Today Chile raised its minimum wage slightly. Conservative government officials argue that due to the size of Chile’s economy they can’t raise the minimum wage further or the country would see unemployment and stagnate in growth.
Countries all over the world are constantly being subjected to this rhetoric by powerful elites that would rather play the ‘safe’ card than strive for social progress.
We ought to remember that when the size of Canada’s economy was equivalent to Chile’s back in time (you have to go back all the way to 1965 for that), the minimum wage in Canadian provinces was over twice as much. The gross levels of inequality you see in developing countries today are caused to a great extent by the unwillingness of elites to redistribute wealth as they try to catch up with the world’s richest nations by growing at faster rates than they do.
If many of these ‘almost developed’ countries spent more time coming up with creative ways to improve well-being and less time obsessing about neoliberal dogma, the affordable workers that are truly building them up would get their fair share of the reward.
As things stand:
Minimum wage Ontario (Canada): 2012 US$5.30 / hour in 1965
Income per person (inflation and PPP adjusted) Canada (1965): 2005 US$ 15,198
Minimum wage Chile: 2012 US$ 2.20 / hour in 2012
Income per person (inflation and PPP adjusted) Chile (2012): 2005 US$ 14,621
Note: 2012 Canadian Big Mac = 1.14 Chilean Big Macs.
Ontario 1965 Minimum Wage: Caledon Institute for Social Policy
Minimum wage Chile: Gobierno de Chile
Big Mac Index: The Economist
Income per person (Canada and Chile): IMF via Gapminder World
Historic conversion rates: Bank of Canada