The U.S. has a $7.25 minimum wage. Australia’s is $16.88

August 19, 2013

Minimum wage advocates love to point to Australia's $16.88 an hour minimum as evidence that a very high wage floor needn't stifle a country's growth. After all, Australia hasn't had a recession in 20 years. But Australia is hardly an outlier. Most developed countries have a higher minimum wage than we do, as this chart from Business Insider's Matthew Boesler — using data from the ConvergEx Group — shows:

This holds up if you compare the minimums to the median wage in the country in question, as the OECD did. Here's what they found:

The U.S., unsurprisingly, is on the bottom but it's tied with Japan. And Australia isn't on top; that goes to France, which has a lower average wage than Australia, which makes up for a lower minimum wage and leads to a higher ratio.

The Center for American Progress has proposed setting the minimum wage at half the average wage (mean, not median as used above) for production and non-supervisory workers; at the current level, that means a $10.07 minimum. If we were to adopt France's 60 percent ratio, that'd put us at about $12.08.

Of course, there are all kinds of pros and cons to that kind of increase. I went through many of them here. And it's worth noting that Australia's minimum wage comes with all kinds of exceptions, especially for younger workers.

Update: Another point, which Guan Yang reminded me of on Twitter - a large number of countries, including Denmark, Germany, Italy, Norway, Singapore, Sweden, and Switzerland, don't have minimum wages at all. Most of them make up for it with widespread collective bargaining, which sets de facto minimums.

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Neil Irwin | August 19, 2013