The wage gap between developed countries and emerging market economies like India, China, and the Philippines, are likely to shrink significantly by 2030, and the average Indian wage could more than quadruple over the said period, says a PwC report.
According to the report, emerging markets like India and Indonesia, which are at the lower end of wage projection in relative terms, are expected to witness spike in average wages levels, and this would in turn re-shape the global businesses.
"India and the Philippines remain at the lower end of wage projection in relative terms, but average wages in India could more than quadruple over the period (by 2030) in real dollar terms," the PwC report said adding that real wages in the UK and US are projected to rise by only around a third over the same period.
"India's current average monthly wage is around 25 times smaller than that of the UK. By 2030, it is likely to be only 7.5 times smaller," PwC said.
Similarly, at present the average wage in US is 7.5 times more than in Mexico, but the gap could be less than 4 times by 2030. Over the same period, the average monthly Chinese wages could rise to around half of that of Spain.
"As an increasing population moves into middle income brackets, aspirations and expectations from both governments and private enterprise will change, with greater demands for meritocracy, use of technology in all spheres, transparency and society building." Padmaja Alaganandan, leader - people and change practice, PwC India, said.
"With an increasing base of young workforce, India will continue to enjoy wage arbitrage. Coupled with relative high growth rate of incomes, companies will continue to reap the benefit of the demographic dividend fuelling the demand side growth over the next few decades," he further said.
"Places like Turkey, Poland, China and Mexico will become more valuable as consumer markets, while low-cost production could shift to other locations such as the Philippines.
India could also gain from this shift, but only if it improves its infrastructure and female education levels and cuts red tape," PwC chief economist John Hawksworth said.