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Australia’s Minimum Wage Now Highest In The World

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July 16 2019

By Leigh Johnston

Workers on the minimum wage in Australia officially have more purchasing power than those in any other country in the world, according to the Organisation for Economic Co-operation and Development (OECD) figures for 2018 released this week.

The OECD updated its real minimum wage rankings this week to place Australia in the top spot for purchasing power, adjusted for inflation and translated into US dollars.

A 3.5 per cent increase to our minimum wage in July 2018 saw Australia move ahead of Luxembourg to claim the highest minimum wage in the world, adjusted for inflation and purchasing power.

The latest OECD analysis does not take into account another 3.0 per cent increase in July 2019, outstripping inflation, which indicates we’re likely to stay on top of the rankings for this year.

Business groups and employers say the ranking counters union claims that the minimum wage is failing low-paid workers and indicates the Fair Work Commission needs to take a more moderate approach to wage increases.

In Australian dollar terms, our minimum wage increased from $18.93 per hour in 2018, to $19.49 on 1 July this year.

The 2018 OECD data is adjusted for inflation and purchasing power parities (PPPs) to give a figure of $12.14 USD PPP per hour to enable comparisons with other countries.

The OECD data compares minimum wages across 32 countries.

Others in the top 10 include Luxembourg with $11.82, France with $11.49, Germany with $10.87, The Netherlands with $10.44, Belgium with $10.38, New Zealand with $10.07, the UK with $9.64, Ireland with $9.62 and Canada with $9.52.

An infographic of Australia’s minimum wage since 1966 by Employsure shows how far the Australian minimum wage has come: Australian Minimum Wage Infographic.

Founder and Managing Director of workplace relations firm Employsure, Ed Mallett says, “Our small business clients tell us that there’s a lot of pressure, and that is where we can help SMEs prepare and understand what they need to do, to deal with these changes.”

SMEs may initially face an overall increase in the cost of doing business due to higher wage costs and competition for manpower from the larger firms.

“Some of our small business clients are considering reducing costs, increasing prices, reducing staff or reducing operating hours…or a mixed approach to maintain current profitability,” he said, pointing out that the minimum wage, “has a disproportionate impact on small business, because they have fewer variables that they can change to maintain profitability – can they really just add the extra staff cost to the price of your coffee, for example? Would customers accept that?”

According to global measures, Australia also performs average in terms of holiday benefits. According to James Houghton, senior employment relations adviser at Employsure, “Most permanent full-time employees across Australia get at least four weeks of annual leave plus public holidays.”

It sounds fair. But, on the world scale of holiday leave, there are far more generous holiday benefits around the world: Holiday leave around the world.

“Annual leave and public holiday leave are part of the National Employment Standards and an essential part of working life. In addition to the full-time workers’ entitlement of four weeks annual leave, we receive eight national holidays – plus additional days declared by states or territories,” Mr Houghton says.

With approximately 29 days total, that puts Australia at the 73rd spot.

workers in Iran have little to complain about with the greatest number of statutory holiday entitlements and public holidays: one month of annual leave plus 27 public holidays – a total minimum of 53 days. Bahrain and Kuwait enjoy approximately 40 days. Workers in France enjoy a minimum of 36 days and those working in Cyprus, Russia, Romania, and Sweden all receive an approximate minimum of 34 days.

Click to see the full list: Holiday Leave Around the World.