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Think tank: Centre for Cities
Author(s): Maxwell Read
August 25, 2026
This report from UK think tank Centre for Cities explores how other G7 countries address geography in minimum wage policy.
The UK has one of the highest minimum wages in the OECD. The National Living Wage is now £12.71 an hour, meeting the Government’s target of two-thirds of median national earnings.
In previous research we showed that the ‘local bite’ – the national minimum wages’ fraction of local wages – of this national minimum ranges from just over 50 per cent of median earnings in Reading to more than 80 per cent of local median earnings in Doncaster. This briefing looks at how other G7 countries address geography in minimum wage policy and what the UK can learn from them.
Across the G7, minimum wage systems vary considerably. France, like the UK, operates a largely uniform national minimum wage. Italy and Germany both rely more heavily on collective bargaining to set wage floors, with the latter allowing a degree of geographic variation in rates.
The three remaining G7 nations – the US, Canada, and Japan – have wages that vary within the country. Japan is the only G7 country that has designed its minimum wage to vary according to local labour markets.
