Getting real about the minimum wage

Published March 21, 2019

By Rob Schofield

by Rob Schofield, NC Policy Watch and NC SPIN panelist, March 19, 2019

A new and promising push to raise North Carolina’s minimum wage gets underway today. Lawmakers and advocates will convene a press conference at the General Assembly this morning to announce the introduction of House Bill 366 – a proposal to raise the state’s minimum wage to $15 per hour over the next five years and index it to inflation thereafter. A Senate companion bill will be introduced shortly.

In a rational policy environment, such a move would be widely accepted as a long overdue “no brainer” – the kind of step that any healthy society would implement as a matter of course to keep its economy strong and balanced. The data in support of such a change are compelling and plentiful.

Among the findings in a new report from the North Carolina Justice Center’s Workers Rights Project:

  • Despite a decade of economic expansion and a boom in wealth at the top of the economic ladder, average wages in North Carolina have actually declined slightly. In 2018, the state’s median wage was down around $200 per year from where it was in 2009.
  • Almost one out every eight working families in the state doesn’t make enough to escape the official and absurdly inadequate definition of “poverty.” When it comes to bringing home a genuine “living income,” the number of people coming up short is much higher.
  • Increasing the minimum wage to $15 per hour will give an average $4,422 raise per year to 1.6 million working people in North Carolina—for a total statewide wage boost of $7 billion.
  • A quarter of all married parents and half of all single parents in the state would benefit and 765,000 children would see a raise in their families’ incomes.

The report also highlights compelling data about the impact minimum wage hikes have on the job market. Opponents of raising the minimum wage (many of whom oppose the very idea of the minimum wage to begin with) always argue that hiking the minimum wage will lead to job loss, but the facts say otherwise. As the new report points out, “employment growth over the course of 2018 for the 18 states that saw minimum wage increases take effect on January 1, 2018 is virtually identical to the job growth in the states that did not see an increase in 2018.”

And while there’s no denying that higher wages are a cost for employers, the data also show that employers tend to reduce worker hours slightly rather than implement mass layoffs – a change in which workers still come out ahead. The report finds that a 10-percent minimum wage increase will, for example, end up leading to a reduction in employee hours on the order of one or two percent.

So what’s really going on here?

So, given all of these data and the overwhelming support in public opinion polls for a minimum wage hike, what gives? Why do the Republican powers-that-be remain so adamantly opposed?

Some of it is no doubt a byproduct of conservative, market fundamentalist ideology, but that can’t explain everything. The ideological Right hates corporate business subsidies too, but that doesn’t stop Republican politicians from supporting them.

And the opposition clearly doesn’t spring from some kind of quixotic, noblesse oblige desire to protect workers from themselves. We’re talking about the party of Donald Trump here.    

No, the only way to explain conservative opposition to raising the minimum wage in 2019 is to set aside wonky and rational policy debates and see the contest over this issue for what it is and always has been at its core: a battle between labor and capital for power and wealth.

Eighty-one years ago when the United States first enacted a national, minimum wage, the opposition from defenders of the status quo – even millionaire plutocrats whose day-to-day lives would not conceivably be impacted at all – was borderline apoplectic. Supporters were derided as socialists and communists. Opponents predicted economic calamity and the possible demise of capitalism.

The truth, of course, was radically different, but that wasn’t the main reason workers prevailed – either in 1938 or the 22 other times the wage has been increased since. The reason workers ultimately secured a federal minimum wage and nearly two dozen hikes in the intervening years is simple: they worked like heck to elect people who represented their interests and demanded that they act, once in office.

Today, the same basic dynamics prevail.

At its most basic level, the conservative political dominance of the past few decades has been about transferring wealth and power from the many to the few in countless areas – from taxes to consumer protection laws to the rights of workers. Conservative politicians have engaged in class warfare because that’s what their patrons paid for.

And ultimately, that’s why the Right fears the minimum wage movement – especially the new and assertive “fight for $15” effort – so much. The opposition isn’t born so much out of concern about incremental wage cost hikes as it is of concern that it might be the first of many changes, and that a real adjustment in the national power relationship between labor and capital could be in the offing.

Let’s hope their fears are well-founded.

March 21, 2019 at 8:09 pm
Norm Kelly says:

Isn't NC Policy Watch a left-wing organization?

Isn't the NC Justice Center a left-wing organization?

Is this a case of lefties referencing lefties to justify a lefty position?

But to the point: has anyone done a study of how gov't intervention in a market place like forcing businesses to pay so much per hour to unskilled workers pushes businesses to implement automation? Some of these unskilled jobs actually can be replaced by machines. Will the artificial push to raise the wage for unskilled labor make automation more palatable to more businesses? If so, how does this help minimum wage workers?

Will there be a separate rate for teenagers working their first job? Will there be a separate rate for part-time workers?