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The North Carolina Green Party Supports Increasing the Minimum Wage to $15.00/hr.

 If the supply of money is fixed and is doled out in the zero-sum game that conservatives argue constitutes the economy, then the Green values of Social Justice and Equal Opportunity demand that workers be compensated adequately for their labor. In the last four decades, the gap between the bottom economic rungs and the top earners in our society has increased to levels not understood by the general public. As pointed out in a paper produced by the National Bureau of Economic Research, and quoted from an article in the March 31 issue of Scientific American, “The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined.” The idea that increasing the wealth of a fraction of the bottom 40 percent of the population will spell economic doom in the face of such gargantuan disparity in wealth is unsupported and suggests either irrational fear or insatiable greed on the part of opponents of minimum-wage increases. If we are willing as a nation to permanently consign increasing numbers of our population to permanent economic underclass status so that a small percentage of the population can live in opulence, then social justice and equal opportunity have become empty rhetorical phrases. The North Carolina Green Party believes that it is possible for all people to have a decent and dignified life without the need to struggle desperately for the bare necessities of survival. Increasing the minimum wage to $15.00 per hour is an important step in realizing that goal. 

Supporting Data  for an Increase in the Minimum Wage

The typical arguments against increasing the minimum wage are

  • Minimum-wage jobs are entry-level jobs. Paying more than minimum wage removes the incentive for people to get ahead. This argument is usually accompanied by an anecdote telling how Person A went from (insert low-skill job here) to being the master of his or her own destiny, if not the CEO of a Fortune 500 company. 
  • Businesses will fail due to the burden of paying employees a livable wage. 
  • The pool of jobs available to all workers will decrease as businesses make do with fewer workers to cut down on labor expenses.
  • Increasing the minimum wage does not reduce poverty. 

There are other arguments against raising the minimum wage that deserve closer attention. These arguments use labor, poverty, and employment data in a sparse and one-dimensional fashion, without acknowledgement of the myriad causes of poverty or the impact of an increase in the minimum wage on the overall economy (see here for a Heritage Foundation argument against minimum-wage increase). 

Perhaps one of the most disingenuous arguments is that a minimum-wage increase will help only a relatively few people in the workforce. Per an analysis at Politifact, using 2013 data, only 2.6 percent of the population is paid at or below the federal minimum of $7.25 per hour. This works out to a little over 4 million people. What is left unsaid (and the listener is not supposed to think about) is that an increase in the minimum wage helps anybody who is working below the level of the proposed new wage floor. What if the wage earner makes $9.25 an hour and the new minimum is $15.00? Suddenly a lot more people benefit from the wage increase.

According to a list of potential benefits put out by the National Employment Law Project (NELP), an organization that works on labor policy issues affecting low-wage workers, more than 35 million employees would benefit from an increase in the minimum wage to $12.00 (by the year 2020). This number includes 19.6 million women. 

The NELP list includes other segments of the working population, in percentages of the total labor force that might benefit from a wage increase. For example, 35 percent of the African American labor force, or about 11 million people, would benefit from an increase in the minimum wage (derived from Bureau of Labor Statistics (BLS) numbers for 2015 estimated employment). 

What would the impact of an increase in the minimum wage be on the economy? This is argued back and forth by economists of various ideological bents. However, one thing is certain: workers earning minimum wage have little purchasing power. In a 2013 article in the Atlantic, a graph from BLS data shows that the purchasing power of the minimum wage peaked in 1968 when the federal minimum wage was just $1.60. In 2013, this was equivalent to earning $10.56. Since 1968, although the value of the minimum wage has (slowly) risen, an increase in the hourly wage from $1.60 to $7.25 has been handily outpaced by inflation. The net result is that a person earning minimum wage today actually makes $3.31 an hour less than his or her counterpart in 1968, without considering further erosion due to inflation since 2013.

The arguments against increases in minimum wage—which sound strangely like the arguments cited when Franklin D. Roosevelt signed the Fair Labor Standards Act into law in 1938—have always focused on the detrimental effect on businesses. However, as the Economic Policy Institute documents, during 1978 to 2011 while the minimum wage increased from $2.65 to $7.25 an hour, the average wage compensation for CEOs of publicly traded companies increased from approximately $1 million to over $12 million annually. In that same period, the ratio of CEO wages to workers’ wages increased from 18.3:1 to 209.4:1.

Let’s assume that there are only 4 million workers affected by a minimum-wage increase, as many opponents claim. If the wages of each worker were increased by $5.00 per hour, the total increase would be $20 million. That means the average annual salary of only two CEOs is sufficient to increase the pretax income of 4 million people by 69 percent. This is a fact of the economy we live in. And this is wages only—it does not consider stock options, golden parachutes, and other incentives. (See William Black of New Economic Perspectives for insight into how these compensation packages create perverse incentives for CEOs to enrich themselves at the expense of the investors.)

None of this takes into account gains in worker productivity, which would make todays minimum wage at least $16.54 per hour, or the fact that today’s minimum-wage workers are considerably more educated than minimum-wage workers in 1968. 

Another potential impact of an increase in the minimum wage that is routinely ignored by opponents is the effect that higher wages in the pockets of workers have on economies. Opponents have always claimed that businesses will go under every time the minimum wage goes up. Since after decades of economic analysis this never seems to actually happen, what would be the effect on economies if workers had more money in their pockets? Low-wage workers spend money. Like any CEO, they have to eat; live under a roof; and pay for transportation, clothing, and medical care. Grocery stores, clothing stores, apartment complexes, car dealers, and bicycle shops, and even the fast-food chains and other restaurants that so bitterly oppose increases in the minimum wage, would be the beneficiaries of this money. The principle here is that one person’s expenditures are another person’s income. If few people have money to spend, few people can make a living. This is a prima facie cause of the economic slump we are in today. 

In sum, the North Carolina Green Party supports an increase in the minimum wage to $15.00 per hour because

  • Providing a living wage to every worker affirms their intrinsic value as human beings.
  • Our broader economy will be stronger.
  • Economic realities, such as inflation, demand that wages rise with changes in the purchasing power of money.
  • It is time for the pendulum of economic power to begin to return from its extreme that favors the wealthy and politically connected over the needs of a majority of the population.

Join the Fight for 15 Campaign in NC.
Contact Ben Carroll at .

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