Average wage
Table 7.5 reports the OECD’s full-time average wage (AW) levels for the year 2022. The wage earnings are defined as gross wages before deductions of any kind (including personal income taxes and social security contributions), but including overtime pay and other cash supplements paid to employees.
Average wages are displayed in national currencies and in US dollars (both at market exchange rates and at purchasing power parities, PPP). The PPP exchange rate adjusts for the fact that the purchasing power of a dollar varies between countries: it allows for differences in the price of a basket of goods and services between countries.
Wage earnings across the OECD countries averaged USD 41 261 in 2022 at market exchange rates. Switzerland has the highest level at USD 103 142. This is over 23 times the level recorded in Colombia, at USD 4 443, and nearly 15 times that of Mexico at USD 6 962.
At PPP, wages averaged USD 52 884. Switzerland’s levels remain the highest amongst OECD countries, at USD 93 620, with, Luxembourg, Iceland and Belgium next at USD 83 143, USD 76 768 and USD 76 416 respectively. Mexico is the lowest, at USD 13 503, followed by Colombia at USD 13 593. The higher figure for PPP wages suggests that many OECD countries’ exchange rates with the US Dollar were lower than the rate that would equalise the cost of a standard basket of goods and services.
Average wages for the other major economies have been sourced from the latest ILO Global Wage Report (ILO, 2022). The wages range from a low of USD 2 481 in Indonesia to a high of USD 21 069 in Saudi Arabia, at market exchange rates.
Between 2021 and 2022 nominal wages increased in every country, and by an average of 7.0% in the OECD on average (Figure 7.5). This is about 4 percentage points below average CPI inflation, which ranges from 2.5% in Japan to 72% in Türkiye. This means that wages fell in real terms except in Colombia and Hungary while average real wages were basically flat in France, Luxembourg, New Zealand, Poland and Switzerland.
Definition and measurement
The “average worker” earnings series (AW), defined as the average full-time adult gross wage earnings, was adopted from the second edition of Pensions at a Glance (OECD, 2007). This concept is broader than the previous benchmark of the “average manual production worker” (APW) because it covers more economic sectors and includes both manual and non-manual workers. The new AW measure was introduced in the OECD report Taxing Wages and also serves as benchmark for Benefits and Wages. The third edition of Pensions at a Glance (OECD, 2009) also included a comparison of replacement rates under the old and new measures of earnings for eight countries where the results were significantly different.
Further reading
ILO (2022), Global wage report 2022-23 : the impact of inflation and COVID-19 on wages and purchasing power, International Labour Organization, https://doi.org/10.54394/zlfg5119.
OECD (2023), Purchasing Power Parities - Frequently Asked Questions (FAQs), OECD, Paris, https://www.oecd.org/sdd/prices-ppp/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm.
OECD (2023), Taxing Wages 2023: Indexation of Labour Taxation and Benefits in OECD Countries, OECD Publishing, Paris, https://doi.org/10.1787/8c99fa4d-en.
OECD (2009), Pensions at a Glance 2009: Retirement-Income Systems in OECD Countries, OECD Publishing, Paris, https://doi.org/10.1787/pension_glance-2009-en.
Source: OECD (2023), Taxing Wages 2023, https://doi.org/10.1787/8c99fa4d-en. Consumer prices annual inflation sourced from OECD.Stat.