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09/03/2013

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Great topic.

It would be great to add some cost of Living Indicators for representative baskets of goods for each location as well. Housing, Transportation, and Food can wipe out substantial portions of incomes in some locations (at least for people at or near minimum wage levels). Then there is the matter of subsidies (or lack thereof) for such major cost of living drivers such as fuel / petrol / gas / etc. The price of a liter of petrol in Riyadh (Saudi Arabia) is less than that of a liter of bottled water (at least for most brands of water). Accordingly, lots of people -- including surprisingly large numbers of lower paid employees -- drive massive gas guzzlers of the kind that many people in North America or Europe would tend to avoid. Saudi Arabia is a major market for gas guzzling cars and trucks. Saudi Arabia is of course a / the leading producer of oil globally.
In contrast, in Ghana (West Africa), which has only just recently started producing a 'trickle' of oil (by Saudi standards), and not enough for domestic demand, there is net import of crude oil and related products. Petrol prices are largely without subsidies these days. Therefore very small increases in petrol prices in response to market factors, have for years been well known triggers of major price increase tsunamis for just about everything: transportation costs, food costs, school fees, etc. For many in the lower wrungs in Ghana (and some other developing countries), food costs alone reportedly take up over significant portions (try over 50%) of incomes. As such you can just imagine the effect on livelihoods of prices increases in petrol. After each wave of petrol price increases (and there may be several such within a year) otherwise abundant fresh fruits and vegetables from the verdant acres of Ghana suddenly become painfully pricy for many. By the time farm produce move from farming villages to ever teeming towns, they become less affordable. Urban commuters have to fork out more for the daily rides. Retail shops in Ghana increase prices of the wide range of increasingly imported consumables (notably the new imported staples of rice, cooking oil, frozen chicken, canned fish, canned tomato paste / puree, and even some vegetables such as onions). Incidentally lots of people are in fact working below the minimum wage given that the ‘informal’ sector dominates the economy of Ghana. In 2013 the Ghana Daily Minimum wage moved to 5.24 Ghana Cedis (roughly 2.62 US Dollars per day).

The old maxim from real estate may apply in Global Remuneration: Location! Location!! Location!!!

PS:
The following are a quick random sample of pricing in Accra, Ghana. They are NOT typical or representative sourcing, pricing, and consumption in Ghana. HOUSING: You are required to make two or more years advance payment to obtain the initial lease for a room, or house. Most minimum wage workers in urban areas need a (personal) loan, salary advance, a grant / gift, or Act of God to make this happen. Otherwise they have to find alternatives. TRANSPORTATION: A one hour taxi ride would cost about 10 Ghana cedis (nearly two days minimum wage), if you can negotiate to get that rate, and prefer to be the only party in the cab (versus joining the communal ride from taxi station to taxi station with people you do not know). If you request air conditioning, the taxi drive will ask for more (assuming the cab does have air conditioning). FOOD: This morning, I bought a loaf of (locally made) sliced brown bread from a petrol station convenience store in Accra (capital city of Ghana) for 6.00 Ghana cedis. That is more than the daily minimum wage (white bread dominates the bread market). At one of the really modest, privately-run restaurants that I favor in one of the Senior Common Rooms of the University of Ghana, Legon Campus the lunch meal (without appetizer, desert, or drink) costs 8.00 Ghana Cedis (about 150% of the daily minimum wage).

There are lots of cheaper options, of course. But those require that you really ‘go local’. Lots of foreigners (tourists, exchange students, and expatriate workers do ‘go local’, to some extent). For most locals, it is a matter of course.

A good article. Thanks Jacque.

Just an update for the Czech Republic data:

The minimum wage was raised from CZK 8,000 monthly to CZK 8,500 as of August 1, 2013, i.e. roughly from USD 408 to 434 (FX 19.6).

Average monthly salary is about CZK 25,000 for the whole state and about CZK 32,000 in Prague.

"Middle Class" salary - I can only estimate - can be about CZK 50,000 a month. That's a kind of a magic threshold.

Thanks E.K. ---- you provide us with a wealth of information! I agree with you. The ME and Africa are probably the most complex when it comes to ALL HR practices --- compensation being one. And since many expats don't go local most of the time --- their packages are quite expensive. But I guess that is not deterring companies from using expats. I have heard that about 70% of UAE population is expats.

Peter ---- thanks for the update on Czech Republic. Eastern Europe is quite different from Western Europe isn't it!

Hi ---- well you could take it as a complement but seriously I know it is irritating. One of my fellow writers here on this blog has had entire articles copied and posted! Now that takes guts!

If you know who wrote/plagorized your articles you should contact them. Whether you press charges or not is an individual thing.

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