Minimum Wage Policy
North Carolina’s minimum wage is $7.25 an hour—an amount which, translated to a full year of work ($15,080), would only net 129% of the federal poverty line for an individual. However, if that individual were the sole earner for a family of two, then that family would be living below the federal poverty line. What impacts might the proposed federal minimum wage policy have on low-wage work in North Carolina? To answer that question we examined how many workers and households would be affected by a minimum wage increase to $10.10 per hour—as has been proposed in Congress.
In theory, if the minimum wage were increased to $10.10, individuals earning wages modestly above $10.10 would also receive a wage increase as a result of the so-called “ripple effect.” Our research modeled how much spending power would be added to North Carolina’s economy in the form of wages if individuals earning up to $12 per hour also received a raise. If those individuals were to get a 10% increase in wages that would result in $578,350,000 in additional wages being paid in North Carolina. A 5% increase for those individuals would result in $289,175,000 in additional wages.
In North Carolina, 398,356 households have at least one worker earning between $7.25 and $10.10 per hour. Another 326,109 households have at least one worker earning at or below $7.25, North Carolina’s minimum wage. This means that over 700,000 households--nearly 20% of total households in North Carolina--include at least one worker who would be impacted by the proposed minimum wage increase.