You can file this under the same sorts of decontextualized missing of the point that get me ranting. I saw this meme on Facebook in support of the minimum wage:
It is pulled from an editorial written by Louise Marie Rantzau’s editorial, and it is true, McDonald’s employees in Denmark make about 150 kroner or 21 dollars an hour. Here’s the various ways this well-meaning liberal meme, however, completely misses the point to the point of jumping the shark.
First, a few caveats, most of the attacks on stuff like this come from right-wingers and neo-liberals. They are often half-right. I am to “the left” on most labor issues beyond my renewed doubts about Marixsm, and I am still fairly socialistic, but I find memes like this to be highly dishonest. Let’s look at why I find them dishonest:
- So the average person makes 21 dollars and hour and the meme say the Big Macs cost .56 more. However, the purchasing power of a dollar in US is 28% higher in aggregate than in Demark with consumer prices being 56% higher. So the difference is not as high as you would think in the case of the Burger, but a lot higher in terms in overall cost of living. Although the Big Mac index has the burger at around 2.22 USD more. Still not nearly in proportion to the cost of wages. You will notice that both in real terms, MEDIAN (middle class) Income in the US is higher than Denmark. What you will also notice, however, income inequality in the US is insanely high (see the above Economist link): “ America’s median income is among the highest in the rich world, on a par with that in Switzerland and the Netherlands, a shade above the median in Britain and Canada. The average income of the top decile, by contrast, is easily the highest in the OECD, and nearly twice the OECD average.”
- So it just takes more more maintain to maintain the minimum needs of the worker in those countries if you are going to employ them. That explains some of the 21 dollar an hour difference, which would probably be equivalent to around 18 dollars an hour USD in purchasing power not factoring the higher federal tax burden, whereas the overall tax burden is more variable in the US by state.
- The key factor in this meme calling for a minimum wage; however, is that while Denmark has about 100% unionization, it has NO MINIMUM WAGE like most of the Germanic and Nordic countries: “This would have been Switzerland’s first federally mandated minimum wage. Other countries without minimum wages include Denmark, Germany, Italy, Norway and Sweden, all where there is more collective bargaining between employers and workers to establish pay.”
The key differences is that Denmark has a socialized health care system that does not use market mechanism since there is no efficient way to handle a healthcare market, Denmark does not require heavily regulate the firing of employees for anything other than out-and-out identity discrimination; however, it sets a minimum income so that part of the population does not end up on the street. Employers can fire employees fairly easily, and but you have increased labor market participation to the tone of about 10% higher in Denmark. Indeed, whereas the US has gotten rid of welfare, it has used disability to cover the gap. While Republicans blame this on Obama, this trend has been in place since the Clinton-GOP joint welfare reform. Ironically, “socialist” Denmark has a more independent corporate section for hiring and firing with ah high enough labor participation rate that employees have individual and collective bargaining power, while the partisan reforms of welfare have led to disability covering some of the most vulnerable and working as a incentive against even marginal, part-time employment. It also has nearly 100% Unionized and collective bargaining for wages and benefits, while healthcare is covered by the state at a lower cost to the state and the consumer than the private insurance in the US. This means that benefits costs are significantly lower since the two areas of highest inflation in the US is healthcare and education.
When I mentioned this and the focusing on the wrong things, a lot people of Facebook kept posting responses like “Republithugs can eat it” and “Take that CONservatives,” while letting the Democrats effectively off the hook and pushing a complete misreading of the labour conditions of Northern Europe and the US. Why are people in Denmark happier and healthier than the US: they are shielded from parts of the economy that markets do not work in because there is no way for there to be market rationality, and they are in an socially/economically homogenous country that does not see itself as in competition with internal groups–i.e. class tension is much lower. Although the latter has made Muslim integration in the Denmark a bit of a sticking point as they are seen as an outside force. Unions and equalized education funding are the very things that Democrats have traded in exchange for talk about a minimum wage increase.
You can see why I am frustrated with the liberal-“left” in America as well as the neo-liberal right.