News and Tribune

Community News Network

February 15, 2013

How does the U.S. minimum wage compare to those around the world?

WASHINGTON — In his State of the Union address this week, President Barack Obama announced that he would seek to raise the federal minimum wage to $9 an hour, a measure that would form the centerpiece of an agenda aimed at reducing incoming inequality in the United States.

That announcement got us wondering: How does the U.S. minimum wage stack up against the minimum wage in other countries? The answer depends somewhat on how one chooses to measure the minimum wage and the standard against which it is measured.

One handy way of comparing the minimum wage across borders is to measure it relative to median full-time wages, which indicates the gap between the lowest wage earners and the mid-point of the income spectrum. On that measurement, the U.S. minimum wage is about 38 percent of the median, which is indicative of high levels of income inequality in the United States. Countries like Australia, Belgium, France, Ireland and New Zealand have both higher absolute minimum wages and minimum wages that fall closer to median wages. In other words, living on the minimum wage in one of those countries puts an individual much closer to achieving a median income than it would in the United States. Unstated in all of this, of course, is that the United States is significantly wealthier than all of these countries.

If one looks at minimum wage from an hourly perspective, the picture is much the same. Of the 23 countries for which the Organization for Economic Cooperation and Development has data, the United States ranks 10th in hourly income in PPP dollars, a measurement of purchasing power that indicates how much stuff an employee can buy with an hour of work.

All this is to say that, relative to its wealth, the United States underpays its least-skilled workers.

1
Text Only | Photo Reprints
Community News Network
LOCAL MAGAZINES
Easter 2014 photos


Click on any photo to purchase it.

SPECIAL CONTENT
Twitter Updates
Follow us on twitter
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
AP Video
Renewed Violence Taking Toll on Gaza Residents 2 Americans Detained in North Korea Seek Help US Employers Add 209K Jobs, Rate 6.2 Pct House GOP Optimistic About New Border Bill Gaza Truce Unravels; Israel, Hamas Trade Blame Raw: Tunisia Closes Borders With Libya Four Rescued From Crashed Plane Couple Channel Grief Into Soldiers' Retreat WWI Aviation Still Alive at Aerodrome in NY Raw: Rescuers at Taiwan Explosion Scene Raw: Woman Who Faced Death Over Faith in N.H. Clinton Before 9-11: Could Have Killed Bin Laden Netanyahu Vows to Destroy Hamas Tunnels Obama Slams Republicans Over Lawsuit House Leaders Trade Blame for Inaction
2013 Photos of the year


Take a look at our most memorable photos from 2013.