The American Living Wage Debate and How My Trip To Australia Changed My Stance

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I was overseas for the past 2 months in a far away land called…Australia. I had heard of its amazing minimum wage, the high quality of life, and the kangaroos that people were riding to work (just joking and making sure you’re still with me!) So, I was excited to see how higher minimum wage played out and how we could apply the Australian experience to the U.S. Is it even possible? The American living wage debate has been waged for awhile now and I thought that Australia’s approach could work for us.

According to the Sydney Morning Herald the Australian minimum wage as of June of last year was $18.70. Eighteen dollars and seventy cents. The American minimum wage according to the National Conference of State Legislatures ranges from $5.15 in Georgia to $9.47 in Washington State. I should also mention that the city of Seattle will be on track to have the highest minimum wage in the country per seattle.gov within the next couple of years depending on the size of the business (multi-stage process).

 

Before Australia: Pro Government Mandated Living Wage in the U.S.

Before I went to Australia I very strongly believed that the minimum wage should be raised on a federal level across the board. I don’t believe that people can live comfortably on the wages that they are being paid to do retail/cleaning/etc. These are jobs that I have done and I can safely say that those jobs are HARD and that there are a large number of families living on the wages that they earn from standing all day and hustling making your burgers, your coffee, and everything in between.

It was with great interest that I watched American fast food workers and other workers in other industries protest their wages. It was long overdue. I loved that people were feeling empowered and ANGRY. Big business was happy with the status quo. I wrote a post about American inequality and wages being connected. As long as wages are low and manufacturing costs are low then profits will remain higher than if wages are higher.

My thought about higher wages was that even though fewer people would be employed per business, spending would increase due to increased earnings and new businesses would grow as a result-employing additional people. I still believe this.

So, as I traveled around Australia (specifically Sydney and Melbourne) I was amazed at how happy people seemed, people didn’t seem so stressed, and they seemed to lack the anxiety that American workers seemed to have about: money, living standards, and access to health care.

I should say that people were anxious about: housing. The cost of housing in those two cities is unbelievable and people (especially young people) cannot afford the million dollar price tag for most real estate located in downtown Sydney/Melbourne.

 

The Service I Received

As I went to restaurants and explored the cities I was taken aback by something that I hadn’t expected. No one worked very hard. Now, I understand that I have an American mentality about work, but if I’m paying you almost $20 an hour to serve some coffee I’m expecting a pretty amazing level of service. The service over and over again was just meh. Pleasant enough…but not $20 dollars worth of service which also translated to higher costs for the food and services that I was purchasing to balance out the cost of paying higher wages.  In fact, I had to serve myself my own water time and time again and other service oriented things that I just couldn’t understand. People would disappear for awhile after we placed orders, and it would take awhile to receive what we requested. Now, if this had happened a couple of times I wouldn’t have been so shocked-I used to live in FRANCE where they are notoriously irritated by the clientele. This was different.

I should also point out that in addition to living in France I’ve lived in Japan (as a kiddo) and traveled to the following countries as an adult: Norway, Switzerland, Spain, Italy, England, Canada, Belgium, the Netherlands, Argentina, and all of the United States except: Arkansas, Alaska, Alabama, Washington State, Oregon, and Vermont. So, this is not my first trip outside of my city.

The service so astonished me when I considered the higher wages that I asked my Australian friends about this phenomena and they said the following:

“People will get paid that amount regardless of how hard they work.”  They also referred to the U.S. system of tipping as why we are such a service oriented culture. Well, not all jobs are tipped.

In fact, the following jobs aren’t tipped:

  • Retail Associates-Which account for a large number of U.S. workers (Walmart/Target/etc)
  • Office Workers
  • Fast Food workers
  • Nurses
  • Doctors
  • Teachers
  • CNA’s
  • Non-profit employees

And even WITH tips unless you’re working at Hooters, a bar, or a strip club you probably won’t be making tips that would equal $18.70 an hour. When I worked at Starbucks at a very, very busy store with really good service we would average around $9-$10 an hour once tips were factored into my pay.

 

People Take The Minimum Wage For Granted

What bothered me was that it was obvious that people took this high wage and standard of living for granted. And I totally understood why. According to my friend there is a generation of younger Australians who have never experienced a recession. And I’m truly glad that they haven’t-I’m glad that they haven’t felt the level of fear and uncertainty that Americans have experienced for the past 8 years.

I wouldn’t wish that on anyone.

The thing is-it’s dangerous to take things for granted. What goes up, goes down. It is a natural part of economic cycles. There will be a recession sometime in Australia’s future and I pray that people are saving and taking care of things so that they are ok. Unlike what happened to Americans during the Great Recession.

 

After My Trip To Australia:

Anti-Government Mandated Minimum Wage

I’m now against government mandated changes to minimum wage. I am still pro living wage, but I think that when it’s mandated by the government people take it for granted. Instead, I think people should continue to protest how they are being treated and paid by their employers and leaving when they can leave for better opportunities. And, I don’t by the ridiculous notion that paying people more is bad for the economy. Yes, employers may employee fewer people BUT those people will spend more money creating the need for more services/etc. that need to employ other people.

