Steve Copley: Let’s Raise The State Minimum Wage

by Talk Business & Politics staff ( 24 views 

Editor’s note: Rev. Steve Copley is the executive director for the Arkansas Coalition for Peace and Justice and is the chair of the Give Arkansas a Raise Now Coalition, which is collecting signatures for the ballot initiative.

I support the ballot measure effort to increase the state minimum wage in Arkansas.

The current state minimum wage is $6.25 an hour. The Popular Name of the ballot measure is An Act to Increase the Arkansas Minimum Wage. The measure would amend the Arkansas Code in the following fashion if passed.

“Beginning January 1, 2015, every employer shall pay each of his or her employees wages at the rate of not less than seven dollars and fifty cents ($7.50) per hour; beginning January 1, 2016, the rate of not less than eight dollars ($8.00) per hour and beginning January 1, 2017, the rate of not less than eight dollars and fifty cents ($8.50) per hour.”

Who does this affect? All employers with four or more employees must pay at least $6.25 per hour. If the employer does less than $500,000 per year in business and does not engage in interstate commerce, they will pay the state minimum wage of $6.25. If they do more than $500,000 in business and engage in interstate commerce, they will pay the federal minimum wage of $7.25. If the state minimum wage is ever higher than the federal minimum wage, it is the state minimum wage which is paid to employees.

The federal minimum wage was instituted in 1938 as part of the Fair Labor Standards Act. In 1967, then Governor Winthrop Rockefeller was able to get the first state minimum wage passed through the state legislature.

Why do we need an increase in the state minimum wage? There are people in Arkansas who are working hard, playing by the rules and cannot make ends meet. An individual who works on the state minimum wage of $6.25 makes $13,000 annually. Let’s do some math. If that individual purchased $100 a week in groceries, that would be $5,200 annually. Then, if the individual spent $300 a month for housing, that would be $3,600 annually. That means the individual has spent $8,800 of the $13,000 and we have not discussed an automobile, gasoline, money for medical bills, clothing, and the various insurances that are required. People cannot work at the state minimum wage and make their budgets balance.

How many people would this affect if passed? According to a recent study by the Arkansas Advocates for Children and Families, the increase to $8.50 would affect directly and indirectly about 168,074 people or about 14.7% of the workforce. That is a significant number of people in Arkansas who would have more money to spend in the Arkansas economy. Often critics maintain that these are basically jobs that teenagers do. In the same study, it noted that 142,043 people over the age of twenty, or 12.4% of the total workforce, would be affected.

These figures shows that most of the jobs that are being paid minimum wage at the state level are not being held by teenagers. In fact, as a result of the last recession, we see more adults who lost jobs working at the minimum wage level than since the Great Depression.

What about the criticism that the passage of this measure will cost jobs? We need only turn to the Costco experience to see that this is not the case. Costco’s president and CEO, Craig Jelinek, argues that the minimum wage should be increased. He said, “We know that it is a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty.”

The measure requires over 62,000 valid signatures to be collected and delivered to the Secretary of State by July 7. The measure has proven popular as many people are signing the petitions. In fact, according to a recent April Talk Business-Hendrix College Poll, 79% of Arkansans approve raising the state minimum wage. I believe it is time to raise the state minimum wage to allow those who work hard, play by the rules and share the American dream to be able to make their budget balance.