When are we going to start talking about salaries in Purchasing Power Parity instead of euros ? We are living in the era of ERASMUS, of the euro (even if some people would love to see it disappear), of the web 2.0 or even 3.0, but, there still exists many economic disparities within the European Union and the professional mobility is still very limited.
According to some numbers of 2013, there were only 3,2% among the 500 million Europeans who tried an experience in another state of the E.U. Despite the fact that we believe that the lack of a common official language is having a huge impact on that situation, we still believe that salaries distortions are also having a huge impact on the lack of will of people to try an experience elsewhere.
Would it not be time to use a common « currency » like the purchasing power parity when it comes to compare salaries in countries which do not stand at the same level of development ?
We are already doing it when we compare GDPs of countries which are totally different from each other so why are we not doing it when we speak about salaries ? In order to illustrate our point, we will take the example of two countries that we know very well : France and Bulgaria of course.
These two countries are totally different from an economic point of view. France is the second economical power in Europe, just behind Germany, and Bulgaria, according to the economists of Brussels, is the poorest country on the union.
The average salary in Bulgaria is around 400 euros per month. True, this sounds extremely low for a Frenchman. Despite the fact that most of the salaries are bellow 1 000 euros per month, there are still jobs which pay extremely well, especially in I.T. And we are here speaking about real local jobs from Bulgarian companies. We are not speaking about expat contract which can pay sometimes up to 10 000 euros per month with a house in Boyana, a select residential district in Sofia, and a car with a driver. So, even if these “good” jobs are still very specific to some functions and some sectors, there are many jobs in Bulgaria which pay around 800, 1 000 euros and sometimes up to 2 000 euros per month.
To be very familiar with both job markets in France and in Bulgaria, we can tell that :
the jobs which pay around 800-1 000 euros in Bulgaria, pay around 1 600-1 900 euros in France
Psychologically, it is very hard for a Frenchman to accept a cut of 50% of his salary to come work in Bulgaria even if the job offered by the Bulgarian company is really interesting and with a lot of career evolution perspectives.
That’s really a pity because the cost of life in Bulgaria is about 3 times lower than in France so even with a salary cut by half, the purchasing power is still 50% higher in Bulgaria than in France.
By thinking in euros and in absolute value, we are certain that many Europeans from the West miss great opportunities in the East
Because we believe that the case between France and Bulgaria also exists between Belgium, Germany, the Netherlands and Romania, Poland, and Slovakia for example.
As a result, we believe that if Europe wants to encourage the professional mobility within the states, it would be necessary to develop a comparative tool which would help to compare salaries between countries which do not stand at the same level of economic development. We are already doing it when we compare GDPs so why don’t we do the same when we compare salaries?
For sure, this would contribute to break the psychological barriers by helping people compare what is comparable.