I started my career in 2012 as an entry level analyst working for a tech company in Boston. My base salary was 80,000 dollars a year, about 500,000 RMB. It was quite a decent amount money for a twenty-four years old young man. Most of my schoolmates and friends I know made about 60,000 to 200,000 RMB a year in China back then (someone made more, but not many). We have similar degree, similar skill set and similar age. How come there would be such a huge difference between our compensation? Where are the difference originate from ?
The gap/difference lies in not only silicon valley jobs or wall street jobs. In fact, it is in every sector, every industry, every job.
An average cashier working for supermarket in Brazil or China make about 30,000 to 40,000 RMB, 5,000 dollars a year. However, an average cashier working for supermarket in America or Europe can make 20,000 to 25,000 dollars a year. Cashier jobs help to deliver an effective food logistics system in our society and it is critical to our economy. It is possible for cashier in America works a little bit harder, however, it’s highly unlikely for them to work 5X harder than cashier in Brazil.
Agriculture sector is the largest employer in Sub-Saharan Africa and India. About 50% of the total workforce are engaged in this sector. An average farmer in Africa and India make about 1,000 US dollars a year or less. However, an average farmer in America and Europe can make 50,000 dollars or even 100,000 dollars. 50X gap ! It’s actually more than just gap, it’s a mind blowing distortion on our outlook on the world, life and values. Suppose you are a software engineer making 100,000 dollars in NYC. Now someone from a company on Mars offer you a two year contract, 10 million dollars total compensation. Would you think about it, relocating to Mars (even though you have very limited knowledge about Mars) ?
Similar to automobiles that have drive wheel and driven wheel. In an economy, we have drive wheel jobs and driven wheel jobs. It's the jobs structure/ workforce structure that determines our average/median income level in an economy.