank poverty line?

The World Bank defines a poor individual as a person who lives on less than US$2 (PPP) per day. PPP stands for Purchasing Power Parity, a specific form of price indexation that is widely used for making international comparisons of real incomes. PPP rates are calculated based on the price surveys undertaken by the International Comparison Program (ICP) organized by the World Bank. Using these PPP rates, the World Bank poverty line is calculated as the monthly (i.e. 30 days) income assuming the spending of US$2 (PPP) per person per day. Figures calculated in the national currency are converted to the EURO at the actual exchange rate to allow the global comparison.

What is a statutory minimum wage?

The statutory or legal minimum wages are set by governments, sometimes after consultation with the social partners. A number of countries has one minimum wage; in most cases that applies to the entire workforce. Other countries, however, apply multiple minimum wages for particular categories of workers defined by industry, firm size, occupational group, skill level, educational level, geographical characteristics, age, or years of service. In most countries the level(s) of the national minimum wage(s) are considerably above the level of the National Poverty Line. The Wages in Context application presents the applicable minimum wage(s) jointly with the National Poverty Line and the Living Wages.

Some countries do not update Minimum Wages annually. How does WageIndicator deal with this? In such cases the latest available minimum wages are presented. Minimum wages which have not been revised for many years may be inadequate and their levels may end up close to the poverty line.

Estimated Living Wages

What is the WageIndicator Living Wage?

The WageIndicator Living Wage aims to indicate a wage level that allows families to lead decent lives. It represents an estimate of the monthly expenses necessary to cover the cost of food, housing and transportation, with a 10% margin for other expenses (including expenditure for education, health, clothing, et cetera). The WageIndicator Living Wage is calculated as the gross income necessary to afford these expenditures, taking account of tax liabilities and social welfare entitlements. It is always estimated for an equivalent of a full-time worker which allows to compare to a minimum wage and to calculate real wages. The WageIndicator estimation of the Living Wage is consistent with the methodology developed by Richard and Martha Anker for the Global Living Wage Coalition*. The WageIndicator approach is innovative in the way that it uses prices collected through web surveys across the world in order to provide timely, reasonably accurate and globally comparable estimates. Where needed these web surveys are complimented by collecting information about prices through interviewers conducting face-to-face surveys and observing prices in shops and markets. The ultimate aim is to provide worldwide comparable Living Wages in all countries where WageIndicator operates. Living Wages are updated every quarter to reflect changes in prices of food, housing and transportation. The resulting Living Wages are calculated for several household types to respond to different demands for living wage information. Ideally Living Wages should allow families to lead modest yet decent lives.

* Anker, Richard and Anker, Martha (2017). Living Wages Around the World: Manual for Measurement. Cheltenham: Edward Elgar Publishing

What is the difference between Living Wage and Minimum Wage?

The statutory Minimum Wages are laid down in laws or government regulations and therefore constitute both a worker's right and an employer's obligation. By contrast Living Wages are not prescribed by law and can therefore not be legally enforced. Clearly, Minimum Wages and Living Wages are quite different in nature. The common goal of the many living wage campaigns currently taking place all over the world is to lift minimum wages levels to those of the Living Wages. Wages in Context presents Minimum Wages jointly with Living Wages, aiming to raise awareness concerning the remaining differences in levels.

Why pay a Living Wage?

Paying a Living Wage that allows people to lead decent lives is a moral obligation. Next to that, there is a major economic argument for paying Living Wages. People are not only workers but also consumers. While consuming they maintain a country’s purchasing power, and they indirectly maintain employment in their own country and to some extent also abroad.

How does WageIndicator obtain its information to calculate Living Wages?

To calculate accurate and globally comparable estimates of Living Wages, WageIndicator collects information about prices through its Cost-of-Living web survey. Each day the WageIndicator national websites post a teaser asking the millions of web visitors to indicate the price for one item; the cycle of related questions is continuously repeated. Similar items are put into groups (e.g. the prices of vegetables). Once provided the price of this item, visitors are then asked to fill in prices on all items in that group. The Cost-of-Living survey is a very successful method for collecting information about prices. The multilingual survey is promoted on national WageIndicator websites and also on radio, television, and Facebook pages. A Cost-of-living app is available to collect prices. Where needed these web surveys are complimented by collecting information about prices through interviewers conducting face-to-face surveys and observing prices in shops and markets.

