Initially, it’s essential to understand that a country’s minimum legal wage, as detailed in government guidelines, is the lowest salary that organisations or companies are mandated to pay their employees. A country’s minimum legal wage is the lowest salary that the organisation or company pays the employers per government guidelines. Furthermore, the calculation of minimum wage primarily hinges on the number of hours worked per week or month. However, for contract positions, the calculation deviates from the norm, as it is based on the number of hours dedicated to specific projects or tasks.
The Purpose of a Minimum Wage:
The primary purpose of minimum wage legislation is to protect workers, ensuring they are shielded from unduly low pay rates. Consequently, these regulations aim to establish a minimum living wage for all individuals in employment, regardless of their occupation or background. Moreover, a minimum wage aims to combat poverty effectively while simultaneously working to reduce the gender pay gap.
Integration with Broader Policies:
In the grand scheme of employment and social policies, it is crucial to design minimum wage systems in a manner that strategically supplements and reinforces other initiatives aimed at fostering better working conditions. By doing so, we create a cohesive framework that not only uplifts wage standards but also contributes to an improved overall work environment.
Countries with the lowest minimum wages for 2023 (in USD)
|Country||Minimum Monthly Wage|
|Bangladesh||$68 (clothing industry), $19 (economic sector)|
|Venezuela||Under $20 (unofficial data)|
|Guinea Bissau||$30 + bag of rice per month|
|Georgia||$48 (public employees), $8 (private-sector workers)|
|Central African Republic||$60|
|Indonesia||$82 (Central Java), $232 (Jakarta)|
|Cuba||Around $87 (average) + government benefits|
|El Salvador||$242.40 (retail sector), $237.00 (industrial labour), $202.80 (apparel assembly), $113.70 (agricultural sector)|
|Panama||$1.22 to $2.36 per hour (varies by region and sector)|
|Nicaragua||$88.53 to $198.12 (depending on the sector)|
|Bosnia and Herzegovina||$236|
|Costa Rica||$14.88 to $19.44 (depending on the workforce)|
|Romania||$349.71 (full-time employee, 168-hour work week)|
|Hungary||$353.40 (general workers), $410.71 (specialised workforce)|
|Montenegro||Around $511 (as of January 2022)|
|Guatemala||Varies by sector: $10.65 (agricultural sector), $9.75 (factory workers)|
Countries with average minimum wages for 2022 (in USD)
|Estonia||$533 per month|
|Taiwan||$654 per month|
|Malta||$190 per week, with an annual bonus of $306.56 and annual cost of living increase ($274)|
|Greece||$762 per month|
|Portugal||$701.79 per month|
|South Korea||$5.40 (6,470 South Korean won) per hour|
|Spain||$867.62 per month|
|Slovenia||$897.48 per month|
Countries with the highest minimum wages for 2022 (in USD)
|Country||Minimum Wage||Additional Information|
|Andorra||$1,107.32 (set twice a year)||As of early 2022|
|Ireland||$10.38 per hour (ages 18 and older)|
|$7.27 per hour (under 18)|
|Germany||$1,466 per month|
|Belgium||$1,480 per month||Varies by employee age|
|United Kingdom||$9.75 per hour (ages 25 and over)|
|$9.41 per hour (ages 21-24)|
|$7.52 per hour (ages 18-20)|
|$5.42 per hour (under 18)|
|New Zealand||$10.19 per hour (ages 18 and older)|
|$8.17 per hour (ages 16, 17, or in training)|
|France||$1.664 per month||Government-mandated|
|Canada||$1,696 (varies by province/territory)|
|Netherlands||$1,730.47 per month||National minimum wage|
|San Marino||$11.07 per hour||For all workers|
|Australia||$2,136 (ages 21 and older)||Set by Fair Work Australia Commission|
|Luxembourg||$2,142.90 per month (ages 18 and older)||Varies by age and specialisation|
|Denmark||Average $18 per hour||Determined through bargaining|
|Japan||$6.18 – $8.07 per hour||Additional pay for overtime, holidays, night work, and commuting costs|
|Switzerland||$2,391.31 – $4,564.18 per month||Varies by workforce type|
|Iceland||Determined through collective bargaining||Agreements by sector and occupation|
The Maximal nominal wage in 2022 (In USD)
Luxembourg accounts for the highest annual minimum wage earnings followed by Australia and New Zealand respectively.
|Country||Hourly Minimum Wage||Annual Minimum Wage Earnings||2022 Population|
Conversely, as we delve into the topic of minimum wages globally, it becomes evident that there is a substantial disparity between countries. Luxembourg leads the way by providing its workers with the highest minimum wages, however, an exception to the highest minimum wage exists as some developing nations must catch up, especially from Asia and Africa. Unfortunately, this discrepancy affects the livelihoods of individuals and has broader implications for societies as a whole.
Addressing this issue is crucial for several reasons. Firstly, a higher minimum wage directly reduces poverty. This is explicitly seen when workers earn a wage that allows them to meet their basic needs. Secondly, they are less likely to fall below the poverty line. Consequently, this reduces the burden on social welfare systems and government subsidies (Global Wage Report 2022-2023).
Additionally, a robust minimum wage can empower individuals to improve their quality of life. To begin with, economic empowerment allows individuals to afford essential commodities such as housing, appliances, and even personal vehicles. Furthermore, this empowerment has a cascading effect on various aspects of life, including education, healthcare, and overall well-being (Bishop, J. 2018).
