Another in a long list of socioeconomic studies, released this week, has determined that a $15 federal minimum wage would not prompt most employers to eliminate jobs to cover the pay increases.
The study by economists at the University of California at Berkeley’s Center on Wage and Employment Dynamics said a $15 federal minimum wage by 2024 would “offer more opportunities for workers and their families to lift themselves out of poverty.”
Researchers Anna Godoey and Michael Reich said they examined what happens when the minimum wage rises closer to the median wage in counties across the country.
They focused on the effects on hourly pay, employment, hours and weeks worked, and poverty outcomes among workers who are most likely to work in minimum wage jobs — those with a high school education or less, and teens.
“The data show that the minimum wage has positive effects, especially in areas where the highest proportion of workers received minimum wage increases,” Godoey said. “We also found reduced household and child poverty in such counties.”
The researchers said they “did not detect adverse effects on employment, weeks worked or weekly hours among workers with a high school degree or less ... among women and minority groups.”
The study “provides a reasonable and creative approach to estimating the effects of minimum wage increases in the $15 range,” said David Weil, dean of Brandeis’ Heller School for Social Policy and Management.
“The paper fills a gap in the current literature, important given federal and state efforts to raise the minimum wage to that level.”
Raising the state minimum wage in North Carolina remains a decidedly uphill push.
Workers in 11 blue, five purple and five red states received a raise Jan. 1 by virtue of a state- or voter-mandated increase in their respective minimum hourly wages.
However, for the 10th consecutive year, North Carolina minimum-wage workers did not join them. They remain at the federally mandated $7.25 an hour set in 2009, along with workers in 16 other states.
Meanwhile, the minimum wage for all full-time N.C. government employees jumped to $15 an hour on July 1, 2018, as approved by the Republican-controlled General Assembly. About 8,000 employees, or 12% of the state government workforce, received a raise.
Key Republican legislative leaders have said the free-market system should continue to dictate wages for private-sector employers. They cited the possibility of losing private-sector jobs, or disincentivizing their creation, as a consequence of increasing hourly pay.
“The state of North Carolina is the employer, and we are voluntarily raising the salaries,” said Sen. Joyce Krawiec, R-Forsyth. “Private employers have the option of doing the same. Many companies are raising wages to attract the best talent.
“This all adds credence to the fact that a minimum-wage increase is unnecessary. When the cost of labor exceeds the value of the job, the job is lost.”
The 38,000 federal minimum wage workers in N.C. 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.
There have been at least seven Democratic-sponsored minimum-wage bills introduced during the current session.
HB832 would create a constitutional amendment allowing voters to determine whether to raise the state minimum wage to $12.
By comparison, when Republicans held super-majority control of both chambers, they placed six constitutional amendments on the November 2018 general election ballot.
Two controversial amendments were defeated by voters on judicial vacancies (67% to 33%) and Board of Elections and Ethics Enforcement changes (61% to 39%).
The amendments would have altered how judicial vacancies are filled by the governor and the composition of the elections board. The Republican-controlled legislature has attempted three times since 2017 to change the board’s makeup, only to have a judge reject the legislation.
Meanwhile, constitutional amendments were approved on adding voter ID requirements, capping the state income tax cap at 7%, and hunting and fishing amendments.
Mitch Kokai, senior policy analyst for Libertarian think tank John Locke Foundation, said he believes the prevailing mindset among most Republicans and many Democrats is that “a higher government-mandated minimum wage — especially one as high as $15 per hour — would decrease North Carolina’s economic competitiveness.”
Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said that “even though Republicans no longer have supermajorities, they still control the legislature, and I do not think the governor and the Democrats are going to be able to push through a minimum wage increase as part of a veto threat.”
“Look for this to become more of an issue in the 2020 election season.”