How many items are needed for the calculation of the Living Wage?

The WageIndicator Cost of Living Survey collects prices on some 100 goods and services. The number of items that enter into the calculation remains limited but covers basic needs. Some items are group together (e.g. similar food products) and several items are inquired about the housing characteristics. The survey collects many prices on food items which are used to develop a model diet that reflects the varying food consumption patterns and habits in each country.

How are transportation costs determined?

Transportation is an important cost for households because many people commute for work or travel for their daily activities (e.g. shopping). WageIndicator assumes in its calculation of living wages that families cannot afford to own a motorbike or a car based on the living wage and that they have to rely on other means of transportation. Public transport service is commonly available in most urban places, so the price of a regular monthly public transport pass is regarded as the transport cost for an adult. The average price of such a monthly pass in the country is then used as a meaningful approximation of transport costs also for those rural areas where no local public transport is available. The cost of transport for a family household is estimated as twice the price of a monthly transportation pass. In many places children commuting to schools can travel for free or with a substantial discount. Therefore, in the Living Wage calculation it is assumed that children travel for free.

How are housing costs determined?

Housing costs are the most peculiar kind of costs because they are extremely difficult to estimate. Housing costs depend on many factors and show a high variation in prices within countries. The WageIndicator Cost of Living Survey asks the web visitors whether electricity, water, garbage collection, Internet, and taxes on housing are included in the reported housing costs. They also indicate the size and the location of their apartments or houses. Based on these characteristics house rents are predicted to produce a harmonized estimate of housing costs using state-of-art econometric tools. The housing cost for a family is the typical rent for a 2-bedroom apartment in an average urban area, not centrally located or up-market and outside the city center.

Why is clothing not specifically included in the calculation of the Living Wage?

The cost of clothing is included in the 10% provision for unexpected expenses. First, this has been done since there are no internationally agreed criteria for what is adequate clothing. Second, it is assumed that people do not buy clothes regularly but incidentally.

Why is the 10% margin for unexpected expenses included?

Information on food prices and housing costs is reasonably reliable. However, it is a much greater challenge to estimate costs for items that are not bought regularly and consistently on a weekly/monthly basis. The 10% margin has been added as to cover for such miscellaneous purchases. This practice is common among all Living Wage campaigns.

How often are the Living Wage estimates updated?

The Living Wage calculation is based on prices collected continuously in the WageIndicator Cost of Living Survey. WageIndicator adjusts its Living Wage estimates on a quarterly basis. The calculation is based on prices collected during the last 36 months in order to avoid unnecessary and misleading fluctuations. This reference period is adjusted when necessary, like in countries with high inflation.

Check latest date in legend of Wages in Context.

If economic conditions vary greatly within a country, can regional Living Wage estimates be calculated as well?

The Living Wage is not necessarily uniform throughout a country. The cost of living may vary considerably across regions in particular due to varying housing costs. WageIndicator responds to this challenge and estimates Living Wages for different regions classified according to the population of the largest settlement in that region. The leads to four types of regions: i) metropolitan; ii) large city; iii) small city; iv) rural area. The Living Wages are only estimated for regions in case of sufficient data. These regional Living Wages are not available for the public for free. Please, send a message.

How reliable is the data when it is based on contributions to voluntary surveys?

There are quite a few good reasons to qualify WageIndicator data on the cost of living as reliable. First, scattered individuals from regions wide apart and from diverse cultures do not give fancy information on practical matters as prices in a systematic way. Second, individuals buying food, renting a house or an apartment and using public transport can be considered price experts. They know exactly how much they spend on each item, especially when they have limited means. Jointly many such individuals create collective, yet anonymous, expertise. Third, standard practice is to benchmark the survey data assembled with relevant data from other sources if such data is available like from national statistical agencies.

How many observations are needed to estimate a Living Wage properly?

WageIndicator relies on a high public outreach (40 million visitors on yearly basis) and its experience in adopting sound statistical methods. The incoming data is always tested and cleaned for outliers. Each price that enters the calculation has at least 10 observations per item in a given country or region. The calculated cost of housing requires at least 50 observations. Currently the WageIndicator estimates Living Wages for 68 countries, half of them being of low and middle income countries in Africa, Asia and Latin America. These numbers are increasing continuously, allowing greater specification according to regions.

Is the minimum amount of calories for an adult the same in every country?

