How the world views the USA.

Spacekiwi wrote:Just as an interesting aside about the minimum wage, I earn US$13.70 an hour, as a normal checkout operator at a supermarket. at a normal working year of 2000 hours, that's US 28,500 a year or the median income in the us. By contrast, thats about 70% of the median income in NZ. Our pay for underage employees getting training is US$8.30 an hour, so even underage workers here get paid better than many adults in the US.

As for union dues, here they are set to around 6 to 10 dollars a week for my fulltime employees, and 5 for me being a part-time. the max level of dues if for the full time advanced mechanics, and is around $40 NZ, which is still around an hours pay a week for them. So somethings weird with your unions if the 3 to 5% pay rise to join a union is negated by fees.

Very few US adults were working minimum wage jobs before Obama became President. Now we have many people who used to work full time (2,000+ hours per year) at $20 per hour working part time (<1,500 hours per year) at minimum wage.

The minimum wage was always considered a starting wage for unskilled workers. Workers who acquired job skills made more money.

The solution is not a higher minimum wage.

The solution is to grow the economy so that the market value of labor increases.

Deporting illegal aliens would help.

This further illustrates the topic, in that several posters here believe it is ethical to pay an adult $7.45 an hour. In November 1907 there was a famous court case in Australia that set the national minimum wage, based on what was fair and reasonable for people to live on, not on what employers said they could afford to pay. It is still the precedent, and our minimum wages are $16.37 for permanent full time and $20.30 for casual part time. Relatively few people are on these minimum wages, but they are viewed as a safety net. Before you begin to claim that this would be ruinous consider that our unemployment rate is about two thirds of the US, and we have now had 23 years of uninterrupted economic growth (no recessions in all that time). Union fees are usually about $10 a week, or 1% of wages. As with all big organisations over time some unions have done the wrong thing but generally they are a powerful force for good.

The point I am ponderously trying to make is that our society (and much of Europe) considers the welfare of the worker as paramount, not the profits of big business. Yet surprisingly it doesn't destroy enterprise. When you consider that these minimum wage workers all automatically get free medical care along with much other government support, yet our economy is sound, then perhaps the US could consider giving their little people more of a break.

Daryl,

You lack of recessions has nothing to do with your minimum wage and everything to do with supplying raw materials to China. When that cools will internal demand alone be sufficient to keep employment as high as now? When employment falls and lowering the min wage would increase employment, would you support the lowering? Would you let folks work for less money or offer them unemployment payments instead? Other nations in Europe that share your views are not nearly so lucky with their unemployment rate. If lowering the rate means more people would work, would they be immoral for lowering the min wage to increase employment?

All in all, I am glad current economic trends have favored Australia. Most of the rest of us don't live in nations that export raw material as a large part of our economy. We in the US do more importing. The economics of your situation don't apply nearly so well here. Your assertion that raising the wage will not harm our workers is simply false.

If we decreased the regulatory burden on employment, we would see wages rise. Because most employers want to pay a living wage to adults.
They also want to stay in business.

Of course stemming the flow of illegal immigration, as 'fly mentioned, would help reduce our supply of labor and increase wages.

Daryl wrote:This further illustrates the topic, in that several posters here believe it is ethical to pay an adult $7.45 an hour. In November 1907 there was a famous court case in Australia that set the national minimum wage, based on what was fair and reasonable for people to live on, not on what employers said they could afford to pay. It is still the precedent, and our minimum wages are $16.37 for permanent full time and $20.30 for casual part time. Relatively few people are on these minimum wages, but they are viewed as a safety net. Before you begin to claim that this would be ruinous consider that our unemployment rate is about two thirds of the US, and we have now had 23 years of uninterrupted economic growth (no recessions in all that time). Union fees are usually about $10 a week, or 1% of wages. As with all big organisations over time some unions have done the wrong thing but generally they are a powerful force for good.

The point I am ponderously trying to make is that our society (and much of Europe) considers the welfare of the worker as paramount, not the profits of big business. Yet surprisingly it doesn't destroy enterprise. When you consider that these minimum wage workers all automatically get free medical care along with much other government support, yet our economy is sound, then perhaps the US could consider giving their little people more of a break.

PeterZ, I have to go out so you will be spared my normal long winded diatribe. We have stuck to the living standard based minimum wage through the great recession and other downturns, so I don't see that any minor reversals would influence it, we don't want a nation of working poor, better to tax the rich and pay the dole than that. The story of our mining boom sustaining our economic good fortune is not really accurate. It is helpful but only contributes a small proportion of our overall income, about $4000 per annum per worker. I'd be the first to agree that we are far from perfect, but used our case to illustrate that compassion doesn't ruin an economy. To my amateur economist mind, our (and Western Europe's) advantage is our egalitarian societies. The US has had a massive shift of wealth to the top 1% in recent years, and this is self defeating to capitalism as it devastates the discretionary spending of the middle classes.

