Fair and reasonable people can agree that our record-setting income inequality is a serious problem. Beyond the obvious and relentless stress that affects low-wage workers every day, our educational, social services, public safety and medical systems are being undermined by the consequences. Despite being one of the most affluent counties in North Carolina, Orange County has about an 18 percent poverty rate, which is higher than the state average.
We have struggled for decades to craft effective educational strategies to eliminate the achievement gap in our schools, yet it is well-documented that student success is directly related to socio-economic status. We’ve chipped away for years at the need for affordable housing by the creative use of subsidies yet the fundamental reason housing is unaffordable is because a lot of people don’t make enough money to afford it.
When people earn more, they spend more. And that infuses local businesses with more earnings. The most famous example is when Henry Ford couldn’t figure out why he wasn’t selling more cars. It won’t go down in economic history as the most complex insight, but he realized that if he paid his workers more they could then afford to buy cars. Sales promptly climbed as his employees began purchasing cars.
This is a hot-button issue for the exploitative sector of our economy. Reacting to congressional consideration of a minimum wage hike in 1945 from 40 to 65 cents per hour, the National Association of Manufacturers predicted this would precipitate “a reckless jolt to the economic system” and that the standard of living “would fall – probably to record lows.” The minimum wage was raised and raised again in the coming years. The largest increase in living standards occurred over the next three decades.
In the ’70’s and ’80s, such icons as economist Milton Friedman and Ronald Reagan declared that raising wages increases unemployment and poverty. These bogus talking points have continued through the years, despite overwhelming evidence to the contrary.
A local UNC economist, William Lester, participated in one particular study of several pairs of adjacent counties in which one raised their minimum wage and the other did not. Comparing data from 1990–2006, the study concluded that raising wages had no impact on employment. Other studies looked at companies such as Costco, The Gap, Trader Joe’s, Ben & Jerry’s, plus others who pay higher than minimum wage and found it increased productivity and lessened employee turnover.
It’s high time that we embrace a local living wage. My experience indicates that we should begin with around $12 to $13 per hour. While the undemocratic polices of our state government do not permit local governments to pass living wage ordinances, we can come together and promote this for the undeniable overall benefits to our communities.
Mark Marcoplos has run Marcoplos Construction since 1987, as well as being involved in a variety of local issues. He can be reached at email@example.com