NC may be first state to pay employees $15 an hour

June 18, 2018

Come July 1, North Carolina may well be the first state in the nation to pay its employees at least $15 an hour.

The State Employees Association of North Carolina, which represents state workers at the General Assembly, certainly thinks that’s the case.

Ardis Watkins, SEANC’s legislative affairs director, ​​​​​went searching for other states that do it, focusing in particular on progressive ones such as California, Oregon and Massachusetts. She reached out to other state employee groups and the national office of the Service Employees International Union, which has made a major push in “the fight for $15.”

The closest she found are states that are phasing it in for their employees. New York plans to get there in 2021.

North Carolina will do it this year – as part of a state budget approved by a Republican legislature over the veto of a Democratic governor. It’s plays against type for a GOP majority that has resisted a push from the left to increase the state’s minimum wage above $7.25 an hour.

“People are going to draw their own conclusions,” Senate President Pro Tem Phil Berger said this week. “I would just say that what we are trying to do is manage the resources of the state of North Carolina in a prudent manner.

“Sometimes what that means is you need to pay your people more,” Berger said. “Sometimes it just makes sense.”

According to the Office of State Human Resources, 8,316 state employees earn less than $15 an hour, or $31,200 a year. Of those, 1,192 are within 2 percent of that level, so across-the-board raises included in the budget will get them above the new floor. Others will get larger pay bumps to the $31,200 minimum.

SEANC Executive Director Robert Broome, who lobbied Berger and other legislative leaders on the $23.9 billion budget, recalled visiting a state prison this year where a manager told him he went to a nearby Burger King after work and found a former corrections officer working as assistant manager.

“This guy felt like he was able to make a better living,” Broome said.

In addition to setting a new minimum salary and 2 percent salaries for most state workers, the budget included average 4 percent raises for prison staffers.

But local employees paid by the state, such as teaching assistants, school bus drivers and cafeteria workers, are left out of that equation.

Mark Jewell, president of the North Carolina Association of Educators, has said those school workers will get only $400 raises under the new state budget. Gov. Roy Cooper’s proposed budget, by comparison, would have provided them with $1,200 raises, Jewell said.

Cooper’s human resources office said 72 percent of state agency employees would have fared better under the governor’s budget. He called for freezing planned tax cuts for corporations and people making at least $200,000 a year in order to put more money into education and give state employees larger raises across the board.

Broome called the legislators’ budget the “best deal possible” when it was announced, but he credits Cooper’s budget for pressuring the GOP majority to add about $232 million to their spending plan for state employee and retiree increases.

SEANC members sent lawmakers some 3,700 emails in support of the governor’s budget, Broome said, which “set the tone and changed the conversation.”

Republicans haven’t hyped the move to $15 an hour very much since rolling it out as part of their budget proposal last month.

There was some suggestion at the time that the move would push the private sector to increase what it pays without resorting to a law setting a higher minimum wage, a Democratic priority the GOP majority hasn’t been willing to consider.

It might, economists said, a little.

“As with most of economics, the short answer to all of this is, it depends,” said Peter Summers, associate professor of economics at High Point University.

What types of jobs are these? Are there enough to influence the broader economy? Is the state really setting a new bar, or is it playing catch up?

The most common job classes affected, according to the state, are as follows:

Housekeepers, security guards and deputy clerks likely make minimum wage or close to it in the private sector, making them the most likely areas affected, according to Mike Walden, an economist at North Carolina State University.

But the 5,653 workers those categories make up about only 1 percent of the state’s total non-farm employment, Summers said in an email

“So unless the state is a large employer in some categories, the raises likely won’t affect statewide wages much,” he wrote.

But it will make state jobs more attractive, Summers said, and it should start some conversation.

“If it’s good enough for state workers, then why not everybody else?” he said.

Walden said in an email that it could be argued the increase is a “stealth way of motivating the private sector.”

Republican lawmakers aren’t promising the $15 floor will influence the private sector, but House Appropriations Chairman Nelson Dollar, R-Wake, said he hopes it encourages employers to look at the issue.

“We want those decisions ot be made by the private sector, not dictated by the government,” Dollar said. “But government can set an example.”