- Aussie yakka: One hour of hard yakka buys $32.80 of stuff.
- The UK yakka: One hour of hard yakka buys £15.06 of stuff.
For updated rates as at December 2012, see my post Hard Yakka and the Cost of Living in Australia
Allow me to explain….
Here in Australia it’s called hard yakka and back in England we used to call it hard graft. What is it? Yes, its work. That thing we have to do to earn money to pay for stuff.
For most people, the longer you work the more you earn. And that means you can buy more stuff. But how long do you need to work for to buy each individual item of stuff that you want?
Meet the yakka.
The yakka is a unit of currency (which only exists here on BobinOz) expressed in terms of (a) how long it takes to earn the money in order to (b) buy stuff. The value of a yakka can be calculated for individual countries by taking the average annual salary and dividing it by the number of hours worked.
After extensive research into current average salaries for the UK and Australia, I have decided to use the highest figures I have found for each country from reliable sources. These figures refer to full-time adult total earnings and appear to include overtime.
The figure for the UK came from the BBC website who quote their source as The Office for National Statistics’ Annual Survey of Hours and Earnings (ASHE). They say its £31,323 per annum.
For Australia I have used figures from The Australian Bureau of Statistics (ABS) and they say the figure is $1,312 per week which comes to $68,224 per annum.
Update: When you click on the link to the ABS, you will notice that the figures are no longer there. Please click on “Key Figures” link to the left and you will see updated average weekly wages for full-time employees in public and private sector work, these are the figures I have been using.
Even though both of these annual salary figures include overtime, I have no way of verifying exactly how much for each country. So for both I have assumed 40 hours per week over 52 weeks.
Therefore the current value of an Aussie yakka is $68,224 divided by 52 and then divided by 40. So it’s $32.80.
And the current value of a UK yakka is £31,323 divided by the same as above, so £15.06.
Using yakka’s in cost comparisons.
You want to buy an Apple iPad with Wi-Fi + 3G 64GB. Why??? That’s what I want to know! Okay, never mind that for now, let’s just assume that you do.
In Australia you could buy it (price at time of writing from Apple’s Aussie store) for $1,049. As you are earning $32.80 per hour, it would take you (ignoring silly things like taxes and other stoppages) 31.98 hours to pay for that particular stuff.
Buying the same item in England would set you back (price from Amazon.co.uk at time of writing) £714.00. We know that the average earnings there are £15.06 per hour, so it would take (ignoring those same irritating taxes and things) 47.41 hours to pay for the equivalent stuff in England.
Therefore an Apple iPad with Wi-Fi + 3G 64GB would cost 31.98 yakka’s in Australia and 47.41 yakka’s in the UK.
That makes an Apple iPad with Wi-Fi + 3G 64GB 48% more expensive in the UK than it is here in Australia when using yakka’s as the method of comparison.
Whereas under the old currency conversion system, and at current rates, the £714.00 Apple iPad with Wi-Fi + 3G 64GB would cost ($1,049 divide by 1.62 AUD to the pound) £647.53 here in Australia.
That would make the U.K.’s Apple iPad with Wi-Fi + 3G 64GB just 10.26% dearer in England than it is here in Australia. Big difference!
Why this is important.
If you live in the UK and you are coming to Australia for a holiday, you need to use the old method, the currency conversion method, to work out how expensive Australia is. If you are emigrating here and working here, earning Australian dollars, or intending to, then you probably want to use the yakka system to compare the cost of living between the two countries.
I’ve been meaning to do this post for some time, I’ve used this method of comparing cost between Australia and England in previous posts, like in my post comparing water and sewerage prices, but I’d not got round to explaining it. Until today.
I think this is a much better method of comparing the cost of living between the two countries assuming you are coming here to live and work, rather than on holiday.
But it works for any country.
- What if your annual electricity/gas costs were $720 or £450?
- How about if your yearly water bills were just $360 or £225?
- Supposing your weekly rent for a small apartment was just $50 or about £31?
Sounds fantastic, doesn’t it?
But then how would that all that be for you if your monthly salary was just a $325 or £200?
Not so good huh!
You see, those figures above were given to me by Cristi from Romania who made a comment on my blog post about soaring electricity prices. You have to agree, Romania looks an extremely cheap place in which to live, until you find out how low the wages are.
According to my maths and Cristi’s figures, it would cost 220 Romanian yakka’s to buy 3000 kW of electricity, whereas here in Australia I can buy the same amount for just 17 Australian yakka’s. That’s because the Romanian yakka is worth just $2.00.
Now, where’s my Nobel Prize?
Here are the exact workings out:
Cristi (see Calin Cristian’s comments) tells me an average Romanian salary is €250 a month, that’s about $333. So the average Romanian works for one hour to earn about $2 AUD.
Electricity, for example, costs him (0.11 Euro) just under 15c per kilowatt hour, so 3000 kWh (his annual electricity consumption) cost him about $440 AUD. Because the Romanian hard yakka is equivalent to about $2, it takes Cristi 220 hours of work to pay for that electricity.
Here in Australia, electricity is more expensive at around 16 cents and the Australian hard yakka is worth $32.80. If I were to buy 3000 kWh of electricity over the period of a year, with standing charges it would cost me around $560.
That is 17 Hard Yakkas, or 17 hours of work for an average earning Australian.
220 hours versus 17 hours.
And Romania is cheap and Australia is expensive?
Footnote: I know some will disagree with me on average salaries between Australia and the UK, so here’s where I got it all from.