Australia’s Minimum Wage Revisited

Posted by Bob Lord

Looks like others may be starting to focus on Australia's minimum wage and questioning ours. 

Back in April, in my post, $15 Per Hour: It's Australian For Wage, Mate, I noted Australia's minimum wage of over $15 per hour and it's crazy policy of providing health care to all Australians. 

Lo and behold, just a few months later, McDonalds workers are striking and demanding … (drum roll) … $15 per hour. Imagine that. Are American workers getting the crazy idea that they should be paid a living wage?

Today, Salvatore Babones, in his post Is $15 an Hour a Fair Wage for Serving Fast Food?, considers the demands of McDonalds workers in relation to Australia's minimum wage:

Is $15 an hour really a fair wage for serving fast food? Is it reasonable? Is it affordable? In a word: YES.

… 

If the minimum wage had risen in line with overall economic growth since 1978, it would now be somewhere between $13 and $18 an hour, depending on which national income data are used. The strikers’ demand of $15 sits comfortably in the middle of this range.

Fast food pay of $15 an hour would also be in line with fast food industry pay incountries like Australia, where the industry minimum of AU $17.98 an hour is equivalent to US $16.38 at current exchange rates.

Of course, in Australia fast food workers also get paid sick days, paid holidays, paid vacations and free national health insurance. Australia, incidentally, was the only major western country to avoid falling into recession during or after the global financial crisis that began in 2007.

So, is Australia off the deep end? No, America is. Babones concludes:

In Australia, the global wage leader, a Big Mac costs the equivalent of $4.94 in US Dollars – a modest increase over the $4.20 charged in the United States. That premium is mainly due to the current weakness of the US dollar. At historical exchange rates, an Australian Big Mac costs the same as an American one.

And Australia is not alone in offering cheap hamburgers despite paying workers a living wage, as Atlantic magazine associate editor Jordan Weissman points out. In France ($3.60) and Germany ($3.53), hamburgers are actually cheaper than in the United States, despite all the benefits, regulations and unions that European employers have to deal with.

In short, the comparative evidence is pretty clear: the problem is us, the United States. 

No kidding.