NORTH CAROLINA – Two bills introduced to the General Assembly seek to raise the state minimum wage. The goal, according to one area representative, is to help employees earn a living wage; however, proposed changes also pose challenges to some business owners.
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Currently, minimum wage in North Carolina is set at the federal rate of $7.25 an hour, which has remained unchanged since 2009.
The Economic Security Act (HB 339), sponsored by New Hanover Rep. Deb Butler, was proposed in the House on March 6. The bill seeks to raise the minimum wage to $22 an hour with annual adjustments for inflation.
However, a few days later on March 10, a second bill, The Fair Minimum Wage Act (HB 353), also sponsored by Butler, was filed in the House. This bill proposes a gradual increase to the minimum wage. Starting at $10 per hour in 2026, the rate would increase by $2 annually until reaching $18 per hour in 2030. In 2031, the Commissioner of Labor would adjust the minimum hourly pay rate to account for inflation.
“I cosponsored both bills to send a strong message that the current minimum wage is absolutely unlivable,” Butler said. “However, I support a phased approach so that businesses can adjust over time.”
Alexandra Sirota, executive director for the nonprofit North Carolina Budget and Tax Center, said changes to minimum wage are long overdue.
“For years, minimum wage workers haven’t seen the level raised from $7.25, but the costs of purchasing goods and services has increased,” Sirota said.
The last time the General Assembly saw a bill tackling the minimum wage was in 2023. Up Minimum Wages/No Subminimum or Exemptions sought to expand the minimum wage to $15 an hour by 2025. The bill stalled in the House after being referred to committee.
“When people have more money, their dollars will circulate in the economy, helping businesses to actually have consumers with stronger purchasing power,” Sirota said.
The 2025 Living Income Standard Report, released by the North Carolina Budget and Tax Center, details the earnings needed to cover basic expenses in each of North Carolina’s 100 counties. The report uses actual cost data from the U.S. Bureau of Labor Statistics to estimate the hourly wage individuals and families need to afford housing, food, child care, health care, transportation, taxes, savings, and other necessities.
In New Hanover County, the report found a single adult needs to earn a minimum of $18.90 per hour to meet basic needs. For a family of two adults with two children, the living income standard is $23.20 per hour for each adult.
“We know that when people have higher incomes, they’re able to engage with local businesses,” Sirota stated. “Many families with workers who are earning minimum wages are struggling to get by, struggling to meet the basics, whether it be putting food on the table, or paying rent. By boosting wages, we can make sure that they meet their needs and participate actively in the local economy.”
H.B. 339 would also eliminate the current $2.13 tipped minimum wage. Instead, employers would be required to pay their employees a minimum of $22 per hour, plus tips. Additionally, if employees pool their tips, employers would have to pay them at least 15% of the pooled tips on top of the $22 minimum wage.
Heather Rhodes, Wilmington’s Castle Street Kitchen co-owner, expressed concerns about the proposed changes to the tipped minimum wage. Rhodes has been in business since 2021.
“I currently have eight employees on tipped wages,” she said “That would close my business down.”
Cheryl Hartsoe, president of the Downtown Business Alliance, said she feels that many small businesses in downtown Wilmington may struggle with an increase to the minimum wage.
“I’m thinking about how this will directly affect the hours that small businesses can keep,” Hartsoe said. “Downtown Wilmington is unique and I do think that a lot of businesses downtown pay their employees good wages. Business owners might look at reducing costs which could impact the workforce.”
As a former small business owner, Hartsoe said going to a $22 minimum wage instead of incrementally increasing it leads to more uncertainty with how a business manages their finances.
“I had my business through a recession and hurricanes,” Hartsoe said. “I think that owning a small business is uncertain and quick changes to how employees are paid could result in less growth and development.”
Port City Daily reached out to the Wilmington Chamber of Commerce to speak about the bills as well but did not hear back by press.
“If a business cannot afford to pay a living wage to its employees, then it should reconsider its business model because anyone working 40 hours a week should be able to provide for themselves in a reasonable manner,” Butler said.
Both bills are now in committee for further review.
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