Comparison of Minimum Wages Across Countries

Table A4.1

Comparison of Level of Minimum Wages(a) Across Countries, End 2007

Sources: British Embassies and High Commissions. OECD Minimum Wage Database. LPC calculation of exchange rates and PPPs. PPPs derived from CPLs, OECD Main Economic Indicators, September 2007. For exchange rates, Bank of England monthly average spot exchange rate, September 2007.

Notes:

(a) In all cases, the minimum wage refers to the basic rate for adults.

(b) For countries where the minimum wage is not expressed as an hourly rate, the rate has been converted to an hourly basis assuming a working time of 8 hours per day, 40 hours per week and 173.3 hours per month.

(c) September 2007.

(d) Purchasing Power Parities (PPPs) derived by applying OECD Comparative Price Levels (CPLs) – ratio of PPPs for private consumption to exchange rates – for September 2007.

(e) Exemptions and special rules apply in many cases. For example, in France and the United States the full adult rate applies to young workers with a tenure of more than 6 and more than 3 months respectively.

(f) Federal minimum wage – hourly rate under Fair Pay Commission arrangements.

(g) Weighted average of provincial/territorial rates.

(h) Date of last uprating varies between provinces.

(i) For blue collar workers. Wage used in Figure A4.1 overleaf is for white collar workers (?767.54 per month, representing minimum wage of ?657.89 per month plus entitlement to two additional months of wages).

(j) Weighted average of prefectural rates.

(k) Excludes 8 per cent supplement for holiday pay.

(l) Not including annual supplementary pay of two additional months of salary for full-time workers.

(m) Federal minimum wage. Tipped employees receive a lower minimum wage of $2.13 per hour in direct wages.

Table A4.2

Adult Minimum Wages Relative to Full-time Median Earnings, Mid-2006(a)

Sources: Minimum wages and median earnings for full-time workers: OECD estimates and OECD Earnings Structure Database.

Notes:

(a) In all cases the minimum wage refers to the basic rate for adults. In some cases, the median earnings data for full-time workers for mid-2006 are estimates based on extrapolating data for earlier years in line with other indicators of average earnings growth. All earnings data are gross of employee social security contributions.

(b) Two estimates of median earnings are available based on the Labour Force Survey (LFS) and an Enterprise Survey (ES). In each case, the data refer to weekly earnings. The minimum wage refers to the Federal Minimum Wage.

(c) Minimum wage for blue collar workers.

(d) Differs from the LPC estimate in Chapter 2 (Table 2.4), as the OECD estimate is for the minimum wage relative to the median earnings of full-time, rather than all, employees.

(e) The ratio including 8 per cent supplement for holiday pay is given in parentheses.

(f) The ratio including annual supplementary pay of two additional months of salary is given in parentheses.

Figure A4.1

Adult Minimum Wages Relative to Mean Earnings(a)(b)

Source: Government evidence to the Low Pay Commission on the economic effects of the National Minimum Wage, November 2007. (www.berr.gov.uk)

Notes:

(a) National minimum wage rates used may vary from those used in both Table A4.1 and Table A4.2

(b) Earnings periods used vary between countries, and in most cases differ from that used in Table A4.2. In addition Table A4.2 uses median earnings of full-time, rather than all, employees.