Statistics on the minimum wage presented refer, to the extent possible, to the statutory nominal gross monthly minimum wage, effective December 31st of each year. The scope and coverage of statutory minimum wages vary from country to country. In countries where there are regional minimum wages, ILOSTAT includes the minimum wage in place in the capital city (or region), the largest city (or region), or an average of the largest cities (or regions) in order to capture the minimum wage which affects the largest percentage of employees. In countries with sectoral or occupational minimum wages, ILOSTAT presents the minimum wage in place for the sector or occupation which has the greatest employment coverage (if known).
The concept of earnings, as applied in wages statistics, relates to gross remuneration in cash and in kind paid to employees, as a rule at regular intervals, for time worked or work done together with remuneration for time not worked, such as annual vacation, or other type of paid leave or holidays. Earnings exclude employers’ contributions in respect of their employees paid to social security and pension schemes and also the benefits received by employees under these schemes. Earnings also exclude severance and termination pay. Statistics of earnings presented in ILOSTAT refer, to the extent possible, to employees’ gross remuneration, i.e. the total before any deductions are made by the employer in respect of taxes, contributions of employees to social security and pension schemes, life insurance premiums, union dues and other obligations of employees. Earnings include direct wages and salaries, remuneration for time not worked (excluding severance and termination pay), bonuses and gratuities and housing and family allowances paid by the employer directly to the employee.
Unlike the information presented as reported from national sources, the harmonized series on average monthly earnings and monthly minimum wages include only average monthly earnings and monthly minimum wages, respectively, with the following conversions applied:
- Hourly earnings are multiplied by actual weekly hours worked, if available, for each gender for monthly earnings and for both sexes for monthly minimum wages, and then multiplied by 4.33 weeks
- Daily earnings are multiplied by 5 days and 4.33 weeks
- Weekly earnings are multiplied by 4.33 weeks
- Annual earnings are divided by 12 months
Similarly, the harmonized series on average hourly earnings present only average hourly earnings, with the following conversions applied:
- Weekly earnings are divided by actual weekly hours worked for each gender, if available
- Monthly earnings are divided by 4.33 weeks and then by actual weekly hours worked for each gender, if available
- Annual earnings are divided by 52 weeks and then by actual weekly hours worked for each gender, if available
In addition to converting the figures to a consistent time unit, the harmonized series present data converted to a common currency. Local currency units are converted to US dollars using market exchange rates and also using 2011 purchasing power parities (PPPs). PPPs are the rates of currency conversion that equalize the purchasing power of different currencies by eliminating the differences in price levels between countries.
Gender wage gap
The gender wage gap is calculated as the difference between average hourly earnings of men and average hourly earnings of women expressed as a percentage of average hourly earnings of men. This indicator is not adjusted according to individual characteristics that may explain part of the earnings difference.
The low pay rate is an indicator of earnings distribution and refers to the number of employees whose hourly earnings at all jobs were less than two-thirds of the median hourly earnings, calculated as a percentage. There is no international definition for low pay. The female share of low pay earners is the number of females earning low pay divided by the total number of employees earning low pay, calculated as a percentage. This differs from the low pay rate for women which refers to the number of female employees earning low pay as a percentage of all female employees.
Labour cost is the cost incurred by the employer in the employment of labour in a specified reference period. The statistical concept of labour cost comprises remuneration for work performed, payments in respect of time paid for but not worked, bonuses and gratuities, the cost of food, drink and other payments in kind, cost of workers’ housing borne by employers, employers’ social security expenditures, cost to the employer for vocational training, welfare services and miscellaneous items, such as transport of workers, work clothes and recruitment, together with taxes regarded as labour cost.
Labour cost and compensation of employees are closely related concepts, with many common elements. In some cases, where data on labour cost are not available, ILOSTAT presents data on the compensation of employees, a concept defined in the United Nations System of National Accounts as the total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the latter during the accounting period. The compensation of employees has two main components: a) wages and salaries payable in cash or in kind and b) social insurance contributions payable by employers, which include contributions to social security schemes; actual social contributions to other employment-related social insurance schemes and imputed social contributions to other employment-related social insurance schemes. This concept views compensation of employees as a cost to employer, thus compensation equals zero for unpaid work undertaken voluntarily. However, it does not include taxes payable by employers on the wage and salary bill, such as payroll tax.
The harmonized series on average hourly labour cost present only average hourly labour cost, with similar conversions to those of hourly earnings for the time unit and currency.
Labour income share
The labour income share in GDP is the compensation of total employment, on account of labour input provided to production, given as a percentage of GDP. Total employment is comprised of employees and the self-employed. GDP represents the market value of all final goods and services produced during a specific time period (defined as a year for the purposes of this indicator) in a country’s territory. By construction GDP is equivalent to the overall income earned in a country’s territory. Hence the labour income share in GDP describes the share of overall income that accrues to labour.