The numbers are now in. Trump won with a little help from the Russians, and the Chinese are definitely on the front foot in the South China Sea.
Adrian Beaumont at The Conversation has the final count.
- Clinton won the overall popular vote by 65.84 million votes, to 62.98 million for Trump, a difference of 2.86 million. Clinton’s raw vote was down only slightly from Obama’s 65.92 million in 2012, while Trump was over 2 million above Mitt Romney’s vote.
In percentage terms, Clinton won 48.1%, to Trump’s 46.0%, a 2.1% popular vote win, compared with Obama’s 3.9% win over Romney. Libertarian Gary Johnson won 3.3% and Green Jill Stein 1.1%.
My calculations indicate that around 27% of eligible voters voted for Trump.
Of course, we know that Trump won 306 electoral college vote to Clinton’s 232. The crucial states won by Trump were Wisconsin (by 0.8%) Michigan (by 0.2%) and Pennsylvania (by 0.7%).
We are told that biggest factor in explaining the swings was that higher educated voters, with college degrees, voted for Clinton, and lower educated voters opted for Trump. It was education rather than income, and applied also in states where there were more black or Hispanic voters than whites. Certainly whites voted for Trump and blacks heavily for Clinton. The Hispanic turnout was higher than in 2012, which improved Clinton’s position in Texas and Arizona, without flipping the states. Black turnout was a bit lower than for Obama.
- A crucial factor in Trump’s victory was that voters who did not like either candidate (18% of the total according to exit polls) selected Trump by 47-30 over Clinton. Had these voters split fairly evenly, Clinton would have won as her favourable rating exceeded Trump’s by five points.
Turnout overall was 60.0% of eligible voters, up from 58.6% in 2012. This seems low, but we should remember that only 82% of eligible Australians cast a formal vote at the recent Federal election under compulsory voting.
Beaumont links to this electoral map. The one at The Guardian I linked to previously doesn’t show as many votes as Beaumont cites.
The election was so close that many of the narratives about how Trump won are probably true. The article says that reopening the Clinton email file by the FBI 11 days before the election probably changed the result.
The FBI and the CIA both believe that the Russians intervened by hacking the emails of Democrat campaign chair John Podesta and provided them to WikiLeaks. I don’t know why this would surprise anyone.
Yet Clinton and Podesta have been reluctant to admit that their strategy was fundamentally flawed and inadequate. Articles like this tell how she neglected the states that turned the election, that the famous Democrat ground game had willing workers who were not supported, and that the whole campaign was corporate and bland.
John Fallows at The Atlantic says he has spent half of the last decade getting around the traps in the US to see what is going on, the other half in China. He says that the election of Trump was the most grievous blow that the American idea has suffered in his lifetime. However, it was not one of “sweeping change” caused by the authorities ignoring the pain of those left behind. He believes that:
- our current era has been another one of painful but remarkable reinvention, in which the United States is doing more than most other societies to position itself, despite technological and economic challenges, for a new era of prosperity, opportunity, and hope.
He emphatically disagrees that:
- this was a sweeping “change” election, and that it reflected a pent-up desperation and fury that would have been evident if anyone had bothered to check with Americans “out there,” away from the coasts.
He says that there was a bit of everything in the story which gave Trump a very narrow win, including the “fury out there” theory. Yet everywhere he and his wife went in America people were getting together and improving their lives, and their lives were improving.
- city by city, and at the level of politics where people’s judgments are based on direct observation rather than media-fueled fear, Americans still trust democratic processes and observe long-respected norms. As I argued in a cover story last year, most American communities still manage to compromise, invest and innovate, make long-term plans. They even manage to cope with the ethnic change and racial tension that Donald Trump so crudely exploited in his campaign, with more flexibility and harmony than anything about the campaign might indicate. Yes, residential and educational segregation are evident across the country. Yes, police violence is more visible than ever before. But people in Michigan and Mississippi and Kansas were more willing to start confronting these injustices locally than nationally. The same was true of immigration. In our travels we observed what polls also indicate: The more a community is exposed to recent immigrants and refugees, the less fearful its people are about an immigrant menace. We heard no lusty “Build a wall” cheers in California or Texas or other places where large numbers of outsiders had arrived.
And yet Donald Trump won.
