Minimum wage statistics

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Data from August 2011, most recent data: Further Eurostat information, main tables and database.

This article illustrates how minimum wage levels – established by national legislation or directly by national intersectoral agreement – vary considerably among European Union (EU) Member States and within the euro area; it also provides a comparison with the situation in the United States.

Minimum wage statistics published by Eurostat refer to monthly national minimum wages. The national minimum wage usually applies to all employees, or at least to a large majority of employees in the country. Minimum wages are gross amounts, that is, before deduction of income tax and social security contributions. Such deductions vary from country to country. The national minimum wage is enforced by law, often after consultation with the social partners, or directly by national intersectoral agreement (as is the case in Belgium and Greece).

Map 1: Minimum wages in the EU, EFTA and candidate countries, July 2011, in EUR
Figure 1: Minimum wages in EU Member States, Croatia, Turkey and the USA, July 2011, in EUR
Figure 2: Minimum wages in EU Member States, Croatia, Turkey and the USA, July 2011, in PPS
Figure 3: Minimum wages as proportion of the mean value of average gross monthly earnings (Nace Rev.2, B-S) in EU Member States, Croatia and the USA, 2010 (*2009; BE, FR, IE, TR: no data)

Contents

Main statistical findings

In July 2011, 20 of the EU's 27 Member States (Belgium, Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, and the United Kingdom) and two candidate countries (Croatia, Turkey) had national legislation setting a minimum wage by statute or by national intersectoral agreement.

Monthly minimum wages varied widely, from 123 EUR in Bulgaria to 1 758 EUR in Luxembourg. When adjusted for differences in purchasing power, the disparities between the Member States are reduced from a range of one to fourteen (in EUR) to a range of one to six in purchasing power standard (PPS). At the opposite ends of the scale were again Luxembourg (1 466 PPS per month) and Bulgaria (243 PPS).

Variation of statutory minimum wages

In July 2011, statutory minimum wages varied from 123 to 1 758 EUR gross per month

Figure 1 shows the minimum monthly wage levels expressed in euro in the Member States, Croatia, Turkey and the United States in July 2011. Among the Member States, the gross minimum wage ranged from 123 EUR (Bulgaria) to 1 758 EUR (Luxembourg).

The 20 Member States concerned together with Croatia, Turkey and the United States can be divided into three groups based on the level of minimum wage on 1 July 2011.

The first group includes the eleven countries with the lowest minimum wages, between 100 EUR and 400 EUR a month: Bulgaria, Romania, Lithuania, Estonia, Latvia, Hungary, Slovakia, the Czech Republic, Poland, Turkey and Croatia.

The second group comprises five Member States (Portugal, Malta, Slovenia, Spain and Greece) and the United States with an intermediate level of minimum wages, from just over 550 EUR to just below 900 EUR a month.

The third group comprises six Member States (United Kingdom, France, the Netherlands, Belgium, Ireland and Luxembourg) in which the minimum wage was above 1 000 EUR per month.

Minimum wages expressed in purchasing power parities

The gap is considerably smaller when expressed in purchasing power parities

Figure 2 compares minimum wages taking into account differences in price levels by applying purchasing power parities (PPPs) for household final consumption expenditure.

As one would expect, adjusting for differences in price levels reduces the variation between countries: while the minimum wage in euros (Figure 1) ranged from 123 EUR to 1 758 EUR in July 2011 (a factor of about 1:14), the minimum wage in PPS (Figure 2) ranged from 243 to 1 466 (a factor of about 1:6). The countries in groups 1 and 2 with relatively lower minimum wages in euros also have lower price levels and therefore higher minimum wages when expressed in PPS. On the other hand, countries in group 3 with higher minimum wages in euros have higher price levels, and their minimum wages in PPS are relatively lower. The exception in group 3 is the United Kingdom, where the minimum wage in PPS is slightly higher than in euros – this is explained by the currently relatively weak pound against the euro.

Comparing the ranking of the monthly minimum wages in euros with those in PPS, the most remarkable changes are for the Netherlands, Ireland, Spain and Croatia, all moving by two positions. Several other countries change their position, but only by 1 rank (the Czech Republic, Slovakia, Poland, Turkey, Malta, Slovenia, Greece, and the United States).

Minimum wage level in relation to average gross monthly earnings

In 2010 the minimum wage level is between 30% and 50% of average gross monthly earnings in industry, construction and services (except activities of households as employers and extra-territorial organisations and bodies)

Looking at the minimum wage in relation to average gross monthly earnings in industry, construction and services (except activities of households as employers and extra-territorial organisations and bodies, Nace Rev. 2 sections B-S, Figure 3), the highest values are reported for Slovenia, followed by Malta and Luxembourg. In these three countries the minimum wage is above 45% of the gross monthly earnings. At the lower end of the scale the Czech Republic, Romania (2009) and the United States report minimum wages below 35% of the average gross monthly earnings.

