Tuesday, May 8, 2007

Talent and its inherent value

There has been many reports on talent fleeing the respective countries and that there are labour shortage everywhere. Earlier, all those news do not really make sense until I try to put in the value of a talent into someone and gauge his willingness to stay at his/her current pay. In Indonesia at least, it seems that the labour shortage is not going anywhere but up. A fresh computer science graduates skillful in Java, in fact, is paid for 2.5 mil Rp, equivalent to roughly 500 Singapore dollars a month! That's already above average. While, in Singapore, one with similar skill level can expect a pay of 2,500 Singapore dollar a month or even far more. Using Big Mac Index to measure, it'd be really easy to measure how easy it is for talents to run out of Indonesia. Currently, a Big Mac meal costs S$5 to S$6 in Indonesia, which is the same as in Singapore. A pay of S$500 (Rp. 2.5 million) can only purchase 100 burgers (assuming lowest cost). On the other hand, one working in Singapore with S$2,500 can have 416 burgers, 4 times of the Indonesian counterpart!

To add into the argument, a cost of an average bunk (a room without bed and furniture, of 3 m x 3 m) is 500k Rp in Jakarta while one could get a very nice furnished room for <>

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