Monday, February 7, 2022

How Many Hours of Work Buys an iPhone 12 in India, Pakistan?

It takes an Indian minimum wage worker twice as long to afford an Apple iPhone 12 as his Pakistani counterpart. A minimum wage Pakistani has to work 1,642 hours, or about 10 months of work, to buy an iPhone 12, according to Bloomberg News. An Indian minimum worker, on the other hand, must work nearly twice as long, a total of 3,254 hours, to buy it.  It takes 1,791 hours in Indonesia and 2,045 hours in Egypt. Assuming a 40-hour work-week and two weeks of vacation, there are 2,000 hours of work in a year. Given these figures, it can be safely assumed that very few minimum wage workers in the developing world can afford to buy an iPhone 12.

Hours of Work Needed to Buy iPhone 12. Source: Bloomberg

Bloomberg reported the following on February 4 as follows: "Based on minimum wage levels, a new report from Grover.com estimates it would take 6,639 hours for a Venezuelan to earn enough for the prized smartphone and 3,254 hours for an Indian. Chinese people must work 680 hours to make enough money". 

Minimum Wage in Selected Countries. Source: ILO via The Business Standard

International Labor Organization's Global Wage Report 2020-21 reported that the minimum wage in Pakistan is $491 a month in purchasing power parity, the highest in South Asia. India's minimum wage is $215 a month, less than half of Pakistan's. 

India is one of the most unequal countries in the world, according to the World Inequality Report 2022. There is rising poverty and hunger. Nearly 230 million middle class Indians have slipped below the poverty line, constituting a 15 to 20% increase in poverty. India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. Meanwhile, the wealth of Indian billionaires jumped by 35% during the pandemic. 

Neoliberal policies in emerging markets like India have spurred economic growth in last few decades. However, the gains from this rapid growth have been heavily skewed in favor of the rich. The rich have gotten richer while the poor have languished. The average per capita income in India has tripled in recent decades but the minimum dietary intake has fallen. According to the World Food Program, a quarter of the world's undernourished people live in India. The COVID19 pandemic has further widened the gap between the rich and poor. 

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers

Naya Pakistan Housing Program

Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years

Pakistan to Become World's 6th Largest Cement Producer by 2030

Has Bangladesh Really Left India and Pakistan Behind?

Pakistan Projected to Be World's 7th Largest Consumer Market

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan's Sehat Card Health Insurance Program

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

India's Unemployment and Hunger Crises"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel



14 comments:

Mo said...

I keep saying that India’s and BD’ economic indicators related to income of its population are seriously inflated and skewed and in case of Pakistan they may not cover significant economic activity. We, no doubt have a balance of payment problems but that is due to historic structural issues and warrants a separate discussion. We also have issues with poverty but the type of pervasive and abject poverty prevalent in India and BD is not that obvious in Pakistan.

Moiz said...

Should that be seen as a problem ? Why is the minimum wage higher in Pakistan when both the total as well as per capita GDP is higher in India ? Does this play a role in attracting or not attracting FDI ?

Riaz Haq said...

Moiz: "Should that be seen as a problem ? Why is the minimum wage higher in Pakistan when both the total as well as per capita GDP is higher in India ? Does this play a role in attracting or not attracting FDI"

Rich save & invest while the poor & middle class consume. Lower inequality in Pakistan shows in its abysmal domestic savings & #investment rate of around 10% of GDP. It shows in Pakistan's lower economic growth rate compared to Bangladesh and India.

https://www.riazhaq.com/2021/04/income-inequality-elite-capture-in.html

RK Singh said...

Riaz bhai, Indians buys 44 Crores Smartphones per year, co pared to 4 crores in Pakistan, which is about twice the rate as Pakistan, compared population wise.
Indians buy 30 Lakh cars per year- Pakistanis buy 2 lakh cars.
Please do not get into India-Pakistan comparisons. India is miles ahead.

Riaz Haq said...

RK: "Please do not get into India-Pakistan comparisons. India is miles ahead"

You are delusional.

