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By Stephen Herzenberg, Third and State
The Australian minimum wage this year is $15.96 per hour. I know this mostly because my daughter lives in Melbourne these days (not forever, I hope). When she arrived there 18 months ago, she got a job at a minimum-wage restaurant. She earned enough to cover her rent and other expenses.
What brought the idea of a much higher minimum wage to mind is a blog post from Dean Baker of the Center for Economic Policy Research. Dean estimates that the U.S. minimum wage today would be $16.54 per hour if it had kept pace with U.S. productivity growth since 1947.
For those with knowledge of economic history (both of us), a minimum wage that increases its buying power every year does not seem far fetched, even in the good old United States. The U.S. minimum wage DID increase with productivity growth from 1948 to 1968. This linkage (see Dean’s chart below) resulted from the combined impact of two mechanisms: manufacturing wages kept pace with productivity growth thanks to collective bargaining in mass manufacturing (starting with the famous auto industry “Treaty of Detroit” in 1948); and Congress periodically increased the minimum wage to bring it back up to 50% of the average manufacturing wage.
Click on the chart above for a larger view
If you think about it for a second, a minimum wage that keeps pace with inflation is a fairly pathetic aspiration. It means that our lowest-wage workers get to have their living standards stay the same forever, even as the economic pie keeps growing with increases in productivity.
Wages — and minimum wages — that keep pace with productivity growth express a different and completely practical aspiration: the idea that workers at all levels should share in the expanding economic pie. Fair reward for hard work. Even sounds like a fundamental American value. Let’s get back to it. If we did, Charlotte might even come home.
14 Comments
Rec’d, and I hope that Charlotte will be able to come home soon!
Except for the fact that Australia is on fire half of the time I applaud your daughter’s decision to leave this third rate dystopia we call Amerika.
You might think of visiting down under since our wages are stagnent or falling and I wonder why she would come back.
My friends that moved to Australia, some 36 yrs. ago and others within the the last decade, would never come back to the good ol’ U.S.A. Yes, there are trade offs. Maybe your daughter can dip into her savings and have you visit and come back and write about it. Just don’t let those HSA officers find your notes or you’ll be fined and charged with espionage and treason, no doubt.
Recommended. I was thinking of advising my two daughters to move out of country to find a better life.
My change of heart came when thinking of all the hard working Americans who will never have that option. This country needs my smart, caring children if we are ever to change things for the better.
I’m sure this generation will do their best. They’re smart, lovely, human beings of the first order. It certainly will not be easy, but I have confidence they’re up to the task.
My generation left them quite the mess, but I feel this generation is fearless. Good Luck. PEACE
I’ll probably be pegged as a screaming socialist Marxist for saying this, but: if people were treated as human beings and given their fair value by employers, rather than as commodities to be exploited, such issues as minimum wage and redistribution of wealth would probably never be raised.
Wait, wasn’t Australia the place those Tea Party morans were going to go if Obama got reelected?
yes, I think they did threaten to go to Australia. But, then I think they found out that Australia has the dreaded government healthcare.
“Even sounds like a fundamental American value”…from some day in the distant past maybe…now the American Way is to pay as little as possible and the lower the pay, the more work expected.
I think the message from politicians about the American Dream is that most Americans need to wake up and smell the coffee–if they can afford coffee.
It’s quite sad. My husband and I both served this country. At this point I don’t see myself staying here and I’ve encouraged my children to consider expatriating. We’re on the precipice of third world status and ironically enough it appears even Mexico will have a universal health care system before us.
With all the regulations and taxes and now medical benefits that employees would be costing me, if I were to start a business these days I’d go about doing it with as few employees as possible, certainly 4 or less. With all the improving software and robotics, not to mention services by contract/outsourcing that are available these days, hiring employees is really an incredibly foolish thing to do.
A reason we need single payer.
I appreciate the sentiment, truly. But as a boomer, I refuse to take responsibility for anything “this generation” supposedly has done. For one thing, we don’t have anything remotely resembling a representative democracy. So that leaves out 99% of my generation and every other generation.
Now, if I were a member of the 1%, I would be obliged to take a share of the blame for our current mess. But I’m not, and neither is anyone I know.
As a boomer also, I understand your point. We’ve been living a lie for these many years, I agree.
Maybe now is the time to do something about it. I’ve been working for 40 yrs. and watching my wages go downhill. If SS or Medicare are fucked with, I’ve made a promise to myself.
Head to Washington D.C. and let them know how I truly feel.It will not be pretty. PEACE