Countries With Higher Minimum Wages Among the Happiest in the World

Who says money can’t buy happiness? It certainly made Republicans happy in Tuesday’s elections. A grand total of $4 billion was spent on the midterms which saw a wave of Republican pick-ups. But with Republican pick-ups came something unexpected: minimum wage increases.Voters in Alaska, Arkansas, Nebraska and South Dakota, dominant Republican states, voted to gradually increase the state’s minimum wage.

Two-thirds of voters in Alaska supported the measure, which raised the wage to $9.75, from its current rate of $7.75, by 2016. In Arkansas, two-thirds of voters supported an increase to $8.50 by 2017, from its current rate of $6.25. Nebraska, meanwhile, saw 59 percent of their voters back an increase to $9 by 2016, from their current rate of $7.25.

Minimum Wage Laws by State, 2014

San Francisco voters approved a ballot measure to greatly raise the minimum wage to $15 by 2018, almost five dollars up from the current rate of $10.74. They now match Seattle as the city with the highest minimum wage hike.

This is certainly a victory for working Americans across the country. With the debate surrounding the minimum wage hotly contested, we need to remember that our Founding Fathers wanted a government that would seek to defend the “pursuit of happiness” for all.

The debate surrounding the minimum wage will continue to be a polarizing, partisan separation. Progressives see raising it as improving the standard of living for the working American, while conservatives see it as a job-killing initiative. Both sentiments are possible, given the Congressional Budget Office’s report showing that if the United States raised the federal rate from $7.25 to President Obama’s proposal of $10, millions of Americans would be lifted out of poverty while approximately 500,000 jobs could be lost in the process.

What we, as supporters of raising the minimum wage, seek to do is better the standard of the lives of people who work hard for their money. When it comes to raising the minimum wage, we have the facts on our side: in the graph below, when relating wages to satisfaction as a positive, the trend shows that the levels of life satisfaction increase as the minimum wage increases.

 

Life Satisfaction and the Minimum Wage
The wages are expressed in real 2012 U.S. dollars for purchasing power parity. The question was asked, “Taking all together, how satisfied or dissatisfied are you with your life as a whole these days?” Satisfaction is measured on a scale of 1-10. The data for the minimum wages come from the OECD for the year 2005. The year 2005 was chosen to avoid the damning effects on the public brought on by the Great Recession. The data for the Satisfaction are for the same year and come from the massive collection of survey data at the World Database of Happiness.

This time, it seem correlation does equal causation: As the minimum wage increases, people are generally more satisfied with their overall livelihood. The data also showed that regardless of the size of the economy (a favorite talking point of the right), the immediate economic conditions or the time the data was chosen, overall satisfaction in life increases as the minimum wage increases. And in Scandinavian countries, the raising of the minimum wage owe a major thanks to strong labor movements and collective-bargaining rights. Data also shows that countries who have strong labor movements also tend to be amongst the happiest in the world.

Not surprisingly, the U.N. 2013 World Happiness Report lists Denmark, with a minimum wage of $20 and the strongest labor unions, as the happiest country in the world, with Sweden and Norway following close behind, respectively.

According to the Washington Post, “the research finds this ‘happiness benefit’ applies to everyone in society: the affluent and the poor, men and women, liberals and conservatives, people who belong to unions and those who do not.”

But here in America, conservatives want to appease only one group: the affluent. We can’t pass minimum wage increases, because that would force McDonald’s to make $30 billion a year instead of $33 billion. Oh the horror. The evidence in today’s market economy suggests that certain labor market regulations – progressive, unionized, and fait – indeed work to better the happiness of all. Gee, that’s a surprise.