- How could his message of despair and anger about the American prospect, and disrespect for the norms that made us great, have prevailed in a nation that still believes in itself at the local level? How can Americans have remained so confident and practical-minded in their daily civic dealings, and so suspicious, fearful, and tribally resentful about the nation as a whole?
- Nearly a century ago, Walter Lippmann wrote that the challenge for democracies is that citizens necessarily base decisions on the “pictures in our heads,” the images of reality we construct for ourselves. The American public has just made a decision of the gravest consequence, largely based on distorted, frightening, and bigoted caricatures of reality that we all would recognize as caricature if applied to our own communities. Given the atrophy of old-line media with their quaint regard for truth, the addictive strength of social media and their unprecedented capacity to spread lies, and the cynicism of modern politics, will we ever be able to accurately match image with reality? The answer to that question will determine the answer to another: whether this election will be a dire but survivable challenge to American institutions or an irreversible step toward something else.
With post-truth politics and fake news spread by social media, political discourse in the context of democratic representative democracy seems broken. The question is whether it can be put together again.
Kevin Rudd expressed similar sentiments recently when receiving a doctor of laws at the ANU:
- Our land and our people have indeed been deeply blessed. Yet I fear that part of our cup that remains empty may become the larger part.
But somehow we seem powerless to act. It is as if we have lost our national bearings. Lost in a national culture of learned helplessness. Lost in what the Jesuits call “the globalisation of superficiality”. Losing faith too in our national institutions.
We are satisfied instead by this shrieking culture of partisan recrimination, and the kabuki play that now passes for our national politics – where the room for discourse on the deep questions of our future has become increasingly marginal; where any discussion of national vision, let alone global vision, disappears amid the deafening howls of derision from a political class and large parts of the commentariat whose first instinct is to tear down, never to build up.
This is all reinforced by national elites, both of the right and the left, both corporate and union, including both academia and the media, increasingly incapable of honest self-reflection.
It is as if we have produced such a vicious public culture, well beyond the realms necessary for robust disagreement and debate, in which to admit error is to admit weakness and therefore to yield to defeat.
Rudd calls for a big Australia, an “Australia that is big in heart, big in imagination, big in innovation, big in its entrepreneurial spirit.”
It’s a rallying call, but to mean anything we need politicians who act as leaders rather than play partisan games. I still think that in our recent election experience the point at which a politics of reasonable discourse was destroyed was when Malcolm Turnbull said negative gearing would smash house prices, when he knew it wouldn’t. Things went south from there.
60 thoughts on “How Trump won, but what does it mean?”
Obama cozied up to China and battled Putin. Trump is doing the exact opposite.
China by seizing an underwater American drone near the Philippines is sending a signal that it won’t be pushed around.
Get ready for turbulence.
Trump may be making the right call. China has been playing the bully in the South China Sea.
I guess it all depends on what game Putin is playing.
John, it occurs to me that China may have planned to become more aggressive in the South China Sea irrespective of who won the election, taking advantage of the changeover period.
Brian: I think China is more interested in putting pressure on its neighbours and acquiring territory than pressuring the US. However, they may have decided to do this while the US was distracted.
I see it more as a game of GO.
David Frum has an interesting article Foreign-Policy Poker With Donald Trump.
Apparently Russia has an economy about the size of Italy’s, but seems to be playing well above it’s weight. trump looks like a sucker. Frum says:
Indeed “… but what does it mean?”.
Just a quick response, with the festive season on doorstep, relentless heat and no rain and major disaster with the chooks in mind.
A thorough analysis of the election of Trump will be a longterm project, as indeed that of the major social political events of 2016 will be. Personally I think the more salient question should be on why Bernie Sanders lost the nomination, because really that was the straw that broke the “representative democracy” camel’s back in the USA. I am not sure even if it can be put together again using the same mould as before. Clearly something major has changed, whereby the symptoms are easily identified, it is much harder to outline the underlying drivers of the change and even more so the new direction it will bring.
Of course there is always history and we have looked at previous parallels with Nixon and Reagan, there were men a few articles comparing the events to imperial roman epochs. However, it is more complicated than that, given the changes we have undergone really since industrialisation, the size of pressing social, economic and ecological issues and the increasing globalised context. For me it is hard to see how representative democracy can contain all the solutions to the vexed problems we are facing as humanity. Indeed I am questioning whether old social and political institutions, such as Nation states even have a future in above context. Will we see further rapid social, economic and ecological fragmentation, with the Trumps in this world merely the facilitators not the drivers of such change?
