BHP Billiton Limited (ADR) (BHP), Rio Tinto plc (ADR) (RIO): Five Great Countries for Minimum-Wage Workers

Australia, $15.40 an hour
Australia pays full-time adults 15.96 Australian dollars an hour. But there are a wide variety of sub-categories in the minimum-wage laws. For instance, workers under 16 can get paid as little as A$5.87 an hour, with a sliding scale for those ages 16 to 20 that goes from A$7.55 to A$15.59. In addition, apprenticeships have special amounts, ranging from A$10.22 in the first year to A$17.65 in the fourth year.

What national minimum wages mean for investors
It’s important to realize that minimum-wage laws affect companies only to the extent of their operations in their home countries. For instance, in Australia, mining giants BHP Billiton Limited (ADR) (NYSE:BHP) and Rio Tinto plc (ADR) (NYSE:RIO) have to follow minimum-wage laws for their Australian operations, but elsewhere around the world, both companies have faced labor disputes over pay levels that in some cases are much lower than what Australian law would require domestically. Moreover, even as Eaton Corporation, PLC Ordinary Shares (NYSE:ETN), Actavis Inc (NYSE:ACT) , and other companies have moved or are in the process of moving their corporate headquarters to Ireland, you shouldn’t expect a huge shift of employees that would require higher pay.

In addition, wages are only part of the labor cost that companies bear. With countries having different tax rates and social programs and requiring different levels of benefits, you have to look at the entire labor-cost picture to get a true sense of what businesses pay on behalf of their employees.

Nevertheless, in terms of competitiveness, labor costs are a key component of profitability. With every dollar that workers receive taking a dollar of profits away from the bottom line, companies will inexorably seek out places where productivity-adjusted wages are as low as they can find. That makes national minimum-wage legislation an important aspect of preventing a race to the bottom for wage rates worldwide.

The article 5 Great Countries for Minimum-Wage Workers originally appeared on Fool.com is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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