Editor’s Note: Information for this piece came from the University of Arkansas Cooperative Extension Service. It is one of several articles The Commercial will run on the upcoming ballot initiatives for the November election.
Ballot Issue 5 proposes increasing the Arkansas minimum wage.
BALLOT TITLE: An act to amend the Arkansas Code concerning the state minimum wage; the Act would raise the current state minimum wage from eight dollars and fifty cents ($8.50) per hour to nine dollars and twenty-five cents ($9.25) per hour on January 1, 2019, to ten dollars ($10.00) per hour on January 1, 2020, and to eleven dollars ($11.00) per hour on January 1, 2021.
What is being proposed?
This initiated act would increase the state minimum wage from $8.50 to $9.25 per hour on Jan. 1, 2019, then to $10 per hour on Jan. 1, 2020, and finally to $11 per hour on Jan. 1, 2021.
How did this issue get on the ballot? Sponsors collected signatures from at least 67,887 Arkansas voters – equal to eight percent of the people who voted for governor in the last election – to put Issue 5 on the statewide General Election ballot.
Who are the main sponsors of this initiated act?
Arkansans for a Fair Wage has filed Ballot Question Committee paperwork with the Arkansas Ethics Commission to support this measure. Their statement of organization and financial filings are online at the Arkansas Ethics Commission website, www.arkansasethics.com.
When was the last time Arkansas voted on this issue?
A proposal to increase the state’s minimum wage was on the statewide ballot in 2014. Arkansas voters approved the initiated act, or state law, by a vote of 548,789 (66 percent) to 283,524 (34 percent). The law increased the state’s minimum wage by $2.25 over three years.
What does your vote mean?
FOR: A FOR vote means you are in favor of increasing the Arkansas state minimum wage from $8.50 per hour to $9.25 on January 1, 2019, to $10 per hour on January 1, 2020, and to $11 per hour on January 1, 2021.
AGAINST: An AGAINST vote means you are not in favor of increasing the Arkansas state minimum wage from $8.50 per hour to $9.25 on January 1, 2019, to $10 per hour on January 1, 2020, and to $11 per hour on January 21, 2021. 32 The following statements are examples of what supporters and opponents have made public either in media statements, campaign literature, on websites or in interviews with Public Policy Center staff. The University of Arkansas System Division of Agriculture does not endorse or validate these statements.
What do supporters say?
• Raising the minimum wage helps hardworking families cover basic needs, and that money goes right back into local communities and Arkansas’ economy. It’s more customers for small businesses, which means more hiring and more jobs. When working families do well, Arkansas thrives.
• No one working full time should live in poverty. The cost of housing and groceries has been going up for years, but the minimum wage, just $18,000 for a full-time worker, hasn’t kept up. Gradually and responsibly raising the minimum wage will increase the incomes of low-wage workers who frequently rely on government programs, thus increasing their selfreliance and reducing the amount of taxpayer-funded assistance they use. • Raising the minimum wage pays off in lower employee turnover, reduced hiring and training costs, lower error and accident rates, increased productivity and better customer service.
What do opponents say?
• The free market should determine wages. Minimum wage laws typically have a negative impact on jobs for low-skilled workers and family businesses.
• Large corporations would take advantage of this and would further cut employee hours and further enhance automation therefore eliminating more jobs and exacerbating an already tenuous labor market in our state. The wage increase would not be paid by the employers but would be passed through in higher prices.
• A new report from the Bureau of Labor Statistics shows that teen unemployment is near a record low. But there’s a dark side to this figure: Nearly 11 million teens have stopped looking for work or never started. Higher minimum wages at the state and local level are one factor eliminating workplace opportunities for teenagers and other job seekers with less experience.
Wages increased from $6.25 per hour to $7.50 per hour in 2015, then to $8 per hour in 2016 and finally to $8.50 per hour in 2017.
The 2014 law was the first time minimum wage was on the state ballot. Arkansas law established a minimum wage of $1.25 a day for most experienced women workers in 1915, but it wasn’t until 1969 that a minimum wage law of $1 per hour took effect for the entire state. Since then, Arkansas’ minimum wage has increased 25 times to the rate now paid today. All but the last three increases were adopted by the state legislature rather than by a citizen-initiated law.
What is the current state of Arkansas minimum wage, and how does it compare with the federal minimum wage?
The current state minimum wage is $8.50 per hour, which is $1.25 above the federal minimum wage of $7.25 per hour. If voters pass Issue 5, how would the new state minimum wage rate affect businesses? The answer depends on a number of factors discussed below. Businesses subject to the federal minimum wage: If the state minimum wage is higher than the federal minimum wage, then the state law applies.
Therefore, if voters approve Issue 5, businesses with four or more employees would be required to pay the proposed hourly wage unless they are already exempt by state law. Businesses not subject to federal minimum wage: In Arkansas, the state minimum wage law applies to business with four or more employees. There are exceptions for some occupations and industries under state law.
For example, some agricultural activities and newspapers with a small circulation are exempt from minimum wage rate requirements. Also, allowances are made for gratuities (tips) to be part of the hourly minimum wage rate for occupations in which gratuities are customary.
If voters approve Issue 5, how would the new state minimum wage affect workers? If Issue 5 passes, the state minimum wage will apply to employees who are not working in the exempted industries or occupations and currently earn less than the proposed minimum wage, which would be $9.25 beginning Jan. 1, 2019.
How does increasing the minimum wage affect employment and the economy?
There have been many studies and there are many viewpoints about the effect of increasing the minimum wage on overall employment and the economy.
From a review of past academic studies on the topic and new developments in the study of the effect of increases in the minimum wage on employment, seven Nobel Prize winners and more than 600 other economists state that the bulk of evidence shows that gradually raising the minimum wage does not necessarily mean lower employment (Aaron, H., 2014). The economists also point out that a wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth.
If passed, when would Issue 5 take effect?
If approved, the Arkansas state minimum wage would increase to $9.25 on Jan. 1, 2019, to $10 on Jan. 1, 2020, and to $11 on Jan. 1, 2021.
For more information, log on to www.uaex.edu/issue5