Commentary, News

Minimum wage increases take effect in 21 states, but not NC

In case you missed it yesterday, reporter Richard Craver had a story in the Winston-Salem Journal about North Carolina’s increasingly obsolete minimum wage law. As Craver explains, numerous states raised their minimum wage yesterday, but not North Carolina, where stubborn right-wing ideologues at the General Assembly continue to say no.

Workers in 11 blue, five purple and five red states will receive a raise today by virtue of a state- or voter-mandated increase in their respective minimum hourly wages.

For the 10th consecutive year, North Carolina minimum-wage workers will not join them.

They remain at the federally mandated $7.25 an hour set in 2009, along with workers in 16 other states. Workers in the remaining states did not see an increase today, but were already above the federal minimum wage.

After explaining that about 8,000 state government workers recently saw a significant jump in their minimum wage to $15 per hour due to the action of the General Assembly, Craver explains that many more workers in the private sector are being left behind:

The 38,000 federal minimum wage workers in North Carolina are among 700,000 nationwide, according to 2017 data from the U.S. Bureau of Labor Statistics.

A full-time N.C. minimum-wage worker earns $15,080 per year — $1,000 less than the federal poverty level for 2016 for a family of one adult and one child.

An additional 52,000 North Carolinians make less than $7.25 because they work in the restaurant sector, where their compensation is often based more on customer tips.

Craver’s article goes on, frustratingly, to feature predictable quotes from a John Locke Foundation spokesperson that raising the minimum wage here will somehow harm the state’s “competitiveness.” (It should be noted that the Locke people have repeatedly argued down through the years that there should be no minimum wage law at all.)

Meanwhile, however, out in the real world, evidence continues to mount that the benefits of a higher wage outweigh any drawbacks. As CNN reported last fall:

Seattle has served as a national guinea pig for the policy since 2014, when its voted to gradually raise its minimum wage from $9.47 to $15.45 for large employers this year and $16 in 2019. The latest research, released Monday, shows that workers made more money despite getting fewer hours — but that experienced workers made out the best.

The study, conducted by economists at the University of Washington using state unemployment insurance data, found that the increase added about $10 per week on average to the earnings of low-income workers through 2016, even while reducing weekly hours slightly. But more experienced workers made $19 more per week, the research found, partly by making up for lost hours in Seattle at second jobs worked outside city limits.

In addition, employee turnover decreased, which the authors believe suggests that employers tried harder to retain their most productive staff members as wages went up. That’s a plus for existing workers, but potentially an obstacle for inexperienced or new workers trying to get that first line on their resume.

Indeed, the study showed that fewer new workers entered Seattle’s low-wage labor market compared to the rest of Washington. “Seattle’s minimum wage ordinance appears to have delivered higher pay to experienced workers at the cost of reduced opportunity for the inexperienced,” the study’s authors wrote.

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