I agree with you Daryl. I agree that an employer has a moral obligation to his employees. That obligation includes paying a good wage and a safe work environment.

I just don't agree that what constitutes an appropriate wage is best set by government. Let the employee and employer decide between them. Their individual solutions will work best for them. Government should make sure that neither is compelled. If the agreement no longer satisfies both parties, change the terms so they become satisfactory again or part company.

Daryl wrote:PeterZ, I have to go out so you will be spared my normal long winded diatribe. We have stuck to the living standard based minimum wage through the great recession and other downturns, so I don't see that any minor reversals would influence it, we don't want a nation of working poor, better to tax the rich and pay the dole than that. The story of our mining boom sustaining our economic good fortune is not really accurate. It is helpful but only contributes a small proportion of our overall income, about $4000 per annum per worker. I'd be the first to agree that we are far from perfect, but used our case to illustrate that compassion doesn't ruin an economy. To my amateur economist mind, our (and Western Europe's) advantage is our egalitarian societies. The US has had a massive shift of wealth to the top 1% in recent years, and this is self defeating to capitalism as it devastates the discretionary spending of the middle classes.

The US has had a massive shift of wealth to the top 1% in recent years, and this is self defeating to capitalism as it devastates the discretionary spending of the middle classes.

That has less to do with the minimum wage and more to do with:

1. The tax on capital gains is 14% while the highest rate on ordinary income is 39%, so those earning income through salary pay but CEOs, trust fund babies and wall street gurus who earn most of their income through capital gains pay 14%

2. Carried interest. This is a complex financial trick used by hedge fund operators to put their income into the lower capital gains tax rate.

http://www.taxpolicycenter.org/briefing ... terest.cfm

3. Crony capitalism and sweetheart deals with the government. Both political parties are deeply involved.

4. Overregulation which massively increases compliance costs while being minimally effective strongly benefits big business who has the expertise to efficiently deal with the compliance while strongly inhibiting their smaller competitors. No surprise big business and their friends on capital hill love to work together to get these things passed.

5. Globalization which allows the fat cats to outsource middle class jobs to India and China at a fraction of the salary. It's not just manufacturing and call centers that are going overseas, it is also high paying computer programing and chemistry jobs.

6. Public knowledge of CEO incomes has apparently backfired as instead of being used by stockholders to demand value for their investment, has actually been used by CEOs and their cronies on the boards to justify massive salary increases for the CEO, board members and other top executives.


The decline of unions has also contributed to income inequality. However, unions are incredibly and deservedly unpopular right now. There has been a long series of problems that they have contributed to or caused directly. The latest is the pension time bomb facing both municipalities and industries which are heavily unionized (ex. the auto industry). Basically the unions and the politicians/management negotiated wonderful pension deals which sounded great at the time: generous benefits, early retirement ages, low contributions from employees etc. What they didn't negotiate was how to pay for those benefits. The union leadership negotiated for pensions that depended on the continued financial health of the entity with which they were negotiating. Now that many of those entities have become financially challenged, the retired union members are in for massive pension cuts. The average union worker was not a financial expert and didn't understand the risk of this type of pension funding but the union leaders knew and they didn't care. They just wanted to be re-elected to their cushy high paying leadership positions and knew that they would be retired with their golden parachutes long before the time bomb exploded. (Yes the politicians/company management are equally responsible for this mess, but politicians are excepted to do this kind of crooked thing. The union membership trusted that their leadership was working in the best interest of the average union employee. So there is a feeling of betrayal.)

And What about NZ? We manage to have a higher wage rate than the US, we dont have many resources apart from milk and a bit of wood, and our trade balance can be positive or negative in any given quarter, but we also have a lower unemployment rate.

PeterZ wrote:Daryl,

You lack of recessions has nothing to do with your minimum wage and everything to do with supplying raw materials to China. When that cools will internal demand alone be sufficient to keep employment as high as now? When employment falls and lowering the min wage would increase employment, would you support the lowering? Would you let folks work for less money or offer them unemployment payments instead? Other nations in Europe that share your views are not nearly so lucky with their unemployment rate. If lowering the rate means more people would work, would they be immoral for lowering the min wage to increase employment?

