The Downside of Higher Minimum Wage

Since arriving, I’ve been astonished at the higher cost of living in Australia.  But it’s not across the board.  Electronics manufactured in China aren’t unreasonably more expensive than they would be in the States.  In some cases they cost the same.  But things like cars (that are locally manufactured even though they are foreign companies), food (grocery and restaurant) and other services can be three or four times as expensive as they are in the States.  What’s the link?  It’s probably a good thesis for some economics student (if it hasn’t already been done), but my speculation is that this is caused by a higher minimum wage.  Australia’s minimum wage is about AU$15 (about $13.90 US).  As you look at things that are significantly higher, they also tend to be more dependent on minimum wage workers.

At what point does the cost of living impact of minimum wage increases zero-out the income gains?  And if cost of living is impacted by minimum wage increases, at what point is it affecting the population and economy at large to a worse extent than it is benefitting minimum wage workers?

I don’t have answers or even ideas.  Just observations at this point.  Maybe it will be in Super Duper Freakenomics???

That’s what I get for not saving as draft

I have been working on a long post that didn’t get saved at some point.  I’m guessing I lost it on a patch Tuesday reboot.  At any rate, I’ll just post several small thoughts as they come back to me.

For now:

“Global Economy”
Someone forgot to tell the banks and cell (“mobile” here) that the world is flat.  My US credit cards are hit-or-miss, and there’s the wonderful foreign transaction fee when it does work.

Getting a cell phone here (AT&T no worky;  then again that’s not too different from home) is more difficult than getting US government security clearance.  I once held a sword over then Governor Bush’s head during his inauguration, but Telstra won’t give me a post-paid plan.  Then again, thanks to Apple and AT&T, my iPhone won’t work on Telstra’s network anyway.  Waiting on that iPhone OS 4.0 and subsequent DevTeam jailbreak/unlock before I try again with Telstra.

Socialized Healthcare
Beware America, this is coming soon if the Dems get their way.  Like many things, this sounds good in theory – medical care costs are out of control, everyone should have access to medical care, our system is flawed.  But inserting the government into the value chain of any industry is never the answer.  For example, schools in the US and Australia require immunization records.  In the US that entails calling your pediatrician and having them fax the records to the school.  In the socialized Australian system, it involves going to your doctor and getting a signed government form (not valid if it’s not on the government paper), taking that form to a local council which will then submit the form to a national registry.  One month later, you will have a certificate that is functionally equivalent to what took 5 minutes in a privatized healthcare system. 

I’m not going to get into my beliefs about how to fix the medical system, but here’s a hint to where I believe the fixes should start – legal system, education system.

Driving on the left, sitting on the right
No, that’s not a clever political turn of phrase.  Literally driving on the left side of the road and sitting on the right side of the car.  It’s actually not as bad as I thought it would be.  But why did they have to move the blinker to the right side of the steering column!  I hope everyone realizes that when I turn my windshield wipers on it means I’m turning left.