Countries without a minimum wage (and how they set pay instead)

If a national minimum wage were the only thing standing between workers and destitution, Denmark should be a grim place to work. It isn't. Neither is Sweden, Norway, Finland, Iceland, Austria or Switzerland. None of them has a single wage floor written into national law, and all of them rank near the top of the world on pay and living standards.

For minimum-wage skeptics, that is a tempting place to stop. We'd rather not. These countries do have wage floors. They just don't come from a legislature, and where they come from decides what an American reformer can borrow.

The short answer

According to Eurostat, 22 of the 27 EU member states had a national minimum wage as of July 2026. The five that do not are Denmark, Italy, Austria, Finland and Sweden. Outside the EU, Norway, Iceland and Switzerland have no national statutory floor either. Neither does Singapore. Its Ministry of Manpower says plainly that "there is no minimum wage or salary in Singapore."

In the European cases, pay floors are set by collective agreements between unions and employer associations, sector by sector. In Singapore, the government sets mandatory wage ladders for specific low-wage occupations and tops up low earnings with a wage supplement. The table below summarizes each system.

The Nordics: wage floors without wage laws

Denmark is the purest case. The Danish Working Environment Authority describes "a division of responsibility between the Danish state and the labour market parties" and states flatly that there is no statutory minimum wage. Pay is set in agreements between unions and employer associations. Those agreements are private contracts that bind the parties who sign them, and coverage depends on how organized each side is: about 81% overall, but closer to 72% in the private sector. Many Danish agreements don't even contain a number. One in four full-time employees in the main private-sector bargaining area works under a "figureless" agreement that sets only a process for negotiating pay locally, with no minimum rate at all.

Sweden works the same way. A 2025 country profile co-written by the Swedish National Mediation Office notes that Sweden has neither a statutory minimum wage "or any possibility of declaring collective agreements universally valid." About 300 of the country's 620 sectoral agreements contain specific minimum rates, mostly for blue-collar jobs. The authors put it directly: "the Swedish alternative to an extension mechanism is the permissibility of strikes (including sympathy strikes)" against employers who refuse to sign.

That alternative has limits, and 2026 showed them. In October 2023 the metalworkers' union IF Metall struck Tesla's Swedish service workshops to force a collective agreement. On 13 August 2026 the union announced it would call off all action from 19 August, because Tesla had bought out every striking member. Tesla never signed. The Swedish model is voluntary at its core, and a determined employer with willing employees can stay outside it.

Norway adds a legal backstop. It has no statutory minimum wage, but a public Tariff Board can declare parts of a collective agreement generally applicable to a whole sector. As of October 2026, the Norwegian Labour Inspection Authority lists legally binding minimum rates in nine sectors: construction, electricians, road freight, agriculture and horticulture, hospitality, tour-bus transport, cleaning, maritime construction, and, since June 2026, the automotive industry. (A tenth, fish processing, was repealed in August 2026.) Cleaning, for example, carries a floor of NOK 236.54 an hour for adults, with a lower NOK 185.55 rate for workers under 18. Everywhere else, Norway has no wage floor at all beyond what agreements or contracts say.

Finland goes further. Collective agreements judged representative of their sector can be confirmed as "generally applicable" by a committee under the Ministry of Social Affairs and Health. Once confirmed, an agreement binds every employer in the field, members or not. Finland has no minimum wage law, but in practice most of its private sector works under legally binding, sector-specific minimums.

Iceland goes furthest of all. Under Act No. 55/1980, the terms of a collective agreement are legal minimum terms for everyone in its occupational and geographic area. In the words of the Icelandic Confederation of Labour's legal guide, agreements are "automatically binding for all workers and employers." Union density is around 91%, the highest of any country in our table. Iceland has no minimum wage law, but it has dozens of minimum wages, and every one of them binds.

Italy and Austria: near-universal coverage

Italy has no statutory minimum wage. Article 36 of its constitution guarantees pay "proportionate" to the work, and Italian courts have long enforced that right by pointing to the national sectoral agreements (CCNL). Bargaining coverage is close to 100% on OECD figures. In 2023 the governing majority set aside an opposition bill for a €9 hourly minimum and ruled out a single national rate. Instead, Parliament passed Law 144/2025, which told the government to tie minimum pay to the most widely applied agreement in each sector. The government let that delegation lapse in April 2026 and put the idea into Decree-Law 62/2026, the "fair wage" decree, which Parliament converted into law in June 2026. It sets no hourly number. It requires employers to pay at least the total compensation of the leading agreement for their activity. In effect, Italy has a legally anchored minimum wage that unions and employers write.

Austria's Social Ministry says there is "no statutory minimum wage in Austria," and that around 95% of employees are covered by more than 800 collective agreements (the OECD puts it at 98%). The reason for such high coverage is institutional, not cultural. Membership in the Austrian Economic Chamber is "compulsory, as laid down by law," and the chamber negotiates collective agreements. Every member firm is therefore bound. In 2017 the government told the social partners to deliver a €1,500 monthly floor across all sectors or it would legislate one. They delivered. Today the ministry reports that most agreements set minimums of at least €1,700 gross, paid 14 times a year.

Switzerland: no federal floor, a growing cantonal patchwork

In May 2014, Swiss voters rejected a national minimum wage of 22 francs an hour (4,000 a month) by 2,210,192 votes to 687,571. That is about 76% against, and every canton voted no. Switzerland still has no federal minimum.

