1. Federal, and North Carolina, minimum wage increased to $7.25 July 24, 2009.

2. Myth: No one who works for a living is poor. Most minimum wage workers are not poor and do not need a raise.
Reality: No one who works full-time in America should be poor, but in fact many poor people are low-wage workers. 

3. An estimated 4.5 million workers (over 3 percent of the US workforce) received an increase in their hourly wage rate when the minimum wage increased to $7.25 in 2009. Of these workers, 2.8 million workers earned less than $7.25 and will be directly affected by the increase. The additional 1.6 million workers earning slightly above the minimum, were indirectly affected, benefiting from an increase due to “spillover effects.”  These spillover effects preserve the wage structure in a firm. 

4. The Federal minimum wage increased to $7.25 on July 24, 2009 which provides an annual salary of $15,080 per year.  However, according to the NC Justice Center’s Living Income Standard calculation, the typical North Carolina family with children must earn $41,184 per year to afford basic expenses.  That amount requires adults in the average family to earn a total of $19.80 per hour, more than triple the amount of the current minimum wage.  

5. While the federal minimum wage has never been sufficient to meet the basic needs of a family, it has lost significant value over time. Adjusted to 2007 dollars, the value of minimum wage peaked in 1968. To provide the same buying power to low-wage workers in North Carolina, the minimum wage needs to be increased to more than $10 per hour.  To prevent further erosion of the value of the wage floor, the minimum wage should be indexed to inflation. 

6. The minimum wage has varied from a maximum of 94 percent of the poverty level in 1968 and has averaged approximately two thirds (69 percent) of the poverty level since 1959, when the poverty level was established. The lowest percentage the annual income from the minimum wage has been of the poverty level was 2006 (52 percent), just before Congress raised it for the first time in a decade. Minimum wages have never been sufficient to raise a family out of poverty, if only one member of the family works.

7. Over the period from 1979 - 2003, the lowest-paid North Carolinians saw their wages increase by $0.88 per hour, while middle-income workers saw an increase of $2.17 per hour. 

8. Myth: Most of the workers who would benefit from a minimum wage increase are teenagers who work part-time to earn extra spending money.
Reality: The majority of minimum wage workers are adults. Many minimum wage workers contribute substantially to family income.

9. Nearly 13 percent of US families and 9 percent of North Carolina families have house hold incomes less than $15,000.

10. The July 2009 minimum wage increase to $7.25 benefits working families.

• An estimated 430,000 single parents with children under 18 will benefit from a minimum wage increase. Single parents will benefit disproportionately from an increase—single parents will make up 10% of workers affected by this increase, but they make up only 7% of the overall workforce. In addition, approximately 2.2 million children will benefit as their parents’ wages are increased.
• Adults make up the largest share of workers who will benefit from a minimum wage increase: 76% of workers whose wages will be raised by a minimum wage increase to $7.25 in 2009 are adults (age 20 or older).
• Almost half (47%) of workers who will benefit from a minimum wage increase work full time and another third (34%) work between 20 and 34 hours per week. 

11. The North Carolina Budget and Tax Center at the North Carolina Justice Center developed a Living Income Standard (LIS), a market-based approach for estimating how much income working families with children need to pay for basic expenses in North Carolina.

12. Examination of the 2008 LIS finds that the typical North Carolina family with children must earn $41,184 annually – an amount equal to 207 percent of the average federal poverty level (for the four family types) – to afford the actual costs of seven essential expenses: housing, food, childcare, health care, transportation, other necessities and taxes. To meet that level, the adults in the average family would need to earn a combined $19.80 per hour for every working hour of every week of the year.

13. An estimated 37 percent of the North Carolina families fall below that modest income threshold. Women, African Americans, Hispanics and immigrants are disproportionately likely to live in families below the LIS. And 60 percent of the adults in those families work full-time. 

14. In 2007, over 700,000 or 30 percent of North Carolina families earned less than $35,000 or $16.83 per hour.

15. Myth: Increasing the minimum wage would harm workers by causing substantial job loss.
Reality: Minimum wage increases have not caused job loss. 

16. There is no evidence of job loss from previous minimum wage increases.

• A 1998 EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).
• Studies of the 1990-91 federal and several state minimum wage increases, also found no measurable negative impact on employment.
• New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.
• A recent Fiscal Policy Institute (FPI) study of state minimum wages found no evidence of negative employment effects on small businesses.  

