Twenty-nine states, more than half the nation, now have a state minimum wage higher than the federal minimum wage of $7.25 per hour. North Carolina is not one of them.
That should change this year, especially this year. This is a state where the Republican-led General Assembly has handed out billions of dollars in tax cuts that disproportionately benefit the wealthy and profitable corporations. Those cuts have now been followed by even more generous federal tax cuts that favor big companies and the top 1 percent of earners. If this isn’t the time for North Carolina to give the working poor a break, it never will be.
State Rep. Bob Steinburg, an Edenton Republican who sits on the legislature’s Commerce and Job Development Committee, said the state and federal tax cuts and the strong economy make this “an opportune time” to consider a higher state minimum wage.
“There may be some room to move it,” he said.
States raising wage
Some opponents of setting a higher North Carolina minimum wage say it will make the state less attractive to businesses that might move here, and it could make businesses that rely on minimum-wage employees unprofitable. But experience is proving these concerns unfounded. A majority of states and scores of cities and counties have set higher minimum wages without clear negative economic effects. On New Year’s Day, eight states further upped their minimum wage because their rates are tied to the cost of living and 11 states increased their rates under new laws or previously passed ballot initiatives.
Others oppose any minimum, saying the market, not the government, should set wages. Rep. Donny Lambeth, R-Forsyth, recently told the Winston-Salem Journal that’s already happening. He noted that some major companies have raised their base wages in response to the federal corporate tax cut.
“So the market is already adjusting to raising the rate in many industries without government mandates,” he said. “This is likely how it will continue in North Carolina.”
But market forces don’t necessarily raise wages across the board. Too often, the minimum wage remains the maximum some employers will pay. In North Carolina, 38,000 workers still toil for a minimum wage last increased nine years ago. Another 52,000 work for less than the minimum wage because they are in jobs where tips supposedly will get them to at least the minimum wage. Raising the base pay a $1 or so would also help many more workers who earn just above the minimum wage.
A wage near poverty
North Carolina’s refusal to increase its minimum wage is beginning to look as heartless and thoughtless as its refusal to expand Medicaid. Sticking with the federal minimum wage doesn’t improve the state’s economy and only protects jobs barely worth having. A full-time minimum-wage employee working 40 hours per week, 52 weeks a year would earn $15,080 a year. That’s just above the federal poverty level of $12,060 for an individual. For a family of four, the poverty level is $24,600.
Not only is the minimum wage barely above poverty level, it’s shrinking. Since it was last increased in 2009, the federal minimum wage has lost about 10 percent of its purchasing power to inflation. In the Triangle and other fast-growing parts of the state that erosion is even greater as the cost of living climbs faster than the national average.
Last March, state Sen. Joyce Waddell, along with other Senate Democrats proposed legislation that would raise the state’s minimum wage to $12 per hour by 2020 and to $15 per hour by 2022. Thereafter, the minimum wage would be indexed to inflation.
Waddell said at a news conference on the bill that more than two-thirds of minimum-wage workers are women, many of them supporting families.
“The state’s current minimum wage does not provide enough income for impoverished families to survive on,” she said. “We must free our hard-working citizens from the cycle of poverty. Women should be able to afford necessities and experience economic independence.”
The bill, of course, went nowhere, but the need it addressed is clearer than ever.
At the state and federal level, tax cuts have further enriched the wealthy. Now is the time to help those workers on the bottom rung whose pay shrinks with every year it goes without an increase.
Federal minimum wage: $7.25
N.C. minimum wage: $7.25
States with a higher minimum wage: 29
Year of last increase in the federal minimum wage: 2009
What would it be if adjusted to inflation since then: $8.47
Some other states’ hourly minimum wages: Ohio $8.30; New Jersey $8.60; Florida $8.25; Arizona $10.50; California $11; Washington $11.50
Source: National Conference of State Legislatures