Minimum wage statistics
From Statistics Explained
- Data from January 2013. 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 Croatia, Turkey and 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.
National minimum wages are published by Eurostat bi-annually. They reflect the situation on 1st of January and 1st of July of each year respectively. As a consequence modifications to minimum wages introduced between the two dates are shown only with the following bi-annually release. Please consult also the ESMS metadata file.
Main statistical findings
In January 2013, 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), Croatia and Turkey had national legislation setting a minimum wage by statute or by national intersectoral agreement.
Monthly minimum wages varied widely, from EUR 157 in Romania to EUR 1 874 in Luxembourg. When adjusted for price differentials across countries, the disparities between the Member States are reduced from a range of one to twelve (in EUR) to a range of one to six in purchasing power standard (PPS). At the opposite ends of the scale were Romania (274 PPS) and Luxembourg (1 524 PPS per month).
Variation of statutory minimum wages
In January 2013, statutory minimum wages varied from 157 to EUR 1 874 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 January 2013. Among the Member States, the gross minimum wage ranged from EUR 157 (Romania) to EUR 1 874 (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 January 2013.
The first group includes the eleven countries with the lowest minimum wages, between EUR 100 and EUR 500 a month: Romania, Bulgaria, Latvia, Lithuania, the Czech Republic, Estonia, Slovakia, Hungary, Croatia, Poland and Turkey.
The second group comprises five Member States (Portugal, Greece, Malta, Spain and Slovenia) and the United States with an intermediate level of minimum wages, from over EUR 500 to just below EUR 1 000 a month.
The third group comprises six Member States (the United Kingdom, France, Ireland, the Netherlands, Belgium and Luxembourg) in which the minimum wage was above EUR 1 200 per month.
However, it should be noted that for non-EA countries (8 Member States, Croatia and Turkey in the first group as well as the United Kingdom and the United States) the levels and ranking of minimum wages expressed in euro are affected both by the values of the minimum wages in national currencies and by exchange rates.
Minimum wages expressed in purchasing power standards
The gap is considerably smaller when expressed in purchasing power standards
Among the Member States, the gross minimum wage expressed in PPS ranged from 274 (Romania) to 1 524 (Luxembourg).
As one would expect, adjusting for differences in price levels reduces the variation between countries: while the minimum wage in euro (Figure 1) ranged from EUR 157 to EUR 1 874 in January 2013 (a factor of about 1:12), the minimum wage in PPS (Figure 2) ranged from 274 to 1 524 (a factor of about 1:6). The countries in group 1 with relatively lower minimum wages in euro 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 euro have higher price levels, and their minimum wages in PPS are relatively lower. In addition, as a consequence, the breaks between the three groups are partly smoothed out when looking at minimum wages expressed in PPS.
Comparing the ranking of the monthly minimum wages in euro with those in PPS, the most remarkable changes are for Estonia, Lithuania, Poland and Portugal, all moving by two positions. Several other countries change their position, but only by 1 rank (Belgium, Ireland, Spain, France, Hungary, Malta, Netherlands and Croatia). The monthly minimum wages expressed in PPS group the countries in the same class as when expressed in euro with the exception of Hungary, Poland Croatia and Turkey, moving from group 1 (lower wages) to group 2 (medium wages) and the United States moving from group 2 (medium wages) to group 3 (higher wages).
Minimum wage level in relation to average gross monthly earnings
In 2011 the minimum wage level varies 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 Greece (50.2 %), Turkey (2010) (50.0 %) and Slovenia 49.0 %) followed by France (2010) and Malta (both 47.4 %) and Luxembourg (46.7 %). At the lower end of the scale the United States, the Czech Republic, Estonia and Spain report minimum wages below 35 % of the average gross monthly earnings.
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 exchange rate of the end of the previous month (e.g. the end of December 2012 rate was used for the minimum wages at 1st of January 2013).
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 2013 are not yet available, the ones of the previous year are used, and the series are updated once 2013 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 each individual contract. 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).
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.
Further Eurostat information
- Labour market statistics - Pocketbook - 2011 edition
- Minimum wages in January 2009 - Data in Focus 29/2009
- Earnings (t_earn)
- Minimum wages (tps00155)
- 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)
- Minimum wages (earn_minw)
Methodology / Metadata
- Minimum wages (ESMS metadata file - earn_minw_esms)
- Eurofound - European Industrial Relations Observatory (EIRO)
- International Labour Organization
- OECD - Eurofound conference on wage developments, minimum wages and wage flexibility