Poverty lines are typically related to nutritional requirements, and these tend to be similar for people in poorer and richer countries. A nutritional requirement for good health proposed by the World Bank equals 2,100 calories per person per day*. The composition of the food basket per country is taken from the national food balance sheets published by the UN Food and Agriculture Organization (FAO). Although the composition of the food baskets varies across countries, the calories of the various baskets are calculated as to end up at 2,100. For a family of 2 + 2 we assume 8400 kcal  per day. 

* Haughton, Jonathan Henry, and Khandker, Shahidur R. (2009) Handbook on poverty and inequality. New York: World Bank Publications.

How does WageIndicator calculate the cost of food?

The food costs are calculated using the specified amounts of the food categories needed for one person for a month. The information comes from two data sources. The first is the WageIndicator Cost of Living Survey which collects the actual prices of all items necessary to calculate the Living Wage. The second is the UN Food and Agriculture Organization (FAO) database, which expresses the national food consumption patterns in per capita units, distinguished for about 50 food groups. For the Living Wage calculation the composition of the food basket represents the actual food consumption in a country. The value of the food basket is estimated using the current food prices generated by the WageIndicator Cost of Living Survey (https://costofliving.wageindicator.org) . The calculation of food costs assumes that all foods are prepared at home and that ingredients are purchased from supermarkets or at markets at lower-range prices.

How does WageIndicator deal with differences in food preferences across countries?

The UN Food and Agriculture Organization (FAO) database includes the national food consumption patterns in per capita units which reflect the food preferences in a country. The data provides the per capita food supply, its dietary energy value and fat content in about 50 food groups. For instance, according to the data Spain and Portugal consume the largest amount of rice in the EU (more than 100 grams per person per day), while rice consumption in Serbia or Poland is only 10 grams per capita per day. The calculation of Living Wages takes these differences in food consumption patterns into account. The food patterns for children and adults are assumed to be identical.

Is the skin of a banana seen as food or as waste?

The calculation of Living Wages is confronted with these not-so-trivial issues. However, it is not just the issue of whether a banana is peeled or not-peeled, but also other issues that must be tackled. When shopping for pre-packed food items in the local supermarket these do not always come in standardized volumes like 1 kilogram or 1 litre. Moreover, standard measurements may differ; for example, bananas may be sold per piece, per bunch or in stalk. The WageIndicator Cost of Living Survey asks respondents to indicate the quantities precisely. Next, prices are standardized before calculation. To return to the banana issue: the skin is generally not consumed and therefore not counted as food for calorie-intake.

People live in households of varying size and composition. How does WageIndicator deal with this fact of life?

In order to respond to different demands for Living Wage information, WageIndicator presents Living Wages for several household situations. The Living Wage is commonly presented for a one-person household as well as for a standard 2+2 family composed of two working adults and two children. The living wage is also calculated for households with one child or three children and for different labour market participation rates of a spouse. Other assumptions are that adults are of economically active age and competent to manage their family budget efficiently. It is also assumed that all household members are in a good health.

Why is a Living Wage presented for a one-person household?

A one-person household consists of an adult working individual. The Living Wage estimate for an individual provides a baseline estimate and permits a direct comparison with the prevailing statutory Minimum Wage and with actual wages, since WageIndicator also defines these wages at the individual level.

What is a standard 2+2 family?

A 2+2 family is composed of two adults and two children. The Living Wage is calculated to ensure that the total income earned by both spouses would be sufficient to support a family with two children. The standard assumption is that one spouse is employed full-time and the engagement of the second spouse is 0.8 or four days a week. In this case, if both spouses earn a Living Wage, the total family income equals 1.8 Living Wage. This approach allows a global comparison of Living Wages, focusing on price variation while keeping the family composition and labour market participation constant. Other Living Wage campaigns, like those in the United Kingdom. United States, New Zealand and Canada, have also adopted the 2+2 family approach, which makes their results mutually comparable.

How many wage earners does a family include?

The WageIndicator always takes the equivalent of a full-time worker as the basis for Living Wage calculations. In a one-person household the adult is assumed to work full-time. For a standard 2+2 family household the assumption is that one spouse is employed full-time and the labour market participation of the second spouse is 0.8 or four days a week. This approach allows a global comparison of Living Wages focusing on price variation while keeping the family composition and labour market participation constant. The Living Wage is also calculated for households with different labour market participation rates of a spouse.

Is the WageIndicator Living Wage calculated gross or net?

