Old canards never die; they don’t even fade away. So it is that in 2014, with minimum-wage laws facing voters or legislatures, the cries go up, “My God, when you raise the minimum wage, you drive people out of jobs and hurt the economy.”
It is as baseless now as it was in 1938, when Congress passed the Fair Labor Standards Act, which fixed a 40-hour work week and the first minimum wage of 25 cents an hour, or the many times afterward that Congress raised the floor, or in 1968, when the great Republican Governor Winthrop Rockefeller pushed Arkansas’ first state wage law through the legislature, or the numerous times since then that the legislature has raised it.
Raising the minimum wage just never harmed the economy or drove people to the unemployment lines. The modest raises not only improved the hard lives of those who were at the bottom of the job chain but they gave a healthy jolt to the economy as a whole.
The June evening before he signed Fair Labor Standards into law, President Franklin Roosevelt told the nation in one of his fireside chats: “Do not let any calamity-howling executive with an income of $1,000 a day … tell you ... that a wage of $11 a week is going to have a disastrous effect on all American industry.”
But those are exactly the warnings this fall as Arkansas voters consider whether to raise the state’s $6.25-an-hour floor to $7.50 next January, then to $8 in January 2016 and to $8.50 in January 2017. Arkansas has not raised its minimum wage in eight years. The Arkansas law applies to employers with four or more full-time workers.
Polls show that Arkansas voters, now as in the past, heavily favor raising the minimum wage, which has not kept pace with either inflation or gains in worker productivity. Nearly everyone who has ever labored for a wage or salary has an innate sense that there should be a bedrock value for work—that all honest toil, no matter how taxing or menial, deserves to be rewarded with a wage that enables the worker to clothe and feed his or her family.
We take some pleasure in noting that even conservative Republicans have largely come around to saying they will vote for the wage act. Even the libertarian U.S. Senate candidate Tom Cotton, who believes the government has no business passing laws and rules that restrict how corporations treat their employees, customers or the environment, said he would vote for the Arkansas wage proposal.
Only banker French Hill, the Republican candidate for Congress in the Second District, opposes it. Hill, who enjoys family wealth and who made a small fortune selling his bank this year, opposes it. He said it’s not a way to get a genuinely poor person out of poverty.
The editors at the statewide newspaper, the Arkansas Democrat Gazette, raised the usual dire warnings about raising the wage floor for Arkansas’ poorest workers. They embraced the old notion that teenagers who work at takeout burger counters are about the only people making the minimum wage and if the fast-food joints have to raise their pay they will just fire lots of them and perhaps other employees as well. The editorial said Arkansas voters should defeat the wage act and then wait a few years to see what happens if you raise the minimum wage. It suggested waiting to see what effect Seattle’s minimum wage law has when it is fully implemented between now and 2021. The Seattle city council raised the city’s minimum to $15 an hour over several years. Big national corporations with operations in Seattle will have until 2017 to pay $15 an hour and to 2018 if they have employee health insurance. Other Seattle employers will have until 2021 to reach $15. So Arkansas’ big corporate newspaper would have us wait until 2021 to see if its predictions of woe are borne out.
But what is wrong with history? Already, we have 75 years of experience with minimum-wage increases and 45 years with Arkansas’ own minimum wage, which applies to employers with four or more full-time employees.
As it happens, we have the immediate experience of 13 states that have raised their minimum wages the past year. Did they put teenagers and adults with high school educations or less out of work, as the Democrat Gazette says happens? Comparing those 13 states with the 37 that did not raise their wage floors, federal data shows that jobs were growing faster in the 13 states than in the others. Two University of Delaware economists examined the data in the states closely and concluded: “There is no evidence of negative employment effects.”
What about Arkansas? Governor Mike Huckabee called the legislature into special session in 2006 to raise the wage. The act he signed raised it to $6.25 effective Oct. 1 that year. For the next year, according to monthly labor statistics, the Arkansas job market remained stable. In fact, Arkansas employers added 5,000 jobs. The great Bush recession started 15 months after our wage law took effect, so it is pointless to look beyond that.
Over the long course of history in the United States and in Arkansas, there is no record of the kind of calamity following minimum-wage increases that the Democrat Gazette and others always predict.
If only all the issues on the ballot were so easy as this one. —ErnieDumas
