What if the minimum wage in North Carolina increased more than 70 percent?
Instead of $7.25 an hour, you could make $12.50 an hour. That is the difference between the federal minimum wage, which North Carolina adheres to, and the new minimum wage Oregon plans to implement by 2022.
Oregon has proposed legislation to slowly increase wages over the next six years. The tiered system will tie the minimum wage to the living costs of different areas.
The urban side of Oregon will have a higher minimum wage than smaller cities and rural areas. However, the rural areas would still have the highest in the country at $12.50 an hour. It is the first system of its kind.
“I think having several reference points is much better than having one single reference point,” said Assistant Professor of Economics Natalya Shelkova in response to Oregon’s tiered system.
According to Shelkova, who wrote her dissertation on minimum wage, employers often use the minimum wage as a reference point. Low-wage workers are tied to the minimum even while higher-paid employees are given raises.
“Minimum wage can be used by employers to keep the wages down,” said Shelkova. “So, for example, the employer might make the decision to hire, and the employer’s thinking, well, how much should they pay? The obvious suggestion (is) the minimum wage.”
The federal minimum wage of $7.25 has been the same since 2009. Lack of response from the federal government has led to about a dozen states, including Oregon, to call for increasing wages statewide. North Carolina has not.
People who argue for higher pay say it increases jobs and maintains living standards. In addition, organizations like the North Carolina Justice Center say that a raised minimum wage is necessary to keep up with inflation.
Some movements, such as Raise Up for $15, which advocates for $15 an hour for fast food employees and other low-wage workers, have brought minimum wage issues to the forefront of protests.
Some change has come locally. In August 2015, Greensboro City Council voted to increase city employees’ pay to $10 an hour. They argued it would help keep workers above the poverty line.
The opposing side argues that increasing the minimum wage will make Greensboro less competitive, and it will become harder for unskilled workers to find jobs. According to a survey published in 2013 on the Chicago Booth’s Initiative on Global Markets website, economists are split almost evenly as to whether or not this is true.
“It’s been a long historic divide among economists: what does the minimum wage do to employment?” said Shelkova. “I tend to agree with the camp that says it doesn’t affect employment.”
As for whether or not the federal government will make changes, it is hard to say. Although some states, such as Arizona and Idaho, have blocked bills that would have increased the minimum wage, most that have proposed legislation have passed it, including Oregon.
It is only a question of whether future legislation is proposed in North Carolina as well.
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