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International differences in low-paid work
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By Sébastien LaRochelle-Côté and Claude Dionne
With nearly a quarter of full-year, full-time workers earning less than two-thirds of the median, Canada's proportion of low-paid workers is comparable to that of other nations commonly cited as having a flexible labour market—including the United States and the United Kingdom.
Countries with lower levels of low pay are typically characterized as having more regulated labour markets. These countries include the Scandinavian countries with levels in the 6% to 11% range and other countries in continental Europe with low-pay rates varying from 13% to 16%.
Australia has a low-pay rate more in the European mould, even though it has many social and economic characteristics similar to Canada's. A detailed examination shows that pay-setting processes and minimum-wage conditions likely explain at least some of the Canada-Australia difference in low-paid work.
