Tuesday, April 7, 2009

What Does An Average Indian Earn?

Geoff asked me a question that became a very long comment, so I am turning it into another blog post...

Geoff said...
Medical care sounds pretty cheap, if somewhat sketchy. Maybe I should give up this rat race and pull a rickshaw in Delhi. I got a $75 copay just for an MRI!

What can I expect to earn per year as an ... average Indian?


Okay, first a disclaimer - these are my impressions and not any report based on the due diligence of statistical review.

The average pay is hard to quantify because so much money stays off the tax rolls. The range of pay for people working in multinational companies is a factor of at least 2 compared to Indian companies. Many people freelance and work more than one job if they can find it. Any money they can get in cash is under reported.

Rickshaw wallas and cab drivers pay a rental fee for the rickshaw/cab and keep everything they earn after expenses. In Kolkata, the daily rental for a cab was 500 rupees, plus petrol, etc. That's why a lot of them want to become chauffeurs - one client, much higher pay, especially if they speak English. In Kolkata, the cost (to me) for a car/driver was between 25K and 30K/month. Here, the average charge for the same service with a semi-English speaking driver seems to be around 40K and is typically closer to 60K in the expat world.

Domestic staff prefer to work for expats because they pay a LOT more. For example, a family of five living in the Salt Lake section of Kolkata paid their maid 500 rupees/month with no benefits to work seven days a week. My maid in Kolkata was paid 3,000 to run a household of two. She spoke only Bengali, worked six days a week and was provided with vacations. Here in Gurgaon, my English-speaking housekeeper makes 7,000 salary, 1,000/month for transportation, 2,500/quarter for uniforms, full medical and takes a week off every couple of months. She works six days/week, and hired two women to do floors, wash dishes and clothes. She pays for their salaries out of hers because she said there was too much work. Now she cooks and does the food shopping and supervises the other women. Previously, she worked for one family who paid her 16,000/month with all the accompanying benefits. She'll be heading to London to visit them in the summer. I hope she comes back.

The other thing is that a lot of folks have more than one income. Using my housekeeper as an example, I know for a fact that she works with another expat in the same building because we hired her together. We both pay half her salary, and split her benefits, so she makes a minimum of 16,000/month. I believe she also manages a few other households - at least one other...

Now, looking back at the internet companies I worked for here, linkers had a starting salary of 7,000/month. The security guard at the telecom tower I visited last week in Rajasthan makes 12,000/month. Management level pay is even wider ranging. I had two managers with the same backgrounds - one was paid 1.1 lakh/month (110,000 Rupees) and the other 40,000. No reason given. All I know is that one came from Bangalore and the other Kolkata. Both came from successful dotcoms. Their original salaries were just as inconsistent.

The lack of parity really caused a problem. This situation occurs frequently and HR groups don't have any concerns. Salary ranges for the same job, i.e., linking, spanned 7,000/month to 26,000/month in one company I worked for. Some staff shared with me their attitude of "why should I work hard when I know someone else is getting paid three times more and only brings in 6 links for the entire month? I bring in three times that and get paid a third of what he does." I couldn't have agreed more and couldn't respond adequately. I implemented incentive programs so that higher performing linkers could make more money just to reduce this problem and provide a way to increase overall performance. Only one of the staff actually earned any money, but it made him visible and provided him with access to jobs with more responsibility. The worst example of salary inconsistency was the two Spanish translators at one company I worked for. The woman was a full-time professional who had worked at the company for a couple of years before I joined. She was making 5,000/month for 50-hour work weeks. I hired a part-time Spanish student (still in college) and I found out later he was making 9,000/month for 9 hours work a week! I'm still shocked at this. I tried to fix the situation but my boss refused to allow me to even discuss salaries. When she quit to work in Bangalore, she never looked back. As soon as she got her offer letter, she left the same day...

So what is the average salary? Have no idea. Because there is still subsistence farming and itinerant workers (especially in construction), low end salaries are a few dollars a month. Executives are paid like they are everywhere - sometimes too much for what they contribute. (Not me!) Bottom end executives in Indian companies make at least Rupees 100,000/month (USD $2,000), typically much more. The range goes all the way up to standard American executive packages, translated into Rupees.

Teachers here have the same problem. If you speak English, your salary would be higher because you can teach in an English speaking school. There are local language schools, Hindi schools and English. There are also Embassy schools for other languages. Typical salaries for teaching staff in the International schools (from what I've heard) is between Rupees 10,000 and 30,000/month. I could be wrong - this is just hearsay.

As an expat, I can't think of my salary in American terms otherwise I would become very depressed. I make less than half what I made in the States, but it's a very good living for this country. Even so, my expenses are very high - after paying for rent, private school, chauffeur, housekeeper, restaurants, western foods, books, travel, satellite TV, broadband internet, air conditioning, etc., I'm broke by the end of the month. I pay a premium for my lifestyle. Having a zero balance in my bank account at the end of the month is a grave concern and something I need to address ASAP.

