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Your Take: Your Place on the Global Pay Scale

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If you do enough traveling outside of the United States and the “developed” world, you’re probably keenly aware of how good we have it here. While it’s not always sunshine and lollipops in the US, chances are you’d be better off here than anywhere else in the world. The slums from Slumdog Millionaire are a very real thing and not just an eye opening visual for a movie.

It comes as no surprise than the average US citizen’s monthly wage puts him or her near the top of the worldwide global pay scale. This was most recently on showcase when the BBC took a peek back in March. The world average monthly wage is $1480, which would put you above the poverty line in the United States depending on the number of persons in your family. The poverty line in the US is just $10,890 for one person and $14,710 for two persons. $17,760 would be less than the poverty line for a three person family. The average in the United States is $3263, which is fourth behind Luxembourg ($4089), Norway ($3678), and Austria ($3437). India is down near the bottom at $295 a month.

And for all the talk about China taking over the world, average wages there are a mere $656 a month. China needs to take care of themselves before they’d consider taking over the world. :)

What’s your take on this?

{ 32 comments, please add your thoughts now! }

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32 Responses to “Your Take: Your Place on the Global Pay Scale”

  1. Fascinating statistics. America definitely has it good, however, we’ve forgotten how to handle that average $3k a month we receive. The rest of the world doesn’t buy 60″ plasma TV’s and boats and RV’s or 4,000 square foot homes either. That’s where the true poverty in America is. Debt.

    • tbork84 says:

      Very well said.

    • NateUVM says:

      More to the point, how does this compare to a nation’s cost-of-living? Combining the two measures in some way and then ranking them might present an interesting picture…

      For instance, while India is low at $295/mo., my impression is that the cost of living in India is lower, too. While the average salary may not provide everything that one would hope a salary would, it no doubt goes further in India than it would here. How do we normalize the comparison? Given what have become social norms (i.e. everyone in the U.S. “needing” cable/internet/car/etc…) is it even possible?

      • uclalien says:

        I think standard of living is better measure. After all, the cost of living is extremely low if you live under a bridge or in a tent. The simple fact is that impoverished Americans live a far higher standard of living than the average Indian.

  2. cubiclegeoff says:

    I hate when people use these figures. Yes our pay is a lot higher, our base cost of living is also a lot higher. There are a lot of people that make a lot less and live very well in their own countries. And do we really believe that everyone should live at the American standard (which is really the middle class American standard)? Many people are perfectly happy being subsistence farmers and such, but somehow we (or others) decide that’s not enough. Like a rural/native community may be happy in their own garments, but we come in (or the religious come in) and decide they need shirts and pants. That forces them to have to find a way to make money to try and buy stuff that wasn’t necessary until someone from the outside/developed world told them it was. They then need to be profitable so they can buy crap. And sometimes they believe it because they see our extravagance and want that, yet having that comes with its own problems.

    • knotReally says:

      Hmm. good point. lets not bother the rural/native community at all. in fact, lets take our water purification science that was developed using locally available resources, along with our clothes, and leave. They would be so much better off without it.

  3. Many Americans need higher salaries to pay for private health insurance, a burden not borne by all of the rest of the ‘developed’ world (and much of the undeveloped world!).

    • Texas Wahoo says:

      But those countries often need higher salaries to pay higher tax rates.

      • NateUVM says:

        Yes, the tax burden is greater in countries with a single-payer system, but the increase in taxes is much LESS than what is spent when purchasing private health care.

        http://www.pnhp.org/facts/single-payer-resources

        But then, why would we want something that cost less and provided better care… Especially when there is the issue of protecting insurance companies’ bottom lines.

        • uclalien says:

          It may cost less. But better care? I think not. Rankings provided by the WHO and other international organizations tend to be heavily weighted toward quantity of care, not quality.

          If you delve deeper into the WHO statistics, you will see that their rankings are nearly useless. They are entirely dependent on inconsistent data collection methods across countries.

          For instance, the supposedly high infant mortality rate in the US is simply false. The US is one of the few nations that counts every baby. Alternatively, most countries simply exclude from the data any baby that doesn’t meet a certain weight threshold or other criteria.

          Life expectancy rates in the US are severely understated as a result of non-healthcare related deaths (e.g., murder, car fatalities, etc.). Stripping non-healthcare related deaths from the data results in the US having the highest mean life expectancy of all OECD countries (which includes all the major players in Europe, Canada, and Japan).

          In addition, 5-year survival rates for most forms of cancer (e.g., breast, cervical, colon, lung, prostate, thyroid, skin, stomach, non-Hodgkin lymphoma) are by far the best in the world.

