Nine years ago yesterday, the United States increased the minimum wage to $7.25 an hour. Yet in the decade since, workers have lived through the worst recession since the 1930’s and an economic recovery that saw their wages fail to keep pace with rising costs of living. More than half of the jobs created since the end of the recession don’t pay workers the $33,700 it takes for a family of one adult and one child to make ends meet in North Carolina. Fortunately, state and federal policymakers have the opportunity to help more workers afford the basics—and put food on the table, gas in the car, and a roof over their heads—by raising the minimum wage.
Raising the legal wage floor will help workers and boost the economy. Over the past thirty years, business productivity—the value of goods and services produced by each worker—has almost doubled in North Carolina and across the country. Yet these historic productivity gains have gone to increase corporate bottom lines rather than workers’ wages; corporate employers have spent these gains on executive compensation, expensive stock buy-backs, dividends, and income distributions to shareholders, benefiting wealthy investors at the expense of workers and their wages.
So while these productivity gains have generated a three-decades-long “Golden Age of Corporate Profits,” very few of the fruits of this Golden Age have made its way into workers’ paychecks. In fact, the share of North Carolina’s GDP (the value of all the goods and services in our state’s economy) going to workers’ wages and benefits has declined over the past decade at the same time that the economy itself experienced growth—the textbook definition of an economy that’s leaving its workers behind. As a result, workers are earning $11 billion less today as a share of our economy than they did in 2007. Given these trends, it’s no surprise that North Carolina has experienced significant long-term wage stagnation and rising income inequality.