Apr 18, 2012


In this paper I set out the conceptual basis for such measures, provide some historical examples, and then provide my own preliminary analysis of a decade long project designed to measure the wages of workers doing the same job in over 60 countries—workers at McDonald’s restaurants. The results demonstrate that 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.
That is the abstract of the paper "Comparing Real Wage Rates" by Orley Ashenfelter (AER, April 2012). 
The author explain:
The data I use come from an organization that is famous for producing the same product in different places and it has done so for many decades using a known production technology. The workers are thus using identical skills, using identical technology, and producing the same product. I am, of course speaking of workers at McDonald’s restaurants, and their famous product the Big Mac.
He concludes:
These data suggest that there are extraordinarily large differences in the wage rates received by workers doing the same work and using the same skills in the rich and poor countries. These data also show that there has been some remarkable growth in the world’s low wage countries in the last decade, but that this growth has slowed, and in many cases halted, since the start of the recent financial crisis. I hope that the future evolution of real wage rates in both poor and rich countries will be measured more systematically in the future than has been the case in the past.
From the paper: 

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