Context

Minimum wage statistics published by Eurostat refer to monthly national minimum wages. The national minimum wage usually applies to all employees, or at least to a large majority of employees in the country.

Minimum wages are gross amounts, that is, before deduction of income tax and social security contributions. Such deductions vary from country to country. The national minimum wage is enforced by law, often after consultation with the social partners, or directly by national intersectoral agreement (this is the case in Belgium and Greece).

Data sources and availability

Statutory monthly minimum wages

The basic national minimum wage is fixed at an hourly, weekly or monthly rate, and this minimum wage is enforced by law (the government), often after consultation with the social partners, or directly by national intersectoral agreement. The national minimum wage usually applies to all employees, or at least to a large majority of employees in the country. Gross wages are reported.

Minimum wage statistics published by Eurostat refer to monthly national minimum wages; data are published as on 1st of January and 1st of July each year. For countries where the national minimum wage is not set monthly (e.g. hourly or weekly) the rates are converted into monthly rates according to conversion factors directly supplied by the countries:

  • Ireland: hourly rate x 39 hours x 52 weeks / 12 months;
  • France: data January 1999 to January 2005: hourly rate x 39 hours x 52 weeks / 12 months; data from July 2005: hourly rate x 35 hours x 52 weeks / 12 months;
  • Malta: weekly rate x 52 weeks / 12 months;
  • United Kingdom: (Hourly rate x Mean Basic Paid Hours per week for full-time employees in all sectors x 52.18 weeks) / 12 months;
  • United States: hourly rate x 40 hours x 52 weeks / 12 months.

In addition, when the minimum wage is paid for more than 12 months per year (as in Greece, Spain and Portugal, where it is paid for 14 months a year), data have been adjusted to take these payments into account.

Data on national minimum wages are submitted to Eurostat in national currency. For the non-euro area countries, the minimum wages in their national currencies are converted into euro by applying the monthly average exchange rate of the previous month (e.g. the December 2010 rate was used for the minimum wages at 1st of January 2011).

To remove the effect of differences in price levels between the countries, special conversion rates called purchasing power parities (PPPs) are used. PPPs for household final consumption expenditure in each country are used to convert the monthly minimum wages expressed in national currencies (euro-fixed series for euro area countries) to an artificial common unit called the purchasing power standard (PPS). If e.g. PPPs for 2011 are not yet available, the ones of the previous year are used, and the series are updated once 2011 PPPs are available.

Countries not covered by the data collection

Germany, Cyprus and the Former Yugoslav Republic of Macedonia have statutory minimum wages that do not apply to all or the large majority of employees but are restricted to specific groups which are defined e.g. by sectors or by professions. These are excluded from the data collection. Also excluded are countries where there are no statutory national minimum wages: Denmark, Italy, Austria, Finland, Sweden, Iceland, Norway and Switzerland. In these countries, wages are either determined by negotiations between the social partners, at company level or at the level of individual contracts. Typically, sectoral level agreements are widely applied and have erga omnes applicability, thus constituting de facto minimum wages.

Monthly minimum wage as a proportion of average monthly earnings

Data on gross monthly earnings used to calculate this indicator should cover remuneration in cash paid before any tax deductions and social security contributions payable by wage earners and retained by the employer, and restricted to gross earnings which are paid in each pay period. 'Non-standard payments' such as 13th or 14th month payments, holiday bonuses, etc. are excluded. This definition follows the Structure of earnings survey (SES).

Data should refer to sections B-S of Nace Rev. 2 (industry, construction and services, except activities of households as employers and extra-territorial organisations and bodies), to enterprises of all size classes and to full-time employees. The reference period is the annual average (if not available: a specific month).

Further Eurostat information

Publications

Main tables

Earnings
Main tables
Earnings (t_earn)
Minimum wages (tps00155)

Database

Earnings
Database
Earnings (earn)
Minimum wages (earn_minw)
Monthly minimum wages - bi-annual data (earn_mw_cur)
Monthly minimum wage as a proportion of average monthly earnings (%) - Nace Rev. 2 (from 2008 onwards) (earn_mw_avgr2)
Monthly minimum wage as a proportion of average monthly earnings (%) - Nace Rev. 1.1 (1999-2009) (earn_mw_avgr1)

Methodology / Metadata

External links

See also

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