Thursday, October 10, 2013

Wages

I guess one useful way to measure wealth of a nation is the time into labor versus the amount of utility you get (Related to Big Mac Index). From my experience of living in India and US here are few observations.  Lets compare a software engineer paid about Rs 50k per month as software engineer in Bangalore to someone doing blue collar job like Subway worker in US getting 10$/hour.  For the software Engineer working on 40hrs/week x 4 weeks gives 160Hrs. Therefore 50k/160Hrs = 312 Rs/hr. Converting that into $ gives 5.2$/Hr, roughly half of US worker. The minimum wage according to Wikipedia is around 0.4$. Now this might sound less, but the cost of living is way less in India. It's strange that some things are cheap in India, and other things are actually cheaper in US. We can compare some stuff.

Food: 
A Subway sandwich costs about 6$ in US while in India it may cost 2$. So a subway worker has to work 36mins to earn a sandwich while the Indian Software Engineer has to work 23mins. Eating out is generally costlier in US.

Bread:
3$  in US, 40Rs in India

  1. US Worker: 20mins work in US
  2. Indian SW Engineer: 12mins of coding in India
  3. Indian Minimum wage worker (MWW): 130mins working.


Smartphone:
Electronic items usually cost same in both the places.
600$ in US and India

  • US Worker: 60Hrs of work ~ 11days
  • SW Engineer: 120Hrs of work ~ 22days
  • Indian MWW: 1500Hrs of work ~ 9 months 

Here we see the stark difference in how poor India is. The minimum wage worker just can't afford to buy a 600$ smartphone. Which is why they usually buy the 100$ smartphone. These days even the blue collar workers have smartphone.

From my experience in US, Petrol, Electricity and any manufactured items are really cheap to its citizens. Anything that requires manual labor is costly. In India the opposite is true. Cheap housemaids are some of the few advantages of India, while plenty cheap stuff in WalMart is USAs advantage.
These are some of the interesting ways to compare the amount of work needed in different countries. 

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