WASHINGTON — In his State of the Union address this week, President Barack Obama announced that he would seek to raise the federal minimum wage to $9 an hour, a measure that would form the centerpiece of an agenda aimed at reducing incoming inequality in the United States.
That announcement got us wondering: How does the U.S. minimum wage stack up against the minimum wage in other countries? The answer depends somewhat on how one chooses to measure the minimum wage and the standard against which it is measured.
One handy way of comparing the minimum wage across borders is to measure it relative to median full-time wages, which indicates the gap between the lowest wage earners and the mid-point of the income spectrum. On that measurement, the U.S. minimum wage is about 38 percent of the median, which is indicative of high levels of income inequality in the United States. Countries like Australia, Belgium, France, Ireland and New Zealand have both higher absolute minimum wages and minimum wages that fall closer to median wages. In other words, living on the minimum wage in one of those countries puts an individual much closer to achieving a median income than it would in the United States. Unstated in all of this, of course, is that the United States is significantly wealthier than all of these countries.
If one looks at minimum wage from an hourly perspective, the picture is much the same. Of the 23 countries for which the Organization for Economic Cooperation and Development has data, the United States ranks 10th in hourly income in PPP dollars, a measurement of purchasing power that indicates how much stuff an employee can buy with an hour of work.
All this is to say that, relative to its wealth, the United States underpays its least-skilled workers.
Raw: Tornado on the Ground in Oklahoma
Raw: Rescue Workers Search Oklahoma School
Raw: Aftermath of Massive Tornado in Oklahoma
Raw: Walking in a Flattened Okla. Neighborhood
Oklahoma Gov: 'Hearts Are Broken' After Tornado
Huge Tornado Kills Dozens Near Oklahoma City
Raw: Witness Describes Scene After Okla. Tornado
Raw: House Burns After Massive Oklahoma Tornado
Raw: Rescuers Pull Tornado Survivors to Safety
Raw: Suspects Butt Dial 911, Lead to Arrest
Raw: Massive Funnel Clouds in Oklahoma
Split-second Choice Ended With NY Student Dead
White House Backs 'Shield Law' for Media
Voters Could Elect LA's First Female Mayor
Active Search for Utah Missing Mom Ends
Raw: Swarm of Tornadoes Slams Plains
Tornadoes, Storms Strike Midwest
RAW: TV Staff Take Cover From Tornado
Pug Life on Display at Wisconsin Festival
Raw: Widespread Destruction in Moore, Okla.
IWitness Look at Moore, OK Tornado
Trailer: 'The Last Stand' Available on Blu-ray Disc, DVD, Digital Download
Pickler's Dance Moves Cause A Stir
Okla. tornado survivor finds dog buried alive under rubble
RAW: Moore, OK tornado touches down near school
Sneak Peek: 'Modern Family' Says Good Bye
Robert Pattinson Moves Out
RAW: Russian dash cam catches car 20 feet in the air
Oklahoma tornado survivor: "Everything is gone"
Khloe Lashes Out at Kim Kardashian's Critics
Couple Argues As Woman's Lover Crawls Out Window
RAW: Brad Paisley Forgets Lyrics To His Own Song
Justin Bieber Gets Booed
New 'Anchorman 2' Trailer, Drake Joins List of Rumored Cameos
Eva Longoria's Wardrobe Malfunction
Heat Star Dwyane Wade Surprises Coral Gables Teen At Prom
Steak n' Shake waitress scores huge tip
Singer Miguel Accidentally Lands on Fan At Billboard Music Awards
Celebs Celebrate the Rise of the Side Butt
