Minimum wage hike fails in U.S. Senate, debate continues in Arkansas

Efforts to increase the minimum wage aren't just happening – or not happening – in the halls of Congress or the West Wing. A group in Arkansas is working to increase the state's minimum wage above the current federal rate.

The U.S. Senate on Wednesday (April 30) failed to pass a bill that would raise the federal minimum wage from $7.25 an hour to $10.10 an hour. The vote was 54 to 42, with Senate Leader Harry Reid, D-Nev., voting against the bill so he could re-introduce it later. The bill needed 60 votes to overcome a Republican filibuster. Even if the bill passes the Senate, it’s not likely to meet with approval in the GOP controlled U.S. House.

U.S. Sen. Mark Pryor, D-Ark., was not in Washington to vote on the bill because he was in Arkansas working on tornado recovery efforts. However, Pryor is in favor of raising Arkansas’ minimum wage.

“By giving a raise to the nearly 170,000 Arkansans who make minimum wage, our economy will get a much needed shot in the arm,” Pryor noted in a commentary on the issue. “I hear from Arkansas business owners all the time, and one of their main concerns these days is demand for their products. Better wages for workers means increased sales for small business owners as families have a little more each month to plug back into the economy.”

The current Arkansas minimum wage stands at $6.25 per hour, a dollar below the federal minimum wage of $7.25 per hour.

Stephen Copley, chairman of the Give Arkansas a Raise Now Coalition, said his organization is seeking signatures to place a minimum wage of $8.50 per hour on the November ballot.

The reason for moving for a move to $8.50 per hour versus the $10.10 per hour being pushed by President Barack Obama and recently passed by a handful of states, including Maryland, was due to one simple reason.

"It was the feasibility… what we thought might pass," he said. "There was a sense that something like $10.10 was not the sort of proposal Arkansans would pass, so we sat down and looked at what might politically pass in an initiative."

And while many in Arkansas are paid above the state's minimum wage because the federal minimum wage is a higher rate, Copley said a small number of the state's residents are still paid the $6.25 per hour rate, which equals only $13,000 per year based on a 40-hour work week.

"Basically (those workers fall under a) law passed in Arkansas in the 1960s," he said. "Anybody who works at a job that does not involve interstate commerce and the business makes less than $500,000 a year. If they are involved in interstate commerce, it falls under the federal (law) even if they make less money."

Senior Policy Analyst Eleanor Wheeler, who has authored a study for the Arkansas Advocates for Children and Families that supports a rise in the state's minimum wage, said there is a misconception that individuals earning minimum wage are just young high school or college students.

"Actually, 85% of minimum wage workers are at least 20 years old and earn at least half the income for their families," she said. "That's a big reason why it's important in Arkansas. These full-time workers are struggling to support their families and it gets harder each year because of increasing prices."

She said raising the minimum wage would help raise Arkansas families out of poverty, while having no negative impact on job growth and retention.

"For one thing, a lot of businesses who employ low wage workers are the bigger businesses who can absorb the increase in payroll," she said. "Even these small business will see the money coming back to them because if you put the money in the hands of people in the community, they'll spend in that community. It creates a cycle where it is good for business."

But Randy Zook, president and CEO of the Arkansas State Chamber of Commerce, said the opposite would be true.

"It will hurt employees," he said. "It will result in fewer people being hired, but I don't know that it will necessarily, in the long term, hurt employers. Employers will adjust their work teams to compensate for the increased pay and there will be fewer people hired."

And the Congressional Budget Office appears to back Zook's assertion.

According to a February report by the CBO, while a hike in the minimum wage would be a benefit to some employees and their families, it could have the exact opposite effect for others.

"But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly," the report read in its summary.

And while Copley feels confident his group will successfully get the 62,507 signatures by July 7 to have the minimum wage increase appear on the November ballot, Zook said the State Chamber would likely stay out of the discussion since many of its members have not expressed any opinion one way or another, adding that many of its members pay above the minimum wage.

"At this point, there is so little interest or expression of concern. My guess is that we'll probably not express a position. That's not the final word, but at this point it appears unlikely."