5 developed countries without a national minimum wage
Interestingly, some highly developed countries operate without a national minimum wage
In the United States, employers covered by the Fair Labor Standards Act (FLSA) are required to pay a federal minimum wage of $7.25 per hour as of 2025.
However, individual states can set higher minimum wages, and many do. On January 1, 2025, twenty-one states implemented minimum wage increases, with ten of them—plus Washington, D.C.—raising their minimum wages to $15 per hour or more.
While the U.S. maintains a federally mandated minimum wage, critics argue that such regulations can discourage businesses from hiring, as wages should be determined by market forces.
Interestingly, some highly developed countries operate without a national minimum wage, instead relying on collective bargaining agreements to set industry-specific pay standards.
1. Sweden
Sweden does not enforce a nationwide minimum wage, instead following the Nordic model, where wages are determined through sectoral agreements between trade unions and employer organizations.
Approximately 90% of Swedish workers are part of trade unions, which negotiate wages, overtime pay, and working conditions.
Despite the absence of a legal minimum wage, Swedish labor laws ensure worker protection, including a 40-hour workweek, 25 vacation days annually, and 13 public holidays.
2. Denmark
Denmark also lacks a statutory minimum wage, with wages negotiated through collective agreements between trade unions and employers. This system fosters harmonious labor relations and ensures fair compensation across industries.
In some cases, wages are determined by factors such as performance-based pay or piece-rate work, meaning earnings can vary by role and sector. However, Danish workers generally benefit from stable employment conditions and strong labor protections.
3. Iceland
Iceland is known for its high quality of life, strong labor rights, and a workforce where almost all employees are unionized. Rather than setting a legal minimum wage, unions negotiate baseline salaries for each industry, ensuring fair pay standards.
Icelandic workers enjoy comprehensive benefits, including high wages relative to living costs, extensive social protections, and strong job security.
4. Norway
Norway follows a similar model, relying on industry-specific agreements instead of a nationwide minimum wage. Wages vary by sector, experience level, and age, but most workers receive fair compensation through collective bargaining.
Norwegian workers typically earn fixed monthly salaries, while unskilled laborers are often paid hourly wages. On average, Norwegian employees earn around $55,780 per year, reflecting the country’s high living standards and strong labor protections.
5. Switzerland
Switzerland does not enforce a national minimum wage, though wages remain among the highest globally. Certain industries set minimum pay standards through collective and standard employment agreements negotiated by unions and employers’ associations.
Workers in sectors covered by these agreements cannot be paid below the stipulated minimum wage. As a result, despite the lack of a federal wage law, Swiss employees generally receive competitive salaries and enjoy a high standard of living.
Vanguard News
