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Wednesday, December 4, 2013

Some Unintended Consequences Of A Massive Increase In The Minimum Wage


I hear a lot of talk about raising the minimum wage up to $15.00 an hour. I have a lot of empathy for low-wage workers. I was one for many years. I also lived in Australia from 1981 to 1986. At that time it was a society with a high minimum wage. The good news was that there was virtually no poverty except among aborigional people. The high minimum wage did not destroy jobs. In fact the unemployment rate was very low. But there were some serious consequences for most middle class people. First restaurant meals were so expensive that eating out was a once a month treat. Second the cost of repairing anything was prohibitive. People had to learn how to do it yourself to make house hold and vehicle repairs. Third the cost of clothing and necessities like that were high. The better-off Australians flew out of Australia to South Korea with empty suitcases. They did a lot of their shopping with shadowy vendors who sold all sorts of goodies from US military bases around Seoul. People of more humble means always had a sewing machine in the house. Women often had to make a lot of their own clothes. Please consider my words here before advocating a massive increase in the minimum wage.

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