Pricey Harrison

Friday, August 05, 2005

Health Care Tax Credit, Small Businesses/Minimum Wage Increase

The House Finance Committee passed legislation on Thursday that will provide a tax credit for small businesses that provide health insurance to employees and increase the state's minimum wage. The legislation, House Bill 20, combined the two issues and the bill sponsors, Reps. Hugh Holliman (D-Davidson) and Alma Adams (D-Guilford) argued the bill would help our state's workers and small business owners, while ensuring better access to health care for more North Carolinians.

First, the bill would provide a tax credit for small businesses that provide health insurance to employees, which business leaders have said is one of the biggest expenses that they struggle to meet for their employees. Representative Holliman said that we are all looking for ways to help our small businesses with less than 25 employees grow and prosper and this bill accomplishes this goal.

Secondly, the bill would increase our state's minimum wage to $6.00 per hour. The national minimum wage of $5.15 has not increased since 1997 and inflation has eroded 14 percent of its buying power since then, supporters argued. Fifteen states and Washington, D.C. now have minimum wages greater than $5.15. Florida recently raised its minimum wage to $6.15, indexed to inflation, which resulted from a 2004 ballot initiative that was approved by 71 percent and passed in every county.

The 85-cent increase is a compromise on a previous bill, which originally sought to increase the wage to $8.50 by 2007, but in June, was scaled back to $6.15 over the next year. The N.C. Budget and Tax Center said that modest increases in the minimum wage would have minimal or no impact on employment in the state despite opponents' claims stating otherwise.

There have been approximately 20 wage increases over the past 67 years and supporters argued that no evidence exists that proves an increase would lead to lost jobs. According to the census bureau, there are approximately 101,000 North Carolinians (3% of our state's total workforce) making minimum wage or approximately $10,700 per year. Roughly half of these people are family breadwinners and do not receive other state assistance such as Medicaid to help with expenses; three-fourths are 20 years and older, which includes 51.8% over 25 years old.

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