You don't understand the simple fact that an average Indian working at minimum wage is miserable. India fares worse than Pakistan on international induces of hunger, poverty and unemployment. The fact is that India has been devastated by Modi's poor handling of the COVID pandemic.No wonder Indians are so unhappy, as reflected in its low ranking on world happiness index.

https://www.riazhaq.com/2021/12/india-in-crisis-unemployment-and-hunger.html

And you wildly exaggerate the numbers like cars and smartphone sales.

See below:

According to Counterpoint Research, smartphone shipments are estimated to reach 173 million (17 crore, not 44 crore that you claim) in 2021, a ~14% increase from the 2020 figure. Buoyed by an improved economic environment, the demand for smartphones in 2021 will be driven by elevated consumer spending.


https://www.ibef.org/blogs/indian-smartphone-market-to-reach-a-record-173-million-units-in-2021


A record 2.9 million passenger cars and commercial vehicles were sold in India in 2020. This figure then fell by roughly 0.9 million units from the previous year. With a population of around 1.4 billion people, the addressable market for vehicle sales is more than twice as big as that of South Korea.Jan 14, 2022

https://www.statista.com/statistics/265958/vehicle-sales-in-india/

Anonymous said...

BS compare salaries of labour in both countries on jobsites.

Pakistan doesn't save and doesn't invest.

Slow growth.

On top of that both at a state and personal level borrows money to fund consumption. Result 22 IMF bailouts not even a single company comparable to Tier 2 Indian conglomerates like Mahindra and Godrej.Not a single year where international begging has not taken place!!

Relies on FDI for basic infrastructure telecom etc this FDI becomes a steady stream of dollar transfers to foreign investors.There is a reason India discourages FDI in key infrastructure projects its Telecom,Freeways Mines etc are in Indian hands.
This is true also of Japan S Korea China etc. almost no FDI in infrastructure.

Basically a basket case.And an extremely arrogant one at that.situation is completely hopeless..

Riaz Haq said...

Anon: "compare salaries of labour in both countries on jobsites"

What jobs? A few IT jobs can't make up for mass unemployment in India.

India has serious unemployment and hunger crises.

Even before the COVID19 pandemic, India's labor participation rate was around 43%, lower than its neighbors'. Now it has slipped further to about 40%. Meanwhile, the Indian government has reported an 8.4% jump in economic growth in the July-to-September period compared with a contraction of 7.4% for the same period a year earlier. This raises the following questions: Has India had jobless growth? Or its GDP figures are fudged? If the Indian economy fails to deliver for the common man, will Prime Minister Narendra Modi step up his anti-Pakistan and anti-Muslim rhetoric to maintain his popularity among Hindus?

https://www.riazhaq.com/2021/12/india-in-crisis-unemployment-and-hunger.html

India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. The COVID19 pandemic has worsened India's hunger and malnutrition. Tens of thousands of Indian children were forced to go to sleep on an empty stomach as the daily wage workers lost their livelihood and Prime Minister Narendra Modi imposed one of the strictest lockdowns in the South Asian nation. Pakistan's Prime Minister Imran Khan opted for "smart lockdown" that reduced the impact on daily wage earners. China, the place where COVID19 virus first emerged, is among 17 countries with the lowest level of hunger.

Riaz Haq said...

How India affords a falling LPR
by Mahesh Vyas

https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=20211220172959&msec=676#:~:text=Evidently%2C%20the%20fall%20in%20labour,30.1%20per%20cent%20in%202018.

There should be a limit to the unemployment rate rising or the labour force participation rate falling. Since employment in India is largely informal in nature and wages are quite low, people cannot afford to remain unemployed or choose not be employed by not being a part of the labour market for long. Informal jobs imply no compulsory savings and low wages imply no practical savings. If people cannot save then not working would imply that they will not be able to meet the minimum daily expenses required to keep body and soul together.

