Arkansas Minimum Wage Initiative (2014)

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The Arkansas Minimum Wage Initiative may appear on the November 4, 2014 ballot in Arkansas as an initiated state statute. The measure would increase the state’s minimum wage from $6.25 to $7.50 per hour on January 1, 2015, to $8 on January 1, 2016 and to $8.50 per hour on January 1, 2017.[1]

Text of measure

Ballot title

The following popular name and ballot title were certified for circulation by the Arkansas Attorney General:[2]

Popular Name:

An Act to Increase the Arkansas Minimum Wage

Ballot Title:

An act to amend the Arkansas Code concerning the state minimum wage; the act would raise the current state minimum wage from six dollars and twenty-five cents ($6.25) per hour to seven dollars and fifty cents ($7.50) per hour on January 1, 2015, to eight dollars ($8.00) per hour on January 1, 2016, and to eight dollars and fifty cents ($8.50) per hour on January 1, 2017.[3]

Support

The measure is sponsored by Give Arkansas a Raise Now.[1]

Supporters

Organizations

  • Give Arkansas a Raise Now (GARN)
  • NAACP, Arkansas Chapter
  • AFL-CIO[4]
  • Arkansas Hunger Relief Alliance[5]

Officials

Individuals

Opposition

Opponents

Reports & analyses

Many studies have been done on the effects of minimum wages, real wage fluctuations and other aspects posited to be impacting economic inequality. The following provides a small sampling of the research that has been done.

CBO 2014 report

CBO mimimum wage report 2014.png

The Congressional Budget Office released a report on February 18, 2014 examining the effects of two proposed federal minimum wage increases. The first option would raise the rate from $7.25 to $10.10 an hour over three years. After reaching $10.10 an hour in 2016, it would continue to be annually adjusted for inflation. The second option reviewed would raise the minimum wage to $9.00 per hour by 2016 with no further adjustments for inflation to follow.[8][9]

The report had the following findings for the first option:[8]

  • Projected employment reductions would be about 500,000 workers or 0.3 percent.
  • Approximately 16.5 million workers would have higher earnings during an average week by the second half of 2016.
  • "Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold (out of the roughly 45 million people who are projected to be below that threshold under current law)."

The report provided the following findings for the second option:[8]

  • Employment projected to be reduced by about 100,000 workers or less than 0.1 percent.
  • "Real income would increase, on net, by about $1 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 1 percent and moving about 300,000 people, on net, above the poverty threshold."

The report also noted that federal spending and taxes would be indirectly affected by the increases in real income for some and reductions for others. It noted that for several years an increase could likely lead to a small decrease in budget deficits for several years, but would likely see a small increase in deficits afterwards. However, the report was unclear on "whether the effect for the coming decade as a whole would be a small increase or a small decrease in budget deficits."[8]

Read the full report here.

IRLE 2014 working paper

A March 2014 working paper from the Institute for Research on Labor and Employment of the University of California, Berkley examined the effects of minimum wage increases, as well as other employment regulations, in the city of San Francisco. In 2004, San Francisco raised its minimum wage from $6.75 and hour to $8.50 an hour. Further increases have occurred at regular intervals which bring the current minimum wage to $10.47.[10] In the working paper for the study, researchers Michael Reich, Ken Jacobs and Annette Bernhardt note that these changes had almost no effect on the overall employment in the city. One study cited in the working paper demonstrated that there were "no statistically significant negative effects on either employment or the proportion of full-time jobs," while another found restraint employment rose faster in San Francisco than in surrounding counties following the wage increase.[11]

The working paper provided the following conclusions regarding minimum wage increases:[11]

  • Paying workers more can change productivity, work attitude and ability to make it to work on time.
  • Turnover maybe reduced by minimum wage increases by reducing the number of workers leaving their jobs to look for better wages or "due to poverty-related problems such as difficulties with transportation, child care, or health."
  • Firms can use a "combination of strategies," such as increasing costs for consumers or earning lower profits, to adjust to minimum wage increases.
  • "Additional benefits, such as reduced spending on public assistance programs and the local stimulus of additional spending by low-income families, might also occur."
Read the full working paper here.

Levy Economics Institute

In a 2014 policy note from the Levy Economics Institute of Bard College, Fernando Rios-Avila and Julie L. Hotchkiss argued that the so-called "decade of flat wages" has actually been a decade of decreasing wages. The decade between 2002 and 2013 has been seen as a period with no real wage growth despite continued increases in labor productivity, according to the authors. They argue that, in fact, that decade was one of declining real wages with real wages at year-end of 2013 5 percent lower than they were in 2002 and closer to levels in 1998.[12]

The study suggested the decline in gross domestic product (GDP) growth meant there was less growth in returns to labor and capital. "In turn, declining real wages means consumers have less to spend in order to fuel growth." The authors further suggested that educational attainment and experience among works have propped up average real wages and that as the older generations retire "the average experience in the labor force will decline, pulling average wages down." The study also pointed out that any increases in productivity may not necessarily translate to raises in real wages because "the significant productivity growth seen since 1973 has not produced commensurate increases in real wages."[12]

Read the full policy note here.

Path to the ballot

See also: Laws governing the initiative process in Arkansas

The Arkansas Attorney General approved the measure proposal for circulation on January 3, 2014.[4] Initiative supporters had to collect at least 62,507 valid signatures from registered voters by July 7, 2014 in order to place the initiated state statute on the ballot.[13] Supporters announced at the beginning of June that they had collected between 72,000 and 75,000 signatures to place the measure on the ballot.[7] Supporters claimed to have submitted 77,288 signatures by the prescribed deadline.[14]

Similar measures

The following measures related to minimum wage increases were proposed for the general election ballot in November:

See also

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Suggest a link

External links

Additional reading

References

  1. 1.0 1.1 Memphis Business Journal, “Attorney General clears way for Arkansas minimum wage ballot initiative”, January 6, 2013
  2. Attorney General website, "Response to request for certification of Minimum Wage Initiative," accessed March 5, 2014
  3. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  4. 4.0 4.1 4.2 Arkansas News, "AG certifies ballot proposal to raise minimum wage," January 3, 2014
  5. Give Arkansas a Raise Now, "About," accessed June 20, 2014
  6. KATV, “Democrats seek to win Arkansas with minimum wage platform," December 30, 2013
  7. 7.0 7.1 7.2 Arkansas Democrat-Gazette, "Backers: Pay issue signings gathered," June 3, 2014
  8. 8.0 8.1 8.2 8.3 Congressional Budget Office, "The Effects of a Minimum-Wage Increase on Employment and Family Income," February 18, 2014
  9. Congressional Budget Office, "The Effects of a Minimum-Wage Increase on Employment and Family Income (full report)," February 18, 2014
  10. The Seattle Times, "Studies look at what happened when cities raised minimum wage," March 12, 2014
  11. 11.0 11.1 [http://www.irle.berkeley.edu/workingpapers/104-14.pdf Reich, M., Jacobs, K. & Bernhardt, A. (March 2014). Local Minimum Wage Laws: Impacts on Workers, Families and Businesses. IRLE Working Paper No. 104-14.]
  12. 12.0 12.1 Rios-Avila, F. & Hotchkiss, J. L. (2014) Policy Note: A decade of flat wages? Levy Economics Institute of Bard College. 1-5.
  13. Arkansas Secretary of State, "2014 Initiatives and Referenda: Facts and Information for the 2014 General Election," accessed March 5, 2014
  14. The Bellingham Herald, "Minimum wage, alcohol sales petitions submitted," July 7, 2014