Low Pay in Europe and the USA. Evidence from Harmonised Data

This paper calculates the extent of low pay in Britain, Germany, Luxembourg Spain and the USA using a newly harmonised data set, PACO, and the European household panel study for Spain. The data are all based on nationally representative household panel studies from each country. The paper adopts an hourly definition of low pay based on being paid less per hour than 66 per cent of the male median hourly earnings. We examine the extent to which countries' systems of collective bargaining and minimum wage regimes help to explain the differences between their distributions of low paid by industry, size of firm, occupation, type of contract, and public-private sector, all with a gender dimension. At one level, the findings support the proposition that strong collective bargaining regimes and minimum wages help to reduce the percentage of low paid workers. However, the benefits of such bargaining did not extend to women and especially part-time women employees as much as they did to male employees.