The OECD considers that before the escalation of the current inflation it is necessary to favor the increases of the minimum salary to cushion the blow for the most vulnerable families, and accompany this with other social benefits and mechanisms or bonuses to compensate for the increase in energy prices.
(Read: ‘Outrageous that our salary reaches 38 million’: congressman).
“Although heightened uncertainty and a significant slowdown in economic growth may suggest caution in raising minimum wages, several countries have room to go beyond current minimum wage levels and protect, at least partially, the most vulnerable workers in the workforce. rising prices“he points out.
In a report dedicated to the minimum wage in these times of inflation, published this Friday, the Organization for Economic Cooperation and Development (Oecd) does not say which countries are, but it does give some indirect clues.
One of them is to compare it in relative terms -in each of the 30 countries of its 38 members in which there is a national minimum wage- cwith the median salary, that is, with the remuneration below which 50% of the workers are and above the other 50%.
(In addition: Companies would readjust their budgets due to the rise in the minimum wage).
On average, in the OECD the minimum wage represents 55% of the median, although this figure varies greatly, of more than 70% in Colombia (92%), Costa Rica (81%), Chile (72%) and Turkey (70%), to only 29% in the United States. Spain is below the average, with 48%, a percentage that has risen notably since 2005 (it was then 37%), but which is still lower than that of other large European countries such as Germany (51%), the United Kingdom Kingdom (57%) or France (61%).
The study authors also analyze the loss in purchasing power of the minimum wage in a dozen member countries between the end of 2020 and September 2022. The drop in real terms is particularly strong (more than 10%) in the United States, where there has been no revaluation in those seven quarters, and in the Netherlands. The loss of purchasing power is greater than 5% in Spain (the 5.3% increase in the minimum wage in January has not made it possible to offset the impact of inflation) and in Poland, while it is between 0 and 5% in Germany, Greece, the United Kingdom and Japan.
Faced with that, the purchasing power of the minimum wage in Australia has been maintained and has increased between 0 and 5% in Belgium, France and, above all in Chile, where the minimum wage has had three increases in the period studied (3.2% in May 2021, 12.8% in May 2022 and 5.3% in August 2022).
The OECD emphasizes that, in the current context of record inflation in the last four decades that “disproportionately” affects the least well off, “minimum wages can become an even more important tool to protect the living standards of low-wage workers“.
(Keep reading: Is work at risk with the minimum wage hike?).
But it also points out that, beyond the increase in the minimum wage, it is necessary to use other mechanisms to protect the income of the most vulnerable, such as “specific and temporary” energy bonuses or “help for active workers”.
EFE
