In the 2018 midterms, the voters of two otherwise predominantly conservative states, Arkansas and Missouri, apparently lost their collective minds and approved significant minimum wage increases. Arkansas ballot issue #5, which passed 590,285 (68%) to 274,475 (32%), mandates the state wage be $11 per hour by 2021. In the Show-Me State, voters passed Proposition B with 1,488,368 votes (62%) to 901,808 (38%), requiring no less than $12 per hour by 2023.
Minimum wage earners across both states who lack the experience to know better rejoice – for now – while the rest of us worry over what is to come.
Experience
In 1998, the minimum wage in Arkansas rose from $4.25 an hour to $5.15, likely because of the federal increase. But that meant nothing to me then; I was just a 14-year-old kid, utterly oblivious to such things. This $5.15 was the minimum wage when I entered the workforce in 2002, and so it remained until 2007 when it jumped a buck-ten to $6.25/hour.
I was lucky enough only to need to settle for that twice in the five-year span, and only briefly even then. When the federal wage later crept to $6.55 an hour in 2009, bringing all states with it by default, I was making $12.75 working nights in an industrial waste processing plant – with plenty of $19.13 an hour overtime – and never noticed the mere 30 cent increase.
But I certainly noticed that jump from $5.15 to $6.25 in ‘07. I was glad when I got my necessary quarter an hour increase, indeed, but I would have gladly given it back if I could once I realized what that “raise” cost me. My job paying 85 cents over minimum wage was, all of a sudden, just the minimum – and it didn’t take long for the cost of living to spike in response. The price of milk and bread almost doubled in just a few short months. I recall friends who smoke complaining about the sudden increase in cigarette prices. It didn’t take me long to hypothesize a link between the drastic increase in prices and the mandatory raise of wages.
When the federal minimum jumped to $7.25 in 2010, I was self-employed and enjoying – or suffering – the feast or famine that is the life of a self-employed bordering on unemployed freelance writer. My girlfriend wasn’t so lucky, however. She worked in a fast food restaurant and was due for her one-year evaluation and, most likely, raise. Instead, she got her “raise” to $7.25 an hour, right along with everyone else, including a high school kid who goofed off far more than he worked.
Flash forward to 2013. The girlfriend is now the wife, and an extraordinarily long period of “famine” has sent me back into the job market, where I quickly found work in an assembly plant for $7.25 an hour. With the two of us working full time at minimum wage, we couldn’t afford our mortgage, my truck payment, all the various forms of insurance we were required by law to keep, and still buy food and gas and other basic necessities. As folk must when there isn’t enough to spread around, we paid those bills that neglecting would soon leave us homeless, carless, or starving and worried about such luxuries as insurance when we could afford them.
...when what you’re making is the least you can legally earn, why give any more effort than required to obtain it?
As we fell farther behind each pay period, what was once a strong hypothesis was, for me, proven fact: I had more spending power making minimum wage at $5.15 an hour a decade earlier than I did at $7.25 then. Thankfully, we both found better jobs before our first daughter was born in 2014.
My family and I have always been blessed enough to make it – even if only just barely – no matter how close we came to losing everything. Sadly, the same can not be said for everyone.
Progress
In the Natural State, the minimum wage will increase from the current $8.50 per hour to $9.25 January 1, 2019, then to $10 in 2020 and $11 in 2021. In Missouri, it’ll jump from the current $7.85 to $8.60 in January, then $9.45 in 2020, $10.30 in 2021, $11.15 in 2022, and $12.00 in 2023. Notice that both states will experience increases very close to $1 per year.
The effects of the last dollar an hour increase in Arkansas were devastating, beyond even the price hikes that soon followed. Folks making a buck more than the minimum found themselves earning no more than the guy flipping burgers at the fast food restaurant – but working considerably harder. Small businesses suffered the most, as some couldn’t afford to pay all their workers an extra dollar an hour and others lost people to easier jobs. After all, when what you’re making is the least you can legally earn, why give any more effort than required to obtain it?
The last set of increases in my home state moved in smaller intervals – $7.25 to $7.50 in 2015, then to $8.00 in 2016 and $8.50 in 2017 – and still many small businesses had to either cut back on labor or fold up entirely. Even Walmart eliminated many full-time employees to save money between the wage increases and the insurance requirements, with about half of all Walmart employees today being part-time. And they’re anything but a small business. According to the World Economic Forum in 2016, Walmart, the top company in the world, would be the tenth largest economy if it were a country.
Lessons
With insane wage increases locked in for the next three to five years, the residents of these two states are almost certainly in for a hell of a ride. If you have the misfortune of being my neighbor – either as a fellow Arkansan or just in the next state up – you have both my best wishes and my condolences for the storm to come. Here’s hoping we’re all financially secure enough now to weather it, and that those who thought this was a good idea learn their lesson so we don’t have to suffer this again in another few years. Who knows? Maybe they will. Of course, they didn’t pay attention to what happened in Canada earlier this year, or for that matter, right here at home with the last, smaller increases.
