Australia beware! You will become both fascist and communist!

Here’s a new idea – raising the minimum wage will lead to the rise of a Nazi-like American state. Or, so say the Koch brothers and the vice presidents of Koch Industries.

The minimum wage in Australia is currently $16.87 (AUD) per hour for permanent workers (casual and temporary workers earn more per hour to compensate for vacations and sick leave to which they are not entitled). Although Australia is not perfect, the last time I looked it was not a fascist state, nor has it ever been.

It’s rhetoric like this that makes Aussies shake their heads. If it is not higher minimum wages leading to fascism, it is universal health care that will lead to communism. It is just as obvious that Australia is not communist.  The Australian health care system, Medicare, works well, protects all Australians, and has not endangered our liberty since it was introduced about 40 years ago.

The Koch contingent argue that raising the minimum wage would lead to a huge increase in unemployment among unskilled people, which in turn would make them open to the ploys of fascist pretenders (why they would not be open to the imprecations of communists is not made clear by the Kochs).

Debates about the economic effects and the merits of the minimum wage date back many decades.  Back in the first decade of the twentieth century neoclassical economists argued that wage levels were determined by workers’ productivity and that minimum wages would reduce employment among low-skilled workers. In contrast, progressives argued that minimum wages would encourage workers to increase their efforts, and would boost consumers’ purchasing power and thus raise aggregate demand. There is as yet no definitive answer as to its effects, if any.

At the moment, unemployment rates in the US and Australia are very similar, and have been comparable for many years. There are of course peaks and troughs when factors such as when the global financial crisis took effect.

The minimum wage in the US means that many workers need to hold two jobs in order to survive. Holding down two or more jobs means that they cannot spend time studying to raise themselves up the income ladder. So long, American dream.