The WageIndicator Living Wage is corrected for income tax and social contributions. Thus, in most countries the Living Wage is directly comparable to the Statutory Minimum Wage and to gross real wages.

 

Actual wages &  Salary Check

How are the actual wages of low-, medium-, high-skilled workers arrived at?

The application Wages in Context contrasts the assessment of the income situation of working individuals and their families. Reported monthly earnings of workers in low-, medium-, and high-skilled occupations are obtained from the WageIndicator voluntary web surveys from the last five years. The definition of groups follows the one-digit ISCO-classification of occupations where ISCO 1-2 are clustered into high-skilled, ISCO 3-8 into medium-skilled and ISCO 9 into low-skilled groups. The minimum and maximum values represent a typical wage range per occupation given by a variety of characteristics which influence the wage of workers.

 

How does WageIndicator collect the data for the actual salary indications?

WageIndicator collects data by means of a voluntary web-based survey available at national WageIndicator sites. The WageIndicator questionnaire is offered (in 2019) in 47 languages and is operational in 125 countries. The survey questionnaire is similar to those used by statistical agencies for standard labor force surveys, it is user-friendly and consists of multiple-choice questions only. The collected data is anonymized and subject to strict security measures, safeguarding the privacy of the participating individual. In 30 countries with less strong internet WageIndicator also collects salary data on the basis of face-to-face surveys. This data is used for salary indications as well.

Is the wage information reliable?

The wage information used for the calculation of Salary Checks and as presented in Wages in Context is based on voluntarily submitted data. Therefore 100% accuracy cannot and will not be guaranteed. WageIndicator encourages its respondents to provide accurate and precise information about their personal and employment characteristics, pointing out that they provide their professional peers with an improving Salary Check-tool,  which they themselves profit from as well. And all along WageIndicator guarantees their anonymity. The Salary Check is updated twice a year. Wages in Context is updated four times a year. Through increasing participation in the Salary Surveys results improve so that they provide the most timely, accurate and actual wage information. In addition, before calculation the dataset is cleaned and compared to other relevant datasets applying universally accepted statistical methods. In this way WageIndicator eliminates from its datasets most non-trustworthy cases, such as for example extremely high or low hourly wages, and highly unlikely combinations such as starters boasting of astronomical earnings etc.

What is an occupation? And what is an occupational group?

WageIndicator recognizes more than 1700 different occupations. Its classification of occupations is based on the International Standard Classification of Occupations (ISCO) provided by the International Labour Organization (ILO). WageIndicator follows the latest classification ISCO-08 released in March 2008, amending it whenever a more detailed classification is necessary. ISCO-08 classification is a tool for organizing jobs into a clearly defined set of groups according to the tasks and duties undertaken on the job. ILO classifies occupations into smaller and larger occupation groups (either 4-digit, 3-digit, 2-digit or 1-digit ISCO code). The smallest occupation groups are referenced with a 4-digit ISCO-08 code. At the top level occupations are clustered into 10 major occupation groups described by the 1-digit ISCO-08 code. For example the occupation group Professionals includes the occupations: Biotechnologist, Aircraft engineer, Translator, University professor in social sciences, etc. Each of these occupations is then broken down into more narrowly defined ones, e.g. University professor in social sciences, into sociologist, politologist, and the like. In addition to these ILO-defined groups WageIndicator defines exact occupations with 13-digit ISCO-08 codes, in such a way that the first 1,2,3 or 4 digits of the 13-digit ISCO-08 occupation code exactly match the ILO-defined occupation groups under which a certain occupation falls.

How many observations suffice for a reliable wage estimate?

On the country level experience suggests that a minimum of 2000 observations is necessary to get reliable estimates to base the first Salary Checks on for a limited number of occupation groups. We provide such wage estimates only when at least two conditions are met: first a minimum of 120 observations and second, these observations must be reliable and comply with definition of minimum wage. WageIndicator uses modern statistical methods to test whether the estimates are statistically meaningful, realistic and sufficient to base the wage profiles in a particular country on. This practice means that all estimates are based on 20 observations or more, which are found to be realistic and statistically reliable. Ideally there should be enough reliable observations - 20 minimum - for each of the 1700 exact (13-digit ISCO-08 code) occupations. However, if there are already some but not yet 20 observations for a particular occupation, it may be grouped on a higher level of aggregation in accordance with the ISCO-system: i.e. from the 4-digit up to the 1-digit ISCO-08 code, to the level where the two conditions of minimum 20 observations and reliability are fulfilled. However, one should keep in mind that even though statistically tested, all salary indications are estimates and therefore include an element of uncertainty.

