The minimum wage varies greatly across the world. But how does the minimum wage in the United States compare to the rest of the world? And how does it impact our everyday lives, our purchasing decisions, determining our long-term financial stability or otherwise? A new global study by payroll company Moorepay reveals the value of minimum wage in numerous countries, and what it means against their cost of living.
To discover the real value of minimum wages in each country they converted each country’s annual minimum wage into international dollars using the World Bank’s Purchasing Power Parity (PPP) factors. In simple terms, an international dollar reflects “the comparable amount of goods and services a U.S. dollar would buy in the United States,” showing the real value of wages rather than just headline figures.
Eight of the ten countries with the most valuable minimum wage are in Europe, while the same number of African countries are among the ten with the least valuable wage. The federal minimum wage in the United States is $7.25, which gives a salary of $15,080 (the figure is the same in international dollars since the INTL is pegged to U.S. purchasing power). This makes the U.S. minimum wage just the 23rd most powerful in the world, ranking just below Japan and Poland and above Lithuania.
Key findings from the study:
- $15,080 – U.S. federal minimum wage, ranking 23rd globally.
- £25,397 / Intl$36,589 – The UK minimum wage ranks 4th.
- €29,952 / Intl$38,810 – The Netherlands tops the list with the most valuable minimum wage.
- Several African nations including Ethiopia, Eritrea, Somalia and South Sudan have no minimum wage at all.
Some states have enacted higher minimums, but the federal rate – unchanged since 2009 – continues to draw criticism from experts calling for reform, especially as the cost of living rises.
Here’s how much the minimum salary is worth in every country, when accounting for local purchasing power:
The five countries where the minimum wage buys the least amount at the shops are all in Africa. In addition, the African nations of Ethiopia, Eritrea, Somalia and South Sudan have no minimum wage, and the legislation in Namibia and Zimbabwe only covers certain industries. The systems found elsewhere in Africa vary in wage level and complexity but share the characteristic of falling far short of worker needs.
“In many African countries, inflation has surged to levels unseen in decades, with double-digit price increases in 17 countries in 2022 and 19 countries in 2023,” according to an International Labour Office (ILO) report. “Rising inflation has a substantial impact on the cost of living, especially for low-income households that are heavily reliant on essential goods and services.”
The minimum wage remains a matter of debate in many parts of the world, as the global cost of living crisis persists.
Amnesty International writes that “those in favour of keeping wages low have argued that stronger economic growth, often through the success of businesses is ultimately beneficial to the rights and livelihoods of working people.” The International Monetary Fund (IMF) has demonstrated that this ‘trickle-down economics’ assumption is faulty and that “an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth,” and “if the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term.”
You can see the full data set over at the Moorepay website, and find out how your country ranks globally for its minimum wage and cost of living.
