At first glance, North Carolina’s workers have a lot to celebrate this Labor Day. In many ways, it is the best of times. An economy based on textile and furniture manufacturing a generation ago is being rebuilt with the help of industries such as banking, high tech, health care and pharmaceuticals. Our Tar Heel state is now adding jobs at the ninth-fastest rate in the country, and several areas of the state are emerging as small-business hot spots. A host of health and technology companies have fled the expensive Northeast Corridor to set up shop, and Raleigh consistently appears in listings of Top 10 Best Cities in America for Jobs.
In the Durham-Chapel Hill metropolitan area, average wages continue to soar. U.S. Labor Department data show that private sector employees in Durham-Chapel Hill are earning an average of $30 an hour, adjusted for the cost of living – the highest hourly wage among the nearly 200 metro areas studied across the country.
Yet below the surface there’s a second economy. The state’s working poor have nothing to celebrate this Labor Day. So in many ways, it is also the worst of times. The minimum wage in North Carolina has been stuck at the paltry rate of $7.25 an hour for a full seven years. That’s right, the last time our lowest paid and often hardest-working residents got a pay raise was 2009, shortly after President Obama moved into the White House. Twenty-nine states and the District of Columbia have lifted their minimum wage above the federal minimum, in some cases simply to adjust for inflation, but North Carolina has not budged.
Many cities and towns across the country have raised their minimum wage above the federal minimum – much like San Francisco and Seattle and numerous others have done in recent years. Yet in North Carolina, they are forbidden to do so. Touting home rule and smaller government with one hand, our state legislature and governor overreach with the other hand and deny municipalities the authority to increase their minimum wage. Even small adjustments are now against the law, including for factors such as the higher rents in Chapel Hill and Carrboro and in most of the metropolitan areas of the state.
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What does all of this mean for folks working minimum-wage jobs? For seven years now, their annual paychecks have been exactly the same: $15,080, well below the poverty level for a family of two. It means that as hard as these workers try to provide for their families – often working multiple part-time jobs in hotels and hospitals, restaurants and retail, child care and elder care – they must still rely on food stamps, rent subsidies and Medicaid to make ends meet. It means the pride they should take each and every day for their strong work ethic is sapped every two weeks by a paycheck that can feel, well, demeaning.
That’s not all that saps the pride of low-wage workers. The state’s earned income tax credit – designed to buoy the incomes of working people struggling to keep their heads and households above poverty level – was eliminated by the state legislature and governor two years ago. In many cases, the EITC of $1,000 or $2,000 was the single biggest payment that these hard-working families received over the course of the year. Not only did the supplemental income relieve the stress of meeting today’s most basic needs, it had much longer lasting benefits. Children in families receiving additional income through programs such as the EITC go further in school, and work and earn more as adults.
The combination of no EITC and a bottom of the barrel minimum wage of $7.25 makes North Carolina arguably the worst state in the country for low-wage working families. Thankfully, there is at least one small but positive development to lift at least some working families out of poverty.
Taking root in Asheville a decade ago, voluntary certification programs for living wage employers have spread to Durham and Orange County. Asheville’s Just Economics, Durham Living Wage Project and Orange County Living Wage share the same mission: certify and then encourage the community to patronize employers paying their full-time and part-time employees a living wage. In Orange County, that’s defined as $12.75 an hour, rising to $13.15 on Jan. 1. In other words, if the feds and the state won’t hike the minimum wage, let’s at least do something at the local level to give a leg up to low-wage working families.
All three voluntary certification programs are making headway. In Orange County, wages at the low end of the pay scale have been lifted over a half million dollars over the past year by some of the 78 businesses and organizations certified as living-wage employers. It may not be a solution, but it is a solid beginning. This Labor Day, let’s begin writing “A Tale of One Economy,” where the rising tide lifts all boats.
Susan Romaine is the chair of the Orange County Living Wage.