I hope that helps answer the question. :-)

Later, peeps.

24 comments:

  1. I can give you only one advice:CHANGE YOUR DRIVER!!!!! Rs. 40,000-60,000!!F**K!! He's looting you. I can tell you, i live in Chandigarh and the maximum price I've ever paid to any driver is Rs 5000. And the minimum was 3000. I have a few friends who stayed in Delhi and on an average paid theirs 8000-9000...... Get a local friend to broker a good deal for you. You're just paying a higher price because of your skin..... And my wife teaches in a top school ( kids of bureaucrats and chief ministers study there), yet she brings home a paltry 12,000. I guess I should become your driver and she could become your maid!! lol

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  2. Bikram:

    Yeah, I'm not crazy enough to spend 40 - 60K for a car and driver, but a lot of expats do. It seriously causes problems for the rest of us expats who get paid in rupees too. Not too sure about the pay scale for teachers, like I said, it's hearsay, but I've heard that range for new teachers to those with more experience...

    LOL. I had someone at my last job offer the same thing. The mind boggles at what these "western" people are prepared to pay. :-)

    Cheers,
    Jeanne

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  3. Thanks for posting this ... we've heard about the disparity, but your writing about it makes it even clearer.

    Do you think it stems from the constant negotiation and bargaining?

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  4. Hi! Just wanted to say that this post is of particular interest to me. I am in the process of finding a position and have been in talks with a company in Pune. I would be paid indian rate so its good to see how things get paid out. If I get to a point where I have an offer, I may try to contact you to see if it is a livable wage.
    Thanks!

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  5. I was surprised when we weren't immediately rolling in the money here - it's not necessarily the great savings opportunity a lot people might think it is.

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  6. Naomi:

    It comes from constant job hopping, moving to different parts of the country for higher salaries... I had one guy in for an interview who had five jobs in the last two years. When I asked him about it, he said that's how he managed to earn 1 lakh/month. He was actually proud of it. He didn't understand that it showed no loyalty to me or the company.

    Go figure...

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  7. Kathleen:

    Lucky you! I hope you get the job. I have very, very good expat friends and a foster brother who live there. Let me know if you get the job - I will certainly introduce you to them. It will really help to have people you trust who know the area and can speak the language. :-)

    Pune's a beautiful place and there's lots of great food with touches of Portugese influence (with a lot of local Indians named De Souza. LOL) If you like horse racing, the season there is really fun. The weather is pretty good there from what I remember...

    I'll cross my fingers. Keep in touch, yaar. Good luck!

    -- J

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  8. areason2write:

    word. I see two reasons - you have to pay for the western lifestyle which definitely are considered luxuries here, and the overcharging expats deal with every day.

    What (as my mum would say) frosts my a**, is when the vendor (rickshaw walla, cab driver, etc) quotes you a price ten times what it should be and you call him on it, he just laughs. There are days when I just want to grab him by the throat and squeeze really hard. In my culture, he'd be thought a thief; here, he's considered a good businessman.

    I don't allow my son to let them know he understands Hindi or Bengali, so when they talk amongst themselves, he tells me what they say and I confront them and demand a better price. You should see their looks of surprise. I'm much better at bargaining now, two years later, than I was when I first arrived here, when I always paid their asking price! 8-/

    Later.

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  9. Jeanne,
    Great Post!

    The cost of everything in India is negotiable. How much people are willing to negotiate is the question. You make some really good points, especially about the incredible disparity in pay, especially for non-executive type of jobs.

    BTW, if you need a driver, I can put you in touch with my old one. I was paying him 8k/month for 6 days a week, 12hrs a day (nothing on top of that unless I kept him past 10pm - I'd give him a fifty for food, sometimes a hundred).
    Cheers

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  10. Hello friend,
    I was amazed with the prices you are paying up, especially to your driver!! Man, I would be ready to work for you for half that price!!

    I am sure you can get a much better deal. Secondly, even the maid is over prices but not as much as the driver. Bumped across your blog for the first time today and I'm sure I'll follow it now onwards.

    I'm living in Delhi, not so far from Gurgaon and i can convince you that it is WAY TOO MUCH MONEY to pay a driver!

    have a pleasant stay

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  11. Jayant:

    I'm not paying that price, but judging from the posts on many of the expat forums (yuni-net, Gurgaon Connection, etc.), people are doing so. My car/driver setup was arranged by Akshay, the go-to guy at my last job (I love this guy). I'm being charged 12,000 rupees per month for a small AC car that only drives me from home to office and back five days a week. I'm not thinking of changing because 1) they are always there - very dependable, 2) always on time or even early, 3) the driver is always professional, and 4) the owner is very civil and can be reached at anytime (speaks enough English to understand my requests). I genuinely like him and trust that the deal provides him with enough of a profit to put up with my sh*t, and he provides a decent enough service to keep me happy. He's the first driver service here that hasn't made be feel like I'm being robbed, so I'm not thinking of changing.

