In Europe, the correlation between economic strength and the minimum wage is pretty strong. Just like with the shadow economy data, minimum wage tends to be similar to geographically proximate countries.
Findings
- The correlation coefficient between per capita Gross Domestic Product (GDP) in Purchasing Power Parity (PPP) and minimum wage in Europe is 0.85.
- As economic strength increases in Europe, the minimum wage also increases.
- Belarus has the lowest minimum wages on the continent but manages to have the seventh smallest per capita GDP PPP.
- Moldova has the smallest per capita GDP PPP but has the second lowest minimum wages.
- Luxembourg has the largest per capita GDP PPP but the second highest minimum wage on the continent.
- San Marino on the other hand, has the highest minimum wage but only the third largest per capita GDP PPP.
Caveats
- As always, correlation does not imply causation.
- Albania, Andorra, Austria, Denmark, Faroe Islands, Finland, Vatican City, Iceland, Italy, Liechtenstein, the Former Yugoslav Republic of Macedonia, Monaco, Norway, Russia, Sweden, and Switzerland were missing data.
- Minimum wages sometimes vary by profession and other variables.
Details
Only Belarus and Moldova have an annual minimum wage of less than 4,500 international dollars.
Western European countries have both the highest annual minimum wages and per capita GDP PPP.
Per capita GDP PPP as a multiple of minimum wage, ranges from 1.14 in Ukraine to 18,000.00 in Moldova.
Country Codes
| Code | Country |
|---|---|
| AG | Antigua and Barbuda |
| BB | Barbados |
| BZ | Belize |
| CA | Canada |
| CR | Costa Rica |
| DM | Dominica |
| DO | Dominican Republic |
| GT | Guatemala |
| HN | Honduras |
| HT | Haiti |
| JM | Jamaica |
| KN | Saint Kitts and Nevis |
| MX | Mexico |
| NI | Nicaragua |
| PA | Panama |
| SV | El Salvador |
| TT | Trinidad and Tobago |
| US | United States |
| VC | Saint Vincent and the Grenadines |
Sources
US Department of State. 2017. "Country Reports on Human Rights Practices for 2016." Accessed September 2, 2017. https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm#wrapper.