The Best and Worst Countries for Realistic Wage Growth
Are you curious about how your paycheck stacks up globally? We’ve done the maths, uncovering which countries around the world are the best – and worst – when it comes to realistic wage growth.
We’ve analysed wage growth in countries worldwide, comparing salary increases to local inflation to see how much of a pay rise (or cut!) workers are actually receiving. The Netherlands has been discovered as the best country for wages, while those living in Argentina are taking the most significant pay cut.
Here, we’ll break down the figures for the best and worst countries for wage growth, discuss where the UK sits, and explain how you can ensure a pay rise.
Real wage growth in the UK is improving
The UK’s salary growth has overtaken inflation for the first time since October 2021 – but it still falls short when compared to global rates.
The last two years in the UK have seen inflation soar beyond wage increases, resulting in an average £1,604 per worker lost. Calculated over the British workforce, the inflation disparity has meant a combined £53 billion lost in pay rises over the last two years.
The UK currently sits as the 24th worst country on the list. The latest salary increases in the UK are 8.5%, while the inflation rate has recently eased to 6.7% - leading to a ‘real wage growth’ of 1.8%. Despite wages finally outpacing inflation, workers have been losing out for the last two years and still are compared to other countries.
The best countries for wage growth
The top 10 best countries for realistic wage growth are:
| Position | Country | Average 2023 Salary | Salary Growth (%) | Inflation (%) | Real Wage Growth (%) |
|---|---|---|---|---|---|
| 1 | Netherlands | 33,732 | 6.15 | 0.2 | 5.95 |
| 2 | Greece | 8,844 | 7 | 1.6 | 5.4 |
| 3 | Thailand | 5,306 | 5.1 | 0.3 | 4.8 |
| 4 | China | 9,636 | 4.76 | 0.1 | 4.66 |
| 5 | Qatar | 41,721 | 7 | 2.38 | 4.62 |
| 6 | Malaysia | 8,109 | 6 | 2 | 4 |
| 7 | Russia | 5,153 | 9.2 | 5.2 | 4 |
| 8 | Indonesia | 3,243 | 6.1 | 2.28 | 3.82 |
| 9 | Denmark | 34,287 | 4.7 | 0.9 | 3.8 |
| 10 | Poland | 11,934 | 11.9 | 8.2 | 3.7 |
Those living in the Netherlands fared the best, with an average 6.15% salary increase this year compared to just 0.2% inflation, meaning a real wage growth of 5.95%. Greece and Thailand also came out well for realistic wage growth, with both countries' wages increasing significantly above inflation.
The worst countries for wage growth
The 10 worst countries for realistic wage growth are:
| Position | Country | Average 2023 Salary | Salary Growth (%) | Inflation (%) | Real Wage Growth (%) |
|---|---|---|---|---|---|
| 1 | Argentina | 4,210 | 10.8 | 124 | -113.2 |
| 2 | Egypt | 1,454 | 6 | 38 | -32 |
| 3 | Pakistan | 1,590 | 5 | 31.4 | -26.4 |
| 4 | Colombia | 3,450 | 4 | 10.99 | -6.99 |
| 5 | Iceland | 42,053 | 2.8 | 8 | -5.2 |
| 6 | Kenya | 3,426 | 2 | 6.8 | -4.8 |
| 7 | Germany | 29,098 | 0.1 | 4.5 | -4.4 |
| 8 | Sweden | 24,797 | 3.1 | 7.5 | -4.4 |
| 9 | France | 24,003 | 1.9 | 4.9 | -3 |
| 10 | Australia | 31,263 | 3.6 | 6 | -2.4 |
On the other end of the scale, those living in Argentina are experiencing huge financial losses. A real wage growth of -113.2% means workers in Argentina are hit the hardest when it comes to their disposable income.
Some surprising countries made the list: Iceland, known for its high quality of living and with an average take-home salary of £42k, is currently the 5th worst country for realistic wage growth. Due to the negative difference between salary growth and inflation, real wage growth sits at -5.2%.
How to negotiate a pay rise
Although the UK is considered to be improving, workers may not feel this increase instantly, particularly those who have been hit the worst by the cost of living crisis – so it’s still worth workers pushing for pay increases.
HR and business consultant Sue Andrews explains the key to a pay rise is to show your value rather than relying on external reasons, such as the cost of living:
“You need to make an individual case as to why you are worth more to the business based on your personal contribution. Use data, such as salary surveys or adverts for comparable roles and have a figure in mind when you approach your boss.
“Your boss is more likely to take you seriously if you can provide supporting evidence that shows your current salary is below your market value, rather than pulling a figure from thin air or relying on the cost-of-living crisis to make your case.”
In a world where inflation and wage growth are constantly evolving, it’s always worth delving into real wage growth and seeing how your salary, and any pay rises, compare. This helps ensure you’re keeping up with inflation and can negotiate the pay rise you deserve.
Methodology
Salary growth and inflation rates were calculated for 44 countries, with the difference between each measured to create the ‘real wage growth’.
Sources:
- 2023 salary: https://www.lovemoney.com/galleries/79056/what-the-average-person-earns-in-different-countries-around-the-world
- Inflation: https://tradingeconomics.com/country-list/inflation-rate
- Wage growth - https://tradingeconomics.com/country-list/wage-growth
- Austria- https://economy-finance.ec.europa.eu/economic-surveillance-eu-economies/austria/economic-forecast-austria_en
- Bangladesh (via Bangladesh Bureu of Statistics) - https://www.thedailystar.net/business/economy/news/no-respite-workers-wage-growth-stays-behind-inflation-3416621
- Brazil, Malaysia, Mexico, Pakistan - https://www.timedoctor.com/blog/average-salary-in-brazil
- China - https://china.ahk.de/news/news-details/german-companies-in-china-expect-fourth-consecutive-year-of-below-five-percent-wage-growth-labor-market-salary-report-2023-24
- Colombia - https://www.salaryexplorer.com/average-salary-wage-comparison-colombia-c47
- Denmark - https://www.statista.com/statistics/1233084/wage-growth-forecasts-in-the-nordics/
- Egypt, Greece, Kenya, Qatar - https://www.salaryexplorer.com/average-salary-wage-comparison-egypt-c64
- India - https://www.ey.com/en_in/news/2023/03/ecommerce-it-and-professional-services-top-3-sectors-for-salary-increase-projections-in-2023
- Indonesia - https://www.mercer.com/id-id/about/newsroom/companies-in-indonesia-show-steady-recovery
- Luxembourg - https://delano.lu/article/luxembourg-employers-budget-a-
- Saudi Arabia - https://www.thenationalnews.com/business/money/2023/02/02/saudi-arabia-salary-guide-2023-how-much-should-you-be-earning/
- Singapore - https://www.mercer.com/en-sg/about/newsroom/salary-increments-to-surpass-pre-pandemic-levels
- South Africa - https://www.wtwco.com/en-au/insights/2023/09/3-factors-driving-southern-africas-salary-budgets
- South Korea - https://www2.staffingindustry.com/row/Editorial/Daily-News/South-Korea-Majority-of-companies-decided-to-raise-wages-in-2023-64769
- Thailand - https://www.bangkokpost.com/business/general/2459040/inflation-attrition-push-up-salaries
- UAE - https://www.thenationalnews.com/business/money/2023/01/26/uae-salary-guide-2023-how-much-should-you-be-earning/
- UK employment figures -
- https://www.statista.com/statistics/281998/employment-figures-in-the-united-kingdom-uk/
- Money lost calculated on 2023 average salary of £27,924 vs wage growth of 6.6% and inflation rate of 10.1%
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