In North America, the correlation between economic strength and minimum wage is strong. Only two countries on the continent have an annual minimum wage of over 15,000 international dollars, Canada and the United States. All other countries' annual minimum wage is below 9,000 international dollars.
Findings
- The correlation coefficient between per capita Gross Domestic Product (GDP) in Purchasing Power Parity (PPP) and minimum wage in North America is 0.83.
- As economic strength increases in North America, the minimum wage also increases.
- Haiti has both the lowest minimum wages on the continent as well as the smallest per capita GDP PPP.
- The United States has the largest per capita GDP PPP but the second highest minimum wage on the continent.
- Canada on the other hand, has the highest minimum wage but only the second largest per capita GDP PPP.
Caveats
- As always, correlation does not imply causation.
- Cuba, Grenada, Saint Lucia, Anguilla, Aruba, Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Curaçao, Greenland, Guadeloupe, Martinique, Montserrat, Puerto Rico, Saint Martin, Saint Pierre and Miquelon, Sint Maarten, Turks and Caicos Islands, and the US Virgin Islands were missing data.
- Minimum wages sometimes vary by profession and other variables.
Details
There are several countries that have similar minimum wages but have large differences in their per capita GDP PPP. Honduras, Jamaica, and Dominica all have annual minimum wages in the low to mid 4,000 international dollar range but their per capita GDP PPP ranges from 5,271 to 11,375 international dollars.
Conversely, some countries have a per capita GDP PPP that is relatively similar with very different minimum wages. For instance, El Salvador, Jamaica, Belize, and Guatemala have a per capita GDP PPP that ranges from just below 8,000 to just below 9,000 international dollars but have minimum wages that range from 2,194 to 7,197 international dollars.
Per capita GDP PPP as a multiple of minimum wage, ranges from 1.10 in Guatemala to 8.54 in the Dominican Republic.
Country Codes
| Code | Country |
|---|---|
| AG | Antigua and Barbuda |
| BB | Barbados |
| BZ | Belize |
| CA | Canada |
| CR | Costa Rica |
| DM | Dominica |
| DO | Dominican Republic |
| GT | Guatemala |
| HN | Honduras |
| HT | Haiti |
| JM | Jamaica |
| KN | Saint Kitts and Nevis |
| MX | Mexico |
| NI | Nicaragua |
| PA | Panama |
| SV | El Salvador |
| TT | Trinidad and Tobago |
| US | United States |
| VC | Saint Vincent and the Grenadines |
Sources
US Department of State. 2017. "Country Reports on Human Rights Practices for 2016." Accessed September 2, 2017. https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm#wrapper.