Friday, May 25, 2012

The global pay scale calculator: Is your salary more or less than the world's average wage?

If all the salaries of the wage earners in the world are to be summed up and be distributed to every person, how much would one earn?

Where are you on the global pay scale? PHOTO:

Doing a pretty nifty calculation, the world's total income, amounting to $70 trillion per year, divided to the seven billion people of the world, would be $10,000 per person per year, or $833.33 a month, or P35,833.33 in Philippine currency.

But this is not the reality. Not everyone has a job. There is a huge baby population. So now, what's the "world's average wage?"

A group of enonomists at the United Nations' International Labour Organization (ILO) has publicized what really is the average wage of the world. They came up basing it from a country's average salary from each office for national statistics. Then they multiplied the amount on the number of earners in each country.

Adding up all the wages in each countries, they then divided it by the total number of earners in the world. The result turned out to be $1,480 -- the world's average salary.

The amount is based on purchasing power parity (PPP) dollars, where the U.S. dollar currency is the basis of estimating the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power. The exchange rate is adjusted so that an identical product in two different countries has the same price when expressed in the same currency.

For example, a laptop costs P35,000 in the Philippines, given a P43-US$1 exchange rate. If the same laptop costs $750 in the U.S., then Filipino consumers would buy the laptop there, because with the exchange rate, the laptop price amounts to US$813.95 in the Philippines.

The Philippines though, as expected, falls behind the average salary rate, along with other Asian countries such as India, China, Pakistan, Thailand, Malaysia, and Mongolia. Luxembourg tops the list with an average monthly salary of $4,089, while the U.S. has $3,263.

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