National Minimum Wage

Appendix 3
Minimum Wage Systems in
Other Countries
Introduction
1 As in previous reports we have gathered evidence on minimum wage systems in other
countries. These are again the same group of major European Union and Organisation for
Economic Co-operation and Development (OECD) countries we have looked at since the
introduction of the National Minimum Wage (NMW). We are once more grateful for the
contribution made to this part of our work by British Embassies and High Commissions as
well as the OECD.
2 As well as looking at minimum wage rates in national currencies we also consider their
values in exchange rate terms, which takes into account the relative value of the relevant
currency, and in purchasing power parity (PPP) terms which additionally factors in the effect
of price inflation. The value of each country’s minimum wage relative to median earnings is
also analysed.
Minimum Wages in 2010/11
3 In this section we compare the minimum wages in different countries using the latest
available data. That is for the end of 2011 in respect of minimum wage rates, and mid-2010
in respect of comparisons of minimum wage rates against median earnings.
4 Table A3.1 shows that among those countries which increased their minimum wage in 2011,
the NMW increase was higher than most, including Japan, New Zealand and Portugal, but
below the increases in Australia, France and Canada. Some countries had no increase in
2011: in the US changes depend on votes in Congress and occur irregularly (the last of an
agreed three years of increases was in 2009); in Ireland the adult wage was reduced to
€7.65 on 1 February 2011, but then reverted to €8.65 on 1 July 2011; and in Belgium there
was no agreement to increase the wage.
5 However, when both exchange rates and PPPs are taken into account, the UK wage
remained, as in 2010, in the middle of the range of comparator country rates. In PPP terms
the UK rate was broadly similar to New Zealand and Canada, above countries such as Spain,
US and Japan, but well below others such as Australia, France and Belgium.
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