The chart below looks at OECD countries only, so is not representative of the vast populations in many less developed countries such as in many parts of Africa, or in China or India – where we can assume that hours worked are longer and the pay is substantially lower. The Organization for Economic Co-operation and Development (OECD) is generally regarded as a collection of highly developed, high-income countries. However within the 38 member states from across the globe, economic prosperity still varies widely.
The chart shows that Australia is in the “attractive” quadrant, working for around 33 hours per week in exchange for around USD 1,200 and very similar to Canada. Americans work more and get paid more; Mexicans work more but get paid substantially less; and the Swiss work less but get paid almost as much as the Americans.
Source: OECD, Visual Capitalist
Data such as those contained in the chart, by necessity, utilise many assumptions and should be taken as indicative only. For example, despite the wage data using Purchasing Power Parity adjusted metrics, it still doesn’t fully account for discrepancies in local prices, which are influenced by complex factors like tariffs and fuel costs for imported goods, the impact of monopolies and cartels, the price of non-traded goods (energy, housing costs) and government taxes.
And while the difference in salaries seems massive, paying workers enough to meet their costs of living also plays a factor. Countries with higher weekly wages also correlate with a much higher cost of living and vice versa. Switzerland, Denmark, and Iceland are in the top 10 countries with the highest cost of living compared to Mexico, which is far more affordable.
So, while it seems that an average Icelandic worker makes almost 7x what an average Mexican worker makes, the reality of how much of that wage is spent in supporting an average lifestyle in both countries is less direct. In any event, Australia seems to occupy a rather appealing position on the chart – not that there isn’t room for improvement!
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