Wednesday, March 19, 2014

76% of Americans Live Paycheck to Paycheck and the Left Wants to Boost Minimum Wage. SHOCKER.

Every once in a while I'll see a report on cable news, the radio, or some other medium, telling me that most Americans live paycheck to paycheck. CNN just reported that 76% of Americans don't have enough savings to cover major life upsets, such as a health emergency or getting laid off.

That's not a comforting statistic, especially with health plans dropping all over the place thanks to Obamacare. The fact that the great majority of Americans "live paycheck to paycheck" is a zinger of a one-liner for pro minimum-wage-hikers, because after all, everyone should feel secure, right?, for instance, has this to say about the matter:
Bonuses allotted by firms on Wall Street in 2013 could “cover the cost of more than doubling the paychecks for all of the 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.” Even more alarming is the reality that millions of Americans are still living paycheck to paycheck. And while President Obama has signed an executive order raising the minimum wage for employees under federal contracts to $10.10 an hour, Congress continues to drag its feet on wage increases nationwide.
While it may pluck the heart-strings of other liberals in that 76% percent and benevolent billionaire leftists, it is simply exasperating to responsible earners like my husband and me.

I'll explain why, to the dramatic tune of the world's tiniest violin.

As a general rule, at least in Western societies, people spend what they earn. When you get a pay bump, so does your lifestyle. It's almost automatic, and I've experienced it myself. Before you've realized the trap you've fallen into, you have a financed 2012 Honda Civic in your parking spot, an Xbox One, and $50 spent eating out every weekend, and $26k in student debt (personal example).

America really does have a luxurious middle class that spends more time consuming than they do producing, and often spend even more than what they make. You might be reading this post on your iPhone 5, or glancing through it while simultaneously watching cable on your 42" flat screen TV. You're probably sitting on cushy retail furniture.

Even below the poverty line, the majority of households don't go without the standard "essentials" of modern living, including TVs, cell phones, microwaves, washers and dryers, and even air conditioning. Just under 30% have gaming systems, 33% have flatscreen TVs, and 63% have cable. And as for healthcare, the supposed trump card for government involvement on behalf of the poor--only 13% of poor families reported not being able to afford medical attention at any point during the year (2009).

In other words, the fact that most Americans live paycheck to paycheck means that people usually have what they need, and more.

Mr. Money Mustache (I know, strange name), an extremely popular personal finance blogger and early retiree, shows through a case study that even minimum wage earners can get out of their debt
and spending cycles and starting building security by reforming their spending habits (yes, even in the city!). Actually, by implementing some of his strategies, my husband and I are about $300 a month away from being able to live off one income.

Nevertheless, the typical American seems widely unaware of his potential, and continues to consume the entire value of his labor...and that would be fine, if Life didn't happen. But as Michelle Obama incessantly reminds us, Life does happen. Maybe you fall off a bar stool and break your arm, or crash your uninsured car...or blow up your kitchen trying to make hash oil (congrats, Seattle). Life can sting like a Washingtonian sunburn in June. We can agree on that.

What we can't agree on, however, is how to address America's vulnerability to financial crises. Liberals say America "needs a raise", and are pushing for a higher minimum wage.

Conservatives disagree, but is a politician really expected to look straight into the camera and assert that no, we don't need a raise, and that we personally should stop consuming so much and start building some savings? That guy is definitely not the Man with the Plan.

And unfortunately, it seems that the general public does want some sort of plan from government to help ensure their general security.

The messaging from the Right seems less than robust in this regard, at least in Seattle, and as a result we come out looking like the wary watch dogs of corporate interests, not the defenders of liberty and opportunity. "Minimum wage kills jobs" is not a particularly persuasive response to low wage workers, especially since it is so difficult to prove (how do you prove that a job would have been created under different circumstances?) meaning the Left can flat out deny the economic costs again and again.

I'm no political mastermind, but if an Independent were to ask me, "What would YOU do about the fact that Americans live paycheck to paycheck?" I would drive home a message of empowerment, maximizing opportunity and earning potential through a thriving economy that welcomes new businesses and new ideas to improve our quality of life, and ultimately reduce the cost of living.

 I'd throw in some practical policy rhetoric, but just enough to pique their interest and let them know we have practical solutions, like tax-free health savings or emergency accounts and letting you buy the insurance plan that fits your budget.

I'd say we aim to make life easier and more simple for everyone, and let you make your own decisions on what you should put away... and if you're really barely scraping by, encouraging workers to demand higher wages or find someone who will pay them more. If I were a local statesman, I might even add a line or two about mandating Personal Finance classes for public high schools.

This is precisely the opposite of the liberal messaging, but it's just as appealing, if not more so. Liberals aim at benefiting a tiny portion of the population, while conservatives want to expand opportunity for everyone. Liberals don't have a plan to truly increase opportunity, only a plan to privilege a few by mandating that opportunity be given to them at someone else's expense--the opposite of their own messaging.

And while the Right is fighting for you to keep what you earn, the Left chips away at your take-home pay with taxes and withholdings, and increases your living expenses with countless levies, tolls, tabs, and costs passed on to you from businesses--all while assuring they're keeping you safe.

Most Americans live paycheck to paycheck, and most do it by choice. But there is something we can do about it after all, if you take into consideration the way liberals are quietly robbing you of your ability to use your income when you need it. Conservatives want you to have the freedom to negotiate your own employment terms, and do whatever you want with your income...doesn't that sound appealing?

So while this 76% statistic is annoying and misleading, I am all for letting my fellow citizens consume, save, and give however they want. The individuals who brandish this statistic as a weapon of class warfare want the opposite.

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