Figure 21 shows that in emerging economies the variance seems to be greater, between relatively low minimum wages in Viet Nam or Mexico and much higher ratios in the Philippines or Indonesia. In Peru, India, Brazil and Costa Rica minimum wages range between 68 and 82 per cent of median wages. It has been observed previously that some emerging economies have a significantly higher degree of wage and income inequality than some advanced economies. In emerging economies the wage distribution is often characterized by a compressed distribution up to the median (meaning that the wage of the median earner is
28 Global Wage Report 2016/17 U Ratio Figure 20 Minimum wages relative to median and mean wages, selected European countries 0.25 0.50 0.75 Estonia Czech Republic Latvia Netherlands Spain nited Kingdom Luxembourg Malta Bulgaria Ireland Slovakia Belgium Lithuania Croatia Portugal Greece Poland Slovenia Hungary Romania France Minimum to median (2013) Minimum to mean (2013) 0 Ratio Note: Countries are ranked from lowest to highest ratio of minimum wages to mean wages. Source: ILO estimates based on EU-SILC data. Figure 21 Minimum wages relative to mean and median wages, selected emerging economies 0.4 0.8 1.2 Viet Nam (2011) Mexico (2010) Mali (2010) Peru (2010) India (2009–10) Brazil (2009) Costa Rica (2011) Philippines (2009) Indonesia (2009) Minimum to mean Minimum to median 0 Source: Rani et al., 2013. often quite low) and a very long upper tail where top earners earn much more than the median wage earner. This may perhaps explain why in some emerging economies there are higher minimum-to-median wage ratios than in developed economies. Yet, because there is more inequality in those countries, the ratio of minimum to mean wages is closer to those found in developed countries. Note that figure 21 uses information on multiple minimum wage rates where they exist. So, for example, the estimate for Brazil uses not only the federal minimum wage
29 2CTV + 5 Wage inequality and minimum wages Figure 22 Convergence of minimum wages among higher-income countries 0 150 300 450 600 750 900 –150 0 300 600 900 1200 1500 1800 Korea, Rep. of J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J Australia Belgium Canada Chile Croatia Czech Republic Estonia France Greece Hungary Ireland Israel Japan Latvia Lithuania Luxembourg Malta Netherlands New Zealand Poland Portugal Russian Federation Slovakia Slovenia Spain United Kingdom United States Uruguay Venezuela, Bolivarian Republic of Minimum wage growth, 2000–15 (%) Minimum wage level (US$PPP) in 2000 Source: ILO Global Wage Database; World Bank (for PPP conversion factor). but also the state-level minimum wages where they are set at a level that exceeds the federal floor. In the case of Indonesia, provincial rates are taken into account. Looking at changes over time, figure 22 shows that among higher-income countries there has been some trend towards more convergence in the levels of minimum wages, as measured in US$PPP. We see that countries with lower minimum wages in 2000 have implemented the largest increases on average
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