What are the minimum wage rates in popular expat destinations

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Published 4 months ago

The concept of minimum wage helps companies ensure that their employees earn enough for a minimum standard of living, which allows them to stay healthy and enjoy a state of well-being. Clearly, to achieve a similar standard of living in Kuwait, for example, and the Netherlands, you should earn a different minimum salary, depending on the country’s cost of living. In general, if a nation’s minimum wage is high, there is less poverty, more productivity, increased economic mobility, and reduced income inequality. This article will help you understand where does your host country stand in the international minimum wage ranking, and how does this affect its labour force and economic development.

Countries with the highest minimum wage

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The minimum wage in the United Kingdom is among the highest in the world ($22,597 per year). However, the exact amount depends on the employee’s age — for workers who are between 21 and 24 the minimum wage is $9.54 per hour; for younger employees between 18 and 20 it is $7.62, and for those who are 25 or over it is $10.12, and it is called National Living Wage. Disabled, foreign, and part-time or offshore workers are also entitled to the minimum wage, whereas freelancers and self-employed are not. In spite of the UK’s relatively high minimum wage, campaigners are trying to convince companies to pay above the current minimum wage, which is considered unrealistic, and inadequate to meet the needs of the country’s cost of living.

Currently, the national minimum wage in Luxembourg for unqualified workers is at $2,368 per month. Before August’s compulsory indexation of earnings, which aims to keep the balance between salaries and living costs, the minimum wage was at $2,310. Qualified employees earn a minimum of $2,841 per month, making Luxembourg the country with the highest minimum wage in the EU. However, one must take into account that Luxembourg is also one of the most expensive places in the world to live in — a family of four needs at least $4,714 per month to meet its obligations and lead an active social life.

The government of the Netherlands revises the amount of the minimum wage two times per year — on the 1st of January and the 1st of July. The minimum wage depends on the employee’s age. Thus, workers who are 22 or older must earn at least $1,844 per month, whereas younger employees’ minimum wage varies between $553 (15 years old) and $1,568 (21 years old). The employer withholds taxes and contributions for social insurance from the gross salary, and the amount that is withheld depends on the employee’s conditions. Also, expat employees from outside the EU must earn at least the minimum wage that applies to those who are aged 22 or over, even if they are younger or work part-time.  

Since the 1st of January 2018, the minimum wage in Ireland for experienced (two years of employment completed over the age of 18) adult employees is $11, whether they are full-time, part-time, or temporary workers. If an employer provenly cannot afford to pay the national minimum wage, the Labour Court may exempt them for three to 12 months, as long as the majority of the employees give their consent. About 10% of employees in Ireland earn the minimum wage. Even though the minimum wage was increased per 3.2% this year, there are discussions to further increase it to $11.34 per hour in 2019.

France also has among the highest minimum wage rates in the world ($1,733 per month), which is 1.2% higher than last year’s. All employees in France who are 18 years old or over must at least be paid the minimum wage, which aims to secure a decent purchasing power and allow them to contribute to the country’s economic growth. Employees under the age of 17, who have less than six months of professional experience can earn 80% of the minimum wage. However, there have been debates in France about the association between high minimum wages and the disappearance of low-skilled jobs, with many economists supporting the idea that a lower minimum wage will bring many young people outside of the unemployment state.  

Countries without minimum wage

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Whereas the benefits of a minimum wage are apparent, there are countries — many of which are popular expat destinations — which haven’t implemented an official minimum wage. In Denmark, for example, salaries for blue-collar and white-collar workers are negotiated by trade unions and set under collective agreements, depending on age, experience, skills and qualifications, and level of difficulty of the job. On average, the unofficial minimum wage in Denmark is $21 per hour, and the average workweek is 37 hours.

Australia doesn’t have a minimum wage either, and unions often represent full-time employees. However, independent contractors and remote contributors have been on the rise, and are often paid much less than what would be accepted as an unofficial minimum average salary. In Canada, different provinces have different minimum wages; Alberta’s minimum wage currently is $10 per hour, Ontario’s is $10.6, and Quebec’s $9 per hour. Other countries which haven’t got a standard minimum wage are Austria, Belgium, China, Brazil, Algeria, Zimbabwe, Singapore, and the UAE.