How does data in a Salary Check differ from official national data?

 

From the experience gathered since the year 2000 it appears that WageIndicator data are comparable in quality with those from other surveys. However, they offer the additional advantage of becoming available more timely. WageIndicator data are on a half year basis used to calculate and update the online Salary Checks which reflect actual earnings in hundreds of occupations in all countries where WageIndicator has operations. The survey itself is versatile and detailed. Its results can be used to monitor and address significant developments in the labour market as they emerge. However, the survey is not based on a representative sample of the labour force, and therefore no conclusions can be drawn regarding the working population as a whole. In some countries groups in certain wage brackets, or of a certain age, may not visit the Internet as frequently as other groups. This accounts especially for those with very high pay and equally for those who are paid very low. * In developed countries the web survey participants are also younger, and they are more often full-timers and persons working in non-manual occupations.  **Yet, WageIndicator data is proven to be highly apt for research into the income situation of specific occupational groups in the labor market.

* Tijdens KG, Steinmetz S (2015) Is the Web a promising Tool for Data Collection in Developing Countries? Comparing Data from ten Web and Face-to-face Surveys from Africa, Asia and South America, International Journal of Social Research Methodology, DOI:10.1080/13645579.2015.1035875

** Steinmetz S, Raess D, Tijdens KG, De Pedraza P (2013) Measuring wages worldwide – exploring the potentials and constraints of volunteer web surveys. In Sappleton N: Advancing Research Methods with New Media Technologies, p 100-119, IGI Global, Hershey PA

How often are the Salary Check and Wages in Context updated?

Salary Checks are updated twice a year for all countries. The information in the Wages in Context application is updated four times a year.

What happens with outdated data?

WageIndicator securely stores the data that have been collected. The outcomes shown are always the latest, replacing the older ones, based either on fresh data or on indexing data if no or not enough new data is available. The calculation of national the Salary Check is based on uninterrupted series of data collected over the last five years.

Is the wage information in the Salary Check and Wages in Context controlled for inflation?

The calculation of the Salary Check is based on data collected over the last five years. In countries with low data intake earlier wage information may be adjusted by official data, if available by data on wage increases and if not by the official annual inflation rate. In some countries Statutory Minimum Wages or national poverty lines are updated very irregularly. These figures are enforced by law and hence adjusting for inflation would be pointless. The Wages in Context application always presents the latest Minimum Wages or national poverty lines. The estimates of Lliving Wages are based on data collected over the last 36 months. The adjustment for inflation is applied only exceptionally for countries with a very high inflation rate or after the currency redenomination.

Which period do the data for the Salary Check cover?

The calculation of the Salary Check tool is based on data collected over the last five years.

Are overtime and bonuses included?

WageIndicator adjusts calculations for hours worked. Bonuses are not included in the calculation of wages.

What about the difference between gross and net wages?

The calculations in the Salary Check represent gross hourly wages. The number of hours worked determines the gross monthly wage. Some respondents report only their net earnings and others report gross earnings, while some workers report both. Given such a variety of wage information WageIndicator applies the statistical techniques needed to impute gross earnings for every worker.

Why are questions on personal characteristics included in the salary survey?

Personal characteristics significantly affect the wages individuals earn. Therefore, knowing these characteristics is essential to apply the statistical rules that assign wages to any occupation and worker’s profile.

Why is gender important for wages?

Also WageIndicator outcomes show that men and women earn different wages, also when their occupations look similar. Even if men and women seem to carry out work of equal value, gender wage gaps show up that are mostly detrimental for women. If measured by weekly or monthly wages, these gaps may be caused by differences in hours worked. Yet differences often continue to exist to some extent when wages are measured in hourly wages. Such remaining differences may be due to differences in individual characteristics such as years of experience, educational attainment or skills. Other gender wage differences may be caused by differences in paid allowances and bonuses, or may be rooted in job classification and job evaluation systems. In particularly the latter cases elements of discrimination of women may be assumed. Disentangling the various personal characteristics and wage elements available in the WageIndicator dataset may contribute to proof whether such assumptions are justified. Thus, by providing reliable information about empirically observed gender pay differences WageIndicator contributes to a more transparent and equitable labour market.

