A data point on minimum wages

by John Quiggin on April 28, 2016

I’m currently working on a section of my Economics in Two Lessons book dealing with minimum wages in the context of predistribution policies, so I thought I would compare Australia with the US, where the idea of a $15/hour minimum wage is currently a hot topic. In Australia there are two kinds of minimum wage. The PPP exchange rate is estimated at $A$1.30 = $US, which is fairly close to the market exchange rate at present, so I’ll give both $A and estimated $US equivalents

The standard minimum wage for workers aged 21 or over is $A17.29 hour ($US13.30) applying to employees under standard award conditions. These include four weeks annual leave, sick leave, employer contributions to pension plans and so on.

More comparable to the situation of US minimum wage workers are “casual” workers, employed on an hourly basis. Casual workers get a loading of at least 25 per cent, bringing the wage up to at least $A21.60 an hour ($US16.60), to compensate for the absence of leave entitlements. In addition, they have entitlements including:

* “Penalty” rates for weekend and night work (usually a 50 per cent loading, 100 per cent on Sundays)
* For workers employed on a regular basis, protection against unfair dismissal.

The policy question is: what impact have these high minimum wages had on employment and unemployment. That’s too big a question to answer comprehensively, but we can look at the obvious data points: the official unemployment rates (5.7 for Oz, 5.5 per cent US) and the 15-64 employment population ratios (72 per cent for Oz, 67 per cent US). So, it certainly doesn’t look as if the Australian labor market has been crippled by minimum wages.

Note: I’ll respond in advance to the widespread misconception that Australia is a special case due to mineral resources. Mining accounts for about 2 per cent of employment in Australia, and (because most mines are owned by multinationals) its contribution to Australian national income is also so, probably around 5 per cent.

* Workers aged 18 get about 70 per cent of the adult minimum, equivalent to around $US11.50 for casuals. But the great majority of US minimum wage workers (about 80 per cent) are 20+.

Nakul Krishna on Malory Towers

by Harry on April 28, 2016

I was a late reader (late enough to cause considerable worry, I now understand). But when I did read, it was all I wanted to do. I read every comic I could get my hands on (I stayed with the Beano till I was 13 or so — my dad let me get a weekly delivery of Thunder [1] (which quickly merged with Lion, which quickly merged with Valiant, which…) on condition that I also get Look and Learn (which I devoured as enthusiastically as I did Thunder, so it was a smart move). Jennings and William were the cordon bleu of children’s writing, obviously, and later on I got to Geoffrey Trease, Henry Treece, John Rowe Townsend, Penelope Lively, Jill Paton Walsh, Peter Dickinson; and all of those were, rightly, approved of by all adults. But I read everything Enid Blyton wrote. Including the Malory Towers books which, I vaguely realized, must have been aimed at girls (being books about girls in a girls boarding school), but just didn’t care. They were so embedded in my head that when, in my teens (early, not late, I’m glad to say), I graduated from the Beano to Marvel comics, I wondered (and still do) whether Peter Parker’s girlfriend was named after the awful (but pitiable) Gwendolyn Lacey. What was so appealing about them? Nakul Krishna has a wonderful, contemplative and adoring, but sharp analysis, at Aeon, which explains it all. Read it there, but feel free to discuss it here (I am really curious how many of our readers read the Malory Towers books in childhood).

[1] Link is to a site with almost every single Adam Eterno strip. Mergers of comics were frequent, but Lion and Thunder was a rare case in which the junior, second billed, comic, provided most of the stories to the new title — several survived into Valiant and Lion, even after Lion’s name was off the masthead. Most notably, the brilliant Adam Eterno.

Over the fold, an extract from my book-in-very slow-progress, Economics in Two Lessons. I’m getting closer to a complete draft, and I plan, Real Soon Now, to post the material so far in a more accessible form. But for the moment, I’ll toss up an extract which is, I hope, largely self-sufficient. Encouragement is welcome, constructive criticism even more so.

[click to continue…]

Yesterday, New York Magazine’s Jonathan Chait tweeted this:

It was an odd tweet.

On the one hand, Chait was probably just voicing his disgruntlement with an epithet that leftists and Sanders liberals often hurl against Clinton liberals like Chait.

On the other hand, there was a time, not so long ago, when journalists like Chait would have proudly owned the term neoliberal as an apt description of their beliefs. It was The New Republic, after all, the magazine where Chait made his name, that, along with The Washington Monthly, first provided neoliberalism with a home and a face.

Now, neoliberalism, of course, can mean a great many things, many of them associated with the right. But one of its meanings—arguably, in the United States, the most historically accurate—is the name that a small group of journalists, intellectuals, and politicians on the left gave to themselves in the late 1970s in order to register their distance from the traditional liberalism of the New Deal and the Great Society. The original neoliberals included, among others, Michael Kinsley, Charles Peters, James Fallows, Nicholas Lemann, Bill Bradley, Bruce Babbitt, Gary Hart, and Paul Tsongas. Sometimes called “Atari Democrats,” these were the men—and they were almost all men—who helped to remake American liberalism into neoliberalism, culminating in the election of Bill Clinton in 1992.

These were the men who made Jonathan Chait what he is today. Chait, after all, would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.” We know this because he recoils in horror today so resolutely opposes the far more tepid versions of that liberalism that we see in the Sanders campaign.

It’s precisely the distance between that lost world of 20th century American labor liberalism and contemporary liberals like Chait that the phrase “neoliberalism” is meant, in part, to register. [click to continue…]