Tuesday, September 11, 2012

US has lower wages than 10 countries

Low pay does not create more jobs. That's why right-to-work is a scam. But don't take our word for it. Look at these statistics from the Organization for Economic Cooperation and Development.

Unemployment is higher in the United States than in nine of the 10 other countries, and yet wages are lower. As Kenneth Thomas notes at Angry Bear,
What is most confounding, for Republicans at least, is that nine of these countries also have lower unemployment, which contradicts their view that high wages (and high minimum wages) harm employment.
He also makes the point that there are advantages to living in high-cost, high-wage places:
...having extra cash gives you extra options. You will have a higher retirement benefit and will keep it if you move to a lower-cost area, whereas the reverse is not possible. You will have better quality services on average, particularly health care. It is far easier for you to vacation in a low-cost location than it will be for someone in a low-cost location to vacation to a high-cost location ($25 personal pan pizzas!). 
Your high salary will be the benchmark if you take a job in a lower-cost location. If you economize from the standard basket of goods used to measure cost of living, your benefit will be higher in the high-cost area. Of course, a full treatment of this issue requires another post, but the big point is that high wages do not necessarily create unemployment and reducing wages is not the route to middle class prosperity.