Average wage
Table 3.3 reports the Asian economies average wage for 2020, based primarily on survey data. The OECD’s full-time average wage (AW) levels are also given. The wage earnings are defined as gross wages before deductions of any kind (including personal income taxes and social security contributions), but including overtime pay and other cash supplements paid to employees.
Average wages are displayed in national currencies and in US dollars (both at market exchange rates and at purchasing power parities, PPP). The PPP exchange rate adjusts for the fact that the purchasing power of a dollar varies between countries: it allows for differences in the price of a basket of goods and services between countries.
Wage earnings across the Asian economies averaged USD 10 925 in 2020 at market exchange rates. Singapore has the highest at USD 48 596, with Hong Kong (China) next at USD 30 194, China at USD 11 295 (Table 3.3). The lowest levels are found in Pakistan, at USD 860 with India, Indonesia and Sri Lanka also under USD 3 000.
At PPP wages averaged USD 20 521. Singapore is again highest amongst the Asian economies, at USD 80 414, with Hong Kong (China) next at USD 38 614. Pakistan is again the lowest at USD 3 439 but India, Indonesia and Sri Lanka are also under USD 10 000, with the other Asian economies around USD 20 000 or lower. The higher figure for PPP wages suggests that many economies exchange rates with the US dollar were lower than the rate that would equalise the cost of a standard basket of goods and services.
Average wages for the OECD countries are much higher, averaging USD 39 178 at market exchange rates. Australia has the highest wages at market exchange rates for those OECD countries listed at USD 62 530, with Germany and the United States also around USD 60 000. The lowest values among the OECD countries listed are in Italy at USD 34 532 and Korea at USD 38 991.
At PPP wages averaged USD 46 520 across the OECD. Germany is now highest of the countries listed at USD 69 968, with Australia and the United States also over USD60 000. New Zealand is lowest at USD 43 965 with Canada and Italy being the only other OECD countries, of those listed, below USD 50 000. Again, the higher figure for PPP wages suggests that many OECD countries’ exchange rates with the US Dollar were lower than the rate that would equalise the cost of a standard basket of goods and services.
Definition and measurement
The “average worker” earnings series (AW), defined as the average full-time adult gross wage earnings, was adopted from the second edition of Pensions at a Glance (OECD, 2007[1]). This concept is broader than the previous benchmark of the “average manual production worker” (APW) because it covers more economic sectors and includes both manual and non-manual workers. The new AW measure was introduced in the OECD report Taxing Wages and also serves as benchmark for Benefits and Wages. The third edition of Pensions at a Glance (OECD, 2009[2]) also included a comparison of replacement rates under the old and new measures of earnings for eight countries where the results were significantly different.
References
[2] OECD (2009), Pensions at a Glance 2009: Retirement-Income Systems in OECD Countries, OECD Publishing, Paris, https://doi.org/10.1787/pension_glance-2009-en.
[1] OECD (2007), Pensions at a Glance 2007: Public Policies across OECD Countries, OECD Publishing, Paris, https://doi.org/10.1787/pension_glance-2007-en.