So what does it mean? Well it depends again on who is asking and for what reason. I doubt that Rudd’s ‘vision’ of making Australia great again to avoid a superficiality is the solution and sounds as hollow as Trumps version. I suspect it will mean a realigning of who ‘we’ are outside the norm of social structures. An emerging focus on redefining us as individuals, as community and humanity. Such realigning does not go without major crashes and clashes on a scale beyond the present “vicious public culture” as outlined by Rudd. This would mean that as Individuals and as communities we have to become more resilient and agile to absorb and shift with these monumental changes. Of course there is much more to it, but for the sake of brevity let me turn to my favourite contemporary philosopher De Botton in his chapter ‘Consolidation for Difficulties’ quoting Nitzsche:
Just to cement the above consolation, De Botton offers a final quote from the man:
A lot to chew on there Ootz.
In the end I went back to Naomi Klein’s analysis, which I think makes a lot of sense. In selecting Clinton the Democrats were opting for more of the same with corporate capitalism in the saddle. Bernie Sanders would have been subject to a huge scare campaign, being stereotyped as a communist. I imagine they would have done better with Elizabeth Warren.
John Fallows, when you get down to it, was in the same camp as Hillary – we don’t need to make America great because it already is great. We have the industrial wastelands but people are rebuilding their lives. Those jobs they had, that defined them and gave them identity, are gone and are not coming back.
Yet Naomi* Klein too thinks that real jobs can come back, evoking a ‘new deal’:
But the best you get, by and large, is a gig, a contract for a few years at the most, unless you are yourself a mover and shaker.
I think nation states will be around for a while, but they have their limitations, as does democracy which doesn’t easily offer real change.
Immanuel Wallerstein was at it again in his latest commentary (it’s No 439 towards the end if you come along later when it’s in the archive):
The super-elites are embedded in a way that frees them from nation states, the rest of us are serfs.
* Corrected. I originally wrote Melanie for some unknown reason.
Sorry about the chooks, Ootz.
We’ve had a storm or two, destructive for those who had trees falling on their houses, but you can see the grass grow, for a week or two, anyway.
Rudd’s speech linked in the post was OK on the diagnosis, empty rhetoric on the solutions. He was better, I thought, on the 7:30 program tonight.
Michael J Boskin is interesting in Four lessons from Donald Trump’s US election victory :
I don’t think we’ll ever get a just and decent society in the US or Australia from the right wing of politics. The question is whether we can make it on the left.
Thanks Brian, my comment about Bernie Sanders was not meant that he could have won, rather than he was the better candidate, as per your quote by
Appart from that, I agree with your analysis of Klein’s assessment of employment opportunities, as Carl Benedikt Frey and Michael A Osborne estimated, about 47% of US jobs are at high risk from the changes underway in digitisation and automation. This shift is anticipated to occur over the next 20 years, which would be unprecedented, as a similar shift from agriculture to industrialisation occurred over longer period.
We are heading into massive changes and as Prof Klaus Schwab, from the Davos World Economic Forum fame puts it (see my link above):
My reference to the diminishing role of Nation states was made in view of two major trends. The increasing multilateral agreements between nations as well as the trend for regions or states to pick up responsibilities where states have failed. Look no further than effective carbon emission management and energy security in Australia and the US. The dilemma within GB and EU with Brexit is another example. But ultimately you are right the 1% create the larges threat to the cohesion of Nations, just look how they buy our politicians here and in the US. The old capitalist economic paradigm is broken, from an economic point of view as well as from a social. Again a large change or reckoning is looming in that area. Finally, an equal driving force for change are the ecological boundaries we are approaching. I don’t need to go into details here, as your blog does really well in highlighting where the problems lay. So all in all, we are living in interesting times, Trump or no Trump. The problem has grown too large and complex for the ‘leader of the free world’ to make a difference.
