The debate over increasing the minimum wage is being argued by government officials, businesses like Walmart and McDonald’s, and workers all across America. I believe that the minimum wage should be higher than the current poverty level so that workers can earn a living wage. Let me simplify the minimum wage debate with a very basic example to get started. According to the US Department of Health and Human Services, the poverty guideline in 2013 for a family of four was $23,550 (not including Alaska and Hawaii). In order for one parent in this household to make enough money to be above this poverty guideline, one full-time job would have to pay $11.78 dollars an hour (assuming a 40-hour work week for 50 weeks out of the year or $23,560). This simple calculation does not even include taxes and healthcare, so the numbers actually need to be reworked just to find the “correct” minimum wage.
My point here is not to get tangled up in figuring out what the correct amount the minimum wage should be. It is an exercise in futility because so many families are falling short of the American Dream: a married couple with two kids, a house with a white picket fence, one pet, and a car parked in the driveway. The current minimum wage would not support this family today, unless they live off of basic necessities and grow their own food for the family and the dog! We know the costs of heating the home, putting gas in the car, and feeding the family put a strain on many households struggling to make ends meet. So I think most people would agree that the minimum wage is too low, but the question remains: how much is should the minimum wage be to meet our basic needs so that American families can survive?
However, this is not the question that I want to address because I believe there is something missing in the minimum wage debate. The question is: how do we PREVENT so many people from ending up in minimum wage jobs so that they can at least cover their basic living expenses? My answer to this question is to offer free financial education for all people, especially children and young adults. In my opinion, every school in America should be teaching students about the minimum wage, the poverty level, taxation, inflation, and other computations of real-world financial scenarios that affect millions of American today. I don’t mean to get on my soapbox here, but why do most kids need mathematics beyond algebra anyway? Instead, they need to learn about money and finance to have a basic understanding about how their choices can lead to either financial rewards or financial hardships.
The financial hardships so many Americans currently face are based upon their inability to make a living wage, so the debate to raise the minimum wage continues to gain momentum. However, in my opinion raising the minimum wage would be like putting a band aid on an open wound. It definitely needs to be done to temporarily cover the injury, but the real “fix” is prevention before the injury occurs. In other words, providing a minimum wage increase would temporarily “fix” the problem, but we need to help people get out of poverty and avoid getting caught in a minimum wage trap. Even with financial education, there is no guarantee that people will make better choices, but hopefully it will increase our awareness and improve our decision-making abilities.
Improving financial education well before the struggle begins is only one of the cures for the minimum wage problem going forward. Once this is accomplished, it becomes an issue of personal choice of how to manage finances. With education, we have the power to avoid being caught in the trap of needing a minimum wage increase just to survive. I know this debate has a lot more layers, but this simple treatment of the issue should serve only as a starting point and a different way to examine the minimum wage debate. I am an advocate of additional help and resources and education to reduce the problem. This is not an attempt to disparage or criticize anyone fighting for a minimum wage increase to survive.
Let the debate continue…