ILO points at BBC in Estonia’s salary controversy

16.04.2012, 16:11

Representatives of the International Labour Organization say that the ranking published by BBC on March 31 in which Estonia’s purchasing power was ranked below that of Bosnia was made by using the methods of BBC.

At the end of March, BBC ranked world countries by salaries by using the purchasing power parity.

In that list, Estonia was ranked behind Bosnia, Macedonia and Turkey. Estonia was also behind Hungary, Poland, Hong Kong, Croatia, Israel and South Africa.

The list caused an angry outcry from Estonian officials who claimed that the data used in the ranking was inaccurate.

Among others, Estonia claimed that, according to Eurostat, Estonia’s GDP per capita in 2010 by using purchasing power parity was 64 percent of EU average, while Bosnia’s figure was only 31 percent.

Moreover, according to the CIA Factbook, Estonia’s GDP per capita by using the purchasing power parity in 2010 was USD 18,900, about 2.3 times more than for Bosnia.

Although both figures do not relate to salaries, but GDP per capita, Estonian claim that this proves that the ILO data provided in the comparison was inaccurate.

Patrick Besler, senior analyst of ILO, said that ILO itself does not consider salary data fully comparable between countries.

“While it is true that the BBC ranking was based on data collected by ILO which in turn are collected from national statistical offices, BBC used the purchasing power parity (PPP) principles when drawing up the global salary ranking.

Besler said that ILO’s position was that countries should not be compared on the basis of salaries because there may be differences in how countries account salaries.

The analyst added that, instead, ILO prefers to compare the increase or decline in average wages.

Estonian finance minister Jürgen Ligi criticised the ranking and said that he took it as rubbish.

“This is nonsense. I took it as a bogus news. It was not realistic what I read from there,” said Ligi. “These data could be extremely inaccurate,” he added.

The finance ministry said that the ILO comparison was problematic because of significant differences between tax systems.

"Salary comparison is very complex and in there is no standard for international wage statistics, because data cannot be presented comparably”.