My short experience in government employment, left me to come up with a paradigm to explain some counterintuitive experiences I made:
So when I was not able to appeal to reason and appropriate responses, I stopped appealing and ‘fighting’ for such and actually adopted and applied the flawed policies with zest. More often than not, this brought change much quicker and easier than me trying to ‘fight for it’. In that sense I hope Trump will fulfil all the expected failings in order to enable real and effective change quicker. However, some people will have to bear the brunt and there is a real chance for it to go totally out of hand.
With respect Brian, I have real problems with your last comment re the rights inability to enable a just and decent society and questioning the ability of the left. First, no political movement has ever been absolute in benevolence. Second, the old left-right dichotomy is not practical nor applicable anymore. IIRC even the ABC voter compass had a third dimension roughly outlining libertarian tendencies. And there is increasing good research on this, one puts it this way;
We really need a better way of ascribing labels of major qualities of political tendencies. Say for example integrity politics vs corrupt politics or popular politics vs party politics and so forth. Perhaps with the large changes I outlined above in mind, we could differentiate between reactionary vs adaptive politics? Maybe there are some good historical lessons in the past, say when rapid industrialisation and social disruption occurred.
Ootz, I have no idea how Melanie got into my head. She’s never been there much before.
I’ve only had a chance to skim the link, which is interesting, but I’d note that it simply adds one dimension, so we have social as well as economic conservatism and liberalism. That said, the differences they find are quite substantial.
I’d agree that people are all over the place. The fact remains, however, that we have two main offerings, and the underlying philosophies are substantially different, and can still be characterised in left/right terms. The latest Essential Report of voting intentions has about 85% of us voting for well-established parties if you consider the Greens. This great wave of change we hear about is not as vast and overwhelming in its source in the public mind as some would have us believe. We had Brexit and Trump to be sure, but the biggest question is why so many people couldn’t be stuffed voting, but will now live by how others did in two very marginal wins.
I’ve got to write some emails now, and finish a post, and am working up to Christmas.
Here is a perspective from LinkIn which will entertain for hours. The comments are all worth the reading.
The Libertarian theme comes through at fulolo speed.
” Fulolo ” ?
Jumpy, I Googled, and Fulolo is a locality in East Timor. I don’t think that helps! But the “o” is just above the “l” on the keyboard. That might be a clue.
Good in depth comment on the substance, there, Jumpy. The “f” word is obviously a fat finger typo of the intended word “full”.
I’ve been flat out getting an export shipment of our machines off to Europe and haven’t been able to comment as I would like to, Brian.
Merry Christmas and a happy New Year to all.
The Libertarian Association of Workers and Farmers of Fulolo will soon have a website, but it will not be speedy. It will be in Tetum, so there’s a new study area for you Senhor Jumpi.
Down with Portuguese, language of the colonists! Down with Bahasa Indonesia, language of the Neo-colonialists! Down with English, international language of oppression, royalism, bureaucracy, imperialism, hypocrisy and Australia! Down with Dutch, language of the Spice Island colonists!
Down with the coffee beans to Dili before we all starve.
And a happy new year to Timor Leste.
Ootz, to return to my comment, it was:
Firstly, I can agree with your comment that no political movement has ever been absolute in benevolence. I wasn’t suggesting otherwise.
The second part of your comment was “the old left-right dichotomy is not practical nor applicable anymore.” I’m not sure this is true, and hope to explore it in a separate post. However, I was not talking about the political ideology of voters, rather of parties that present themselves as left or right.
Leaving aside the Nationals, it can be argued that both Labor and the Liberals are to the right of centre, on the basis that Labor no longer actively pursues the public ownership of the means of production. This brings up the recent discussion in Labor forums about the ‘socialist objective’.
Turns out they haven’t tried to nationalise anything since the objective was installed in 1921 except a failed attempt on the banks. there’s been plenty going the other way.
I think I’ll do another post on the socialist objective, but I’m not sure where I’d put Labor on a left-right spectrum. I think centre-left. Meanwhile we know them by their works – just think of what the ALP and the Liberals would and wouldn’t do.
The ALP wouldn’t have introduced the ABCC legislation, and run a scare campaign about unions.
Labor would hold a royal commission into the banks, whereas the Liberals won’t.
The Liberals won’t fund Gonski, they talk about funding schools that succeed and penalising those that don’t. Instead of fixing underperforming schools they want to punish them, never mind about the kids.
