Why Charlotte companies are increasing their minimum wage

Here are some recent examples:

• Bank of America raised minimum pay to $15 in early 2017. The bank is headquartered in Charlotte.
• Wells Fargo raised its baseline pay to $13.50 around the same time — and this year raised it to $15 per hour. The bank’s largest employee hub is in Charlotte.
• BB&T went to $15 in early 2018 and PNC will be there by the end of the year.
• Novant Health increased minimum pay to $11 per hour at the end of 2017, affecting 2,000 workers in North Carolina.
• City of Charlotte employees are on their way to $15 per hour by next year.
• North Carolina state employees get bumped up to $15 per hour in this fiscal year’s budget.
• Most recently, Atrium Health announced that its minimum wage would rise to $12.50 per hour in July, affecting 7,500 employees in Charlotte. Atrium is the largest employer in the city.

Why is this happening? These two charts explain it.

It’s all about competition.

First off, it’s important to define what categories of employees are affected. Major companies have mostly long since outsourced the jobs you might associate with the minimum wage — janitorial, food service, security, etc. They’re not benefiting from these minimum wage increases.

Big companies have also increasingly relied on contract workers who also don’t benefit from the wage increases.

The full-time workers getting pay raises are mostly office assistants, customer service reps, tellers, employees operations, billing, call centers, and people in similar jobs.

While Charlotte’s major companies are in different industries, they all employ these same types of hourly workers.

“There is a war for talent,” said Jim Dunn, chief human resources officer at Atrium Health. “The market here in Charlotte — there are plenty of other places where people can work.”

Meanwhile, North Carolina’s metro areas have become national hotbeds of professional services-related jobs. There’s a lot more demand for entry-level white collar type work.

Combined with rock-bottom unemployment — i.e. low supply — that leads to major competition.

Both of these charts were published last week by the North Carolina Office of State Budget and Management.

Expect this trend to continue.

Some companies are constrained in their ability to raise minimum pay.

The vast majority of American Airlines employees, for example, are governed by union contracts. However, the average pay of an American worker has increased 43 percent since the merger with US Airways in 2013, says spokeswoman Katie Cody.

But in general, the strong Charlotte economy should help boost long-stagnant wages.