Glossary
Key minimum wage concepts and terminology.
- Minimum WageThe lowest hourly, daily, or monthly wage that employers may legally pay workers, set by national or subnational law.
- National Living WageA higher minimum wage tier set to cover basic living costs, used in the UK for workers age 21 and older.
- Tipped Minimum WageA lower minimum wage floor for workers who regularly receive tips, with employers required to make up the difference if tips fall short.
- Purchasing Power ParityAn economic metric that adjusts wages or GDP between countries to reflect what the money can actually buy locally.
- Sectoral WageA wage floor set separately for a specific industry through collective bargaining, used in countries without a statutory national minimum.
- Wage IndexationAn automatic mechanism that adjusts minimum wage to inflation, productivity, or median wage growth without requiring new legislation.