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Living wage would benefit our economy

Jan. 18, 2014 at 4:04 p.m.
Updated Jan. 17, 2014 at 7:18 p.m.


Editor, the Advocate:

I read with interest Jim Bluntzer's recent letter giving a fiscal conservative's recommendation for an increased federal minimum wage. I expect he'll be barraged with falling sky prophecies of massive layoffs and economic ruin if that happened. It occurs to me that a real test of those predictions of doom exists in Australia.

The following amounts are adjusted to American dollars using the current exchange rate. The minimum wage for fast food workers in Australia is $15.16 per hour, more than twice the USA's $7.25. While, according to theatlantic.com, a McDonald's Big Mac is only 17 percent more expensive in Australia. So, while an Australian full-time McDonald's employee makes a living wage, an American one does not; and an Australian Big Mac is only slightly more expensive.

You ask, "What about employment?" Well, the American unemployment rate is 7 percent; Australia's is only 5.8 percent. What about Gross Domestic Product? According to worldbank.org, from 2009 to 2013, Australia's annual GDP growth rate was 3.4 percent while the American rate was only 2.8 percent.

So, we do have a model for what might happen if we raised the minimum wage to $15 per hour. The cost of a Big Mac would increase slightly, unemployment would trend downward, and the economy would grow. Minimum wage workers, unlike the wealthy, spend most of their incomes. The American consumer drives our economy. Putting more money into the pockets of consumers benefits everyone - trickle up not trickle down.

Also, McDonald's remains profitable in Australia and has no plans to leave.

Charles Clapsaddle, Goliad

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