Minimum wage worldwide: how did the record inflation affect those earning the least?
Picodi.com analysts checked how the minimum wage changed in 2023 in several dozen countries and if such a wage is enough to ensure a minimum standard of living in those countries.
Wages are catching up with inflation
The study includes 67 countries, in which the minimum wage is set by the government. Tax systems in these countries can be very different, and the difference between gross and net income can range from 0% to as much as 35% (in the Philippines – 0%). To make the comparison fair, we used net wages, which is the money employees actually take home.
In only 7 out of 67 countries included in our ranking, the minimum wage did not increase compared to January 2022. Among others, these countries are Israel, Hong Kong and Nigeria.
The highest year-to-year minimum wage increase was noted in Argentina (104.5%) and Turkey (100%). In those countries, both inflation and devaluation of currency have been exceptionally high in recent years.
Countries, which also stand out with a high minimum wage increase are Moldova (32.5% year-to-year increase), Latvia (27.1%) and Malaysia (25.8%).
In our ranking of salary increases, the Philippines ranked 35th: currently, the minimum wage stands at ₱8,066 net monthly, which is 9.2% higher than in January of last year (₱7,385). Higher pay raises can be enjoyed by those paid the least in, among others, Pakistan (24.6%) and Malaysia (25.8%).
Basic food survival basket
For the purpose of this study, we created a contractual shopping basket and juxtaposed the price of food with the minimum wage. The basket consists of 8 groups of products: bread, milk, eggs, rice, cheese, meat, fruits and vegetables. The list is very limited, but those products in the given amounts are enough to meet the minimum nutrient requirement for an average adult.
Milk (10 liters) – ₱910
Bread (10 loaves, 500 g each) – ₱649
Rice (1.5 kg) – ₱75
Eggs (20 pcs) – ₱159
Cheese (1 kg) – ₱355
Poultry and beef (6 kg) – ₱1,706
Fruits (6 kg) – ₱703
Vegetables (8 kg) – ₱747
In the Philippines, the price of a basic food basket at the beginning of 2023 costs ₱5,304, which is 5.59% higher than last year. The basket is worth 65.8% of the minimum net wage, compared to last year’s 68% of the contemporary minimum wage. This means that the wages of those paid the least increased faster than the food prices.
This is how the price of an identical shopping basket looked like in previous years:
January 2019 – ₱4,370
January 2020 – ₱4,447
January 2021 – ₱4,788
January 2022 – ₱5,023
January 2023 – ₱5,304
Where can you live off the minimum wage?
Although food preferences and perceptions of a comfortable life vary from country to country and even from person to person, we decided to compare the prices of the same basket of food with the minimum wages to see how much of the minimum income has to be spent on products necessary to live.
The best basic food price ratio can be found, as usual, in the United Kingdom, Ireland and Australia – from 6.5% to 7.7%.
In this comparison, the Philippines is in the 64th place in the ranking, with a ratio of 65.8%, being passed by countries such as India (59.4%, 62nd place), Thailand (54.3%, 61st place) and Malaysia (30.6%, 45th place).
In Asia-Pacific countries such as India, Indonesia, the Philippines, Thailand and Vietnam, basic food costs over half of the minimum income. In Nigeria, the minimum wage is not enough to cover even such a basic basket of products.