Worldwide, the correlation between economic strength and the minimum wage is pretty strong. Most countries have low minimum wages and a small per capita GDP PPP.
Findings
- The correlation coefficient between per capita Gross Domestic Product (GDP) in Purchasing Power Parity (PPP) and minimum wage worldwide is 0.81.
- As economic strength increases worldwide, the minimum wage also increases.
- Only Europe, Oceania, and South America have countries with annual minimum wages above 20,000 international dollars.
- Only Europe, North America, Asia, and Oceania have countries with a per capita GDP PPP above 40,000 international dollars.
- Every country in Africa and South America (excluding Argentina) has an annual minimum wage below 10,000 international dollars.
- Every country in Africa and South America has a per capita GDP PPP below 40,000 international dollars.
Caveats
- As always, correlation does not imply causation.
- Several countries are not included as they were missing data. See the continent reports for complete lists.
- Minimum wages sometimes vary by profession and other variables.
Details
If outliers are excluded from the data the correlation between per capita GDP PPP and the annual minimum wage increases.
There are a considerable number of countries that have a per capita GDP PPP below 20,000 international dollars and they exist in every continent.
A good deal of countries have annual minimum wages that are larger than their per capita GDP PPP. They include Afghanistan, Argentina, Burkina Faso, the Central African Republic, Chad, Comoros, Libya, Madagascar, Malawi, the Marshall Islands, Morocco, Mozambique, Nepal, Niger, Pakistan, Sierra Leone, Togo, and Vanuatu.
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.