Minimum Wage Policies in the Developing World

Minimum wage protection is a potential instrument through which policymakers can reduce poverty, provide basic social protection, and, consequently, help to reduce health inequalities. However, many of the world’s low- and middle-income countries (LMICs) either do not provide such protection, or have established minimum wage levels that do not ensure a sufficient buffer against poverty. Using data drawn from MACHEquity’s policy databases, which feature longitudinal information on minimum wage policies dating back to 1999 in 121 LMICs, we’ve examined the current state of minimum wage policies around the world and policy changes over time.

Minimum Wage
Countries with No Established Min. Wage (2013)
BurundiCape Verde
Central African RepublicDjibouti
EgyptEritrea
EthiopiaMaldives
NamibiaQatar
São Tomé and PríncipeSomalia
SurinameUnited Arab Emirates
Yemen
Min. Wage Abolished after 1999

No Minimum Wage in 15 Countries


In 2013, 15 countries included in our sample of 121 LMICs had not established minimum wage protection. While this represents an overall decrease from the 21 countries that did not provide minimum wage protection in 1999, there were three countries (Burundi, Djibouti, and Ethiopia) in which minimum wage protection was abolished between 1999 and 2013.

uganda

Among those countries that do have an established minimum wage, Oman provided the highest minimum wage, at $1679 per month, while the lowest was that of Uganda, where the minimum wage is set at less than $6 per month.

* For comparability, all minimum wages shown here have been adjusted for purchasing power parity (PPP).

oman
mean_mw

In 2013, the average minimum wage among those countries providing minimum wage protection was $338 per month, or $11 per day. On average, the highest minimum wage levels were found in the Middle East and North Africa ($599), whereas the lowest were among the countries of sub-Saharan Africa ($189).

Mean Min. Wage, by Region (PPP$, 2013)
Sub-Saharan Africa189.28
South Asia245.54
East Asia and Pacific326.00
Europe & Central Asia337.97
Americas426.75
Middle East & North Africa599.14

Minimum Wages on the Rise...


11% of those countries that had established minimum wage protection, in 2013, provided a minimum wage of less than $4 a day, while 45% had set the minimum wage at more than $10 per day. This represented an improvement over the minimum wage rates in place in 1999, during which the minimum wage in 35% of countries was set at less than $4 a day, and only 20% of countries had established a minimum wage of more than $10 a day.

Daily Minimum Wage
Minimum Wage, 1999-2013 (PPP$)
Country19992013Change
Angola372.41182.97-189.45
Sierra Leone52.5611.54-41.02
Cote d’Ivoire179.46146.71-32.76
St. Lucia122.19107.03-15.17
Liberia94.9479.83-15.11
Senegal162.60155.26-7.34
Uganda11.855.72-6.13

... But Not Everywhere


However, not all countries saw improvements in minimum wages between 1999 and 2013. In seven countries, minimum wages (adjusted for purchasing power) had actually decreased over the period. If country-specific inflation factors are considered, a total of 25 countries (or 29% of the countries for which this data is available) experienced negative real growth in the minimum wage. In terms of purchasing power, minimum wage workers in these 25 countries actually earned less in 2013 than they would have fourteen years earlier.

MW/GDP Growth, By Income Group
MW/GDP Growth, By Region

... And Not on Pace with Economic Growth


In many countries, minimum wages have proven an insufficient defense against working poverty, largely because established minimum wages have not been adequately adjusted to reflect changing economic conditions. In particular, among those seven countries that experienced decreases in purchasing power-adjusted minimum wages between 1999 and 2013, five (St. Lucia, Uganda, Sierra Leone, Senegal, and Cote d’Ivoire) had made no change to their minimum wages during the entire fourteen-year period.


Although all other countries for which data is available did increase minimum wages between 1999 and 2013, only 36 countries increased minimum wages by an increment that equalled or exceeded the proportional growth of GDP per capita over the same period. Minimum wage growth lagged behind GDP growth in all income groupings – the biggest disparity being found among low income countries, and in all geographic groupings except for the Americas and Europe and Central Asia ; minimum wage growth most notably lagged GDP per capita growth in sub-Saharan Africa.

About the Data


In order to better understand the current state of minimum wage policies around the world, how these policies have changed over time, and the effects of these changes, the MACHEquity team at McGill University has collected longitudinal data on minimum wage, and several other policy areas, dating back to 1999 in most low- and middle-income countries in the world. These data have now been made available for public use through the recently launched MACHEquity Data Dashboards, an interactive data visualization tool which enables users to explore analyze, and download the data contained within MACHEquity’s longitudinal policy databases, alongside supplementary data drawn from the World Bank's World Development Indicators (WDI) database.



All of the data used in this post, and more, are included in the MACHEquity Minimum Wage Data Dashboards. To begin exploring the Data Dashboards for yourself, please click here, or select from the options in the menu below.