 

Big Box Stores: Such As Walmart, Target, and Others

Interestingly enough, businesses have started to take note of the fact that people don’t want to be paid crappy wages. They may also be raising wages due to the negative perceptions that many people have of these businesses. In fact, I don’t shop at Walmart specifically because of my negative perceptions of the business. Umm, and I have no idea where one is near my house LOL!

There are other businesses that have work under a high hourly wage as part of the corporate culture and those businesses are doing well. Moo Cluck Moo is a great example of this philosophy.

Ultimately, I’m surprised at how my trip to Australia changed my belief in how to address a huge social problem should be dealt with in the United States. I wasn’t expecting this and I wasn’t expecting how angry it made me by the end of my trip. Maybe because I’ve worked so hard doing those jobs for nothing and I needed those tiny amounts of money and appreciated every single dollar that came my way.

For those of you who are p.c. I’m not saying that everyone Australian who works for minimum wage takes it for granted. I am positive that the majority of people appreciate their jobs and work hard. What I am saying is that I was left with a surprisingly negative perception of  government mandated minimum wage.

 

I never saw it coming.

I had a very positive experience overall in Australia and will be going back again (gladly!!!) it is a wonderful country with a lot that Americans can learn from it in terms of taking care of our citizens, living life to the fullest, flat whites, and being connected to family.

But the U.S. and Australia are two very, very different countries though with very different approaches (and population sizes) so I do think they can continue (and should) continue their system because it works for Australia.

The American system is clearly not working though and I am hoping that people (including myself) will continue to protest poor wages, vote, and speak with our dollars about how people are being paid.

 

What Do You Think?

Have You Visited Or Lived In Australia?

If You’re Australian Could You Weigh In?

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I am an obsessive foodie, but not self-righteous with it, love travel, meeting new people, helping you look good, and am freaked out by people who don't enjoying reading...something! I have always liked issues connected to personal finance, the movement of money on a bigger scale, and now am fascinated by how people’s emotions affect their personal spending. You can read more at: www.shopmyclosetproject.com I’ve had an amazing time writing for my blog, The Shop My Closet Project, and love the transformative power of connecting with people through writing.
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5 Comments

  1. You’ve seen the light 🙂
    Living wages are so, so much more complicated than simply increasing the minimum wage. Minimum wage workers tend to spend nearly all of their money on goods and services provided by other minimum wage workers, so increases generally lead to inflation which slows down the economy overall. We need more variety in lower-end employment options, which is difficult to create. What I mean by that is more opportunities to make $14 an hour, while keeping jobs at the $7 (or whatever min wage is) mark.
    This is an excellent cultural observation piece Michelle, I love it.

    • The thing is, I’ve lived on those lower wages so I understand why people are frustrated. I think that people have felt very much taken advantage of for a long time-and they have been. But, we have to remember that we have a voice and that we don’t have to perpetually take the crap that’s being dished out. So, when people started walking out of: McDonalds/Walmart/etc. they put those companies on notice that the wages they were being paid were unacceptable. By doing that, they also kept their power in the conversation. It is interesting to note that across the U.S. there are different bills being voted on regarding changing the minimum wage. This is getting into the whole states’ rights vs. federal thing. But, basically, this is how the Founding Fathers imagined things working. Can’t believe I just referred the F.F.’s in a blog comment. WoW.

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  3. Australia might not be the best example of ‘service industry’ (in my experience, bad service is mostly about bad managers because they set the scene) but a living wage which is necessarily tied to a mandated minimum wage has been shown to create a more robust economy. Take a look at Denmark.

    I recall being horrified at the appalling wages being paid to service staff when I was in the US, especially in tourist related services. When the bus driver has a sign up saying he relies on tips to survive, I have to wonder exactly what I’m paying for… just profit to the business owner?

    No system is perfect but I believe if you’re working a full-time job you ought to be able to put a roof over your head and food on the table, without requiring food stamps or charity. Even Australia struggles with this – mostly because housing costs are so high; partly supply & demand, partly artificial inflation due to first home buyer’s grant. Once a family can cover the basics comfortably they then have the option to invest in themselves and their children through better health and education both of which add to the stability of the economy and society.

    Without happy and healthy workers, how can you have a thriving business and society?

    • You know, I’ve really struggled with this issue. Everything that you’ve mentioned completely makes sense. How do people afford housing on these low wages? But, this is a capitalist society and in my experience of Australia I would consider the U.S. EXTREMELY capitalistic in comparison. We are very uncomfortable with Government intervention unless it is moved to intervene due to citizen uprising.

      I have worked a number of service jobs and I do believe that people need to have a living wage. I just think that there is a lot to be said about having ownership over the conversation and having the employers hear the employees vs. being told what to do by the Government. I think there also is a very distinct cultural difference in how I’m thinking about the issue. I can’t change the fact that I was raised in the U.S. and have apparently developed some surprising (to me) ideas about Government intervention on issues vs. citizens rising up and forcing change. Luckily, people are protesting and speaking up for what they want. I quite frankly don’t believe that the U.S. Government is benevolent in the way that many people want it to be. I wrote a post about it on The Shop My Closet Project called “The Irony of U.S. Style Capitalism” and basically I argue that in order for this type of capitalism to exist you have to have impoverished people. And-I think it’s crappy.

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