On February 16, 2013 Politicus USA posts:
After President Obama called for raising the federal minimum wage to $9.00 an hour, the Republicans have been insisting that this would hurt the economy. The issue is the fact that more people would be getting a raise, and that means more money flowing in the economy, which would go back into businesses.
Here is a fact. Australia has a minimum wage of almost $16.00 an hour. Since 1994, they have averaged about 1.75% GDP growth per year.
Here is another great data point. According to trading economics, the unemployment rate never exceeded 6%. These two data points that the GOP has been selling the American people are proven false, at least by the Australian economy. The fact that Australia is the “extreme” of examples, but I am sure this is the norm.
To top this all off, the ultra conservative Heritage Foundation ranked Australia as the third most freest country regarding their economy. “Australia is ranked 3rd out of 41 countries in the Asia-Pacific region, and its score is well above the regional and world averages.
In Australia, an employer is required to pay 9 percent on top of an employee’s wage into a superannuation (pension) scheme. These schemes can be private or not-for-profit run by unions (they are the most successful ones). Employees can contribute more, and that will be taxed at a concessionary rate of 15 percent. The employee cannot access the money until age 65.
The result has been to make trillions of dollars available for investment, while ensuring a decent retirement for millions of workers, and reducing the potential shock of an aging population.
Of course, a GDP growth rate of 1.75 percent is puny. The stark reality is that we are in a depression reflected in rising unemployment and underemployment and instability that we will never escape from until we change our economic policy. Increasingly, more Americans will not be able to ever purchase a home, due to the packed inflationary wage and welfare base factored into the cost of building homes, which inflate prices, and will be forced to rent their entire life or depend on government living assistance––not able to accumulate equity that can help to sustain them in their retirement years. And this is the new reality now facing people in the middle class. The uncertainty of holding onto a good job is frightening to an increasingly wider base of middle-class working citizens. When you factor in the average non-salaried worker, even with a government-mandated minimum labor wage rate of $10.00+ per hour in some states, the outcome is grim. Never mind that consumer demand continues to dwindle because of insufficient income, solely tied to labor worker wages. The impact of the decline in consumer demand due to declining labor worker wages is that production will decline or desist without sustainable consumer demand.
There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.
To stimulate the economy to grow GDP at double digit growth rates support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
http://www.politicususa.com/australias-minimum-wage-16-hour-economy-growing.html
