Governor opposes changing minimum wage; Rep. Lundstrum vows to press on

Gov. Asa Hutchinson said on Wednesday (March 13) that he would not support two bills to grant wide exemptions to Arkansas’ minimum wage hike approved by voters in November, but the sponsor said she still intends to try to pass the bills.

“This is an act of the will of the people of Arkansas, and I do not believe it should be changed by legislative act,” Hutchinson said during a speech before more than 100 people at the monthly Little Rock Political Animals Club meeting in Little Rock.

Voters in November passed an initiated act to increase the state’s minimum wage from $8.50 an hour to $9.25 on Jan. 1, to $10 in 2020, and to $11 in 2021. Voters approved the act by a 68-32% margin.

On Tuesday, two proposals sponsored by Rep. Robin Lundstrum, R-Elm Springs, were approved by the House Public Health, Welfare and Labor Committee.

House Bill 1752 would exempt businesses with fewer than 25 workers from the state’s minimum wage increases starting Jan. 1, 2020. The bill also would exempt nonprofits with annual budgets of less than $1 million, and also private developmental service providers funded primarily by state and/or federal reimbursements on a fee-for-service schedule.

House Bill 1753, also sponsored by Lundstrum, would exempt full-time high school and higher education students under age 21.

The bills must pass with a two-thirds majority because they are changing an initiated act approved by voters.

Speaking with reporters after his speech, Hutchinson reiterated that he would not support the bills despite opposing the minimum wage ballot issue during the 2018 election, where he won a second term as the state’s chief executive.

Hutchinson also said he had talked with Lundstrum and other “key people,” including the Arkansas State Chamber of Commerce.

“I cannot support these bills that alter significantly the minimum wage that was passed by the people,” Hutchinson said.

Lundstrum said Wednesday she would still try to pass the bills, although she did not know when.

“I realize the people voted,” she told reporters, “but we vote for things, we have laws, and sometimes there are unintended consequences that need to be addressed. … The people of Arkansas did not vote to hurt their small businesses, their nonprofits, or to keep teens from having a job. Nobody’s going to hire a 16-year-old with no experience at $11 an hour.”

Attorney David Couch told the Arkansas Democrat-Gazette Tuesday that Lundstrum’s legislation would roll back not only Arkansas’ coming minimum wage increases but also the one passed in 2014. Lundstrum said Wednesday she would amend the bill to clarify that the wage would remain at $9.25 an hour and above.

The Republican Party of Arkansas released a statement Wednesday agreeing with the governor’s position. It said, “As Republicans, we value the opportunity to find employment, businesses who create jobs, and an environment that sustains a healthy job market. In November 2018, the people spoke to incrementally raise the minimum wage in Arkansas. We respect the will of the people and their majority vote. We should only amend the spoken desire of the people when circumstances so demand. Until then, we should follow the will of the people and not attempt to alter it.”

In response, Lundstrum said, “There’s a lot of confusion. I wish they hadn’t made that statement, but they made a statement, so that’s their decision. I’m going forward.”

Senate President Pro Tempore Jim Hendren, R-Sulphur Springs, expressed doubts about the legislation having enough votes in the Senate.

“You’ve got to have a pretty compelling case to overturn something that the voters just approved, so I’ve said from the beginning it’s a pretty high bar,” he said.

Earlier Wednesday, Democratic Party of Arkansas chairman Michael John Gray criticized the bills in front of about a dozen Democratic House members at DPA headquarters, saying that for many people minimum wage is not a starting wage but a standard wage.

“This is the same Legislature that just raised taxes on Arkansans,” he said, referring to a gas and diesel tax increase signed by Hutchinson on Tuesday. “This is the same Legislature that just gave tax breaks to the wealthiest Arkansans, and now they’re saying to those that are on the lower end of the economic spectrum, you’re going to have to move somewhere else because in your small town, this is all you’re worth.”

Gray and House Minority Leader Charles Blake, D-Little Rock, said some Democrats may support Lundstrum’s bills.

Editor’s note: Talk Business & Politics Wes Brown contributed to this report.