- Aussie yakka: One hour of hard yakka buys $35.74 of stuff.
- The UK yakka: One hour of hard yakka buys £13.64 of stuff.
Click on the following link to see my original article on the hard yakka.
As I mentioned in my article How Expensive is Australia last month, I realised I hadn’t written very much about the cost of living in Australia for my monthly column in Australia and New Zealand magazine.
This is the second in a trilogy of articles and it explains the concept I first introduced on this blog almost 2 years ago to the day, the Hard Yakka.
Yakka, by the way, derived from the word “yaga”, means work and comes from the Yagara indigenous language of the Brisbane region. Hard yaga or yakka therefore means hard work…
The Hard Yakka
A lot of people say Australia is expensive, so is it? What’s the truth behind the cost of living in Australia? I have to say, when we first arrived in Oz we were flabbergasted at the prices, everything seemed so expensive. We wondered how people could possibly afford to live here and thought “What have we done?”
Since then, the pound has weakened dramatically against the Aussie dollar, so Brits arriving today are probably horrified at the prices. But they shouldn’t be, and it does take a while for the penny (or cent) to drop, but maybe I could speed up that process. Last month I mentioned the hard yakka, time for me to explain exactly what that is.
Here’s what you would probably do to compare prices between Australia and the UK.
Let’s assume you want to buy some “stuff”. First, you check how much that stuff costs in the UK. Let’s say its £100. Then you check out the price of the same stuff in Australia and discover its $200. To compare, you work out how many of your great British pounds at the current exchange rate (say 1 GBP to 1.5 AUD) you would need to get $200 AUD, so you can buy said stuff in Australia instead of the UK.
“Aargh!’ you say, “That’s £133!”
You now think Australia is expensive because you continue to check more stuff and get similar results. The reality though, is the cost of stuff in Australia has nothing to do with pounds at all.
Working with salaries from each country, we don’t have to express the cost of stuff in pounds or dollars; we can use the hard yakka. According to the Guardian, average full-time income for 2011 was £26,244 in the UK and the Australian Bureau of Statistics says it was $68,775 in Australia.
The economists and statisticians among you will want to know whether that’s “mean”, “median” or “average”, but none of that really matters. The beauty of my experiment is you don’t have to concern yourself whether these figures are right or wrong, I’m just going to show you how it works.
What you can do though is compare your current UK salary with what you might expect if you were to move to Australia. Based on the figures I’ve mentioned and ignoring silly things like taxes, the average UK full-time worker earns £13.64 per hour whilst his Aussie counterpart earns $35.74 based on a 37 hour week.
Forget currencies for one moment; how long does the UK guy have to work to buy his £100 stuff?
That would be 100 divided by 13.64 which is 7.33 hours. The Australian works 200 divided by 35.74, which is 5.60 hours. That then, is the hard yakka. It’s how long you need to work to buy stuff. In this example, stuff that in Australia cost 5.6 hard yakkas, would have set you back 7.33 hard yakkas in the UK.
Now which country is more expensive?
Australia then, isn’t an expensive country. But for those of you thinking of making the move here, there are winners and losers in all this. Next month I’ll explain who they are and also run through a few things to help you to calculate whether you’d be better off here, or not.