Only around 20 per cent of the employed have salaried jobs. These are the only ones who can be expected to have regular savings. Over 50 per cent are self-employed and the rest are daily wage labourer. The median monthly household income in India was around Rs.15,000 and consumption expenditure was around Rs.11,000 in June 2021 according to CMIE’s Consumer Pyramids Household Survey. The headroom for savings, in absolute terms, for half the population is thus too small to permit them the luxury of remaining away from the labour markets over an extended period of time.

People in India just cannot afford to remain unemployed. It could leave a large section of the population vulnerable to hunger and therefore compulsions should drive them to work.

This understanding explained the unemployment rate of around 4 per cent till recently when income and savings rates were much lower. But, unemployment is now much higher at around 7 to 8 per cent and the labour participation rate has fallen dramatically in the past few years from well over 46 per cent in 2016 to just over 40 per cent in 2021. India’s labour force participation rate is now among the worst in the world. How could this have happened without widespread hunger and misery?

We try and explain this mystery and in the process also present a new measure of vulnerability. Our approach is fairly simple. We move the unit of compulsion and vulnerability from the individual to the household.

It is the household as a whole that faces compulsion and needs to overcome its vulnerabilities. For survival, a household requires that at least one of its members should be working. But, it is not similarly necessary for more than one member to be employed.

We find that the fall in the labour participation rate since 2016 has been accompanied with a fall in the proportion of households where more than one person is employed. Evidently, the fall in labour participation rate has largely been the result of the additional person employed in a typical household losing a job.

Riaz Haq said...

A stark statistic: the income of 1/5th of India‘s population has plunged a staggering 53% in the last 5 years. While the wealth of top 100 Indians has soared to Rs 57 lakh crores.

https://youtu.be/xPIPejVpvjY


4.6 crore Indians have slipped into extreme poverty.

What does such inequity say about India? And is the government doing enough to design a pathway out of it?

Provocative. Animated. Incensed. Economist RATHIN ROY — former member of PM’s economic advisory council, and managing director of ODI — lays bare the faultlines in the economy, the Budget, and the principles & priorities driving India’s economic thinking.

“For the first time in India’s independent history, there is no professional mid or long term economic plan,” says he.

So what would he do if he was in the driving seat?

------------

#India’s #economic distress threatens #BJP’s dominance in state elections. India suffered a 7.3% economic contraction in the first year of the #pandemic, with tens of millions of people falling out of the #middleclass and into #poverty. | Financial Times

https://www.ft.com/content/8b5056d3-141b-491d-a715-e810f53fe40e

Saba Rehman said...

Interesting statistics Riaz. Just wondering if the affordability and market share share of these phones from apple match.

Riaz Haq said...

SR: "Interesting statistics Riaz. Just wondering if the affordability and market share share of these phones from apple match."

These stats are meant to show that very few people in South Asia can afford to buy an iPhone 12! Even fewer in India!! But even if a couple of percent of Indians buy it, it still adds up to millions of iPhone 12s!

Riaz Haq said...

Oxfam report: In 2021, income of 84% households fell, but number of billionaires grew

https://indianexpress.com/article/india/oxfam-report-2021-income-households-fell-7726844/


The income of 84 per cent of households in the country declined in 2021, but at the same time the number of Indian billionaires grew from 102 to 142, an Oxfam report has said, pointing to a stark income divide worsened by the Covid pandemic.

The Oxfam report, “Inequality Kills’’, released on Sunday ahead of the World Economic Forum’s Davos Agenda, also found that as Covid continued to ravage India, the country’s healthcare budget saw a 10% decline from RE (revised estimates) of 2020-21. There was a 6% cut in allocation for education, the Oxfam report says, while the budgetary allocation for social security schemes declined from 1.5% of the total Union budget to 0.6%.

The India supplement of the global report also says that in 2021, the collective wealth of India’s 100 richest people hit a record high of Rs 57.3 lakh crore (USD 775 billion). In the same year, the share of the bottom 50 per cent of the population in national wealth was a mere 6 per cent.
During the pandemic (since March 2020, through to November 30, 2021), the report says, the wealth of Indian billionaires increased from Rs 23.14 lakh crore (USD 313 billion) to Rs 53.16 lakh crore (USD 719 billion). More than 4.6 crore Indians, meanwhile, are estimated to have fallen into extreme poverty in 2020, nearly half of the global new poor according to the United Nations.


https://wir2022.wid.world/www-site/uploads/2021/12/WorldInequalityReport2022_Full_Report.pdf

Riaz Haq said...

