Wednesday, December 05, 2007

Cost of Living & Salary Across Nations

Obtained this article on Cost of Living & Salary Across Nations by a fellow Mensa member.

The first one is on Salary Increase in 2007 across country and region. The link is here by ECA-International.com .

In the article, Asian workers are said to be getting the highest real salary increase (after minus inflation) for 2007. It is said that the real salary increase would be 50% higher than in 2006. Would fellow Malaysians agree on this? Not many might agree. Is this real? Is this perception? Is inflation only hitting Malaysia? I don't think so, especially with the oil prices skyrocketing.

Singapore Senior Managers show a real salary increase of 10%. That's quite significant. Malaysia ranks overall no. 8 in terms of real salary increase, just behind India, Indonesia, China, Phillipines, Thailand, Slovakia and Korea. Singapore ranks no. 12.

The other article focuses on Cost of Living. You can access it here at ECA-International.com .

For this, we see KL ranks as one of the cheapest cities to live in. In the world, it is the 197th most expensive city to live, and rank much cheaper compared to cities like Singapore 122th, Jakarta 153rd, Bangkok 168th, Manila 191st and Hanoi 195th.

So, we are like the 6th most expensive ASEAN city, although we should be no. 2 or so.

2 comments:

andy said...

Note that it's just a % increase, not the rank of the actual salary itself. However, I think all these rankings should be taken with a pinch of salt.

I'll just compare it with my own layman's way as I personally think it's more accurate (than the rankings at least).

Take a typical recent graduate working in Malaysia and compare with a recent graduate working in the UK, for example.

Net starting salary = RM2000/month vs £1000/month (note: most malaysians earn less than that pretax and most british earn more than £1000 after tax but let's ignore that for simplicity sake).

House rental/month = RM300 vs £300 (for a decent room in a shared house)

Food etc = RM10/day vs £10/day (mamak meal x 3 vs UK takeaway meals x 3 --> just as a rough estimate)

Net income/month = ~RM1400 vs ~£400

Taking the currency exchange rate as £1 = RM7, £400 = RM2800

Your net income is twice as much in RM if you work in the UK.. Despite the high cost of living in the UK, you can save twice as much money to retire in Malaysia or in any other cheaper countries. Maybe you think it's not much but multiply by 10 years and you'll see a very big difference. I know, my calculations are extremely simplified, highly prone to flaws (i'm no economist) and the amount can differ widely from person to person but the point is, one should never take these rankings too seriously. Try and ask around and do a direct comparison to see which one works out better in your case.

And btw, I don't think the high % increase will make you any richer either.

Chen Chow said...

Thanks, andy for your sharing.

I agree with what you share, but what the first article ranking is comparing is on % increase and not about what is the current situation.

There is no way for us to go back to the past and change the situation. We all know that the purchasing power for Malaysia vs UK is definitely weaker on our side. Their purchasing power could be even 3 times or 4 times higher than us.

What we could do is to close the gap. This is where all the growth rate, productivity gain, salary increase, these kind of matrics will tell us. Are we getting closer or further?

If % wise we are higher, we are definitely inching closer, but remember it is just in % closer, but not magnitude. Even by gaining by smaller %, the magnitude of increase in UK or other developed nation would still be higher. So, it is just how far the % difference that matters.