Minimum-wage hike won't be minimal in some counties.

• Position: Interview with Employment Security Commission of North Carolina's chief economist Greg Sampson - Economic Outlook - Interview

Greg Sampson is chief economist for the Employment Security Commission of North Carolina. He has a bachelor's in social sciences from the College of William & Mary, a master's in economics from Brown University and a Ph.D. in sociology and economics from UNC Chapel Hill. This fall, he studied how North Carolina's counties will be affected by the minimum-wage hike, from $4.25 to $4.75 in October and to $5.15 in September 1997.

BNC: There are 92,000 workers paid at or below $4.25 in the state. But they're not the only ones affected?

It's really more like 450,000 if you include people close to the new minimum wage who will probably experience spillover increases. Essentially, 5% of workers are affected.

BNC: What effect does the increase have on the counties with the most low-wage employees?

In the short run, it should be substantial. In some counties, as much as 25% of the labor force will experience an increase. So the amount of additional disposable income will be noticeable. The longer-term effect may be negligible because a lot of merchants will raise prices - it just sort of bumps down the line.

BNC: Does the increase mainly get spent?

Yeah, because it's handed to people that have really low savings rates to begin with and in many cases are actually going in the hole.

BNC: So does raising the minimum really aid low-income employees?

It doesn't help as much as the recipients think. They get an immediate boost, but it doesn't help them with promotion. It tends to discourage more training because they've gotten this raise despite having done nothing more for it. So in many ways it sends out the wrong signals: Don't worry about your productivity and training, just wait for the minimum-wage boost every X number of years.

BNC: What's the long-term effect?

That's more difficult to describe. It'll slow hiring. In talking to employers, I'm struck by how almost all of them talk about restraining growth, by not filling openings or changing counter help from a four-person staff to a three-person staff, that kind of thing.

BNC: It's only a boost to current workers?

Yeah. It ought to make it more difficult for people looking for lower-wage jobs in those counties. And it will change the pattern of hiring. Employers will try to find people that are older, more productive. The increase will tempt people who are a bit better-educated, with more labor-force experience, to seek out those jobs. You'll have older people who are retired or semiretired who...