Indian workers earn much less than counterparts in rich nation

A vast majority of workers in India get just about 10 per cent of what their counterparts in the developed countries make by doing the same work under identical working conditions and technology, says a study.

The research paper by Orley Ashenfelter, a professor at Princeton University, documenting wages of workers at McDonald's restaurants said a McDonald's worker in India gets just USD 0.46 per hour, while his/her counterpart with same skills set and under identical working condition in the US earns nearly 16 times more.

It studied wages of McDonald's workers doing the same kind job in over 60 countries and the price of a Big Mac or its equivalent in each of those outlets.

It further says a McDonald's employee in the US earns about USD 7.33 per hour and with this pay the worker can afford more than two Big Macs worth USD 3.04 each.

On the contrary, a McDonald's worker in India gets just USD 0.46 per hour, while the equivalent of Big Mac in India is sold at a price of USD 1.29. Hence, the worker needs to slog for two to three hours just to buy a single Big Mac.

It said a vast majority of workers, including those in India, China, Latin America and the Middle-East earn much less that what workers in developed countries like the US, Canada, Japan, and Western Europe earn.

The study further notes that though there has been some remarkable growth in the world's low wage countries in the last decade, this growth has slowed, and in many cases halted, since the start of the recent financial crisis.

"The wage rates of workers using the same skills and doing the same jobs differ by as much as 10 to 1, and that these gaps declined over the period 2000-2007, but with much less progress since the Great Recession," Ashenfelter said.

The cases of India and China, countries that contain nearly one-half of the world's population, are especially "noteworthy", the report said, adding that the growth in real wage rates in China averaged about 9 per cent per year, while in India it was nearly 8 per cent per year.

A real wage rate is a nominal wage rate divided by the price of a good and is a transparent measure of how much of the good an hour of work buys.

Real wage provides an important indicator of the living standards of workers and also of the productivity of workers.