          I could go on and on. But for the sake of brevity, I’ll leave it at those three examples.

          In addition to statistical/data problems, these rankings also ignore the fact that a large portion of the world’s medical innovation occurs in the US. In effect, these single-payer or other government healthcare systems are leeching off the US’s capitalistic system that provides incentives for private companies to make medical breakthroughs. Their costs would be significantly higher and/or their results would look much worse if they weren’t being carried on the backs of Americans.

          As it turns out, healthcare in the US is actually the best in the world by nearly all measures. The problem lies in the messed up system.

          In 2009, the founder of Whole Foods wrote an interesting editorial in the Wall Street Journal discussing the steps, in his view, that need to be taken to fix the system. Give it a read.

          http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html

          • NateUVM says:

            You are sort-of making my point…

            We may have the “best” healthcare…IF it were available to everyone. And that’s the problem. When 100% of the people DON’T have access to basic, preventative care, that is where we fall short. And it’s a problem both financially (expensive emergency care being pushed to those that are insured) AND from the effect of the healthcare on the population. There’s a reason why quanitity is pushed as much as it is by the WHO. Quality doesn’t mean anything if it isn’t available to everyone, or even most people.

            Like you said… It’s the system that’s broken.

            The WSJ piece… Eh, interesting perspective, but the scare tactics about other countries experiences with single-payer systems is getting kind-of tired. It’s not like these people don’t receive emergency care. And if everyone here had the ability to schedule a non-emergency procedure, even if they had to wait, that would be a step up for the country as a whole.

            And in fact, the waiting people would do sort-of parallels what Mackey suggests. I mean, how else are you going to “spend the first $2500 more carefully,” if you’re not delaying a recommended procedure in some way (vis-a-vis shopping around)? What good does making costs more transparent? If you need the care, won’t you be paying, regardless? The only “benefit” having the costs broken down provides is the ability to NOT have the needed treatment… Um, how is THAT a good thing?

            And what where his employers choosing addt’l healthcare dollars over? More peanuts in the cafeteria? I joke, but you see my point… His argument loses meaning if he dosen’t tell the whole story.

            And is he REALLY suggesting that ALL employers cover 100% of HSA premiums…? Would have to be some sort of mandate there, and how does that get passed? How does that help the unemployed?

            Again, nice perspective, but I don’t think we’re looking at legitimate solutions here.

            How about a new system? I hear ours is broken.

        • Texas Wahoo says:

          I don’t see how that article suggests what you seem to be saying: that the average American pays higher taxes+health care costs than the average citizen of other countries. In fact, it doesn’t even seem to discuss tax rates in other developed nations relative to those in the U.S.

          • NateUVM says:

            The article makes the point that the cost the care is less. If it costs less, it costs less, no matter how you pay, using whatever mix you want to of taxes, out-of-pocket or premiums.

            If it costs less, it costs less.

          • Texas Wahoo says:

            But we’re not talking about the cost of healthcare. We’re talking about relative income in different countries. It doesn’t matter if Sweden pays less for health care, if they pay more in taxes (whether that money goes to healthcare or not).

          • NateUVM says:

            Wahoo, Kurt was isolating the healthcare piece of the discussion. As such, that is exactly what we are talking about.

            If you would like to dig up the other components of what foreignors pay for taxes, we can go about discussing the relative merits of the different approaches. It may help to introduce a specific example, too.

            However, regarding private healthcare vs. single-payer systems, the point is that we pay more, and have less disposable income, because of the system we use.

          • Texas Wahoo says:

            Kurt brought up health-care as a specific expense and I added to his statement by saying that many countries have higher taxes as a specific expense.

          • NateUVM says:

            You specifically referred to “those countries” that Kurt mentioned and how they would need higher tax salaries to cover their higher tax rates. It would be reasonable to assume that you were trying to tie higher taxes to the health care option of “those countries”, with the (errant) assumption that, ceteris paribus, higher salaries were needed to fund those options.

  4. Ann says:

    Just worked overseas in China for 3 months in a large industrial city “Shenzhen” (reported as the fourth richest city in China). What I noticed is that cost of living is a huge factor. I live in Chicago so a typical lunch $7-10 is pretty normal downtown during the week. In China, I would spend between $0.30 – $1.50 and if I spent $3.00 it would be a lot of food and considered pretty extravagant. My question is whether the average wage quoted is adjusted for cost of living.

