The no-brainer of raising the minimum wage
Published April 10, 2015
by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, April 9, 2015.
One of the biggest problems with the so-called Carolina Comeback frequently touted by Governor Pat McCrory and state legislative leaders is that it is leaving thousands of North Carolina workers behind— and not just the ones who are unable to find a job and are no longer counted when the often-cited unemployment rate is calculated.
Many people lucky enough to have jobs are earning less. That is beyond dispute. Workers in North Carolina have less buying power than they did before the Great Recession even though the state’s overall economic output has increased by more than 18 percent.
Much of the job growth during the recovery has been in low wage industries that pay workers the $7.25 an hour minimum wage or close to it, making it almost impossible for them to make ends meet.
The N.C. Justice Center reports that 80 percent of the new jobs created since 2009 don’t pay enough to cover the costs of housing, food, transportation, health care and other basic needs.
There any many things state and federal policymakers should consider in response to the problem, but one is easy to do, easy to understand, and popular with the voters.
Raise the minimum wage.
Raising it to $10 an hour would affect roughly a million workers in the state. Contrary to claims by folks on the Right, most of the people who would benefit are not teenagers or first time workers or folks who only work part-time.
More than 85 percent are over 20 and more than half are full-time workers trying to provide for their families.
And there’s plenty of evidence that raising the minimum wage helps the overall economy too. States that have raised their minimum wage are doing better than states that haven’t. They have lower unemployment and higher job creation.
That makes sense when you consider the economic impact of raising the wage. In North Carolina that would mean $2 billion more in pay for workers that will end up circulating in the economy.
There’s also compelling evidence that a higher minimum wage helps businesses directly too by reducing employee turnover and increasing productivity.
Folks who have an ideological opposition to increasing the minimum wage—or don’t believe it should exist at all—always claims that it causes a significant loss of jobs, hurting the very people that raising the wage is designed to help.
But that’s not what the economic studies show. A higher minimum wage may result in a small reduction in hours for some workers, but not massive layoffs, and the workers affected still come out ahead overall since their hourly pay is higher.
And maybe most appealing for politicians, people in North Carolina and around the country support a minimum wage increase. Voters in conservative states like South Dakota, Nebraska, Arkansas and Alaska approved ballot initiatives last November to raise the minimum wage and polls show that nearly 60 percent of North Carolinians support an increase.
Help for low-wage workers and their families. More money pumped into the economy by workers spending their higher wages, creating more jobs.
A boost for business from more loyal and productive workers. And the voters overwhelmingly support it. There aren’t many issues like that.
Now if the folks running North Carolina these days can manage to put the economic health of the state and the well-being of the people they represent ahead of their rigid ideology, we could be on the way to a real Carolina Comeback, one that helps everybody, not just the folks at the top.
http://www.ncpolicywatch.com/2015/04/09/the-no-brainer-of-raising-the-minimum-wage/
April 10, 2015 at 8:57 am
Frank Burns says:
Communism is still not welcome here in this country. With the low rate of inflation, there is no basis to raise the minimum wage. For this reason, your appeal is hereby rejected.
April 10, 2015 at 8:57 am
Norm Kelly says:
Once again, prior to opening this post, I tried to determine based on the headline who the author was. Since the headline indicated support for a lib idea, where no facts support the headline's conclusion, it was easy to determine the author was a die-hard lib. It was a short trip from lib-to-the-core to Chris as the author. Will I bother reading this post? I'll start it. When it gets to the point where it is enjoying time in la-la land, living in the land of myths and make believe, I'll quit. What's the chances this post will not move into standard lib-la-la-land? Virtually zero, since the subject is not supported by facts or statistics, but only supported by feelings of libs.
'Workers in North Carolina have less buying power'. Does this have ANYTHING to do with socialist policies enacted by the socialists in Washington? Could the cost of Obamacancer have anything to do with stagnant wages? How about piled-on regulation on business? The cost of conforming to government regulation? The continued deficit spending by lib pols that costs everyone more and actually reduces the economy for everyone? How about the cost to businesses for the deficit spending on extended unemployment benefits enacted by the previous state leaders, all of whom belonged to the lib party? You know, where libs borrowed money from the central planners to pay for these 'benefits' with NO PLAN in place to repay the loan? And then berated Republicans when they chose NOT to borrow even more money to once again extend unemployment 'benefits' with no plan for repayment? Could any of these issues, and many others coming from central planners, have any affect on stagnant income?