All in all, I am glad current economic trends have favored Australia. Most of the rest of us don't live in nations that export raw material as a large part of our economy. We in the US do more importing. The economics of your situation don't apply nearly so well here. Your assertion that raising the wage will not harm our workers is simply false.

If we decreased the regulatory burden on employment, we would see wages rise. Because most employers want to pay a living wage to adults.
They also want to stay in business.

Of course stemming the flow of illegal immigration, as 'fly mentioned, would help reduce our supply of labor and increase wages.

Daryl wrote:This further illustrates the topic, in that several posters here believe it is ethical to pay an adult $7.45 an hour. In November 1907 there was a famous court case in Australia that set the national minimum wage, based on what was fair and reasonable for people to live on, not on what employers said they could afford to pay. It is still the precedent, and our minimum wages are $16.37 for permanent full time and $20.30 for casual part time. Relatively few people are on these minimum wages, but they are viewed as a safety net. Before you begin to claim that this would be ruinous consider that our unemployment rate is about two thirds of the US, and we have now had 23 years of uninterrupted economic growth (no recessions in all that time). Union fees are usually about $10 a week, or 1% of wages. As with all big organisations over time some unions have done the wrong thing but generally they are a powerful force for good.

The point I am ponderously trying to make is that our society (and much of Europe) considers the welfare of the worker as paramount, not the profits of big business. Yet surprisingly it doesn't destroy enterprise. When you consider that these minimum wage workers all automatically get free medical care along with much other government support, yet our economy is sound, then perhaps the US could consider giving their little people more of a break.

Just to perplex my US friends here I'd like to mention that our National Minimum Wage is just one of our regulated wages. We have hundred of award wages for different professions. We have them for clerks, bar attendants, truck drivers, scientists, farm hands and many more. I do have a problem agreeing with "I just don't agree that what constitutes an appropriate wage is best set by government. Let the employee and employer decide between them. Their individual solutions will work best for them.".
Two reasons there to cause me to disagree. Firstly it is not an even negotiating field if one party is a rich multinational, and the other is a father trying to feed his family and pay off his mortgage. Guess who gets screwed?
Second reason is that I've been an employer on a number of occasions, and have paid over the minimum Award for someone with skills in demand that I wanted to retain. However more often the situation is when I would have thought "Gee, Fred is a great bloke but his skills are a dime a dozen, should I pay him over the odds just because I like him, or should I pay the legal minimum and put the money saved aside for my kid's education, if he leaves I'll just get another?". This is ok in our system because his minimum is probably $30 an hour, but not ok if it is $7.45.

Until recently VERY few people made min wage. Those that did were almost invariably young workers just learning skills. The rest of use made more than the minimum. Raising that minimum then wouldn't t have impacted anyone except union members and a few younger workers. Union wages would have risen and the few younger workers that remained employed would have seen wage increases. It would be better for all of us if we simply roll back Obama's policies that to keep those idiot regulations AND raise the minimum wage.

While intrusive governments might work in your society and in Europe, it wouldn't work here for various reason. Asking that we adopt such is asking for the unintended consequences of that type of government here. Just look at Detroit and those municipalities in or courting bankruptcy as an indicator of just some of those consequences.

Daryl wrote:Just to perplex my US friends here I'd like to mention that our National Minimum Wage is just one of our regulated wages. We have hundred of award wages for different professions. We have them for clerks, bar attendants, truck drivers, scientists, farm hands and many more. I do have a problem agreeing with "I just don't agree that what constitutes an appropriate wage is best set by government. Let the employee and employer decide between them. Their individual solutions will work best for them.".
Two reasons there to cause me to disagree. Firstly it is not an even negotiating field if one party is a rich multinational, and the other is a father trying to feed his family and pay off his mortgage. Guess who gets screwed?
Second reason is that I've been an employer on a number of occasions, and have paid over the minimum Award for someone with skills in demand that I wanted to retain. However more often the situation is when I would have thought "Gee, Fred is a great bloke but his skills are a dime a dozen, should I pay him over the odds just because I like him, or should I pay the legal minimum and put the money saved aside for my kid's education, if he leaves I'll just get another?". This is ok in our system because his minimum is probably $30 an hour, but not ok if it is $7.45.

How difficult is it for me to move to NZ and find a job? Last I checked you folks had a strict immigration policy. No illegal workers. That argues for a stable labor pool that would support the high wage. We don't have that luxury either.

Spacekiwi wrote:And What about NZ? We manage to have a higher wage rate than the US, we dont have many resources apart from milk and a bit of wood, and our trade balance can be positive or negative in any given quarter, but we also have a lower unemployment rate.