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A financial services firm finds out the real value of salaries in Dubai based on prevailing costs of goods, services
Dubai: Many UAE residents identify the size of their paycheque as a very important consideration for staying with a company. The more satisfied they are with their salary, the more loyal they become. As one recent survey shows, about three in ten respondents in the country believe that their loyalty is “directly linked” to how much their organisation is paying them.
But how can you tell that your monthly income is really worth given the prevailing costs of goods and services? Is your income enough to cover the cost of living? Or are you often spending more on the same basket of goods than you would elsewhere?
An analysis by UBS, which takes a look at living costs and workers' purchasing power in 71 cities worldwide, shows that residents in Dubai need to fork out more than twice their salaries in order to buy the same items that their peers in other labour markets would consume in a month.
The domestic purchasing power in Dubai, calculated using gross earnings, is ranked 34th worldwide, lower than in other cities in the United Kingdom, Europe and United States. Overall, the salaries of residents in Luxembourg go farthest, where the net hourly wage buys the most goods and services.
The wage purchasing power was calculated using average hourly pay and standardised basket of goods that a three-person family in Europe would consume in a month. Professionals in major cities in Switzerland and US can afford 20 and 18 baskets per year, respectively, while those of Western European cities such as London, Lyon and Oslo can buy a basket every month.
In terms of gross salaries, professionals in Zurich are the highest paid in the world, followed by Geneva and Luxembourg. Gross earnings in Dubai are ranked 36th worldwide, behind other major cities, such as London, Seoul, New York, Chicago, Paris and Los Angeles.
Another way to look at the real wage value is by calculating how much time an average worker in each city must work to bring home, say, a McDonald’s Big Mac or an Apple iPhone, both staple consumer items.
Workers in Hong Kong only need to work on average nine minutes to buy a Big Mac, while workers in Dubai need to put in 17 minutes. In Nairobi, workers have to work almost three hours just to afford a burger.
The one big advantage about working in Dubai, though is that, without income tax and other state-mandated deductions, the average take-home pay turns out bigger when compared to the net salaries of workers in other countries.
© Gulf News 2016
