The overwhelming case for raising North Carolina’s minimum wage

The overwhelming case for raising North Carolina’s minimum wage

- in Featured Articles, Must Reads

minimum-wage3Hike would be good for lifting incomes and improving the state’s economy

The North Carolina Justice Center, the state’s leading anti-poverty advocacy organization, has unveiled a new and regular feature it’s calling “How to Build an Economy that Works for All.” Its objective: to outline a series of policy priorities and proposals that both policymakers and average North Carolinians can learn about and promote throughout the remainder of the election season and during the run-up to the 2017 legislative session.

Entry Number One in the new series is a brief, but information-packed report on the minimum wage and the vital importance of raising it in North Carolina. As author Allan Freyer explains in the introduction to Time for a raise: Increasing the minimum wage helps build an economy that works for all:

North Carolina needs an economy that works for all and ensures broadly shared prosperity. That means creating jobs that pay workers enough to afford the basics for themselves and their families—enough to buy groceries, pay the rent, put gas in the car, and keep their children in day care. Unfortunately, the jobs that paid decent wages are largely vanishing, as low-wage service jobs replace the manufacturing positions that once provided generations of North Carolinians with vital pathways to the middle class. This trend has only accelerated since the end of the Great Recession.

Raising the minimum wage in North Carolina provides a critical antidote to the ongoing boom in low-wage work. The state’s current minimum wage is identical to the nation’s wage at $7.25 an hour. But our elected officials have the opportunity to join a growing list of state governments— including Arkansas, Nebraska, Alaska, South Dakota, New York, and California—that have recently acted to raise the wage floor for employers within their jurisdictions. These states have recognized that the current national minimum wage simply doesn’t pay enough to make ends meet, and that by raising their own wage floors they can help workers and boost their overall economies. Joining this movement will benefit North Carolina’s businesses, help workers, and boost the state’s overall economy.”

The report goes on to make clear just how badly a minimum wage hike is needed for struggling North Carolina workers and their families:

At the current North Carolina minimum wage of $7.25 an hour, a full-time minimum-wage worker earns approximately $15,080 per year. This is approximately $1,000 less than the federal poverty level for 2016 for a family of one adult and one child5 and more than $18,000 less than what it truly takes to make ends according to the LIS. Additionally, over the last 40 years, the inflation-adjusted value of the minimum wage has eroded by nearly one-third. While food, healthcare, and housing costs continue to increase, the purchasing power of the minimum wage has decreased dramatically. The minimum wage has lost approximately 7 percent of its value since the last time the federal minimum wage was raised in 2007.”

It also explains why a hike would boost the entire economy. Here’s an excerpt:

Raising the minimum wage creates more customers, more sales, and bigger profits. Recent studies have indicated that raising the minimum wage to $10 an hour would increase paychecks for North Carolina’s workers by $2 billion a year. That’s $2 billion in increased consumer spending at local businesses, boosting business sales, business profits, and creating more than 5,000 new jobs. Additionally, this would put more money in the pockets of those workers most likely to spend it. For example, boosting the wage floor to $12 an hour would affect approximately 1.3 million workers in North Carolina. Because of the boom in low-wage work, the vast majority of those North Carolinians benefiting from the wage increase are no longer the part-time, teenaged workers who once filled the bulk of entry-level jobs in past generations. Now, more than 90 percent of those benefiting from a minimum wage increase to $12 are workers older than 20 years of age, and more than half work full-time. Three-quarters of a million children in the state would experience increased security thanks to their parents’ higher wages.”

The report concludes by outlining a way that a significant hike could be phased in over the coming years – a path on which multiple states and localities have already embarked.

The bottom line: At a time in which a growing chorus across the country is demanding that elected officials transform the minimum wage into a genuine living wage, Time for a raise, does a great job of compiling the key statistics and marshaling the arguments.

Click here to check out the entire report.