  5. Huh, interesting! Well, my husband and I make about 3 times the American average overall but try to live on that $3250 mentioned…so I guess we are living the average but saving and investing more than normal…

  6. Ben says:

    Jim wrote “…And for all the talk about China taking over the world, average wages there are a mere $656 a month. China needs to take care of themselves before they’d consider taking over the world. :) …”

    So high cost of living equals world domination? China and other foreign investors OWN the US debt. Our synthetic prosperity is borrowed and unsustainable.

    • uclalien says:

      I don’t think that was what Jim was implying. While I agree that current trends are unsustainable, very few Chinese own any part of the US. While a small portion of the Chinese population is fairly wealthy, over 90% of the Chinese population lives in abject poverty. The simple fact is that even lower income Americans have a standard of living that is far superior what would be considered upper-middle class in China.

    • NateUVM says:

      Chinese/foreign ownership of US debt is a relative non-issue. I mean, it’s not like we haven’t been trying to re-pay them. In fact, we want them to buy more…

      http://american.com/archive/2012/january/why-growth-matters-more-than-debt

  7. NoCleverName says:

    Interesting topic. Our cost of living is significantly higher and our salaries reflect that. On the other hand most Americans (probably other countries, too) do not live within their means. I am one of the “rich” people (ie, top 1% income) and I drive down the rode and see that over 30% (probably an underestimation) of the population I live in have houses and drive cars that far exceed mine. I don’t get it! They must be house rich and cash poor or underwater. Many of us have a sense of entitlement and banks let us live this lifestyle that is not sustainable. I’m not sure if other countries allow for such lending. I apologize for the ranting.

    • Carl Lassegue says:

      I completely agree. A lot of the things we view as essential in the United States are luxuries to the rest of the world. Those “essential” items contribute to our cost of living.

  8. Derek says:

    Our average wage may be higher… for now; however, I think they may be catching up. I just posted on my site some interesting numbers regarding the declining number of millionaires in the US. In fact, the population of U.S. millionaire households fell to 5,134,000 last year, according to a global wealth study by The Boston Consulting Group. However, China is creating millionaires so quickly it is now in third place behind America and Singapore, climbing in number of millionaire households by 16% since 2010. So, we may make more per month on average, but China is creating a growing number of millionaires while we are declining. Not a good sign for us. Great post!

  9. Stephanie says:

    Our median pay here in the US is MUCH lower than the median in western European countries like Switzerland, Austria,etc.

  10. Derek says:

    Did you hear that the number of millionaires in the US is declining while the number of millionaires in China is increasing (16% since 2010)? We still have over 5M millionaires and China is just over a 1M, but we are decreasing the number while they are growing in number. So, we are still a much wealthier country, but if we are not careful that could certainly change. Great Post!

  11. I wouldn’t put much weight in these numbers when comparing to other countries since our cost of living is so much higher as others have pointed out.

    But I do think that 95% of the people in the US are born better off than most of the world. I think that was the point of the article.

  12. JDRobison says:

    This is very thought-provoking post. I make a decent entry-level salary, but my wife and I still struggle to pay rent in a modest apartment, and we don’t do anything that to extravagantly spend our money. If one more clutch goes out, we will be in a serious financial situation. There are also pressures from a professional job to dress nicely with new clothes, and it appears that not doing so can hamper one’s career. It truly is struggle between modesty and trying to progress in life, and reading this post is truly thought provoking in this light.

  13. Merchant Account Provider says:

    Jim,

    I think you have missed out on a very important aspect of this entire debate. The fact is that while Americans earn a lot more money than people in the developing world, for example China, they pay a LOT less for everything.

    I was in China recently and I had to have emergency surgery. What would have cost me thousands of dollars in the US cost me no less than a few hundred dollars in China. It’s not just with healthcare. Americans might be earning more than people in third world countries, but they have to pay a lot more for all basic life necessities, specially food and electricity.

    If we are to compare life in the first world as opposed to the third world, we should take into account the relative price levels also. Personally, I find that despite having slightly lesser standards of living, people in the developing world are far happier than many here in the US.

    -James

  14. Ellen says:

    I think some right and some wrong ,some peoples in the other country think that live in the State better than in the other country.where the salary lower than there.
    But if you know when you like to buy some food exactly made in america or UK ,you would be surprise the price triple times higher than you buy in the state.
    Yeah just try to eat food where you can eat or made in the local factory in that country, the price cheaper and you will spend less money.for the health I think without have health insurance the same just hopeless more over for surgery plus hospital it makes spend much money.on the other hand you have insurance health in my country the rule different where the regular checking health or maybe just get light sick which no need stay in the hospital,we can’t ask payback out of the money for what we spend for doctor and medicine.


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