Minimum Wage Proposals Spark Disagreement

by Mark Friedman  on Monday, Mar. 10, 2014 12:00 am  

The Rev. Steve Copley, chair of Give Arkansas a Raise Now, said increasing the state’s minimum wage to $8.50 an hour will help more than 168,000 Arkansas workers.  Montine McNulty, executive director of the Arkansas Hospitality Association, said that if the minimum wage rises, restaurant owners would have two choices: lay off workers or raise the menu prices. (Photo of Copley by Jason Burt)

“We’re in the early stages, so we haven’t seen that much money come in” to fund the campaign, Copley said.

If the initiative were to get on the ballot and then be approved, the state’s minimum wage would rise to $7.50 on Jan. 1, then to $8 on Jan. 1, 2016. On the first day of 2017, the wage would climb to $8.50 an hour. It would stay at that rate until another ballot measure or the Legislature raised it.

The last time Arkansas’ minimum wage was increased was during a special session in 2006, when the Legislature, under pressure from a similar petition drive, increased it from $5.15 an hour to $6.25.

“We didn’t hear of any jobs loss as a result of the increase” in 2006, Copley said.

Others agreed.

“Most research on the effects of increases in minimum wage finds that the change in jobs after a minimum wage increase is either zero of very close to zero,” said Wheeler of the AACF in her report.

She pointed to a study by two Princeton University economists, David Card and Alan Krueger, who studied fast-food restaurants along the New Jersey and Pennsylvania border before and after New Jersey raised its minimum wage in 1992 while Pennsylvania didn’t.

“We find no indication that the rise in the minimum wage reduced employment,” Card and Krueger said in their report.

Some companies already have announced that they are raising the minimum wage for their hourly workers.

The Gap Inc., the apparel retailer based in San Francisco, said on Feb. 19 that it would increase the minimum hourly rate for its employees to $9 an hour this year and $10 next year. About 65,000 of its store employees will get raises.

“To us, this is not a political issue,” Glenn Murphy, The Gap’s chairman and CEO, said in a letter to employees that was published on the company’s website. “Our decision to invest in frontline employees will directly support our business, and is one that we expect to deliver a return many times over.”

Businesses’ Concerns



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