Asia Has World’s Biggest Pay Gap

Jul 15, 2013

Asia Has World’s Biggest Pay Gap

By Riva Gold

In Asia, middle managers such as department heads make more than 14 times as much as operational employees such as clerical workers–the biggest such pay disparity in the world, according to a report by global management consulting firm Hay Group. The difference in pay in Asia is far greater, for example, than in North America (3.5 times) and Europe (2.9 times), and somewhat bigger than in the Middle East (11.9 times) and Central and South America (10.2), other regions comprised mostly of emerging markets, the report said.The greater disparity in pay in emerging versus developed markets can largely be blamed on a battle for experienced talent in emerging markets that is pushing up management salaries, said Thomas Higgins, managing director of Hay Group.

In places where the disparity is extreme, such as Pakistan and Egypt, it creates “strains between haves and have-nots,” he said.

Among cities, pay is most unequal in Karachi, Pakistan, where middle managers earn 22.5 times as much as workers. A number of East Asian cities, though, ranked among the 10 most unequal. They include Shanghai (18.5), Delhi (18.3), Beijing (18), Mumbai (16.6) and Bangkok (16.6). The global average for 2012 was 8.4.

Growing inequality in Asia has begun to attract attention. In a report last year, the Asian Development Bank cited as contributing factors technological advances, globalization and market-oriented reforms that tend to favor those who live in urban areas, highly skilled workers and the owners of capital.

Earlier this year, China’s State Council vowed to shrink the growing gap between rich and poor by improving social safety nets and raising taxes on the rich.

Workers fared best overall in purchasing power in Geneva, the Ha Group study reported, with 166% of the purchasing power of their counterparts in New York. But senior management in Doha, Qatar, enjoyed the world’s greatest purchasing power by far–366% of senior managers in New York City.

While workers’ purchasing power is lower in Eastern European and Asia, middle managers and executives there have fared well, often better than those in the West.

The report also measured the cost of employing operational workers beyond their base salary, including such things as payments for pensions and disability benefits. The most expensive employees in the world? Operational workers in Zurich, who cost 75% more than those in New York.

