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What would a minimum wage raise mean for North Carolina?

raise the wage

As others have written, President Obama’s State of the Union address this week was, in many ways, a game changer. The President focused his speech on economic policies that are crucial for addressing women’s and families’ economic security  – not only as an argument of economic fairness but as sound economic policy:

A family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong, Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9 an hour. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.

As we’ve written before, a raise in the federal minimum wage to $9 per hour would not only affect almost 700,000 low-wage workers in North Carolina, it would have a potential positive GDP impact of $495 million.

North Carolina’s minimum wage tracks the federal standard of $7.25 per hour, which means that a full-time minimum wage worker earns roughly $15,080 per year. A conservative measure of actual family costs for one adult and one child in North Carolina requires an income of more than twice this amount. And the price of food, gas and utilities has steadily climbed while the value of the minimum wage has not.

In North Carolina, as in the rest of the country, the majority of minimum wage workers are adults, many of whom are supporting families. And minimum wage workers are disproportionately women. As this infographic from the National Women’s Law Center demonstrates, women have about a 4 percent chance of becoming the CEO of a Fortune 500 company, yet have a more than 60 percent chance of being a minimum wage worker.

A recent letter signed by close to 600 economists called on our nation’s leaders to raise the minimum wage, reemphasizing that doing so is good economic policy. And a robust body of research has looked at employment levels before and after minimum wage increases in states, counties, and metropolitan areas and has shown that raises in the minimum wage failed to lead to job losses, even during times of high unemployment.

It’s pretty straightforward: jobs that don’t pay enough to pay the bills, can’t sustain the economy. Take a look at this 1.5 minute video from the Topos Partnership  - it’s a great illustration of how adequate job compensation builds thriving communities.

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5 Comments

  1. LayintheSmakDown

    January 30, 2014 at 6:37 pm

    Answer: increased prices due to increased labor costs…so the minimum wage is then cancelled out and we are right back at square one, just like every other time this issue has played out.

  2. CJ Roberts

    January 30, 2014 at 7:35 pm

    Right wing always cries prices will rise. Prices will rise regardless. Do you ever get a raise? Increase people’s worth, increase people’s spending.

  3. jack teeters

    January 31, 2014 at 5:16 am

    It will destroy manufactuiring jobs and kill the lower class for opportunity of finding jobs and keep them on the tax dole, FACT. Obama’s intent is to destroy the middle class

  4. Jack

    January 31, 2014 at 4:46 pm

    Teeters, you have no idea what you are talking about. Your way of thinking calls for a $1.00 and hours wage for all people so we can save our manufacturing jobs. Have you looked around NC recently to see that those jobs moved over seas years ago and the cost of those manufactured items continue to rise even though they are built by cheap over seas labor.

    People deserve a living wage. How much do you make a year?

  5. ProPeople

    February 3, 2014 at 1:17 pm

    LayintheSmakdown: Why wasn’t raising prices an issue while CEOs have been raising their “earnings”? In 1968 a large corp. CEO made (on average) approximately 54 times that of minimum wage. Today they are “earning” 847 times minimum wage.

    In 1980, the average salary of an S&P 500 CEO was about 42 times that of their average employee (non supervisor and below). Today, that ratio has become 380:1.

    So why no complaints about the CEOs raising their salaries, but an increase to a worker’s pay is a problem?

    Also, why should the entire population be responsible for supporting the labor costs of a corporation? Shouldn’t those costs be paid by their customers? I don’t shop at WalMart, yet I pay taxes to support their workforce. Does that seem right to you?

    I really cannot comprehend why the middle class is supporting their own destruction. The wealthy are getting wealthier, while the middle class and poor are getting poorer. And the middle class cheer the wealthy on, and blame the poor.

    Want to know how taxes have changed for the wealthy since 1968? All income levels have been adjusted for inflation to today’s rates: 1968: $450K income paid 55%, in 2013 it’s 39.6%. In 1968, $550K @ 58%, $650K @ 60%, $750K @ 62%, $850K @ 64%, $950K @ 66%, $1.1mil @ 68%, and finally anyone over $1.319mil @ 70%. All of those income levels today are taxed at the maximum of 39.6%.

    So, who do you think is draining the economy….the poor folks who just want to eat, or the wealthy, who have managed to stop paying fair wages to their employees, stop paying high taxes on their excessive incomes, and increased their salaries exponentially over the years?

    Keep picking on the poor, I’m sure they’ve got a little more to pony up and contribute to the system. Obviously, the wealthy are all tapped out and simply cannot give anymore.