The Denmark Minimum Wage Delusion @Bernie Sanders
18Let's take a look at the real numbers, shall we? (The numbers indicate the source)
Let's assume their claim is true, that McDonalds employees (OVER the age of 18) make over $20 an hour. At an exchange rate of 6dkk per USD (technically 5.966)[1], that puts them at 120 dkk per hour. At their standard 33 hour work week [2], that's 3960 dkk per week. At 50 weeks a year, that's 198,000 dkk a year.
198,000dkk is $33,000 a year, which is pretty good compared to a U.S. McDonald's employee earning $15,098 a year. (Per the McD's workers' median figure of $9.15/hour times equal number of hours worked)
But what about their actual take home pay?
An individual making $15,098 a year in the United States:
- Pays $0 federal income taxes. [4]
- Pays $936 in SS tax [5]
- Pays $219 in Medicare tax [5]
Take-home TOTAL = $13,943
An individual making 198,000 dkk ($33,000 a year) in Denmark:
- Pays 15,840 dkk ($2640) Gross Labour Market Contribution [6]
- Pays 9,095 dkk ($1516) Post-Deduction at Bottom Bracket tax rate [6]
- Pays 40,092 dkk ($6682) Municipal Income Tax and Church Tax [6]
- Pays 1080 dkk ($180) ATP (their SS) [7]
Take-home TOTAL = 131,893 dkk ($21,982)
Once factoring in their high taxes, the income differential goes from 219% to 158% comparing their McD employee wages to ours. While accurate to acknowledge that this is greater than comparable U.S. employees, it must be noted, their money purchases fewer goods than ours. Here's why...
The cost of living in Denmark is considerably higher than in the United States. Copenhagen is among the five most expensive cities in the world, for instance, and the flat-rate VAT (sales) in Denmark is 25%. [8]
Here's a snapshot of some key differences in everyday prices: [See citation 9 for complete list]
Basic Utilities: 49% more than US
Clothing (Jeans): 3-4 times what we pay
Shoes: 77% more than US
Car (Volkswagon): 2.5 times what we pay
Milk: 22% more than US
The major cost indices: [10]
Consumer Prices in Denmark are 38.08% higher than in United States
Consumer Prices Including Rent in Denmark are 25.05% higher than in United States.
Restaurant Prices in Denmark are 84.82% higher than in United States.
Groceries Prices in Denmark are 12.87% higher than in United States.
Local Purchasing Power in Denmark is 24.45% lower than in United States.
So let's be ironic here, and ask, "How many McDonald's Meals can a McDonald's worker afford to buy in each country?"
DENMARK: $21,982 net income, at $10.91 per McD Combo Meal (or similar)[10] = 2,015 meals.
USA: $13,943 net income, at $6 per McD Combo Meal (or similar)[10] = 2,324 meals
USA wins by 15%.
Sources:
[1] http://www.xe.com/currencyconverter/convert/?From=DKK&To=USDTo=USD
[2] http://money.cnn.com/gallery/news/economy/2013/07/10/worlds-shortest-work-weeks/2.html
[3] http://www.businessinsider.com/denmark-mcdonalds-pays-20-an-hour-2014-9
[4] https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
[5] https://www.irs.gov/taxtopics/tc751.html
[6] http://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/denmark/index_en.htm
[7] https://www2.deloitte.com/content/dam/Deloitte/dk/Documents/tax/Working_and_living_in_Denmark_for_2014.pdf
[8] http://denmark.usembassy.gov/living-in-denmark.html
[9] http://www.nationmaster.com/country-info/compare/Denmark/United-States/Cost-of-living
[10] http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=United+States&country2=Denmark
[11] http://www.nationmaster.com/country-info/stats/Cost-of-living/Restaurant-prices/McDonalds-meal