Millions of #Indian workers fled to villages amid #COVID #pandemic. Number of people working in #manufacturing fell by half over 4 years ending in March 2021. Around 75 million people in #India slipped into extreme #poverty. #Modi #unemployment https://www.wsj.com/articles/indias-economy-hinges-on-the-return-of-workers-who-fled-to-their-villages-11644777177?st=ipnsr42dt1cnv0k&reflink=desktopwebshare_twitter via @WSJ

The nationwide lockdown in 2020 set off the biggest wave of migration since India gained independence in 1947. In the first months of the pandemic, workers traveled hundreds of miles by train, bus, bicycle and even on foot.

While some returned to the cities at various points during the pandemic, another deadly Covid-19 surge last spring, and the most recent spike, have caused further uncertainty among workers about the costs of urban life.

Economists calculate that around 32 million people took up agricultural work in the year that ended on June 30, 2020, an estimate based on government data. That continued last year, according to the Centre for Monitoring Indian Economy Pvt., CMIE, an independent think tank in Mumbai. The share of agriculture in total employment in the year ended June 30, 2021, rose 1.4 percentage point from a year earlier, according to its data.

Some economists believe workers will return en masse after the pandemic subsides. “Agriculture can’t support so many people for so long,” said Sachchidanand Shukla, chief economist at the Mahindra Group, a conglomerate that includes businesses in information technology and vehicle manufacturing.

Mr. Nayal, the former call-center worker, isn’t sure of that. He lives in Satbunga, a village of about 1,400 people who live and work on land spread across mountain slopes.

The village head, Priyanka Bisht, estimated about 250 mostly men left for jobs in the city over the past five years. Most have returned, she said, bringing new skills and experience that benefit Satbunga. Ms. Bisht said she believed most prefer to stay, but added, “Let’s wait and watch how it turns out.”

---------

The number of people working in manufacturing has fallen by half over the four years that ended in March 2021, according to an analysis by Ashoka University’s Centre for Economic Data and Analysis based on CMIE data. “The decade that just went by, it can be called a decade of job loss,” said Kunal Kumar Kundu, an India economist at French bank Société Générale SA . “That is disastrous for an economy.”

India’s Finance Minister Nirmala Sitharaman said a recently announced government program to boost domestic manufacturing will create millions of jobs.

About half of India’s working-age population is employed or seeking work, one of the world’s lowest labor-force participation rates, according to the ILO. Adding to the job squeeze, an estimated four million-plus young people join the workforce each year.

Riaz Haq said...

State of
Global Hiring
Report 2021

https://f.hubspotusercontent30.net/hubfs/19498232/State%20of%20hiring%20report%202021/State%20of%20Hiring%20Report%202021.pdf

Salaries are rising fastest in 
 Mexico (57%), Canada (38%), 
 Pakistan (27%), and Argentina (21%) 
 for jobs in marketing, sales, and product.

India 8%, Philippines 7% & Russia 4%

----------------

Top three countries where people hired through Deel were located:

1.Philippines 2. India 3. Pakistan

---------------

Top 3 roles hired through deel:

1. Software engineer 2. Virtual assistant 3. Custom Support Executive


------

State of Global Hiring
Report 2021


Global hiring has never been more popular
between pandemic-related office closures,
fierce talent competition, and a bevy of online
tools enabling collaboration and reducing
hiring complications. But where is it popular,
and for what roles? What countries are hiring
more than ever, and from where? What’s
happening to wages as demand increases?

Using data pulled from more than 100,000 work contracts from 

over 150 countries, along with 500,000 third-party data points, 

a new report from global hiring and payroll company Deel gives a
breakdown of what’s happening within the global job landscape.
Trends are tracked over six months—from July 2021 through December 2021.