US Minimum Wage Vs. The World

Posted by Rene Volpi  on June 22nd, 2010

Thanks to Fixr.com for making this chart

And now the comments:

This is extremely negligent economics.

More important than the skewed spacial presentation mentioned above, the whole premise of the chart misrepresents as "minimum wage" what appears to be merely the relationship of the countries' currencies to the US dollar. A true minimum wage has to do with what is purchasable by a person's own currency within a person's own country, not what is shown here. This chart only shows the absurd notion of what the person could buy if they were magically ported to the United States with 15,000 units of whatever his/her currency is.

Put another way: it takes an American person (in America) a year to earn a year's worth of the barest minimum amount of food and a poor quality shared housing. It does NOT take an Indian person (in India) 24 years to earn a year's worth of the barest minimum amount of food and a poor quality shared housing.

If this chart were true, Indians (in India) would all be dead within months.

If you want to keep this chart up on the site, title the post as unfortunately an example of what not to do. It is only perpetuating politically-biased terminology (in this case, left-wing).

June 16, 2010 | k

k -- I don't think this chart shows the relationship of the countries' currencies to the US dollar. What then would explain the six month difference between France and Spain, both of which use the Euro?

June 16, 2010 | John S.

I have questions: Does the chart represents the net income (the money the worker gets on his bank account) or the labour cost (for Europe: inclusing taxes on labour). In that case countries like the Scandinavian countries and Belgium would rank high (because tax on labour cost is high) although their net income wouldn't be higher at all.

June 16, 2010 | Filip Meuris

Hi - This is Andres from FIXR.COM - we made the infographic to illustrate how raw earnings at minimum wage at each country differ as compared to US minimum wage. The infograph ultimately answers one question: how long does it take (under minimum wage) for a person in each country to make $15,080?

We chose to show the differences in years as we benchmarked everything to US annual minimum wage. We could have adjusted minimum wages across countries using purchasing power parity (http://en.wikipedia.org/wiki/Purchasing_power_parity) but we ultimately decided to stick to raw USD equivalences to convey a single idea and illustrate it graphically (although we made a consistency mistake by having areas not be proportional with the figures as Randy rightly pointed out). Illustrating purchasing power under either averages wages or minimum wages is a very interesting idea and it makes great material for a different infographic. Any takers?

Yes, the infograph is not useful to compare purchasing power or cost of living. We believe the infograph is useful from multiple perspectives: it gives a relative idea on the power of saving while working in one country and sending the savings to a different country; it's also useful to understand how labor costs are different across countries (although there can be cost differences potentially up to ~30% range cost to account for taxes, social benefits, health insurance as incurred by employers - as those are different in each country).

Regarding Spain and France having a 6 month difference it is because their respective minimum wages accounts for France having ~1.6 times higher minimum wage than Spain which maps to the 1 yr + 4 months vs. 10 months difference (~1.6) necessary to make $15,080 (or the equivalent in EUR at the exchange rate we used when we did the infograph).

June 17, 2010 | Andres Torrubia

So if a country abolishes minimum wage (which I believe is the right thing to do), the chart would show infinite time to earn that money. Hence the more progressive a country becomes (by reducing minimum wage), the more time it will take to earn a fixed sum of money. So does this graph imply that India is more progressive than US because a higher proportional of population is allowed to work? I don't think so, which makes the graph useless for all practical purposes.

June 18, 2010 | 

Any way you look at it, we are not doing so shabbily. While it is true that Europe has Euros as their general currency, these countries make in 8-10 months what it takes 1 year for us, they also nap at around noon, still, judging by England and Frances' income, does that mean  they are better off? Anyone has any comments? 

René ~stillmind~