In Asia, middle managers such as department heads make more than 14 times as much as operational employees such as clerical workers–the biggest such pay disparity in the world, according to a report by global management consulting firm Hay Group.
The difference in pay in Asia is far greater, for example, than in North America (3.5 times) and Europe (2.9 times), and somewhat bigger than in the Middle East (11.9 times) and Central and South America (10.2), other regions comprised mostly of emerging markets, the report said.
The greater disparity in pay in emerging versus developed markets can largely be blamed on a battle for experienced talent in emerging markets that is pushing up management salaries, said Thomas Higgins, managing director of Hay Group.
In places where the disparity is extreme, such as Pakistan and Egypt, it creates “strains between haves and have-nots,” he said.
Growing inequality in Asia has begun to attract attention. In a report last year, the Asian Development Bank cited as contributing factors technological advances, globalization and market-oriented reforms that tend to favor those who live in urban areas, highly skilled workers and the owners of capital.
Earlier this year, China’s State Council vowed to shrink the growing gap between rich and poor by improving social safety nets and raising taxes on the rich.
While workers’ purchasing power is lower in Eastern European and Asia, middle managers and executives there have fared well, often better than those in the West.
The report also measured the cost of employing operational workers beyond their base salary, including such things as payments for pensions and disability benefits. The most expensive employees in the world? Operational workers in Zurich, who cost 75% more than those in New York.