Minimum wage should be left up to local governments

The summer of 2013 will be remembered for the fast food employees who failed to strike for a doubling of the minimum wage. What made them think that America is a nation where legislation has replaced hard work as a way to earn more money?

There are many arguments as to why it is important to raise minimum wage at the federal level that are based on the assumption that hard work is no longer the path to wealth. Those arguments will be addressed along with the exaggerated sense of entitlement that has become the hallmark of today's minimum-wage earning generation.

Is minimum wage really a living wage?

In most of the country a single person can live very comfortably on the income from one full-time job earning just $7.25 per hour--that's $14,500 per year. In most American cities that is enough to pay for housing, meals, utilities and transportation and even allows for some savings to go into the bank. All that is required is a budget.

Minimum wage is not meant to allow an employee to buy a new car every five years or live in a McMansion with a swimming pool in a gated community. It is meant to allow a single person to live comfortably. It will cover the cost of a reasonable apartment or shared housing. It will provide a comfortable living for one person and cover reasonable expenses.^*

* In most American cities.

How can I pay my mortgage and make my car payments on minimum wage?

Since its invention, television has not only entertained America, but it has left us with a misconception of what the average American lifestyle is like and given us an unreasonable picture of success. Everyday programming is of wealthy American families because viewers want to see wealth and consequently these families have been mislabeled as "middle class" and are assumed to be the norm.

Living in a big house like the family from "Leave It To Beaver" is a lofty and worthwhile goal, but it should be understood that few Americans are born into the lifestyle and wealth that Ward Cleaver provided for his family. Most Americans must work and save for decades on an income well above a living wage to accumulate that much wealth.

This is what the middle class lifestyle really looks like.

In reality the dreamy lifestyle that Wally and the Beaver enjoyed growing up is not middle class. Only 20% of American families can afford to live like that. The remaining 80% lives at a level approaching what many would call "poverty" but this is also a misnomer.

This expectation of a wealthy lifestyle, combined with the societal need to demonstrate success, is why easily-available credit leaves many in a position of indebtedness that cannot be maintained by a minimum-wage job. The lessons here are that savings can be used as a yard stick for when it is feasible to buy something and that impressing your friends isn't as important as you think--they're probably not as successful as you think they are.

Minimum wage is meant to provide a comfortable living wage to support one person with reasonable expenses. It is unreasonable to expect employers to pay every employee enough to display ostentatious wealth for the purpose of demonstrating misconceived success.

I had a wealthy lifestyle and now I should not have to lower my standard of living.

Many Americans are now working minimum-wage jobs after years of earning more in higher-paying jobs that were lost due to the current economy. It is natural to resist change, but maintaining the same standard of living on a minimum-wage job is impractical. These Americans must take one or more of the pragmatic options available.

Volunteering for overtime and working a second job are great alternatives to reducing a family's standard of living. Sending a spouse to work can help to keep a family afloat during hard times.

In lieu of these options, reducing a family's standard of living works best if done sooner than later--best if done at the first sign of financial distress. It is unreasonable to blame a minimum-wage employer for financial distress brought on by too much debt.

But I want to move out of my parent's house now!

Teenagers who have worked a part-time after-school job have gotten much more than a little extra spending money for candy and video games. These kids have gotten a lessen in independence and have learned the value of hard work.

Modern schooling and parenting do little to prepare us to leave the nest--just the opposite, really. 18 years of free housing, transportation, entertainment and meals do much to foster our sense of entitlement and dependency.

These benefits are turned off like a faucet for most kids the day they move out. Many teenagers have a support network provided by friends and family, but many do not and end up back in the home of resentful parents.

Some good advice for teenagers eager to be independent, but are unwilling to lower their standard of living: be patient and tolerate your parent's unreasonable while-you-are-under-my-roof rules. They were never teenagers. They cannot relate to what you are going through, but they do provide free room and board. When you see how much an electric bill for their four-bedroom house is during the Summer, you'll be glad to have them.

I chose to start a family and now I cannot support my baby on minimum wage.

In the same way that minimum wage is not meant to provide luxuries like a big houses and new cars, a baby is an expense that is not accounted for when calculating the minimum wage. A single mother can still have a baby, but the baby's father has the responsibility for supplementing her income, not the mother's employer.

Minimum wage is meant to provide a comfortable living wage to support one person with reasonable expenses. To raise minimum wage high enough to allow single parents to support themselves and one child would unduly burden employers by forcing them to pay every employee enough to support two people instead of the current wage meant to support just one person.

