Minimum wage increase needs consideration
Sunday, March 24, 2019
The minimum wage is now less about pay and more about inequality.
As a practical matter, the minimum wage doesn’t apply to the vast majority of workers. In North Carolina in 2016, only 38,000 out of 2.5 million workers earned exactly the minimum wage. (Another 52,000 workers — mostly youth workers, workers with disabilities and tipped employees — earned less than the federal minimum wage of $7.25 an hour.)
Nonetheless, the minimum wage is an important indicator of how much a state or local government cares about rising income inequality. The broader significance of increasing the federal minimum wage — the last increase was in 2009 — isn’t what it does for minimum wage earners, but how it creates a pressure to increase the wages of all hourly workers.
And upward pressure is needed. Income inequality is now the greatest in the U.S. since the 1920s. The richest 1 percent now hold 40 percent of the nation’s household wealth. In the 1950s , a typical CEO made 20 times the pay of the average worker in his or her company. Now it’s more than 360 times.
Other states are pushing to narrow this gap by increasing their state minimum wages. On Jan 1, the minimum wage rose in 18 states through ballot measures or an annual adjustment for inflation. Twenty four cities and counties also increased their local minimum wage. North Carolina and states across the South, except for Florida and Arkansas, are holding out against approving a minimum wage above a federal minimum that long ago stopped being a living wage.
But that resistance may be cracking in North Carolina. The Republican-led General Assembly last year agreed to a $15 minimum wage for state employees. UNC Health Care has done the same. Gov. Roy Cooper has called for a minimum wage increase and on Tuesday a group of Democratic state lawmakers introduced legislation. to make it happen.
The bill would increase the minimum wage gradually to $15 an hour by 2024. Thereafter, it would be indexed to inflation. The bill would also gradually increase the minimum wage for tipped workers.
Rep. Susan C. Fisher (D-Buncombe), one of he bill’s sponsors, said the increase is needed to restore the minimum wage to its original purpose — the minimum needed to meet basic needs for food, housing and transportation.
“The minimum wage when it was first passed was not meant to be something you could survive on. It was supposed to be something you could plan with, not just make it. You could plan to buy a car or a house. Nowadays, $7.25 an hour is not going to get you anywhere near that,” she said in an interview.
For example, Fisher said, a minimum-wage worker now would have to work 122 hours a week every week all year to afford a modest apartment.. “People are not surviving on what they are being paid these days,” she said.
A truly representative government would be responsive to that reality, but some lawmakers worry that raising the minimum wage will lead to job losses and higher prices. The experience of states that have raised the wage has shown mixed results, but the overall effect is a healthier wage structure for those just above minimum wage. Fisher estimates that raising the minimum wage to just $12 would benefit 1.3 million workers in North Carolina.
It’s encouraging that Republican House leaders sent the minimum wage bill to the Finance Committee. There may be a hearing, possibly even a floor debate about how to help those at the bottom of the page scale.
And the more lawmakers learn about the minimum wage, the more likely they are to agree on the need to raise it.
The News & Observer of Raleigh