Prosperity Watch Issue 51, No. 4: Economy-boosting jobs pay workers a wage to make ends meet

The central challenge confronting North Carolina is restoring the promise of work to our state's families, in turn delivering greater economic security, and the potential for workers' full participation in the economy. This #wageweek, advocates, practitioners, economists, and business leaders note that the erosion of the minimum wage standard has undermined that effort in addition to the failure to pursue other policies that support higher wages and quality jobs for everyone.

Today a minimum wage worker in North Carolina earns $7.25 an hour. They can purchase far less than they could in 1968 when the minimum wage standard reached its peak. The erosion of the purchasing power of the minimum wage is a more recent phenomenon since federal policymakers have failed to raise the wage since July 2009. The minimum wage now falls nearly $9 short of what would be needed for a worker to meet the Living Income Standard of $16.21 each hour. Across the state, minimum wage workers' earnings fall short of this standard.

Yet minimum wage workers aren’t the only ones who have seen their wages’ purchasing power erode even as costs rise. Workers in all income groups have seen their wages fall since 2009.
Raising the minimum wage has been shown to make a clear and measurable difference for workers in the bottom end of the income distribution. But it would also benefit workers earning above the minimum wage and the broader economy, as higher wages mean an ability to make ends meet and spend in local economies. 

It is clear that a wage floor for North Carolina must better reflect economic conditions and the goal of boosting the economy. Policymakers need to consider a standard that better reflects what it actually takes to make ends meet. And at the same time, they must consider a broader set of policies that can ensure workers are paid accordingly for their increased productivity and that wages increase across the income distribution.

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