Minimum wage could jump to $8.80 in North Carolina
Small business owners in North Carolina may see a minimum wage hike, as legislators debate two bills in the House and Senate.
House Bill 230 aims to bring the state’s minimum wage up to $8.80 per hour, a 22 percent increase. Currently, the minimum wage in North Carolina is the same as the federal rate of $7.25 per hour.
A second bill in the Senate, S39, would increase the minimum wage to reflect the cost of living as measured by the consumer price index beginning Jan. 1, 2016.
Several states have raised their minimum wage levels over the past few years, putting small business in jeopardy. Twenty-nine states and Washington, D.C., have raised their minimum wage levels above the federal rate as of Feb. 24, 2015, according to the National Conference of State Legislators.
Proponents of the bills hope higher wages will provide more money in the pockets of low-skilled workers. But for small business owners, higher wage costs can be burdensome. In most cases, small business owners have to reflect their higher costs by raising prices, curbing hiring or reducing expenses elsewhere.
“Small business owners would have to either raise prices for services and goods,” says NFIB/North Carolina state director Gregg Thompson. “At the same time, they have to be competitive. If they could afford it, they would pay more.”
North Carolina small business owner Glenn Robbins of Acroprint says legislators should shift their focus to make the state more business friendly to boost economic development and growth.
“If the state and federal governments want higher wages, they need to make their cities, states and country a place where industry wants to be,” Robbins says. “Better educated workers, low taxes and a decent infrastructure will be attractive to business.”
Raising the minimum wage without increasing business incentives could have the opposite effect proponents of the bills intend.
“If governments keep raising the minimum wage, business and industry will move to where wages are lower, like China [for example],” says Robbins.
In addition to cutting jobs, raising the minimum wage can have a negative effect on employees. Employers are less willing and unable to expand, and higher labor costs can also lead to downsizing, directly affecting unemployment levels.
“The whole issue for small business owners is the fact that it’s a mandate,” says Thompson. “We are a member-driven organization and [the members] are adamantly opposed to it…We already have a minimum wage.”
