Saturday, March 31, 2012

Malaysia, where are you on the global pay scale?

Hantu Laut

Following my post "Are Malaysians Too Lazy To Deserve Minimum Wage", I came across this rather interesting article, which, paradoxical, it may seem, actually makes sensible deduction of what would be the average income of every employed human being on the face of this earth, the hypothesis of which is as good as "laughter is the best medicine" cure for the sick.

It's just a meaningless academic figure.
How nice if it can be a reality, we would not have poor souls on this earth.

The world's average salary is US$1,480 per month. Malaysia sits at No.48 out of 72 countries.Not so good standing compared to South Korea at No.10 and Singapore at No.14.

Carry on reading:

If there were no rich and poor, and everyone had an equal share of the world's total pay packet, how much would they earn?

The total value of world income is closing in on $70 trillion (£43.9tn) per year, and there are seven billion people in the world, so the average income is heading towards $10,000 (£6,273) per person per year. Easy.

But not everyone has a job and some of those seven billion are children. So another question you could ask is: "What is the world's average wage?"

That is more tricky to answer, but a group of economists at the United Nations' International Labour Organization (ILO) has had a go, though they have never gone public with this information. Until now.

Let's consider the scale of the Herculean task the number crunchers at the ILO set themselves.

First, they work out the total wage bill for every country in the world. To do that they get the average salary from each office for national statistics, and multiply that amount by the number of earners in each country.

Data limitations

  • The data (for 2009) covers 72 countries, and misses out some big ones, Nigeria for example
  • Only wage earners are counted - not the self-employed or people on benefits
  • In some countries the data is incomplete - in South Africa, for example, it leaves out public sector workers and agricultural workers, while in Uganda it covers only the manufacturing sector

In this way, they are able to give more weight to countries which have more workers in them. The average salary in China has more influence on the world average than the average salary in New Zealand, where many fewer people live.

Once they have the total wage bill for each country, they add them all together and divide by the total number of earners in the world.

That gives you the answer - the world's average salary is $1,480 (£928) a month, which is just less than $18,000 (£11,291) a year.

But these dollars are not normal US dollars. The economists use specially adjusted exchange rates - the average salary is calculated in Purchasing Power Parity (PPP) dollars. One PPP dollar is equal to $1 spent in the US.

Essentially, the PPP dollar takes into account the fact that it is cheaper to live in some countries than others. The idea is that we don't care how many actual dollars somebody is paid in, say, China, but we care about what sort of stuff those dollars can buy.Read more.

Do you earn more or less than the world's average wage? Type in your monthly salary and we'll give you the answer.

Go to the page here.

The average wage, calculated by the International Labour Organization, is published here for the first time. It's a rough figure based on data from 72 countries, omitting some of the world's poorest nations. All figures are adjusted to reflect variations in the cost of living from one country to another, and as Ruth Alexander of BBC radio's More or Less programme underlines, it's all about wage earners, not the self-employed or people on benefits.Read more.

1 comment:

Purple Haze said...

The reserach only covers 72 countries and probably only those who actually have statistics to offer to the survey.

If one were to include the other 130 odd countries, the average wage would probably reduce.

But you are right, HL. This is a fairly meaningless piece !