    Same thing for my housekeeper. She's expensive, but I know my house will be well taken care of and meals will be ready when I want them. My clothes are clean when I look for them. My house is (for the most part) presentable. That's all I care about.

    In both cases, it's money well spent. :-)

    Cheers.

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  12. I think I can simplify this. The per capita income in India is about RS38,000, or USD760.

    That makes your Emergency Room visit, at RS300/USD60 the equivalent of nearly 8% of the average Indian's salary, before taxes.

    The total medical bill of RS15000 which you incurred would amount to 40% of the gross annual pay of the average Joe.

    And I expect that rickshaw drivers fare a bit worse than average. But maybe they have some really good insurance coverage.

    No wonder so many of the indiginous people are so (from your description) willing to steal from the wealthy white westerner.

    And you got away with just mild hepatitis and some sloppy stitching. Good deal.

    G.

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  13. Hey...............Geoff, look there are huge class differences,you can't have the same definition of average joe here, I mean joe the plumber in the US, would not the have the same social standing as here in India, plumbers, electricians etc. are at the bottom of the social heap.....they are not average joes, they are way below average. Farming is a respectable business in the US, but here a farmer is a mostly a picture of poverty and the profession is looked down upon. The pecking order is quite different here and there. You'd be shocked to know that doctors here earn a lowly fraction of the doctors there....15000 dollars per year as compared to the 200,000 doctors in the US. But you know what, they are still rich because everything is adjusted to the purchasing power in rupees. Things are reaaaaalllllllllly cheap here. The tuition of the Harvard of India, (IITs) including boarding is just 800 dollars per year It really doesn't make sense converting everything in dollars. I got speedo goggles from the US for 13 dollars, but here the same were available for 4$. I can have a good hearty supper here from a local Indian joint just 2$...i.e i can eat out almost everyday....And education and health is highly subsidized....the government hospitals in the urban areas are great (but ambiance and cleanliness suck, nevertheless). But the rickshaw driver doesn't have an insurance.

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  14. what salary in u.s. dollars would one need to make in india if they wanted to have a very comfortable life?

    and does the city where you live make a difference? for example, I've heard that rents in mumbai are the same as those in new york city.

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  15. well i wanna be a chauffeur in delhi,but for a foreighners family only.so if u need a decent driver you can reply me .thanks

    christopher

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  16. jeanne,thanks for all the info.you brought the most important stats to the limelight
    tushar bhattacharyya

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  17. Thanks, Tushar! I hope it was helpful. I'm still with the same driver service and still very happy with them and their price which has only gone up to accommodate the rise in petrol prices. I just recently changed my housekeeper to a live-in and she's paid 4,000/month. I'm slowly, slowly learning the ways of living in India. Each year it gets easier! :-)

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  18. Do you guys know that a poor US cab driver earns MORE money than an experienced Indian IT professional residing in India ????

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  19. Yes, but the cost of living in the US is distinctly higher. You're comparing apples to oranges.

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  20. This comment has been removed by the author.

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  21. @emily india is knw for its genuinity and honesty.. except the politicians..

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  22. I must say reading about the maid charges. I wanted to comment. My mom in law till today pays her maid a mean 150 rupees per month in andhra pradesh India. The maid does the grocery shopping, sweeping the floors and then mopping with phenyl disinfectant, she does the dishes, and washes and hangs the clothes and she chops veggies and cooks lunch and dinner. i have never in all my years in India heard of a maid earning a 5 or 4 figure salary or even getting "medical" benefits is completely unheard off. My mom in law will get a heart attack if she heard of a maid going to London. We cut pay for every skipped day. The maid only gets holidays during a festival like Diwali maybe or if she wants to visit her village.Except maybe for a big festival like Diwali pay is and MUST be cut. Otherwise the maid feigns all kinds of illnesses on herself or her daughter etc. Please discuss with your neighbor and reduce the pay and stand firm with the payment you give your maid. I lived in Mumbai all my life before moving to the US after marriage. I never paid my maid beyond 300$ for sweeping and mopping the house floors and doing the laundry. My maid was a great actor in pretending sickness to get off work. So cut pay for every day skipped. Since you live in KOlkata I think you really need to pay not more than 500Rs for the tasks I mentioned.

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  23. Bargain bargain bargain is the way in India. Here in US it is just the opposite. The prices quoted in India are way too high and for foreigners they are beyond exorbitant. Haggle Haggle Haggle. That is just the way of life there. From your veggies and clothes to a hair pin. I hope you have learnt the language by now.

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  24. I really liked all your comments. Particularly the ones about cutting pay for a sick day (from original 150inr/month!) and about grabbing rickshaw by the throat and squeezing really hard. Loved it. You guys are a cool bunch, really.
    Thanks a lot again, this gave me new perspective.

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