Will struggling minimum-wage workers in Arkansas see a raise soon?
Yes, if a recently drafted bill passes the Arkansas legislature.
State Rep. Butch Wilkins has filed a bill to increase Arkansas’s minimum wage to $8.25 an hour. Currently, Arkansas’s minimum wage is $6.25 an hour. The national minimum wage is $7.25 an hour.
Even if Arkansas’s minimum wage was raised to the federal rate of $7.25 an hour, a full-time employee working the entire year at the federal minimum wage would still only earn $15,080. Rep. Wilkins’s bill increasing Arkansas’s minimum wage to $8.25 an hour would mean a few thousand dollars more a year than what each Arkansas minimum-wage worker earns under the current law.
To understand the full story about a minimum wage increase, we have to get past some common misconceptions about low-wage jobs in Arkansas.
A misconception is that minimum wage jobs pay more than the work done is worth and that these jobs pay enough to support those with minimum wage jobs. Supporters of this position think that a minimum wage artificially inflates labor costs. They think businesses then pass that cost on to consumers and goods, making everything more expensive for everyone.
The problem with this line of thinking is twofold: first, minimum wage jobs in Arkansas currently do not provide enough money for those that earn it to support themselves or a family; and, secondly, minimum wage increases actually increase economic activity because it puts money with those who actually spend it.
As to the first issue, a minimum wage in Arkansas does not provide enough money to support an individual or a family. The living wage is the hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time, which is 2080 hours per year.
According to a study from MIT, for a typical single female in Faulkner County, a living wage would mean a wage of $8.53 an hour. For a mom with a daughter, the living wage would be nearly $17.00 per hour.
As to a minimum wage increasing costs for everyone, study after study shows that allowing workers to have more money means more consumer spending and demand, thus more economic activity that raises all boats.
In the end, a minimum-wage increase would simply make economic sense, in addition to being the right thing to do for those who are struggling.
Chris Burks is an attorney in Little Rock who formerly worked in El Dorado and Conway. He can be reached at chburks@gmail.com