Minimum Wage in Europe – 2019

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Recently, Eurostat published a survey that compares the minimum wages across different countries in the European Union, including also candidates to become EU members and the USA. In this post, we show the current minimum wages in European Union and we especially compare Poland to other countries.

Currently, 22 out of 28 countries have minimum wages defined by the country’s law. The remaining six are: Denmark, Italy, Cyprus, Austria, Finland, Sweden.

Considerations about the data

Some considerations that are worth making concerning what this data describes:

The data consists in gross monthly wages .

. The amount of hours considered for the monthly wages will vary from country to country, but they usually fall within the range of 39~40 hours per week. Actually, in some cases, the minimum wage is given as an hourly/weekly rate and not as a monthly value. For those cases, Eurostat has considered the following:

For those countries where the national minimum wage is not fixed at a monthly rate (for example, where minimum wages are specified on an hourly or weekly basis) the level of the minimum wage is converted into a monthly rate according to conversion factors supplied by the countries concerned

The values are represented in Euros (€) and the exchange rate used to convert the wages is from December 2018.

and the exchange rate used to convert the wages is from December 2018. The data does not consider any specific age group. It’s the official national minimum wage value defined by law.

In some countries, such as Portugal, a regular employee receives 14 salaries per year. For those cases, Eurostat considered the monthly wage to be equal to 1/14 of the annual salary.

More info about the considerations that were made about the study can be checked directly on Eurotat’s article, in the section “Data Sources”.

Minimum Wages in European Union

This first map exhibits information about the minimum wage in different EU countries converted from the local currencies onto Euros. Following the map, you’ll see the same information expressed as a bar chart.

If you’re on a computer, hover the country to see its minimum wage. If you’re using a smartphone, touch the country and its minimum wage value should show up.

In this first scenario, the minimum wage in Poland is visibly behind the minimum wage in western countries. However, this information cannot be considered complete as the living costs vary significantly between countries.

What I mean by this is that, for example, with EUR 503 in Poland you have better living standards than you’d have in the UK with exactly the same EUR 503.

For that reason, a better way to compare minimum wages is to compensate them by the purchasing power parity, which is our next map.

PPP Minimum Wage in European Union

The second analysis of Eurostat uses PPP index (Purchasing Power Parity) in order to adjust the values of the minimum salaries.

In other words, the values of minimum salaries were corrected in order to compensate for the difference between living costs across the countries. Let’s call this new index as PPP minimum wage index.

In this second case, we can observe that Poland seems to have a better index than countries such as Portugal or Greece. In reality, Poland is very similar to Spain’s index.

With this comparison, it’s possible to have a better idea of the living standards in Poland in comparison with other European countries.

Of course, it does not take into account all aspects of living standards but at least you can tell that people that earn the minimum wage in Poland have a greater purchasing power than a person earning minimum wage in Greece or Portugal.

PPP Minimum Wage Growth from 2009 to 2019

Another important factor to mention is that the quality of life in Poland has improved significantly in the past years. This is evident if you analyse the map below that show the % growth of PPP minimum wage index between 2009 and 2019.

Here, you can see that Germany has no data. It is due to the fact that they did not have a minimum salary by 2009.

Note that countries that improved the most are the Eastern European countries. Poland increased their index by 80.9%!

Noticeably, Greece is the only country of EU where the PPP minimum wage has decreased in the past 10 years.

Minimum Wage in Poland From 1999 to 2019

Over the last 20 years, the minimum wage in Poland has increased considerably. The minimum wage in Poland in 1999 was 650 zloty, while now in 2019 it’s equal to 2250 zloty. This represents an increase of almost 250%. Moreover, the average annual increase in the minimum wage during this period was equal to 6.41%.

The minimum wage in Poland along the years is shown in the line graph below.

Forecast of the Minimum Wage in Poland

As mentioned previously, 6.41% was the average annual increase of the minimum wage in Poland from 1999 to 2019. Using this value, it’s possible to roughly forecast the minimum wage for the future years.

This analysis is just to serve as an indication about the living standards in Poland. In addition to that, we cannot forget about such factors as constant economic growth for the past 20 years, low inflation levels as well as low unemployment rates.

On the other hand, many Polish people have left the country and flew to the west (which affects positively the unemployment rates in Poland).

All in all, it reflects the general trend of improving living standards since the fall of the Soviet Union.

Another aspect that can be analysed is the unemployment rate in European Union, for which we have also written an article.