Some of Raleigh’s security guards, mechanics and customer service reps will soon get a big pay raise.
The Raleigh City Council on Tuesday adopted a “Living Wage” policy, which promises to raise the base pay of the city’s lowest-level full-time employees next fiscal year, which starts in July. Raleigh’s policy will be re-calculated every year based on several factors that measure the local cost-of-living.
The city currently pays its lowest-level employees a minimum of $12.01 an hour, which comes out to about $24,981 a year. Under the new policy, Raleigh will pay those employees $13.76 an hour – which is about $28,621 a year. That’s a 14.5 percent raise.
The council’s move will cost the city an estimated $500,000 and affect 215 of Raleigh’s 3,853 full-time positions, 72 of which are currently vacant. Mayor Pro-Tem Kay Crowder referred to the change as an act of compassion.
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“We work hard as a large employer to offer rich and competitive pay and benefits that recognize how important our employees are,” Crowder said. She ran Tuesday’s meeting in Mayor Nancy McFarlane’s absence.
Raleigh becomes the latest in a growing number of U.S. cities to adopt a wage policy, as well as the 10th North Carolina municipality to do so.
A national movement among big cities started in the last 5 to 10 years, according to Richard Troxell, chairman of the Universal Living Wage, a Texas-based nonprofit organization affiliated with House the Homeless, Inc.
Low-level incomes got more attention after 2007, when the federal government raised the minimum wage for the first time in 10 years. But people earning the current federal minimum wage of $7.25 an hour are still under the poverty line, Troxell said.
“You can work a full 40-hour week and not afford a one-bedroom apartment,” he said.
The more governments studied the issue, the more they’ve found that higher wages can improve employee retention and even help their local economies, said Ben Zipperer, an expert with the Economic Policy Institute, a nonprofit, nonpartisan think tank in Washington, D.C.
“To some degree, the private sector is going to be competing for people who might be considering these jobs with the city, so they’ll be forced to consider raising their wages as well,” Zipperer said. EPI estimates a single adult with no kids needs to earn about $30,200 a year to live comfortably in the Raleigh/Cary area.
Wake County in 2015 boosted its minimum wage for county employees to $13.50 per hour from $11.08, while Durham’s city council adopted a $15 per hour minimum wage for city employees last June. Charlotte pays its low-level employees $13 an hour.
The Raleigh council’s vote on Tuesday comes less than a year after boosting pay for most employees by 3 percent and raising the property tax rate one cent in order to raise an additional $5 million a year to fund more affordable housing.
It also comes as the council faces growing scrutiny from some of its emergency responders. Leaders of the city’s police and firefighter unions last year sought raises of more than 5 percent.
An entry-level Raleigh firefighter earns a base pay of $33,654, while an entry-level police officer makes $35,309 – the lowest starting salaries among Wake County's 12 municipalities, according to compensation data provided by the towns last year.
Council members declined to drastically raise pay for entry-level police officers and firefighters until they review a consultant’s report on the city’s compensation structure, which is considered antiquated. The city expects the study to be completed this spring.
The living wage policy “is one of the steps that we’re going to be taking to bring this all together in a coherent manner,” Councilwoman Mary-Ann Baldwin said.
“By raising pay not only for low-wage earners but also police and fire, we hope to improve some folks’ standard of living and recruit good employees,” Baldwin said.
David Cox, who represents North Raleigh, was the only councilman to initially balk at the wage policy, saying the city could pay more.
One living wage calculation offered by city staff found that Raleigh residents need to earn $15.26 an hour to live comfortably in the area. City staff deducted $1.50 from that calculation after factoring in the health care benefits Raleigh provides its employees.
However, other council members noted that Raleigh used the same living wage calculation as other North Carolina cities and that further study isn’t needed.
“We’ve got a list of the top municipalities here, and we’re at the top of the list,” Councilman Dickie Thompson said.