17. Minimum wage increases stimulate the economy through increased consumer spending.

• A study by the Chicago Federal Reserve found that households with minimum wage workers increase their spending when the minimum wage goes up.
• EPI estimates that the increase to $7.25 will, over the course of the following 12 months, boost consumer spending by over $5.5 billion.

SOURCES

1. NC Department of Labor, http://www.nclabor.com/wh/fact%20sheets/minimum_wage_in_NC.htm
2. “Raising the Minimum Wage: Talking Points and Background,” AFL-CIO Legislation Department, May 2006, www.aflcio.org/issues/jobseconomy/livingwages/upload/minimumwage_handbook.pdf
3. Economic Policy Institute, “Fact sheet for 2009 minimum wage increase—Minimum Wage Issue Guide, July 20, 2009,”www.epi.org/publications/entry/mwig_fact_sheet/
4. North Carolina Justice Center, “Support for Working Families: Boosting Incomes,” http://74.220.215.210/~ncjustic/?q=node/193
5. North Carolina Justice Center, “Support for Working Families: Boosting Incomes,” http://74.220.215.210/~ncjustic/?q=node/193
6. Values were calculated using Federal Minimum wage values from the US Department of Labor, www.dol.gov/esa/whd/minimumwage.htm, Poverty Thresholds from the US Census Bureau, www.census.gov/hhes/www/poverty/threshld.html and were adjusted to 2009 dollars using the Bureau of Labor Statistics CPI Inflation Calculator at http://data.bls.gov/cgi-bin/cpicalc.pl (CPI calculator uses the consumer price index average for a given year)
7. Jason R. Jenkins, “A Living Wage for North Carolina: An Introduction,” published by the NC Council of Churches, NC Fair Wages Coalition, and Let Justice Roll, available online at www.nccouncilofchurches.org/resources/downloads/Living%20Wage%20for%20NC%20Report-Final.pdf.
8. “Raising the Minimum Wage: Talking Points and Background,” AFL-CIO Legislation Department, May 2006, www.aflcio.org/issues/jobseconomy/livingwages/upload/minimumwage_handbook.pdf
9. US Census Bureau, American Community Survey, Selected Economic Characteristics: 2007
http://factfinder.census.gov/servlet/ADPTable?-geo_id=04000US37&-qr_name=ACS_2007_1YR_G00_DP3&-ds_name=ACS_2007_1YR_G00_
10. Economic Policy Institute, “Fact sheet for 2009 minimum wage increase—Minimum Wage Issue Guide, July 20, 2009,”www.epi.org/publications/entry/mwig_fact_sheet/
11. North Carolina Justice Center, “LIVING INCOME STANDARD, 2008: Making ends meet on low wages,” www.ncjustice.org/sites/default/files/2008%20LIS%20report%20(Final%20March%2025).pdf
12. North Carolina Justice Center, “LIVING INCOME STANDARD, 2008: Making ends meet on low wages,” www.ncjustice.org/sites/default/files/2008%20LIS%20report%20(Final%20March%2025).pdf
Values were calculated using the minimum wage of $7.25, the FPL from the US Census Bureau, “Preliminary Estimates of Weighted Average Poverty Thresholds for 2008,”  www.census.gov/hhes/www/poverty/threshld/08prelim.html; FPL – 2008 weighted federal poverty levels, $19,929 is the average weighted federal poverty level for the four family types used.
13. North Carolina Justice Center, “LIVING INCOME STANDARD, 2008: Making ends meet on low wages,” www.ncjustice.org/sites/default/files/2008%20LIS%20report%20(Final%20March%2025).pdf
14. US Census Bureau, American Community Survey, Selected Economic Characteristics: 2007
http://factfinder.census.gov/servlet/ADPTable?-geo_id=04000US37&-qr_name=ACS_2007_1YR_G00_DP3&-ds_name=ACS_2007_1YR_G00_
15. “Raising the Minimum Wage: Talking Points and Background,” AFL-CIO Legislation Department, May 2006, www.aflcio.org/issues/jobseconomy/livingwages/upload/minimumwage_handbook.pdf
16. Economic Policy Institute, “Fact sheet for 2009 minimum wage increase—Minimum Wage Issue Guide, July 20, 2009,”www.epi.org/publications/entry/mwig_fact_sheet/
17. Economic Policy Institute, “Fact sheet for 2009 minimum wage increase—Minimum Wage Issue Guide, July 20, 2009,”www.epi.org/publications/entry/mwig_fact_sheet/