This style of argument is nonsense. As to earnings, if I have a company and I earn $20k/yr on the side for myself I am not "transitioning that cost to the stat

This style of argument is nonsense. As to earnings, if I have a company and I earn $20k/yr on the side for myself I am not "transitioning that cost to the state" and I should not be prevented by law from operating my business. The same is true if I employ someone to do the work rather than doing it myself. As to determining the cost of living: How would you propose this even be done? The cost of a student living at home is very different from a single person, and in turn is very different from a family with arbitrarily large numbers of dependents. There is no such thing as a universal cost of living. Prohibiting part-time work only hurts people who could otherwise benefit from it -- like students who do not have availability to work full time hours.