To conclude, in the broader context, focusing on the highest minimum wage aligns with the United Nations Sustainable Development Goals (SDGs). These global objectives aim to eradicate poverty, promote equality, and ensure decent work for all. By prioritising fair wages, countries can make significant progress toward achieving these goals.
Why is it essential that we focus on the highest minimum wage?
The importance of emphasising the highest minimum wage must be balanced. It is a matter of social justice, economic stability, and human dignity. Here are some key reasons why this issue deserves our attention:
- Poverty Alleviation: Firstly, a higher minimum wage directly lifts people out of poverty. It provides them with the means to cover their basic needs and improve their quality of life.
2. Reducing Income Inequality: Secondly, high wage disparities can lead to social unrest and instability. By narrowing the income gap, countries can foster a more equitable society (Soares et al., 2023).
3. Health and Well-being: Additionally, living wages enable individuals to have the financial means to access healthcare, nutritious food, and safe housing. This has a positive impact on their overall health and well-being.
4. Education: Moreover, adequate income enables families to invest in education for their children, breaking the cycle of poverty and opening up opportunities for future generations.
5. Boosting Consumer Spending: Furthermore, workers with more disposable income are more likely to spend, stimulating economic growth and benefiting businesses.
7. Human Rights: Lastly, fair wages are a fundamental human right. Ensuring that all workers are paid a living wage is a moral imperative. (Chun, N., & Khor, N. 2010)
In conclusion, focusing on achieving the highest minimum wage is not just an economic decision; it’s a moral obligation and a step toward a more just and sustainable future.
The Challenges of Implementing Higher Minimum Wage Policies
Several factors come into play when addressing the challenges of implementing higher minimum wage policies.
- Inflation Concerns: Firstly, critics argue that raising the minimum wage can lead to inflation. Businesses may pass on the increased labour costs to consumers through higher prices. Striking the right balance between wage hikes and inflation control is a challenge.
- Impact on Small Businesses: Additionally, small businesses with limited profit margins may need help to absorb increased labour costs and this can lead to job cuts or even business closures. This could be achieved with the help of many economic players, but policymakers need to consider ways to support small enterprises during these transitions.
- Informal Economy: Furthermore, in many developing countries, a significant portion of the workforce operates in the informal sector, where minimum wage laws are challenging to enforce. Raising the minimum wage can inadvertently encourage more informal work arrangements.
- Regional Disparities: Moreover, implementing a uniform minimum wage nationwide with vast regional economic disparities can be problematic. Living costs in urban areas may be significantly higher than in rural regions. This leads to making a one-size-fits-all approach less effective.
- Automation: Lastly, in response to higher labour costs, some businesses may accelerate automation efforts, potentially leading to job displacement. Though automation can enhance productivity, it can also disrupt employment patterns (Autor, D. H., 2019).
achieving the United Nations Sustainable Development Goals (SDGs) and how they link to the highest minimum wage
The United Nations Sustainable Development Goals (SDGs) encompass many global challenges, from poverty eradication to environmental sustainability. The issue of the highest minimum wage is intricately linked to several of these goals:
Goal 1: No Poverty: Firstly, a higher minimum wage directly reduces poverty rates, aligning with the first SDG’s objective of ending poverty in all its forms.
Goal 5: Gender Equality: Moreover, fair wages are essential for achieving gender equality. Women benefit from wage equality, helping bridge the gender pay gap.
Goal 8: Decent Work and Economic Growth: Additionally, ensuring a fair minimum wage is critical to providing decent work. It promotes economic growth by increasing consumer spending and reducing income inequality.
Goal 10: Reduced Inequalities: Furthermore, A high minimum wage helps reduce social income inequalities, a central focus of the tenth SDG.
Goal 16: Peace, Justice, and Strong Institutions: Additionally, Fair wages and social justice go hand in hand. Achieving the highest minimum wage supports the goal of promoting peaceful and just societies.
Goal 17: Partnerships for the Goals: Lastly, collaboration between governments, businesses, and civil society is essential for advancing the highest minimum wage and, by extension, the SDGs.
Prioritising the highest minimum wage aligns with the overarching mission of the SDGs—to create a better world for all, where poverty is eradicated, inequality is reduced, and economic growth is sustainable. Pursuing the highest minimum wage is not merely an economic concern—it’s a foundational element that is used to build thriving communities, achieve the SDGs, and create a better future for all. Join us in this important journey towards a more just and equitable world.
A Thrivable Framework
At THRIVE, we believe that humanity can thrive by harnessing the knowledge and resources at our disposal. Our framework extends beyond sustainability to embrace the concept of “thrivability.” Here’s how it connects with the issue of the highest minimum wage:
Transition to Thrivability: THRIVE’s initial perspective is that we see the pursuit of fair wages as a crucial element in thriving societies. Ensuring that individuals have the means to thrive aligns with our mission.
The Thrivable Zone: Our ciambella chart illustrates the delicate balance between human happiness and environmental well-being. Adequate wages contribute to this equilibrium by fostering contentment and reducing societal strains-enter THRIVE Framework.
Diverse Content: Explore our blog and podcast series to understand how fair wages contribute to thriving societies. We regularly host webinars featuring experts in the sustainability field to delve deeper into this critical issue.