'Much of the job growth during the recovery has been in low wage industries that pay workers the $7.25 an hour minimum wage'. Deviated from the standard lib line of blaming Republicans from everything? Is this an admission that the economic praise coming from central planner libs isn't quite the truth? We've all known this for several years, but to have a true lib admit that the socialist policies of the left are ruining the economy and making life harder for the average person is amazing. I wonder if Chris realizes what he just did?! What could possibly be causing the rise in low-wage jobs and reducing the high-wage jobs? Could it be government regulation? Could it be Obamacancer, commonly known as socialized medicine? Could it be his higness's plan to drive the cost of energy to skyrocket? Since socialism has taken hold in Washington, the recovery is less than admirable, and now even libs are complaining that these policies are causing full-time, well-paying jobs to become more scarce? Incredible! John Hood would be proud that Chris finally came around to understanding lib policies are detrimental to the average person, and the economy as a whole. I don't expect Chris's new-found revelation to last much beyond the next sentence though. It will take less than 1 paragraph for Chris to blame our state legislators, or the Republican House for standing in the way of even more socialist schemes.
Ok. Gotta earn a living. Don't have time for the rest of the socialist drivel that is sure to follow. Do the stats that Chris is bound to mention take into account every aspect of raising the minimum wage, or does it only take into account a few choice factors so that his argument can be supported? Do his stats say anything about how businesses raise their prices to pay the higher cost of doing business? At the same time that government regulation is increasing, complying with socialized medicine is costing more, the cost of energy is going up by design, the world is less stable which will negatively impact the economy, more people are on the government dole, is this really the time for central planners to force an increase in the minimum wage? I trust John Hood to be factual than ANY lib!
April 10, 2015 at 10:37 am
Richard L Bunce says:
Luckily we are not rule by majority, we have a Constitution that protects the minority from the tyranny of the majority. Government and its big government supporters need to stop coercing private business from doing it's dirty work with both tax withholding and minimum wage requirements. If you want people to have guaranteed, "liveable" incomes then create a program with a guaranteed income benefit with a broad based tax to fund it. Business does not exist to employee people. Business does not exist to provide people with some minimum level of income. Nobody owes anybody a job but themselves. Employees and employers enter into mutually agreed to agreements to perform specified tasks for specified compensation. If the employee is not willing to work for the offered compensation they are free to seek another employer including starting a business and employing themselves. The minimum wage is very regressive. A very profitable business employing only high compensation employees is not directly impacted by minimum wage requirements while a marginally profitable business with mainly low compensation employees is greatly impacted by an increase in the minimum wage. Of course raising the minimum wage increase Federal and State government revenues... to fund even more big government programs that enrich the government bureaucracy but does little to benefit anyone else.
April 10, 2015 at 12:55 pm
James W. Harris says:
Both of the above comments ignore a fundamental fact. If you reduce or eliminate taxes on the wealthy and corporate taxpayers, you need to make up the lost revenue with increased sales taxes. To blame this simple fact on socialism in Washington is wrong on its face and shows ignorance of the facts. Talk about communism, have you seen the latest in eminent domain regulations? Have you seen the manner in which the current legislature is dictating to counties how they must structure themselves to keep Republicans in power? Have you seen how many millionaires file tax returns in NC and yet pay no taxes. Talk about Socialism, the Republicans on on their way to the Soviet Union of North Carolina. Stop imagining things and look at the facts around you.
April 13, 2015 at 11:44 am
Richard L Bunce says:
Dude, the State created the local governments and assigned them limited powers. They have an obligation to the citizens of NC to oversee their creations to assure they do not abuse those powers. Of course Democrats in majority election districts like local governments want all at large seats and of course then the minority wants elections by districts. The same is true when the majorities are reversed.
If you reduce State government tax revenues you need to reduce State government spending... not go out and tax someone else. This article was about the minimum wage however which is the government "taxing" employers without regard to their profitability... which you would otherwise refer to as a regressive tax.
