The national economy is recovering, but those who lost heavily in the Great Recession are not. Wages were frozen and hours cut during the downturn, and even as jobs come back and profits go up, wages are stagnant.
There are many reasons for the flat pay: globalization, immigration policy, robots replacing people, a lack of trained workers, fading unions, a frozen federal minimum wage and, in the spirit of Scrooge, tightfisted employers. The slow growth in pay is widening income inequality, shrinking the middle class and sapping consumer demand that drives the U.S. economy.
But this big and complicated problem may have a simple solution. All employers should agree to pay employees enough that they can support themselves and their families without relying on public assistance. That’s called a living wage.
North Carolina has not been receptive to setting wage floors. For many years, the state’s selling point was a large population of non-unionized employees willing to work for less than what employees demanded in other parts of the nation. For a while, that drove the state’s textile mills and other manufacturing industries. But then companies found even cheaper labor overseas, and low wages were no longer a North Carolina selling point.
The least-unionized state
That experience hasn’t turned some from the belief that low wages are good for business. North Carolina has failed to follow other states in setting a minimum wage higher than the federal minimum of $7.25 an hour, an amount last raised in 2009. The federal minimum wage would have to be nearly $11 an hour to match its buying power in the late 1960s.
President Obama has proposed raising the minimum wage to $10.10. A hike to just $9 would directly affect 527,000 workers in North Carolina who make less than $9 an hour, according to a 2013 report from the N.C. Justice Center.
There’s little likelihood that North Carolina’s Republican-led legislature will support a boost in the minimum wage or the right of workers to bargain collectively for better pay. Indeed, there’s a push to keep North Carolina as the least-unionized state in the United States. Some state leaders support a state constitutional amendment that would reinforce the state’s right-to-work law.
Against this grim backdrop for low-wage workers, a glimmer of hope came through last week in Durham. There, the Durham Living Wage Project is pushing local companies and nonprofits to pay up to 70 percent above the state and federal minimum wage. So far, the effort has signed up 20 businesses and eight nonprofits with nearly 700 combined employees.
Durham Living Wage Project
There’s no immediate payoff for employers who join the project. But they do get the satisfaction of doing right by their employees and the ability to brand their businesses or organizations as living wage employers. In the longer run, however, they will see the savings from more productive employees, better applicants and lower turnover.
To receive a Durham Living Wage certification, employers must pay individuals at least $12.33 an hour without insurance or $10.83 an hour with insurance. Independent contractors have to be paid at least $14.33 an hour. Durham’s city and county governments already follow those standards.
The Durham Living Wage Project is modeled after Just Economics of Western North Carolina. The Asheville-based group succeeded in passing an Asheville City ordinance in 2007, which guarantees city employees a living wage. The group has taken its living wage campaign into the private sector and is helping to improve wages and shape economic development in Western North Carolina.
Workers need help to get their wages rising again. Those who lead the state legislature think the answer is to cut taxes on corporations and the wealthy and the benefits will trickle down. But it’s encouraging to see groups in Durham, Asheville and elsewhere taking a different approach. They say that boosting wages for low earners will lift not only the working poor, but also the entire economy. It’s a good-hearted and sound-minded approach. Employers should welcome the chance to be part of the living wage movement. Call it trickle up.