Labouring for Lagers
Raising a glass to the most consequential measurement of income this side of Oktoberfest.
Metrics, measures, markers. Indices, indicators, indexes. The world abounds in tools that compare X with Y to tell you something about Z. Some are useful, some are not. We looked around and thought we had better add another.
Introducing the GPI’s Labour for Lagers Index. This index tracks how many hours work at the national minimum wage you need to do to enjoy a big, delicious beer at the end of the day (or hour) in the capital city of that country. Think of it as a GDP at PPP for the People. As a general metric of affordability, the lower the number, the more affordable life is but actually it’s a measure of leisure time. If you have to toil for almost five hours in Madagascar to knock one back in Antananarivo, you might be thinking twice before ordering that second round. But with less than 25mins of minimum wage work in Australia, you can be sitting pretty at BBQ in Canberra knocking the top off an ice-cold Foster’s (well maybe not actually a Foster’s).
This index is obviously a little bit tongue in cheek (or feel free to insert your own play on words about drinking beers) and doffing its frothy head to The Economist’s Big Mac Index of relative currency value. However, beer is a globally consumed product with relatively consistent quality and production methods across different regions. This makes it relatively easy to compare prices across time and space without too many variables affecting the results.
It also shows just how intellectually shallow, unlike GPI’s Nobel worthy analysis, the Dollar per Day (now $2.15 per day) poverty line is. People working a minimum wage job in Timor-Leste earn well over twice this amount. So they are comfortably well out of “poverty” by this meagre definition. But they will spend almost 7hrs working for their sole chilled beer in a bar in Dili. Hardly the definition of a development success that the World Bank economists would have envisaged in the late 1980s when they first delineated the poverty line.
So the next time you quaff down a warm ale in Old London Town (34mins, 46secs), spare a thought for the working stiffs of Lilongwe (4hrs, 44mins) or Luanda (9hrs, 23mins). Broad-based sustainable economic growth is the best way we can raise living standards around the world. And if it means you don’t have to spend half your day trying to afford one beer, that’s something we can all raise a glass to as well.
As you might expect for an index named 'Labouring for Lagers', our analysis comes with a few data caveats. For example, not every country in the world has a national minimum wage, and a few countries, like Georgia, have a minimum wage that hasn't changed in 25 years. And obviously beer prices vary within countries as well as between them.
However, if anyone would like to fund a research trip to every country in the world to update our beer price data, please email alex@thegpi.org. Until then, it's probably best to take the figures with a pinch of salt.