The Liberals are taking money off legal aid and other programs to help the dispossessed. You can’t have a decent society without access to justice.
You can look at corporate tax cuts vs money for hospitals and schools, or just climate change. In Australia, the USA and Canada, attitudes to climate change are a marker for which side of politics you are on. Labor is serious about climate change, but screwed about coal mining. The Liberals clearly prioritise economics, as they see them, over the environment.
I did intentionally restrict my comments to Australia and the USA.
Finally, I have to confess that I didn’t look at the ABC Compass survey. Opt-in online polls are said to lack scientific validity.
I think about a million people did the survey. That’s roughly 6% of the 16.5 million eligible voters. So the survey only told you about the group who completed the survey, not about the Australian voting population generally. I couldn’t help hearing about it, but tried to pay as little attention as I could, until someone competent in statistics tells me I should.
Trump’s Inauguration Speech in full Nice words but we will have to wait and see what actually happens.
The acid test will come quickly. If Trump does not increase the minimum wage nationally on the same day he abolishes Obama Care then the outcome of his presidency will be abject failure. IMHO.
The ” minimum wage idea ” is an unachievable, unenforceable pipe dream that causes more harm than good.
Unless of course its possible to eradicate the black market and and volunteerism, which its not.
That is you just throwing words around, Jumpy.
It is easy to prove that a higher income level yields more economic activity.
The simple test is look at an economy where wage levels are zero. People work for no return making products to sell to the people with no money. The business owner gets all of the proceeds of zero turnover. How long will that economy work?
The other is where all of the money earned by selling products from a business are disbursed to the employees leaving nothing for the operation of the business or to buy materials. How long will that economy work?
So a viable economy operates between the two extremes where all of the proceeds go to the business owner or to the worker. The US has drifted significantly to the first of those scenarios, and the nation is suffering as a result. The economy is OK and the business owners are very OK but the operation of the nation is failing due to insufficient revenue. The only way to fix that is with greater economic turnover. Either the rich people need to spend all of their money so that taxation can be generated, or the population need to have higher incomes with which to generate taxation income.
Rich people get rich by not spending their money and that is not going to change, so the body of the population need to have higher incomes, hence an increase in the minimum wage, or the baseline income.
The minimum wage works just fine in most countries, your claim is false.
Black market? is that where you buy your groceries, Jumpy?
If the ‘minimum wage’ is unenforceable, how can it cause harm?
If you are claiming that a minimum wage is unenforceable, prove it.
Only the law abiding would follow it giving financial incentive and advantage to those not abiding. Eventuating in a Greece like economy, high levels but little compliance.
Bilb, please explain to me how destructive to the economy are the thousands of Australians that work producing goods and services for nothing, the volunteer sector. Should we ban that activity because it crowds out tax paying enterprises with wage earning employees ?
Jumpy: I remember the bad old days when the Aus minimum wage was enforced. Almost full employment and and an economy that was growing steadily.
Wouldn’t want those sorts of things would you?
Last time I visited the US we found that the cost of things in $US was about the same in $Aus here. Yet the US min wage at the time was under half the Aus min wage. The family living under plastic in the park was probably working full time according to my son.
The US won’t be great again until it gets some money into the hands of poor consumers.
John, economies grow by producing more or higher value to existing products.
Paying everyone $1000 per hour will not grow the economy.
I put to you the question I asked of bilb.
Like pork belly futures.
… or sub-prime mortgages.
A wonderful Government initiative, and taxpayer guaranteed !!
What could possibly go wrong….
… and collateralized debt obligations .
Yes, the ever so accurate ratings agencies had most at AAA.
But the price fixing of wages theory having positive effect is still bad.
Jumpy: You are quite right. Suddenly paying everyone $1000 per hr would create dramatic inflation and economic instability. On the other hand, reducing wages can be equally disabling. You just have to look at the US to see what the other extreme does and think about the potential for revolution. You could of course consider what happens when the pay increases are moderate.
I agree about volunteering and internships. If what is happening is that the unpaid are stopping people who need paid work getting paid work then there is a problem. Ditto when businesses are pressuring people into doing unpaid work to “get experience”. I am thoughtful re what I volunteer for.