Minimum wage does not cause poverty.

There is a correlation between minimum wage and poverty, but it is poverty that creates minimum wage jobs--not the other way around. Poor people need jobs and struggling business owners need employees. Minimum-wage employees are not made poor by jobs, the poor are lifted out of poverty by minimum wage jobs.

A carpenter who takes on an apprentice cannot afford to pay him very much, but the carpenter needs the help of the apprentice and the apprentice needs the job and the training. In addition to a low wage, the apprentice learns valuable job skills. The same relationship exists between a landscaper and unskilled laborers or between a farmer and farm workers.

Prospective employees with lots of money have no incentive to work; they are unlikely to be hired by employers with little money to pay for their salaries. People who need income to support themselves (poor people) are willing to work in jobs for low wages.

How little income constitutes poverty?

According to the United Stated Department of Health and Human Services the poverty level for a single person is defined by an income of $11,490 or less per year. Minimum wage pays much more than that. Two adults with full-time minimum wage jobs will earn enough money to keep a family of 5 above the poverty line.^*

* Not in Hawaii or Alaska--those States cost a little more. Alaska has a higher minimum wage and Hawaii is considering to raise theirs.

Some employers of minimum-wage employees earn billions

It is true that some businesses are very successful and many propose to take the profits from these companies and give them to employees in the form of higher wages. This un-American practice of taking from the wealthy and giving to the poor is like tearing down somebody's house in order to give the lumber to a homeless person. There are many reasons why this is a bad idea.

Giving a successful company's profits to its employees not only makes it harder for competing businesses to hire workers, it removes any incentive for a worker to start a competing business. Competition is what drives innovation and is arguably the best system for consumers.

Giving a successful company's profits to its employees keeps those profits out of the hands of investors who rely on that money for their living. Many investors are pension funds and retirement programs that allow senior citizens to supplement their anemic Social Security income.

If there is no reward for investing then people will not bother to invest. Investment is what allows businesses to expand, innovate and compete with other businesses. Investors do not invest in businesses so that those businesses can give the money to employees.

Minimum wage is meant to provide a comfortable living wage to support one person with reasonable expenses. To raise minimum wage in order to redirect profits to workers would unfairly burden less-profitable employers by forcing them to pay their employees the same wage and limiting their ability to compete.

Abraham Lincoln's conservative view on this particular topic was very clear. In 1864 he had this to say.

Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.

Minimum wage controlled at the state level

According to the United States Department of Labor, many states have already raised the minimum wage for their state to exceed the Federal minimum. A higher minimum wage may make a state more attractive to skilled labor that, in turn, makes the state more attractive to employers who are seeking skilled labor. States with a minimum wage that does not exceed the federal minimum may be more attractive to employers who rely on unskilled manual labor.

Minimum wage controlled at the city level

Since 2008 the State-wide minimum wage in California has been $8/hr. In March of 2013 the California city of San Jose set the city-wide minimum wage to $10/hr and tied annual increases to the inflation index.

Many states do not allow individual cities to set their own minimum wage, but several cities have including Santa Fe, Albuquerque, Washington, D.C. and San Francisco.

Most cities in expensive regions do not bother to raise their minimum wages as employers are already forced to compete for employees with each other and with more affordable cities. Employees who are paid too little to survive in an expensive city is forced to move to a city where he can afford to live and that leaves the employer in the expensive city without the help he needs.

What must be done to fix the problem?

So far, nobody has identified a legitimate problem. Unrealistic expectations, economic downturn and unexpected pregnancy are already addressed by other private and government programs and were never the problems meant to be "fixed" by a minimum wage.

Minimum-wage workers aren't rich, but they're not supposed to be rich. An American willing to work a full-time job already lives well above the poverty line. Luxuries like large houses and fancy cars are the incentives for education and advancement, not the reward for the least amount of effort.

William J. H. Boetcker, a German immigrant whose wise words have been misattributed to Abraham Lincoln for 70 years, leaves us with the best advice for how to fix this unidentifiable problem in his epic "The Ten Cannots".

You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong.
You cannot help small men by tearing down big men.
You cannot help the poor by destroying the rich.
You cannot lift the wage earner by pulling down the wage payer.
You cannot keep out of trouble by spending more than your income.
You cannot further the brotherhood of man by inciting class hatreds.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away a man's initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves.