To the editor:
I was intrigued by the political wrap by Brooks and Marcus on PBS Newshour last night. The commentators reported their analysis of continuing gloomy economic forecasts. Brooks commented that the gridlock in Washington is preventing necessary structural changes in U.S. policy. He failed to report just what economic structural changes were needed.
American economics is floundering in a loss for direction. Australia has a minimum wage of $16.85 per hour. The Australian dollar is at $1.10 U.S. and expected to become $1.70 U.S. by 2014. Unemployment in Australia is at 5.5 percent. The Australian Universal Healthcare System is completely funded by a 1.5 percent income tax. These structural changes are working for Australia because of some basic economic factors. When workers make a livable wage, they purchase goods and services that grow the economy. When labor has no value, the greatest commodity of a society has no value.
Minimum wage in developing countries is below 25 cents U.S. per hour. These developing economies draw capital investment from developed economies producing a reduction in the developed economies and producing no benefit to the host economies. This is my deduction to the decline in the world economy.
Trickle-down economics is clearly a failure. China is shifting to a consumer-based economy. Their minimum wage standard is only $2.65 U.S. but is steadily growing. As labor becomes valuable in China, their economy will grow and become less dependent on exports.
I am sure we need structural changes that make labor more valuable and structural changes to provide incentives that prevent capital investments that exploit world labor markets.
Wilbur Clark
Presque Isle