Jumpy, you are going to have to be more specific. Are you talking about scoutmaster, kennel club and orchid club officials, or perhaps people who manage netball games and soccer games on the week end for their kids. Is the people who run soup kitchens for the homeless or the mentally challenged lady who is seen around a nearby neighbourhood picking up the trash from the streets on the weekend.
I am struggling to see where there is some economy crippling impact in volunteerism where people give their time to help others in fields where there is zero commercial return possible.
Then again you might be thinking about councils where councillors are not paid, not paid directly at least. There is no mystery there. That is a ruse organised by those who run local businesses to command access to and commercial gain from property control in their local area. The no pay keeps undesirables out so that shady dealings remain undiscovered. Fortunately this one is changing slowly.
Please, where do you see an army of economy crippling unpaid workers, other than in Tony Abbott’s imagination?
As to US minimum wage, this is about $7.5 rising to $12.00. It tells me something about what goes on in your head that you have inflated that to $1000 per hour.
I don’t understand why the US is considered bad, the quality of life is ranked very well.
I mean, there’s no legal minimum wage in Sweden, Denmark, Iceland, Norway and Switzerland yet you often hold them up as models.
I struggle to see consistency in the arguments for it.
Now now bilb, you’re getting personal again.
Regardless, is your argument that raising the minimum wage will have positive economic impact for Australians and working for free does too ?
Yet somewhere in between the minimum wage and free is somehow evil and cruel ?
I think that Clinton made a massive mistake by not taking Sanders in as a running mate, and bringing along his huge support.
Also, what economic models have $12/hour as optimum and not $8 or $16 ?
I haven’t followed it much but what did Obama do about it over 8 years ?
Again Jumpy you seem to be suggesting that people who volunteer in their spare time, after working for above the minimum wage all week, to do recreational pursuits in an organised way are crippling the economy. You are not making sense.
You seem to have dropped your earlier angle by which I suspect that your notion of a black market refers to, say, groups of mates who are, perhaps, builders and chippies who do jobs for cash so that they don’t have to pay tax, and having done that claim to be Libertarians to minimise the guilt of their tax cheating. Such people are those who are unable to operate legitimate businesses and in no way signal a Greek situation in Australia.
We all know that that goes on, though certainly inflated in Pub talk time, and is a narrow non mainstream fringe in Australia. That is the one advantage of the GST, it means that most of those people pay some tax, and in the so doing they are easy to eventually track down when their income gets high enough to justify the hunt.
Jumpy: I looked at your quality of life table. It didn’t seem to have anything about fairness etc. My take on the US is that, at best it is a second world country because the people at the bottom are treated so poorly.
Averages are a poor indicator of quality of life.
No bilb, Im not arguing that working for free, or less than the minimum wage should be banned. Or there should be a minimum wage at all.
The pro minimum wage argument is that the economy would be better off due to more churn, volunteering ( working for free ) would be more harmful than lower wages.
Im taking not of recreational pursuits rather areas of work, child care, entertainment, fundraising, refuse disposal etc .
It is for you to justify the argument that more pay laws = better for everyone. I don’t believe thats true.
Many from India want to go to the US because even the poorest are fat, thats a first world thing in my opinion.
I too am careful in what I volunteer for.
Not all volunteering represents zero dollar churn. A case study: local Opp shop, with large turnover. Charity owns Opp shop in town centre, so electricity and cleaning costs mainly. Staff volunteer.
Huge sorting centre elsewhere, on which charity pays rent. Operates two vehicles for delivery of furniture sold or pickups of donations. Sells clothes, books, crockery, brick a brac, toys, sports equipment, bicycles, furniture including beds, tools, “dress up” clothes etc. Sorting centre staffed by volunteers.
Unsaleable clothes sent to rag buyer, excess donations to an Opp shop in another town. Old blankets sold to greyhound owners. Unuseable metal goods sold to a metal recycler. Wire sold to a copper fancier, excess books given to two other charities … etc etc.
Cash circulates, useable goods diverted from being dumped at the tip, bargains for the impecunious and discerning buyers.
Volunteering isn’t always outside the money economy, though it can be on the periphery.
The other intersection with the standard economy is the Opp shop’s taking advantage of the “throw-away” penchant of the town. Amazingly new garments, books, toys (unwanted gifts??) are donated.
