State money counter calls for a raise for the poor

by Jordan Green

The state treasurer fired a new volley in the simmering battle over wages for low-skilled workers in North Carolina on Jan. 3 when he addressed the NC Citizens for Business and Industry’s annual economic forecast forum, proposing to the state’s CEOs and bankers that the minimum wage be raised by a dollar.

‘“While our overall direction is positive, one area that greatly troubles me is that status of our lowest-income workers,’” said State Treasurer Richard Moore. ‘“The costs of healthcare, gasoline and housing are increasing rapidly’…. For North Carolina’s low-income families, these costs are all too often a crushing burden. When the door to advancement and opportunity is closed to our people we all suffer and it can have a huge impact on the bottom line.’”

Rep. Alma Adams (D-Greensboro) has long proposed raising the minimum wage in North Carolina. A law sponsored by Adams to increase the minimum wage annually until it reached $8.50 an hour failed last year, but another bill that includes a provision to raise the minimum wage to $6 an hour passed the House in August. It has languished in the Senate Finance Committee since then.

Moore framed a minimum wage raise as a moral issue.

‘“Our workers deserve it,’” he said. ‘“Our morals demand it. And our state’s economy will be better off for it.’”

The state treasurer’s proposal has created widespread speculation that Moore plans to run for governor on the Democratic ticket in 2008. Not surprisingly, the suggested pay hike prompted praise from political observers on the state’s political left such as NC Policy Watch, and criticism from rightward outfits like the John Locke Foundation. Business leaders reacted to the idea with caution.

‘“What if Moore makes raising the minimum wage part of his next campaign for whatever office he runs?’” wrote Chris Fitzsimon, an analyst with the liberal NC Policy Watch in Raleigh, in his periodic e-mail newsletter. ‘“That’s welcome news, not something to bemoan. Low-wage workers in North Carolina are struggling and North Carolina should do something about it by joining the other 17 states and the District of Columbia that have higher minimum wages than the federal law requires.’”

Roy Cordato, vice president for research at the conservative John Locke Foundation in Raleigh, said he views Moore’s proposal as a transparent political play.

‘“This is a bread-and-butter Democratic issue,’” he said. ‘“Interest groups, in particular the public service unions, will be in favor of this. I wouldn’t be surprised if we don’t see candidates trying to outdo each other. My guess is that you will see similar proposals from [Attorney General] Roy Cooper and [Lt. Gov.] Beverly Perdue.’”

Cordato, who favors abolishing the minimum wage altogether, said poorest of the poor would be hurt the most by a minimum wage raise.

‘“What minimum wages do is it keeps workers from competing on the price of their labor,’” he said. ‘“That’s why it hurts low-skilled, less experienced workers. You price them out of the market. It leverages up the wages for all workers who are near minimum wage at the expense of the least skilled.’”

Cordato also argues that raising the minimum wage would put certain businesses at a competitive disadvantage.

‘“Wal-Mart recently came out in favor of increasing the minimum wage,’” he said. ‘“That’s not about altruism. If you are already out there paying more than your competitors and you want to raise the costs for your competitors you do so by making them pay the same wages as you.

‘“I see business interests being split on minimum wage issues,’” he added. ‘“Generally, retail businesses tend to be against raising the minimum wage.’”

In his speech before the state’s most powerful business group Moore made exactly the opposite argument ‘—’ that a minimum wage stuck at $5.15 an hour puts companies that pay their employees adequate wages at a