Several cantons have adopted their own. Geneva's, adopted in 2020, is 24.59 francs an hour in 2026 and is indexed each year to local prices. Neuchâtel's is 21.35 francs, and Basel-Stadt's is 22.20, though Basel's law steps aside wherever an extended industry agreement applies. Jura and Ticino also have cantonal minimums. Outside those cantons, floors come from collective agreements, some of which the federal government extends to an entire industry.

Those two systems are now in direct conflict. On 19 June 2026, the federal parliament revised the law on extending collective agreements so that minimum-wage clauses in an extended national agreement override cantonal minimums. The Federal Council had opposed the change, and a grandfather clause protects Geneva's and Neuchâtel's existing regimes. On 7 October 2026, unions and left parties submitted more than 100,000 signatures for a referendum. Once they are certified, Swiss voters will decide, probably in 2027.

Singapore: a wage ladder plus a wage top-up

Singapore is the one case on this list that doesn't rest on strong unions. The Ministry of Manpower says pay "is subject to negotiation and mutual agreement between an employer and an employee," and there is no general minimum wage. The state intervenes in two narrower ways.

The first is the Progressive Wage Model (PWM): sector-specific wage ladders tied to training and job grade. Tripartite committees of the government, unions and employers design them. PWM covers cleaning, security, landscape maintenance, lifts and escalators, retail, food services, waste management, and administrators and drivers, and it reaches more than 150,000 workers. It is not voluntary. In cleaning, compliance is a condition of the business licence. An entry-level indoor cleaner must earn at least S$2,080 a month from July 2026, rising each year to S$2,420 in 2028. Separately, any firm that hires foreign workers must pay its local staff at least the Local Qualifying Salary, now S$1,800 a month.

The second is Workfare, a wage supplement much like the American EITC. It pays cash and retirement-account top-ups to lower-wage Singaporeans, up to S$4,900 a year for older workers and people with disabilities. Targeted floors plus a public top-up is the closest thing on this list to the approach we argue for in the minimum wage versus the EITC. It is still not a free market: the PWM floors are government mandates.

The EU directive and the court

In 2022 the EU adopted Directive 2022/2041 on adequate minimum wages. It does not require any country to introduce a statutory minimum where "wage formation is ensured exclusively via collective agreements," which is the Nordic and Italian carve-out. It does push hard on bargaining. Any member state where collective bargaining coverage is below 80% must adopt an action plan to raise it. For countries that do have a statutory minimum, it cites 60% of the gross median wage and 50% of the gross average wage as common reference values.

Denmark, supported by Sweden, asked the EU Court of Justice to annul the whole directive. The Nordic worry was that Brussels had no business near wage-setting at all. On 11 November 2025, the Grand Chamber ruled in Case C-19/23. It annulled Article 5(2), which listed the criteria countries must use when setting statutory minimum wages, along with the clause in Article 5(3) barring indexation from ever lowering a minimum wage. It dismissed the rest of the action. The 80% bargaining target and the transparency rules survive. The court drew the line at "direct interference" in setting pay. Brussels may promote bargaining, but it may not tell governments how to calculate their minimum wage.

The honest part: this is not a free-market model

It would be easy, and wrong, to hold up Denmark and say "see, no minimum wage, and they're fine." Look at the coverage column in the table. Collective agreements cover between 72% and 100% of employees in every European country on this list except Switzerland. In the United States the figure is 11%. Iceland's union density is roughly nine times America's. Austria gets near-universal coverage through compulsory employer membership in a chamber that bargains on their behalf. Norway, Finland and Iceland use the force of law to extend private agreements to firms that never signed them. Italy now writes agreement rates into statute.

These are not countries without wage floors. They are countries where the wage floor is set by organized labor and organized employers, not by a legislature. The negotiated floors can be high: Sweden's mediation office found that under 1% of employees earned less than 60% of the median wage in 2018. Anyone who opposes the minimum wage because they oppose any interference in wage-setting will not find a utopia here. Nor will anyone who believes high floors always destroy jobs. How much these floors cost low-skill workers is genuinely contested.

The actual lesson

So what does the comparison teach? Not that wage floors are unnecessary. What it teaches is narrower, and more important for American policy: no rich country that does without a statutory minimum relies on a single national number. Every system on this list sets floors that are:

• Differentiated. Floors vary by sector, occupation, skill grade and often age. Norway's cleaning floor has a separate under-18 rate. Singapore's ladders rise with training. Sweden sets lowest wages only where the parties think they're needed. A uniform national rate is the design these countries rejected.
• Set by people who bear the cost. Employers who will pay the wage sit at the table with workers who will earn it, sector by sector. If a floor would price out the least experienced workers in that trade, someone in the room is in a position to know.
• Adjustable without an election. Agreements are renegotiated every few years. Swiss voters, offered a single national floor, said no by three to one. Even in Switzerland, the cantonal minimums are local, not national.
• Paired with public income support. Singapore's Workfare is the cleanest example. Low pay is topped up by taxpayers, not only pushed up by mandate.

The US cannot import Nordic union density, and most American free-marketeers wouldn't want to. But it can take the structural lesson. If the goal is to raise the incomes of low-wage workers without closing the first rung of the job ladder, the international evidence points away from one federal number and toward floors that bend to local and sector conditions, plus a wage subsidy like the EITC that does the redistributive work. Where employers genuinely hold wage-setting power, the monopsony argument is strongest, and what these countries rely on there is countervailing bargaining power, not a statute.

Countries without a minimum wage don't prove that markets alone set fair pay. They show that a single legislated price for an hour of labor is an unusual and blunt tool, even among governments that care a great deal about low-wage workers.