Only the law-abiding……..
Yes, murder is illegal.
Every now and then, someone breaks that law.
Do we term the offence “unenforceable” because of such breaches?
Should that law be repealed??
Let me help you, Jumpy.
You will see from this page, which has a huge amount of scary information in it (scary for Libertarians), that Indians are keen to go to the US because the Indian minimum hour wage is $0.31 against the US $7.31 against the Australian $13.3 against France’s $10.93 against Greece’s $4.46. These are all in US$ terms.
You will easily see from these figures that the countries that are struggling or failing have low or minimal hourly rates of pay. The difference between India’s HR and the US HR is a factor of 23. ie US 23 times higher.
You have to view these figures against the cost of living and the cost of real estate while remembering that they represent MINIMUM hourly rates. For Australia the figure represents an annual income of about $30,000 per year. Hands up those who want to attempt to live on $30,000.
It is also important to note that a low income does not necessarily mean a poor quality of life.
Those who are self employed in Australia have no minimum wage, they are able to work for as little as the choose, as long as their work does not effectively amount to an employment situation.
Good on you, Ambi. A worthy cause,…and I feel secure in the belief that your activity is not undermining my business. Carry on.
What, Sweden, Denmark, Norway and Switzerland ?
If an employees take home pay is raise by $1 per hour, how much is the cost to the employer ?
And where will that need to come from ?
Jumpy, you have to remember that Europe has a very long and proud tradition of trade guilds. Unions to you. Each industry sector has their own wage contracts (bargaining agreements or awards in the Australian context) and so those countries have not needed national mandated minimums. But from the Wiki page where Switzerland was considering such legislation the indicated figure was over $22 per hour, if I read it correctly.
Sorry, Jumpy, to your 9:46, that is “commercial in confidence”.
is too narrow a question because you have to think about the effect of that raise beyond your business
In terms of your question keep in mind that pay is only part of the cost of production and raising finance so, for example, a 10% increase in pay will result in less than 10% increase in costs, even when you take into account payroll related costs such as payroll tax, insurance etc.
In terms of the business itself, if you assume that the increase in pay does not affect sales, the increase in pay will increase costs and this will have to be paid for by reducing profits, increasing the loan and/or putting up prices.
If you look beyond the business itself, the pay increase will have a number of effects. Government tax receipts will increase and the income of insurers, super funds etc will increase. In addition, the extra pay will increase the purchasing power of your employee who may spend the money increasing sales of other businesses that have surplus capacity. (A chain of increases in businesses may eventually work its way back to you.)
Widespread pay increases may also result in reductions in the value of the $Aus which may benefit people like Bilb who operate in the global market.
Right now it looks as though small increases in pay will have the net effect of stimulating the economy. However, excessive pay increases are going to lead to something like the stagflation we enjoyed when Howard was treasurer. We have to get the balnce right and we definitely aren’t there at the moment.
Jumpy, John is right. There is no evidence that the Quality of Life index refers to takes account of inequality within the country. If you check out the CIA Factbook, the Gini index for the five countries you mentioned as having no minimum wage – Sweden, Denmark, Icelend, Norway and Switzerland – have a Gini index between 24.8 and 28.7. The US come in at 45. India and China are right up there too as are many poorer countries.
On your 5 Developed Countries without Minimum Wages page it actually explains for each one that fair wages are negotiated between unions and employers. Didn’t you read that, or did you choose to ignore it?
Yes I did bloody well read it and no I didn’t ignore it.
Do they have a legislated minimum wage or not ? No.
Did they find a better way ? Yes, Obviously.
( I’ll get back to John latter. )
JD @ 12:10 pm: Excellent explanation John – thank you for putting it so succinctly.
Then why didn’t you highlight how they had done it?
FYI, if the blog statistics are to be believed, most people don’t follow up links.
FYI, I make a habit of reading the information that I link to.
I didn’t highlight the unions because I thought we were discussing Governments mandating a minimum wage though legislation not collective, or even individual bargaining.
Well, Jumpy, your point
becomes pointless when you understand the reasons.
As I understand it, in the minimum wage hearings in Australia, evidence is presented by several “sides” about the likely economic impacts of changes to the Aussie minimum wage.
It is not a factor that is ignored in the proceedings – far from it.
