Thursday, June 11, 2015

A $15 Minimum Wage Would Put All Americans Into The 1%

By Tim Worstall

I’ve been trying to think through a way of really getting across the point that a $15 an hour minimum wage for the US is really just too high. And I may have found it: a $15 per hour minimum wage would put all workers in the US into the global 1% by income. Well, all those workers in the US who managed to keep their jobs when there’s a $15 an hour minimum wage at least. Given that the US labour force is rather larger than merely 1% of the global labour force this isn’t really going to work, is it?

The point to understand is quite how high US wages already are compared to the rest of the world. We hear about “global poverty” but tend not to really understand what this means. The international definition of absolute poverty is $1.25 a day. And that’s not just for food or anything like that. That’s for everything: shelter, heating, clothes, food, education and so on. There’s some 500 million people who currently live below this line. That’s also after we take account of different prices around the world. So we’re not saying that because rice is 2 cents a tonne in those poor places then they’re doing OK. We really do mean $1.25 a day at what that will buy you in the US. Walk into a Walmart, buck and two bits in hand, and supply yourself with everything you need for a day. That’s absolute poverty.

OK, so, the US doesn’t have any poverty by that definition and hasn’t for decades upon decades. And the US is a rich country, so everyone should righteously be doing better than that. However, how much better should everyone in the US be doing?

Read the rest here.

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