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Lowest-Wage Arkansans Will See More Money in 2019

USA

08 December 2018, 10:54

M.News

The Arkansas native is a housekeeper at a hospital in the town of Jonesboro, an hours drive from Memphis, Tennessee. There, she makes $10 an hour cleaning rooms, changing bed sheets, emptying trash cans. Its dirty work, and it doesnt cover all her bills, but Jones says she enjoys it. She is grateful to have the job and smiles so much that her colleagues gave her the nickname Sunshine, reports VOA News.

If they only knew that yesterday I had to put my last 20 [dollars] in the car [for fuel], and Im wondering all weekend how Im going to pay for my daughters lunch, Jones said. But I dont stress about it because, again, I just pray Lord, if its meant for me to have it this week, youre going to provide for me.

Jones recently shifted from temporary status to full time, meaning she will soon be eligible for employer-subsidized health insurance. That will save her money every month but even then, her paychecks wont cover all the expenses she and her teenage daughter have.

At the same time, Jones makes too much to qualify for government anti-poverty programs, although her daughter is eligible for subsidized health insurance. To afford her monthly car payment, rent, food, gas and utilities, Jones supplements her hospital job by cutting grass and cleaning peoples homes, regularly working from 6:30 a.m. to 11:30 p.m. She says it would be hard to make it all work if her daughter was young enough to still require child care.

All the extra money that you make, you have to hold it. You cant blow it, Jones said.

Minimum wage rises

The lowest-paid Arkansans will enjoy a pay raise Jan. 1 when the minimum wage rises by 50 cents an hour to $9, but Jones will have to wait longer for some relief. Employers will be required by law to pay no less than $10 an hour beginning in 2020 and $11 an hour in 2021.

For comparisons sake, a police officers starting salary in Arkansas is as low as $11.50 an hour; and an emergency medical technician (EMT) makes less than that. Though still not considered a living wage, which hovers around $15 an hour in Arkansas, it will be much higher than the federal minimum wage of $7.25 an hour.

Because of the southern states relatively low cost of living, the new wage will also be considered one of the highest effective minimum wages anywhere in the United States. By the time its fully implemented, its expected to affect about 25 percent of the workforce.

The new law, which was passed through a ballot initiative in early November, received overwhelming support from voters, but some have expressed concern over its implementation. (A ballot initiative is a piece of legislation that is approved or rejected by voters.)

For something to go up 30 percent in the next two years is pretty unusual, said Jeremy Horpedahl, an assistant professor of economics at the University of Central Arkansas. Thats a pretty big cost increase to try and fold into your budget.

Horpedahl said he expects the effects will be all over the board, with nonprofit organizations universally impacted.

Advocates say that more money in more pockets will stimulate the Arkansan economy. But critics of the initiative, including Republican Governor Asa Hutchinson, warned that the potential drawbacks would outweigh the benefits; they say some people may see their employer-sponsored benefits like health insurance reduced or even lose their jobs.

Brent Peterson, co-owner of a restaurant in the state capital of Little Rock, is glad that wages will be rising.

Trios Restaurant currently pays all employees more than the required minimum wage, but by 2021, the restaurant will have to figure out how to raise the wage of its lowest earners. To accommodate this, Peterson said, the restaurant will likely increase menu prices, something he didnt seem too worried about.

We raised [prices] about six months ago, and it was only a quarter here or 50 cents here, Peterson said. There was no sticker shock with our clientele.

Some fears

Not everyone has the same confidence that the gaps can be easily closed.

Maybe it will help our economy, but I can also see where its going to hurt a lot of people, said hair stylist Ashley Holland from the town of Heber Springs, in central Arkansas.

Holland said the wage increase wont personally affect her, as she already makes more than the minimum wage. In fact, she said she might benefit from attracting more clients, who will be able to afford her prices.

Holland is more concerned with how other local businesses, some already struggling to get by, will manage to pay their employees. For years, storefronts along Main Street have been closing or looking for new tenants, partly because of foot traffic (customers) being redirected to online businesses.

I can understand a little increase, but I think its too much, Holland said.

Jones sympathizes.

I understand that, too. They can lose out on what they got going on, she said.

Even when the pay hike takes effect in 2021, it wont be enough for Jones to walk away from her side gigs. But when it does, she plans to maintain her current budget and put the extra money away for her daughters future college expenses.

Anything is always better, more is always better than less, Jones said.

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