John is correct to assert that a huge and sudden increase would likely fuel high inflation.
It’s also true that such a rise has never occurred here.
So the “reductio ad absurdum” argument presented earlier was misdirected.
Hyper-inflation is an ugly word, not to be bandied around lightly.
Off course it is a shame that we have to stipulate minimum wages. Perhaps I have an advantage that I have grown up, been educated and trained in Switzerland and thus have lived in two totally different worlds re employer-employee relationship. The class system based attitude in management as well as workforce is astounding as much as crippling in the long term. The whole nation here runs on the Peter principle*, from the National government down to the building site or shop floor. It is almost as a batch of honour to denigrate and stifle ‘the other side’ in a cultural or class war where no one wins, particularly when such a war is fought within the entity one works or lives. Talking about long term views, increase in collaboration, productivity and competitiveness vs lack of integrity and intellectual rigour substituted by tribal allegiances and ‘The Lucky Country’ attitude**. There are notable and laudable exceptions, but without holes in the ground or raping and pillaging just about any other resources, natural or human, Australia would not exist.
Fancy bringing up Norway in that context. Now that is a Nation who choose a longterm view for the good of everyone of their citizen with respect to their boon of natural resources. This is the Nation where revenue from their oil fund now exceeds revenue from oil. In fact the whole ‘Nordic Model’ (Denmark, Finland, Norway, Iceland and Sweden) revolves around “universal welfare” where representatives of labor and employers negotiate wages and labor market policy only mediated (not stipulated) by the government. They have outstanding education and health systems available for free!
Meanwhile there are thousands to receive basic income in Finland: a trial that could lead to the greatest societal transformation of our time. hat basic income will replace their existing benefits. The amount is the same as the current guaranteed minimum level of Finnish social security support. The pilot study, running for two years in 2017-2018, aims to assess whether basic income can help reduce poverty, social exclusion, and bureaucracy, while increasing the employment rate. This is not only a whole of government but a whole of Nation approach. A credible attempt to deal with the structural economic, social and government problems which are present as well as the massive imminent changes which will occur over the next decade. Switzerland recently was the first to vote on an universal basic wage and voted against such for the time being, but that won’t be the end of it. Familiar with Swiss thinking, I suspect they probably want to see how someone else fares and then learn from it.
Meanwhile Australia is sleep walking divided into the foreseeable head winds, while looking at quick bucks to fight another cultural war. Or a real one for that matter to maintain the national myth of the glorious digger with the foundation of the Nation, while historically abysmally failing to look after it’s returned soldiers.
But hey what has minimal wage and Nordic states got to do with the topic? Oh but to fight another cultural war based on total ignorance (sprouting facts without knowing or understanding background) and incompetence (lack of consistency and substance in argument). Unless of course these comments are being meant as sarcasm (… I don’t do and read sarcasm really well, sorry) but the whole argument re basic income above is contorted, in parts contradictory and uninformed to say the least.
*The Peter Principle by Laurence J. Peter. “Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” “In a hierarchy, every employee tends to rise to his level of incompetence.”
** You can google the research yourself, it was reported in Limited News search for
“”.. a study of 5000 Australian executives over 10 years came to the conclusion that they lack basic interaction skills and can singlehandedly stymie productivity.
“It is often mistakenly assumed that business leaders have mastered such critical interaction skills, but our findings show quite the opposite,” Bruce Watt Ph.D., managing director of DDI Australia, which conducted the research, says.
The research looked at executive skills in relation to team meetings, coaching, delegating and their general ability to communicate effectively … and it found them wanting with:
• 55 per cent of executives believing their ideas are the best and not listening to others
• 45 per cent assuming they understand the problem, but they don’t
• 50 per cent failing to listen effectively or read other people’s reactions well
• 48 per cent leaving meetings without a plan for what to do next””
Looks like Trump hasn’t won the hearts and minds of a majority of his constituents.
Well that is pretty well on the money, Ootz. Sad really.
The Peter principle states that
In a hierachy, given sufficient scope for advancement, every person will rise to his maximum level of incompetence.
(it is one of the few books that I have read from cover to cover. I was intrigued)
Jumpy, just to confirm the mendacity of the ABC, these pictures were both taken shortly before noon from the top of the Washington Monument.
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