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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe minimum wage and the Danish Big Mac
By Ryan Chittum
Last week, I moved to the workers paradise of Denmark, where I will man the Audit Aalborg bureau for a year while my wife is here on a Fulbright. One of the things thats striking here is the disparity between the cost of food at restaurants and at grocery stores. The minimum wage in Denmark (ADDING: I should say that this is an effective minimum wage negotiated with unions, not a legal one) is roughly $20 an hour (though teenagers can earn somewhat less). Not coincidentally, labor-intensive restaurants have very high prices, while less-labor-intensive grocery store prices are much less shocking.
The average full-time equivalent McDonalds employee in Denmark makes about $45,000 a year in total compensation. Forty-five thousand dollars! Even after high Danish taxes, that average worker will take home some $28,000 a year, roughly double what a full-time American McDonalds worker will. To add insult to injury, the Dane gets at least five weeks of paid vacation while the American is lucky to get off (unpaid, of course) when her daughter is home sick with the flu.
And so at the Aalborg McDonalds, for instance, a Big Mac extra value meal costs 58 kroner, or $10.25, while the Dollar Menu is the 10 kroner menu, which means its the dollar-seventy-seven menu here. In Denmark, taxes are included in list prices, unlike in the US, so backing out the 25 percent VAT gives us $8.20 for a Big Mac meal and $1.41 for the dollar menu. That compares to $6 and $1 in Seattle.
According to Bloomberg Views Caroline Baum, such a high minimum wage should mean that scads of Danes cant find work because it violates the most basic principle of economics: the law of supply and demand.
Of course, Baum is empirically wrong. Denmarks unemployment rate is 6.8 percent, despite its close ties to the depressed eurozone. Thats well below the 7.4 percent rate in the US, where the minimum wage is $7.25. The labor participation rate for working-age Danes is 64.4 percent, which means Danes are more likely to work (despite their super-generous welfare state, which includes earlier retirement) than working-age Americans, 63.6 percent of whom work. And amongst teenagers and those aged 20 to 24the group most likely to have low-paid jobsfar more Danes work than Americans, as this Bureau of Labor Statistics chart shows:
http://www.cjr.org/the_audit/the_minimum_wage_and_the_danis.php?page=all
Plus they get government paid health care...
arrows2flowers
(5 posts)Enjoy your time there! That's a country that looks out for its working people.
Response to n2doc (Original post)
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snagglepuss
(12,704 posts)xchrom
(108,903 posts)hunter
(38,316 posts)Unlike the U.S.A. which is some kind of corrupt "developing" nation on steroids.