When Wegman’s, a New York based grocery chain, opens the first of two new stores in North Carolina this spring, full-time workers at the Chapel Hill location will be paid $15 an hour, and receive benefits. That is more than double the state’s minimum wage of $7.25.
“It is difficult to justify opening a location, and not being able to pay highly competitive wages to the community you are entering. Minimum wage raise or not, this is the expectation,” said Richard Walters, who has overseen the expansion of the company in the state.
Even as Washington debates whether to raise the federal minimum wage to $15 an hour, employers in North Carolina are offering pay much higher because the market is requiring them too. With the state minimum wage unlikely to change without a new federal mandate, businesses are beginning to realize they need to pay up to attract a good workforce, says Steve Brantley, Director of Economic Development in Orange County.
“The real factor is going to be competition, with the commitments we have from businesses building warehouses and facilities here, they are going to be competing for good talent,” says Brantley.
Opponents contend that a mandate would force small businesses to pay employees who already benefit from tips, a wage of $15 per hour, could turn their entire employment model on its head. More broadly, like State Rep. Larry Strickland believes that the markets should dictate wage changes. “When you look across the state wages have gone up in the last decade, I just dont think it is our role to tell employers what to do,”said Strickland.
The debate signals a divide that exists between independently owned small businesses and large businesses expanding in the state. Many well known national brands are providing the strong wages to North Carolina residents, in line with what progressives in Washington have deemed a living wage. Small businesses are not looking to cut corners with their wages, but have concerns about the impact a new mandate could have on a wage model they feel has worked for their business and their workers.
The driving force between wages are the investment national companies like Wegmans have made in North Carolina.
Orange County, alone, has commitments over the next two years from four companies, and is expecting to add at least 1,100 jobs all of which will pay living wages above $15 per hour. Brantley attributes this to some pressure from local activist groups like Fight for $15, but mostly from straight up competition.
A majority of Americans support an increase to $15 per hour. In February, 59% of Americans said they would support a raise which would double the federal standard. Since 2000, every time a wage increase has been put on a ballot referendum voters have enacted it, even in conservative leaning states like Arkansas and Missouri. Voters are not inclined to turn down a pay raise.
While voters love to give themselves a raise small businesses are more wary.
There are concerns among some small businesses that the conversation surrounding minimum wage focuses on corporate greed, which they are lumped into. North Carolina’s economy is as diverse as any state, while corporations and universities are large scale employers in the urban areas.
“In theory raising wages for full time workers sounds great but it doesn’t work for us because our workers don’t fit that mold. ” said Kelsey Bonetti, operator of Sunset Kitchen and Bar in Carolla, a popular beach town along the Outer Banks.
Bonetti argues that a majority of his workforce, which is mostly seasonal employees during the summer, would be negatively impacted by the lack of flexibility employers would have. “It would make us completely overhaul our workforce, with students, we would have to be more selective, and if everyone is going to do that, it would kill the summer job market for teenagers and college kids.” said Andrews.
Small businesses in communities in beach towns on the Outer Banks depend on seasonal workers, many who value a level of flexibility which incentivizes them to spend the summer away from home.
Many states raise their minimum wage through a ballot referendum for state voters to decide. North Carolina citizens do not have that power, and so with the GOP controlled state legislature there is little hope a raise will come from the state level.
Strickland cited how many large employers in the state have set higher wages in order to be competitive in finding strong talent. “There is a reason these big businesses are advertising these rates, it’s because they can.”
Bonetti has friends who manage a marina which operates recreational water activities like fishing charters and jet ski rentals who have expressed concerns about what a new mandate could mean. “Most of their employees work almost entirely for tips, but their employees prefer that, nobody is looking for things to change.”
While tipped work for some can be lucrative, many workers in these towns do work multiple jobs which require going over the traditional forty hour work week. Proponents of the increase argue that if someone works a full-time work week, they should be getting a minimum of a living wage.
Fast food and retail workers are most commonly the ones who’s paychecks are impacted by the minimum wage. Yolanda Simpson, has been with Target as store associate since the summer after she was laid off from her longtime office management position. Simpson expected to take a pay decrease when she applied with the retail chain. “To be honest I thought I would be taking a hit in pay, but by just working a couple more hours a week, I am actually making more,” said Simpson who earns $16.05 per hour.
Brantley, who has overseen the development in the research triangle area since 2014 is not surprised. “Any job that is worth having in this area, is going to pay a living wage, you look at places like Chick-Fil-A and Wegmans the wages they have are part of their reputation and that’s a good thing.”
At a new Durham Chick Fil A location, which opened on March 25, “help wanted” signs line the sidewalk advertising a $15.00 starting wage. Joe Fernandez is the general manager of a separate Chick Fil A in Durham, believes this is the expectation for the type of employees they want . “It is the pay that we need to give out to find what we are looking for, which is people who are reliable and accountable and have good people skills,” says Fernandez.