December 2018

  Minimum wages offer a route out of poverty, but they aren’t without controversy.   Where should workers move to in order to earn the best minimum wage? The answer is Australia or Luxembourg, according to data from Germany’s Wirtschafts-und Sozialwissenschaftliches Institut (WSI), which compared pay in different countries on a purchasing-power basis. The hourly rate in Australia yields the equivalent of 9.47 euros (US$10.78) of purchasing power, according to the report, almost six times that of Russia’s, which is worth only 1.64 euros ($1.87) in purchasing power terms. European nations made up the rest of the top five; while Brazil, Greece and Argentina were among the lower earners. Image: WSI data, World Economic Forum Supporting low-paid workers is a key objective for governments around the world, particularly after the financial crisis exacerbated inequality in many countries. While minimum wages offer one route out of poverty, they aren’t without controversy, often sparking politically charged debates and generating headlines. Recently, Spain’s government said its minimum wage will jump by 22% in 2019, the biggest annual increase in more than 40 years, while French President Emmanuel Macron said his nation’s threshold will increase as well. Even in Australia, which has one of the highest levels, there’s tension between the Fair Work Commission, that sets the rate, and the unions who want more. Those in favour say businesses have a responsibility to pay their workers enough to live on, while those against argue that a high minimum wage destroys jobs and hampers entrepreneurship. A report earlier this year by the Institute for Fiscal Studies warned that a rise in the living wage could expose more jobs to automation.  Academic studies have been mixed, calling into question long-held ideas that minimum pay thresholds lead to job cuts and fewer hours offered to employees, while also harming small businesses and pushing up prices. “Thirty […]