Why is education important for wages?

The wage profiles in the WageIndicator dataset are among other things influenced by the level of education of the respondents. In general the level of education is an important factor influencing the productivity of an individual. More educated individuals may be assigned more complex tasks, more responsibility, or simply use their working time more efficiently. Differences in educational attainment give rise to wage differentials even within the same occupation and for individuals sharing other characteristics. Therefore controlling for education is crucial for the reliability of WageIndicator data.

Why are years of experience important for wages?

In general, more productive workers earn higher wages, and more experienced workers tend to be more productive. With years of experience workers learn how to perform their tasks more efficiently. In particular in the early years of one’s career this will translate in higher wages though this effect diminishes over time. Therefore controlling for years of experience and taking these effects into account is crucial for the reliability of WageIndicator data.

Why is it important for wages whether the employee has a supervisory position?

In general, a supervisory job comes along with more responsibility which translates in higher wages for workers in such positions.. Also, the most productive workers (next to other personal characteristics) tend to be selected for supervisory positions. Therefore controlling whether workers have supervisory positions is crucial for the reliability of WageIndicator data.

What is the meaning of minimum and maximum wages in the Salary Check?

The minimum and maximum wages indicated in the Salary Check illustrate how the earned wage varies for a given occupation and with years of experience. The maximum wage is the upper bound of earned wages reported in the Salary Check for a given occupation. Statistical methods are used to construct occupation-specific wage profiles.

Is the physical attractiveness of a person reflected in the Salary Check?

Researchers explored whether one’s physical appearance matters in occupations where attractiveness can be economically important. In most cases the impact on wages of physical attractiveness seems to be overestimated and personal characteristics such as self-confidence, diligence or creativity may well be of greater importance. In the Salary Check one’s physical appearance is not reflected in the wage information.

Why does the Salary Check indicate a far higher/lower salary than my actual one?

The Salary Check predicts one’s wage for a given profile of individual characteristics. It answers the question how much an individual of given characteristics can expect to earn. Clearly, the quality of the prediction depends on the accuracy of information entered into the Salary Check. First of all, it is very important that respondents correctly report their occupation. WageIndicator has a database containing 1,700 occupations. Although some occupational titles are almost similar, they may differ substantially in the tasks and duties performed. If the wage information in the Salary Check does not match one's current salary, it is possible that one has not chosen the proper occupation. WageIndicator tries to capture the most important determinants of wages, but discrepancies between one's actual and predicted wages may remain due to factors not covered by the Salary Check. If one's salary is higher than that reported by the Salary Check, the person in question may have specific characteristics or talents that have been rewarded in the labour market and have remained outside the scope of the WageIndicator. Conversely, if one's salary is lower than that predicted, this may point to underpayment and be an impetus to look for another job. Alternatively, it may be that the respondent’s employer offers benefits that compensate for the lower pay such as free child care or other secondary benefits.

Why does the Salary Check not mention my profession?

If the Salary Check does not mention one’s profession, the respondent may try to refine the occupation search. Currently WageIndicator recognizes some 1,700 different occupations and is busy scaling up to 4,000 occupations, making the occupation search engine a truly encompassing tool. That said, the fact may remain that one's profession is very specialized and unique, and therefore may not yet have been defined in the WageIndicator. In that case, please get in touch with the WageIndicator office to have such an occupation included in the Salary Check Mail: office@wageindicator.org .

Can the outcome of the Salary Check be used for a pay rise?

The aim of the Salary Check is to provide the most accurate information about the expected wage for a worker in a specific occupation with a given set of individual characteristics. However, the calculation of wage information in the Salary Check does not include performance aspects such as effort, creativity, work attitude, and the like. These characteristics are part of an individual’s human capital and may also determine one's pay. Against this backdrop it may clear that wage predictions from the Salary Check have great informative value but that they can only be part of an individual’s input in wage negotiations with an employer. However, it is definitely worthwhile trying to convince that employer of a pay rise referring to the wage of one's occupational peer group as a pay benchmark. How is the median wage calculated?

The median wage is the wage value in the middle if a number of observed wages is sorted into ascending order. Nearly everywhere more people earn low wages than wages above average: in statistical terms, such a wage distribution is skewed. In countries with high income inequality the wage distribution is highly skewed and the median wage ends up substantially lower than the average wage.

 

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