The Correlation between Minimum Wage and Economic Strength in North America

Sep 4, 2017
Scatter plot of shadow economies and GDP

In North America, the correlation between economic strength and minimum wage is strong.  Only two countries on the continent have an annual minimum wage of over 15,000 international dollars, Canada and the United States.  All other countries' annual minimum wage is below 9,000 international dollars.


  • The correlation coefficient between per capita Gross Domestic Product (GDP) in Purchasing Power Parity (PPP) and minimum wage in North America is 0.83.
  • As economic strength increases in North America, the minimum wage also increases.
  • Haiti has both the lowest minimum wages on the continent as well as the smallest per capita GDP PPP.
  • The United States has the largest per capita GDP PPP but the second highest minimum wage on the continent.
  • Canada on the other hand, has the highest minimum wage but only the second largest per capita GDP PPP.


  • As always, correlation does not imply causation.
  • Cuba, Grenada, Saint Lucia, Anguilla, Aruba, Bahamas, Bermuda, British Virgin Islands, Cayman Islands, CuraƧao, Greenland, Guadeloupe, Martinique, Montserrat, Puerto Rico, Saint Martin, Saint Pierre and Miquelon, Sint Maarten, Turks and Caicos Islands, and the US Virgin Islands were missing data.
  • Minimum wages sometimes vary by profession and other variables.


There are several countries that have similar minimum wages but have large differences in their per capita GDP PPP.  Honduras, Jamaica, and Dominica all have annual minimum wages in the low to mid 4,000 international dollar range but their per capita GDP PPP ranges from 5,271 to 11,375 international dollars.

Conversely, some countries have a per capita GDP PPP that is relatively similar with very different minimum wages.  For instance, El Salvador, Jamaica, Belize, and Guatemala have a per capita GDP PPP that ranges from just below 8,000 to just below 9,000 international dollars but have minimum wages that range from 2,194 to 7,197 international dollars.

Per capita GDP PPP as a multiple of minimum wage, ranges from 1.10 in Guatemala to 8.54 in the Dominican Republic.

Country Codes

AGAntigua and Barbuda
CRCosta Rica
DODominican Republic
KNSaint Kitts and Nevis
SVEl Salvador
TTTrinidad and Tobago
USUnited States
VCSaint Vincent and the Grenadines


US Department of State.  2017.  "Country Reports on Human Rights Practices for 2016."  Accessed September 2, 2017.

"Report for Selected Country Groups and Subjects (PPP Valuation of Country GDP)."  International Monetary Fund.

Filed under: Correlations