Region Country /City Base Salary (BS): All BS: Senior Mgmt. /Exec. BS: Middle Mgmt. BS: Supervisory BS: Clerical /Ops. Purchasing Power (PP): All PP: Senior Mgmt. /Exec. PP: Middle Mgmt. /Exec. PP: Supervisory PP: Clerical /Ops.
Africa Algeria – Alger 38 53% 37% 24%
South America Argentina – Buenos Aires 58% 79% 76% 59% 47% 117% 180% 164% 116% 90%
Oceania Australia – Sydney 127% 136% 134% 126% 115% 140% 157% 148% 138% 133%
Europe Austria – Vienna 102% 93% 104% 105% 99% 121% 125% 131% 122% 114%
Asia Bahrain – Manama 56% 126% 105% 64% 35%
Europe Belarus – Minsk 13% 19% 14% 8%
Europe Belgium – Brussels 109% 95% 106% 111% 111% 124% 105% 118% 126% 134%
South America Brazil – Rio de Janeiro 36% 96% 68% 41% 23% 68.00% 210.00% 136.00% 75.00% 40.00%
South America Brazil – Sao Paulo 43% 93% 68% 47% 28% 80.00% 201.00% 135.00% 85.00% 49.00%
Europe Bulgaria – Sofia 22% 34% 24% 16%
North America Canada – Montreal 92% 73% 88% 95% 90% 118% 95% 113% 122% 116%
South America Chile – Santiago 56% 119% 102% 64% 34%
Asia China – Beijing 31% 69% 64% 33% 15% 63.00% 140.00% 134.00% 66.00% 30.00%
Asia China – Shanghai 32% 83% 66% 35% 16% 67.00% 173.00% 144.00% 72.00% 33.00%
Europe Cyprus – Nicosia 58% 88% 62% 49% 108% 173% 116% 89%
Europe Czech Republic – Prague 38% 63% 53% 39% 30% 82.00% 162.00% 124.00% 82.00% 62.00%
Europe Denmark – Copenhagen 126% 107% 118% 129% 132% 112% 91% 104% 113% 138%
Africa Egypt – Cairo 26% 83% 63% 30% 13%
Europe Estonia – Tallinn 34% 51% 39% 30% 69.00% 117.00% 80.00% 60.00%
Europe Finland – Helsinki 96% 79% 96% 99% 92% 96% 79% 94% 98% 93%
Europe France – Paris 85% 83% 89% 87% 78% 111% 113% 121% 114% 100%
Europe Germany – Berlin 105% 89% 101% 109% 101% 156% 142% 158% 161% 150%
Europe Greece – Athens 63% 85% 78% 63% 56% 50.00% 81.00% 68.00% 49.00% 43.00%
Asia Hong Kong – all 67% 113% 98% 73% 48% 111% 209% 166% 120% 77%
Europe Hungary – Budapest 35% 58% 54% 37% 24% 52.00% 107.00% 87.00% 54.00% 35.00%
Asia India – Delhi 8% 26% 18% 9% 4% 21.00% 81.00% 51.00% 24.00% 11.00%
Asia India – Mumbai 9% 30% 18% 10% 5% 21.00% 87.00% 50.00% 24.00% 11.00%
Asia Indonesia – Jakarta 15% 53% 34% 18% 9% 29.00% 121.00% 72.00% 36.00% 16.00%
Asia Iran – Teheran 35% 55% 38% 28%
Europe Ireland – Dublin 105% 100% 108% 110% 95% 153% 143% 155% 157% 144%
Europe Italy – Rome 80% 91% 87% 78% 73% 88% 108% 97% 85% 78%
Asia Jordan – Amman 22% 67% 49% 25% 15%
Asia Kazakhstan – Astana 28% 30% 46% 33% 15%
Europe Latvia – Riga 30% 35% 43% 34% 25% 60.00% 91.00% 98.00% 70.00% 50.00%
Africa Libya – Tripoli 66% 94% 68% 42%
Europe Lithuania – Vilnius 27% 51% 44% 31% 21% 62.00% 159.00% 112.00% 70.00% 46.00%
Europe Luxembourg – all 103% 93% 103% 104% 100% 130% 115% 130% 131% 131%
Asia Malaysia – Kuala Lumpur 30% 49% 45% 30% 21% 62.00% 114.00% 100.00% 60.00% 41.00%
North America Mexico – Mexico City 37% 96% 66% 40% 26% 82.00% 246.00% 157.00% 88.00% 55.00%
Africa Morocco – Rabat region 40% 45% 38%
Europe Netherlands – Amsterdam 80% 74% 80% 82% 76% 107% 95% 101% 112% 101%
Oceania New Zealand – Wellington 82% 75% 85% 83% 73%
Europe Norway – Oslo 134% 96% 128% 141% 141% 112% 83% 109% 114% 123%
Asia Oman – Muscat 60% 123% 104% 71% 42%
Asia Philippines – Manila 34% 47% 30%
Europe Poland – Warsaw 40% 84% 66% 40% 26% 75.00% 174.00% 131.00% 76.00% 48.00%
Europe Portugal – Lisbon 64% 77% 79% 65% 48% 100% 125% 129% 103% 74%
Asia Qatar – Doha 72% 149% 138% 96% 44% 148% 366% 306% 193% 87%
Europe Romania – Bucharest 28% 60% 48% 28% 18% 91% 222% 171% 91% 58%
Europe Russia – Moscow 43% 88% 72% 46% 31% 85.00% 206.00% 153.00% 88.00% 58.00%
Asia Saudi Arabia – Riyadh 48% 116% 94% 57% 30%
Asia Singapore – all 68% 97% 92% 73% 51%
Europe Slovakia – Bratislava 35% 57% 49% 36% 26% 82.00% 163.00% 126.00% 84.00% 60.00%
Africa South Africa – Pretoria 64% 82% 65% 43%
Africa South Africa – Johannesburg 128% 170% 129% 83%
Asia South Korea – Seoul 65% 76% 70% 63% 57% 108% 115% 120% 104% 93%
Europe Spain – Barcelona 87% 87% 89% 84% 67% 133% 134% 133% 134% 103%
Europe Spain – Madrid 81% 90% 91% 82% 63% 130% 147% 144% 133% 102%
Europe Sweden – Stockholm 101% 83% 98% 103% 103% 92% 80% 90% 93% 96%
Europe Switzerland – Geneva 170% 143% 160% 177% 174% 166% 140% 159% 171% 168%
Europe Switzerland – Zurich 167% 126% 153% 174% 178% 164% 121% 147% 173% 180%
Asia Syria – Damascus 14% 29% 17% 8%
Asia Thailand – Bangkok 26% 71% 54% 28% 16% 56.00% 155.00% 128.00% 61.00% 34.00%
Asia Turkey – Istanbul 48% 96% 88% 55% 32% 68.00% 160.00% 133.00% 76.00% 43.00%
Asia United Arab Emirates – Dubai 65% 124% 114% 79% 41% 111% 252% 209% 131% 66%
Europe Ukraine – Kiev 20% 49% 37% 22% 13% 50.00% 151.00% 103.00% 54.00% 31.00%
Europe United Kingdom – London 90% 93% 97% 93% 83% 106% 116% 114% 107% 96%
North America USA – Chicago 96% 89% 98% 96% 94% 142% 139% 149% 141% 138%
North America USA – Los Angeles 95% 88% 96% 95% 92% 153% 153% 162% 153% 147%
North America USA – New York City 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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