Huge wage gaps for the same work between countries - June 2011

 

Big Macs to match Wage Indicator salary checks

An American IT-professional for one hour of work can buy 5 Big Macs, his Indonesian counterpart not even 1 Big Mac sandwich: 0.8 to be precise. An international wage comparison based on Wage indicator data shows that wage gaps between countries for the same work are high. IT-Workers were chosen for this comparison as they have similar job skills everywhere. Their earnings were matched for buying power with Big Macs, available in all selected countries in the same quality.

 

The comparison was done for 3 occupational groups in 27 countries. The occupations are: middle managers (excluding chief executives and legislators), specialized occupations in the IT sector and manual workers, such as craftsmen, machine operators, and assemblers. The 27 countries selected are from all over the world: 9 Western European, 3 Eastern European, the United States, 7 countries in South America and 4 countries of the former Soviet Union. India and Indonesia are the 2 Asian countries represented in the comparison and South Africa the only African country.

 

Some more outcomes are that Indonesian manual workers as compared to IT-workers are better off, relatively speaking: they can buy 0.6 Big Mac for one hour of work, their American counterpart 2.4 Big Macs ‘only’. Compare this to 5 or more Big Macs American IT-specialists and managers can afford to buy after putting in one hour of work.

 

These outcomes were presented during the May 2011 conference celebrating 10 years of Wage Indicator. All results are based on Wage Indicator datasets, collected in these countries during 2009 and 2010 in comparable manner. They are presented in the table below.

 

Table 1: Gross and net hourly pay in USD and hourly Big Mac wage

 

 Note: Reported are median wage rates in 2010 dollars; Big Mac prices are not published for all countries

Source: Wage Indicator 2009-2010